2. Image credits: Cover and page 1, iStock; all others by Nini Jin, The Advisory Board Company.
3. Advisory Board Consulting and Management | 1
We specialize in transforming health care across the
major areas where our clients are focused: growth,
margins, physician alignment, and the transition to
value—and everything in between.
Partner with people
who transform health care.
4. 2 | The Advisory Board Company
Health care is in the midst of transformation. With
an eye on the horizon, we’ve spent over five years
transforming ourselves to better serve our health care
partners during this time.
Transforming ahead of the curve
5. Advisory Board Consulting and Management | 3
evolving to meet emerging DEMANDS
1998
Southwind Health Partners, LLC, is
founded by John Deane. It grows over
10 years to become the leading firm in
physician alignment and employment.
2009
The Advisory Board Company acquires Southwind
Health Partners, retaining 100% of the consulting team
and legacy leadership team, who continue to oversee
Advisory Board Consulting and Management.
PHYSICIAN ALIGNMENT
2009
Recognizing the shift occurring in the industry, we become pioneers in developing the clinically
integrated network. That was just the start. Over the next five years, we continue to add new
capabilities to support the development of all value-based programs, such as advanced primary
care, accountable care organizations, and population health management.
TRANSITION TO VALUE
2014
Support for our clients’ growth initiatives has always been a part of our services. Over
time, we see that our clients need help identifying the strategies that would ensure
their growth in a changing, more consumer-driven market. To address this need, we
launch a new corporate strategy offering fueled by top-rate talent.
GROWTH
2012
As industry and market changes increased their threat to health system margins, we
revitalize our hospital-focused consulting services with margins in mind. Merging hospital and
physician alignment services, and with an eye toward the transition to value, we begin offering
comprehensive support to help health systems achieve sustainable margins.
MARGINS
2015
Recognizing the huge investments being made in IT, we acquire Clinovations, a physician-
led consulting practice focused on ensuring that health systems see the return on their
investments. With the Clinovations team, we provide implementation strategy and planning, in
addition to clinical workflow and technology optimization.
6. 4 | The Advisory Board Company
strong, action-oriented approach
extensive knowledge
consistent, predictable, and positive results
facilitating transformation, driving value
deep relationships
500+
management consultants
Develop deep relationships rooted in trust, with clients,
physicians, employees, and other stakeholders
Communicate bilingually to translate needs between clinicians
and administrators, and to ensure full transparency
Create positive change through innovation and a strong,
action-oriented approach
Retain talent with deep, extensive knowledge in health care,
including trends, strategies, and operating principles
Deliver consistent, predictable, and positive results for every
engagement
Maintain integrity, as paramount, in every interaction
steadfast COMMITMENT to core principles
7. Advisory Board Consulting and Management | 5
operators and clinicians
hospital, physician practice, payer,
and accountable care setting
integrity and innovation
full transparency
2,000+
engagements—50 states
unmatched bench STRENGTH
Averaging 20 years of experience in health care
leadership, our team of over 500 includes both
management executives and clinicians who have
completed more than 2,000 engagements for clients
in all 50 states.
We have subject matter experts in operational and
clinical areas, with experience in the hospital, physician
practice, payer, and accountable care settings.
Most importantly, however, our management
consultants are skilled in transformation. Tackling
extensive change is our true specialty, and why we can
drive value for a 5:1 average ROI.
8. 6 | The Advisory Board Company
We’re not vendors. We’re partners.
Our success depends on yours, so we
stay right beside you until we reach
your goal.
9. partnership-driven ENGAGEMENTS
Introducing Advisory Board Consulting and Management | 7
Partnership is defined as taking part in an activity with
another or others, especially in a business or company
with shared risks and profits.
That is precisely what our consulting and management
services are designed to be—a partnership. We make it
our mission to arm your team with the knowledge and
skills needed to maintain results and continue making
progress long after our exit.
We partner with clients as strategists, analysts,
implementation leaders, and interim executives. With
a management model that has been in place for nearly
20 years, we know what it takes to design a partnership
that can truly transform.
10. 8 | The Advisory Board Company
effecting positive TRANSFORMATION
Helping you transform
to face health care’s most
robust challenges—while
providing support for
every problem, at
every level.
11. ACOs • Advanced Primary Care Practice • Capacity
and Patient Flow • Care Management Program • Clin
Care Models • Clinical Integration • Co-management
• Community Health Needs Assessment• Corporate
Strategy • Cost per Episode • EHR Optimization • Fair
Market Value • Health Insurance Exchanges • ICD-10
• IT Investment • Mergers and Acquisitions • Network
Development • Patient Access • Patient Experience•
Payment Transformation • Physician Compensation
Physician Employment • Physician Needs Assessme
• Population Health • Referral Management• Regiona
Partnerships• Retail Partnerships• Revenue Maximi
Supply Costs • Variation • Workforce Management • P
Clinical Documentation • Clinical Workflow • Co-man
Cost per Episode • Mergers and Acquisitions • Referr
Management • Retail Partnerships • Health Insuranc
Access • Referral Management• Revenue Maximizat
PHYSICIAN
ALIGNMENT
MARGINS
TRANSITION
TO VALUE
GROWTH
Introducing Advisory Board Consulting and Management | 9
12. 10 | The Advisory Board Company
PHYSICIAN ALIGNMENT isn’t about
collecting relationships. It’s about
transforming them.
13. Advisory Board Consulting and Management | 11
CLIENT
PROFILES
PHYSICIAN ALIGNMENT TRANSITION TO VALUE MARGINS GROWTH
As health systems have evolved, the physician relationship has taken on both new
complexity and significance. Separate structures and multiple alignment models are
often at play in one entity, and bringing harmony to this discord is one of the paramount
challenges in health care today.
Innovation stalls when physician alignment is conducted as a transaction. But health
systems can prosper when physicians are empowered as leaders and partners, working
collectively to achieve a common vision.
A culture and care delivery model that is driven by those relationships positions the
enterprise for excellence. We work side-by-side with physicians and corporate leadership
to design and operationalize better systems and stronger brands.
Consolidated legacy medical groups from
acquired health systems into a single, integrated
multispecialty group practice.
Transformed physician
alignment processes
Developed and employed a clinical
integration strategy aimed at creating
physician loyalty by driving cost reductions,
growth, and commercial business.
Developed CI
programs with 2,300+
participating physicians
Quickly established a new base of pediatric
physicians and surgeons to support the revitalization
of a children’s hospital after a long-term affiliate
disengaged for a competing initiative.
Built an integrated
pediatric delivery network
Created a consistent, high-quality patient
experience throughout the entire system by
aligning physicians and staff on operations,
customer service, branding, and management.
Improved patient
standards by 38%
Large academic medical center
Large health system,
serving more than 6 million annually
Community children’s hospital
Private, not-for-profit academic medical center
14. 12 | The Advisory Board Company
1. The network isn’t truly
physician-led
The legal rules for organizing CI networks require
that physicians take a leadership role in the
network, although the hospital can set up the
infrastructure and the network itself can provide
administrative support. This can be a tricky balance
to achieve, because too much independence can
lead to redundancy or even rivalry among care
management efforts. In some markets, we’ve seen
big inefficiencies develop when the CI network
is not sufficiently aligned with health system
administrators and other system-affiliated physician
entities, such as employed medical groups.
However, the CI network needs to be sufficiently
independent and physician-led that physicians want
to participate. So when a health system sets up a CI
network, they also need to make sure that there are
true physician champions, including independent
physicians, not just at the table but driving the
discussion. Otherwise, it could be a great party, but
nobody will come.
As I’ve told more than one client: “If these physicians
were natural joiners, they would have joined
something already!”
2. The CI network never gets
appropriate contracts—and
the hospital doesn’t help
A CI network works only if payers or employers
agree to provide performance-based incentives to
the network. And the reality is, not every market
has payers or employers eager to create those
kinds of contracts. How can CI networks thrive in
a market that isn’t on the forefront of value-based
reimbursement? Many health systems start by
creating incentives around caring for their own
employee population. But beyond that, the health
system needs to help bring payers to the table—and
be willing to use their analytics, their expertise, and
even concessions on other contract terms to get a
favorable CI contract in place. When my Advisory
Board colleagues and I work with health systems
on clinical integration strategy, we typically create
a thorough economic analysis to understand the
full impact of the CI network. That way, the health
system can make an informed decision about how
hard to fight, and which CI terms to fight for, in the
context of overall payer contracting negotiations.
3. The financial case for the CI
network relies too heavily on
shared savings contracts
Although we haven’t seen many shared savings-
related failures yet, the reality of shared savings
programs, including MSSP, is that not all
participants will be able to generate the anticipated
savings. Across the next several years, CI networks
that are banking on shared savings payments to
bolster the case for participation are likely to see
physicians back out if the shared savings payments
don’t live up to initial projections. We advise CI
programs to think about shared savings as “maybe
money”—nice if it materializes, but not what anyone
should be relying on to get, or keep, physicians
engaged in performance improvement efforts.
The good news is that each of these failure points is
preventable with planning, effort, and commitment.
But health systems court disappointment when
they create a clinically integrated network without
sufficiently engaging physicians, committing to
drum up the necessary contracts, or preparing for
the dangers of risk-based contracts.
Why good clinical integration networks
fail—and what to do about it
BY LAURIE SPRUNG, PHD, EXECUTIVE VICE PRESIDENT
CLINICAL INTEGRATION IS ONE OF THE FEW EFFECTIVE models we’ve found for getting physicians
and hospitals to work together on improving care and to be rewarded for their success. Not all
CI networks that look good on paper end up succeeding in the real world, though. Here are three
reasons we see good CI networks fail—and how to position yourself for the best chance of success.
Our perspective on the issues affecting PHYSICIAN ALIGNMENT
15. Advisory Board Consulting and Management | 13
The biggest mistake health systems
make in acquiring physician practices
BY ANTHONY D’EREDITA, EXECUTIVE VICE PRESIDENT
WHEN I WORK WITH HEALTH SYSTEMS on
acquiring physician practices, the biggest mistake
I see them make is to ignore the culture of the
practices they’re looking to acquire. In fact, I’ve
had clients do this intentionally, because they
believe that giving the practices “autonomy” is
more important than cultural integration.
They couldn’t be more wrong. Culture is the most
effective tool a health system can use to ensure return
on investment in acquired physician practices.
When I say culture, I’m not talking about dress
code or taste in music. I mean the shared values,
expectations, and identity that determine how
practices work together. When you acquire a
practice, you’re acquiring an entity that most likely
has its own characteristics that define its culture.
And they may or may not blend well with yours.
Quantifying culture
Culture is often talked about, but mostly as a “soft”
attribute. But culture is a tangible, quantifiable
thing. It defines all of the big ticket items that impact
the medical group’s financial performance and its
revenue contributions to the health system at large.
I had one health system client that pursued
acquisitions without prioritizing cultural fit. The newly
acquired practices did not share the same cultural
value of expanded operating hours, a previous staple
of the acquiring entity. As a result, they eroded
patient access channels. After significantly slowing
new patient growth, the practice is now undergoing
the painful process modifying physician behavior
and post-integration cultural assimilation.
Another recent client assumed employment would
address “leakage” and clinical coordination to
keep costs within the health system’s lower cost
structure. When that didn’t happen, it contributed
to an increase in cost, which jeopardized a new
shared savings incentive program. To fix the issue,
we had to bring their cultural values around clinical
integration front and center. Over time the clinical
coordination increased as culture assimilated.
My final example is a positive situation in which the
client tested the cultural fit of a prospective orthopedic
partner. They explored a few key strategic objectives
such as standardized order sets and care protocols
within an established program. When the practice
refused, the client prioritized cultural fit over potential
short-term program expansion, so they aligned with
other community physician and grew the program in
both a clinically integrated and cost-effective manner.
A final and less quantifiable contribution is physician
engagement and leadership. Integrating your recently
acquired practices to create a comprehensive care
delivery system requires change, and peer-to-peer
facilitated change management is a far better method.
And when physicians truly feel like part of the system,
things that seem like complex issues naturally fall
into place.
Center your acquisition
strategy on culture
Making culture an important part of the acquisition
process requires knowing what your culture is,
being able to articulate it so others understand
it, and making an assessment of cultural fit an
explicit part of the acquisition process.
In their study High-Performance Medical Group,
Health Care Advisory Board researchers identified a
number of tactics for ensuring cultural fit, tactics that
really ought to be used more broadly. For example,
the Gundersen Lutheran health system in Wisconsin
created a “Medical Group Compact” document that
articulates the health system’s cultural priorities
and how that translated to physician behavior.
Another health system, Minneapolis-based
Fairview, actually created an assessment tool
for scoring potential practice acquisitions
on different attributes of cultural fit.
Health systems need a physician acquisitions
strategy that’s more than purchasing and
aggregating practices. Creating a comprehensive
culture and expanding that culture once it’s
established, should drive your M&A strategy.
16. 14 | The Advisory Board Company
The key to success in health care’s
TRANSITION TO VALUE is knowing
how to transform at the core, without
dismantling the whole structure.
17. Advisory Board Consulting and Management | 15
CLIENT
PROFILES
PHYSICIAN ALIGNMENT TRANSITION TO VALUE MARGINS GROWTH
The stakes are high on the path to value, where the challenge is to find solid financial
footing without dropping the ball on current revenue. Many organizations invest
in technology, staff, and contracting strategies—components of population health
management. But disparate pieces won’t add up to a holistic and integrated model.
Organizations need to understand how transformation efforts will impact financial
performance, with a plan to pace out new initiatives over time. They require a tailored
framework for care delivery that fits within the local market—and that sets them up for
future growth.
Partner with a team that travels with ease across payer, physician, and patient worlds—
and that identifies the no-regrets investments while crafting a blueprint for transition to
a new model.
Developed a clinically integrated network, and created
a population health services organization to serve the
CI network and other key stakeholders in an effort to
maximize the health system’s market position, ROI, and
overall care delivery.
Identified $60M opportunity
in transition to value
Created a new NEQCA-affiliated physician
enterprise and supportive management services
organization to integrate its best-of-class
population health resources with best-of-class
practice management infrastructure.
Redesigned hospital-based
outpatient clinic operations
Enhanced patient care and improved physician
recruitment, retention, and alignment by
establishing a patient centered medical home,
CI network, and sustainable ACO strategy.
Decreased inpatient
admissions by 15%
in one year
Developed a population health services organization to
support the system and its various business units, and
revised the existing care delivery model to manage the
population served.
Built the infrastructure for
population health management
Integrated health system
Top academic medical center
Regional health system
Pilot program focused on patient care
18. 16 | The Advisory Board Company
What 650,000 air miles taught Jim
Bonnette about accountable care
Q&A WITH JIM BONNETTE, MD, EXECUTIVE VICE PRESIDENT
Q: Can you talk a bit about your background? It’s awfully diverse—you got into health care
as a physician, initially.
JB: I began practicing as an internist in California, which was for a long time a hotbed of managed care.
And when things got bad in the 1990s, I got the worst of it. I saw it both from the practicing side as well as
having been at an HMO. That helped me get a better perspective on care delivery—namely, what was
effective and what wasn’t working.
Q: You’re not just a MD, of course. You’ve also been a consultant and executive, too.
JB: Throughout my career, I’ve worked in supply chain, clinical IT, and risk-management capacities, among
other areas. I’ve had exposure to many different opportunities for change. In my last position, I built out
a team of consultants across international offices over a period of three years. We did work all across
the U.S. for accountable care and different care model implementations, and then did the same kind of
work in the United Kingdom, France, Singapore, Indonesia, Saudi Arabia, Kuwait, and South America.
Q: That sounds like a lot of travel.
JB: I flew 650,000 miles last year...a bit too many.
Q: On your trips abroad, did you see one country that stood out as a leader in accountable care?
JB: I’ve seen good things in each country, but nobody’s got a complete system. Some things that are
workable in certain cultures aren’t workable in ours, and vice versa. There are two common underlying
problems, however. First, every country has a rate of growth of their expenditure in health care that
they can’t tolerate. Second, the way we train our doctors here in the United States does not encourage or
enable physicians to manage populations with chronic problems. No country that I’ve seen has set up
effective systems to really manage chronically ill patients. None. But we have really good examples in the
U.S., where we’ve experimented and created incredibly effective ways to care for people with chronic
diseases. They are models that can be replicated, it’s just that most systems don’t know how to do it.
Q: Of course, health care leaders have always cared about planning and forecasting. Can you
explain what’s different about setting a strategy today?
JB: In the current health care climate, hospitals and health systems are being pushed to make one change
after another. It’s not enough to simply react to each new challenge. Those executives are looking to map
out a long-term, cohesive plan for how to deal with the changing market. That’s the work Advisory
Board Consulting and Management is really designed to do—build a road map for any organization
grappling with the change in our industry. Given that we [in the health care sector] all buy into the
necessity for change, leaders need to start asking, “In my organization, what do I have to do to get
from where we are to where we need to be?”
Q: What about hospitals that hesitate to move toward accountable care?
JB: When I was talking about this stuff 10 years ago, I was getting all kinds of pushback. Funny, but now I don’t
ever get anyone pushing back about the need to do it. What I get now are questions about how to do it. I
typically recommend the patient-centered discussion: How do we best serve a population of patients?
Our perspective on the issues affecting TRANSITION TO VALUE
19. Advisory Board Consulting and Management | 17
How math makes population
health more digestible
BY LAURIE SPRUNG, PHD, EXECUTIVE VICE PRESIDENT AND
ERIC PASSON, EXECUTIVE VICE PRESIDENT
OUR CLIENTS ARE AT VARIOUS STAGES of population
health management. Some are currently doing nothing,
because their region isn’t experiencing any change.
Others are trying to lay the groundwork and plan for a
transition, but there’s no significant movement. Then
there are more progressive systems that either want
to get ahead of the movement, or have competitive
issues that necessitate risk-based contracts.
What we’re finding across these health systems isn’t
a need for innovation in clinical work. Clinicians are
doing that.
What the health system needs now is to understand
the math behind population health management.
Or rather, what’s the economic model that will support
population health goals without depleting the fee-
for-service business that drives margins today?
Understand your
population targets
The first step to understanding the right economic
model is to identify the right populations—or subsets
of your whole population—to target. With that
understanding, you can identify the resources you need
to respond to the target populations, which includes
organizing physicians and other caregivers around
their conditions.
We were working with a client in the Southeast—a
large health system that serves a population of over 1
million—that was trying to get a handle on population
health management. We started with one of the most
effective ways a health system can begin population
health management, which is to look at its self-insured
population. But we didn’t stop there.
After digging deeper to better understand and quantify
the financial impact of a population health strategy,
we discovered the system simply needed to focus on
3.2% of its self-insured population, or just over 400
individuals. That’s a much easier way to think about
caring for a population of over 1 million people. When
we presented these findings, the response was,
“We can deal with that.”
The health system’s employees are an ideal starting
point, because they’re already at risk for those lives
and the data for that population is easily accessible.
To identify the 3.2%, we leveraged paid claims
data to get a comprehensive view of the issues
facing the health system, and analyzed that data
from a payer, patient, and provider perspective by
integrating data on both hospital cost and utilization.
This provided insight into which percentage of the
population was responsible for the majority of the
health system’s costs. From there, we were able to
identify the high-risk patients in that smaller percentage.
Time your population
health strategy
With the right population targets, you can project
the financial impact of any demand destruction
resulting from fewer inpatient admissions within
those populations. That leads to the second
objective of the math exercise: to pace the execution
of your population health strategy based on what
your health system can withstand financially.
The result of our math exercise was an opportunity
analysis that showed the impact on the health system’s
bottom line if it opted to transition at a slower pace
or at a more aggressive pace. This way, the health
system could determine when, how much, and
where they could invest in developing the physician
network, building the technology infrastructure,
and adding the operational resources needed.
Impacting these smaller population health management
targets allows systems to showcase their value
proposition to payers, employers, and patients who are
scrutinizing performance more than ever before. That’s
when you can begin negotiating risk-based contracts
and reaping financial gains from your progress.
Negotiating for value-based contracts or risk-
based contracts is new to many of our clients,
and we do a lot of work to help them understand
how to accomplish their value-based care goals
in a way that is financially manageable.
20. 18 | The Advisory Board Company
Improving MARGINS through
housekeeping is baseline. Turning
them into market advantage is the
new basis of competition.
21. Advisory Board Consulting and Management | 19
CLIENT
PROFILES
PHYSICIAN ALIGNMENT TRANSITION TO VALUE MARGINS GROWTH
Improving margins is no longer just an exercise in cost management. In a world where
we are competing on value, margins and cost performance can elevate providers of choice
from the rest.
All health systems strive to cut expenses and uncover revenue cycle opportunities. But
fewer also approach margins more broadly, beyond the books—extending accountability
across the value chain to better manage episodes.
By reducing care variation and enhancing performance and quality—within the hospital
and across ambulatory sites—health systems can improve margins while gaining an edge
among payers and consumers alike. We work with clients to uncover system-wide value,
and leverage margins as a competitive advantage.
Maintained financial sustainability for the system
by deploying interim management in accounts
receivable to improve point-of-service cash
collections, payment integrity, and patient access.
Identified $11.5M in
revenue cycle opportunity
Addressed root processes—ranging from
admissions and bed assignments to patient
transfers and case management—to
“hardwire” margin improvement.
Achieved $12M+ in total
financial improvement
Uncovered revenue by maximizing
departmental resources, creating criteria
to triage accounts, and designing reports to
track denials and recoveries.
Generated $3.4M in untapped
revenue within nine months
Led the turnaround of an integrated medical group by
engaging physicians in leadership and governance,
redesigning the professional fee revenue cycle, and
realigning physician incentives in a new compensation plan.
Effected more than $20M
in annual improvement
Regional, not-for-profit health care system
600 bed flagship hospital
400+ bed medical complex
Small, for-profit integrated health system
22. 20 | The Advisory Board Company
How our clients are looking at margin
improvement today—and how they
ought to be
Q&A WITH JOHN JOHNSTON, SENIOR VICE PRESIDENT
Q: For the past several years, hospital executives have been focused on the idea of “Medicare
breakeven,” or performing at a level to generate a positive operating margin at Medicare
reimbursement rates. Are your clients still thinking about their margins in the same way?
JJ: Medicare will continue to be the main payer for hospitals, and it drives rates and models other payers
adopt. Therefore, hospital leaders will keep looking at operating margins in the context of Medicare
reimbursement. But actual Medicare breakeven is also a long way off for most organizations. While it is a
priority, and hospital leaders are working to move in that direction, they’re doing so in a way that prioritizes
“front burner” issues, such as Medicare rate cuts, reimbursement policy changes, and risk readiness.
Q: For your clients who are actively working toward Medicare breakeven, are there common
threads across each of them?
JJ: One common thread is that most of my hospital clients had already begun tightening up cost discipline
over the past two to three years, but they did so in traditional ways: improving labor productivity, lowering
supply cost, and reducing physician practice subsidy. Those efforts were effective to the extent that they
prevented their situation from worsening, but they weren’t quite enough to bend the cost curve in the out
years. There is also a common thread among a subset of our clients who’ve been fortunate to have a good
payer mix. Because they have been able to maintain stronger margins over the past few years, they’re
having a harder time making adjustments to cost structure. Culturally they have not yet become
accustomed to the frequency of change other hospitals have had to experience.
Q: For hospitals on the other end of the spectrum, ones that are struggling today, what advice
are you giving them to get on a path to sustainability?
JJ: The first step for that group is to create a 12- to 18-month business plan to recast their cost structure
while better positioning the organization for risk. It’s important for struggling hospitals to go down both
paths simultaneously. If not, they risk staying two steps behind the market. This means taking a very
purposeful approach to care redesign. Everyone should have a plan. It gives hospital leaders a framework
for guiding their employees, physicians, and even their boards down a road that is difficult to navigate.
The most forward-thinking organizations are not waiting on margins to drop—they are implementing a
plan now, while they have time. One organization that comes to mind is Alexian Brothers Health System in
Chicago. They have a very strong business plan to move to Medicare breakeven. Their plan has become a
new way of doing business, and as a result they are seeing physicians, managers, and staff all move in the
same direction.
Q: This is a turbulent time in the health care industry. Should hospital leaders be
optimistic about the future of health care?
JJ: If hospitals approach their margin improvement efforts in the right way, they should have the resources
to continue building a system that will enable hospitals, physicians, and caregivers to work collaboratively
for the wellness of the patient. Hospitals have always treated sickness, but we also need to help patients
avoid getting to the point of requiring hospitalization. Finally we are moving to a reimbursement model that
supports providers to maintain a patient’s wellness, which is exciting and new. We just have to figure out
how to get there in a financially sustainable way.
Our perspective on the issues affecting MARGINS
23. Advisory Board Consulting and Management | 21
Point-of-service collections start with
you: 4 ways to get your staff on board
BY JAMES GREEN, MANAGING PARTNER
“This isn’t what I signed up for.”
IN MY WORK helping organizations improve their
front-end collections, I hear this phrase a lot.
I get it. Most employees come to a hospital to
help patients. They often feel they didn’t sign
up to collect money, and many staff haven’t had
adequate training to do so. What’s more, no one
wants to upset patients or drive them away.
And yet, I’ve seen the best of the best help their staff
do more than just tolerate asking for point-of-service
collections. How do they get their teams excited about
this effort? Here are four strategies I’ve found that
are keys to optimizing your up-front collections:
1. Hardwire a culture around up-front collections—
from the top down
First and foremost, it’s essential to establish a
hardwired culture around up-front collections. Point-
of-service collections is not optional—it’s the new
standard. That message needs to come from the top
down, “We are going to start collecting at the point-of-
service. We’re going to ask every patient, every time.”
Next, it’s critical to align your processes and policies
to back up your message. Set an organizational goal
and then set managers’ and staff’s goals accordingly.
Update key job descriptions to ensure point-of-service
collections language is included. Consider updating
performance review grids to include POS collections
performance criteria. Make whatever updates you need
to ensure that everyone is on board.
Lastly, organizations doing this well have a formal
accountability structure, so ensure everyone involved
in the point-of-service collections initiative understands
how their role contributes to the organization’s
success, set measurable targets for each key staff
member involved, and hardwire routine report
outs on progress to-date against goals—across
individuals, departments, and organization-wide.
2. Focus on education
Let’s face it: asking a patient for money can be
uncomfortable. But with training, even the most timid
registration staff member can master this skill. Train
your staff to think about the discussion around point-
of-service collections as more than just collecting
payment. It’s about educating the patient, explaining
what their benefits are and what payment options they
have. To boost staff confidence, give your employees a
sample script to guide these types of conversations and
educate them on the different types of patient out-of-
pocket obligations (copay vs. co-insurance, deductible,
out-of-pocket max, etc.).
Once your staff feels empowered to address these
point-of-service collections head-on, your patients will
be better educated about their financial responsibility,
and increased up-front revenue capture will follow.
3. Plan your community outreach
Once you’ve got your organization fully on board, it’s
time to think about how best advertise the point-of-
service collections initiative within your community.
Take the time to decide the most appropriate way to
announce your new policies to ensure you set patient
expectations. Then, think through how best to market
your new policies to focus on the positive aspects of
up-front collections.
Lastly, consider the patient’s perspective—would
you want to be surprised with a collection attempt on
your date of service, or would you prefer to know your
out-of-pocket obligation ahead of time? The majority of
patients prefer the latter whenever possible, so consider
pre-registration strategies, such as outbound calls
3-5 days prior to service, to further get the word out.
4. Remember the benefit to the patient
Price shopping is growing rapidly as we move into
an era of increased price transparency. If you can
provide a timely, accurate estimate to patients, you’re
well prepared for price-sensitive patients. There’s
something else that we all can relate to—nothing kicks
you when you’re down quite like a surprisingly large bill.
By sharing an estimate at the point of service, your
patients have a reasonable idea of what they can
expect to pay, before they even receive care. Even
more, they can sit down with a financial counselor to
arrange an ideal payment plan prior to service if they
anticipate difficulty in paying the full amount at once.
Giving your patients those options should make you
feel better, not worse, about the care you provide.
That, after all, is what you signed up for.
24. 22 | The Advisory Board Company
Scale is measured by increasing your
coverage on a map. GROWTH is measured
by expanding your consumer relevance.
25. Advisory Board Consulting and Management | 23
Today’s retail health care market has drastically changed the rules of the game,
redefining the very basics of growth. Until recently, growth was about scale—a “land
grab” to get bigger for the sake of your business.
But growth today comes from building a relevant network that appeals to different types
of consumers, on issues like cost, quality, and clinical scope.
The potential upside is great, but many organizations lack the underlying foundation to
sustain their investments in growth. We help health systems design a consumer-oriented
growth strategy, and sustain value and relevance over time.
PHYSICIAN ALIGNMENT TRANSITION TO VALUE MARGINS GROWTH
CLIENT
PROFILES
Implemented an aggressive growth strategy for
the employed physician enterprise, including
acquisition support, physician alignment, and
organizational structure redesign.
Expanded physicians’
geographic reach
Deployed block scheduling processes to
optimize surgery flow, allowing for more
surgeons and more volume—all without
having to build out additional ORs.
Increasedsurgical
volumes by 10%
Developed and implemented an ACO and
CI network, overseeing the alignment of
physicians as well as resulting partnerships
that expanded capabilities and capacity.
Yielded first market
share gains in 30 years
Broadened and improved the availability of patient
services by merging three competing cardiology
practices into a single operating entity that
bridged ambulatory and acute care services.
Merged 90+
physicians and surgeons
Five hospital, not-for-profit health system
Not-for-profit community health system
Competitive ACO and CI network
Small, acute care hospital undergoing acquisition
26. 24 | The Advisory Board Company
The #1 reason why hospital deals fail—
and how to make sure yours doesn’t
BY THOMAS CASSELS, EXECUTIVE DIRECTOR
WITH THE U.S. HEALTH CARE SYSTEM in the midst of
a significant period of consolidation, we’re getting
more questions about hospital M&A strategy than
ever before. Many of you are concerned about
getting the details of the transaction process
right—ensuring that you choose the right partner,
conducting extensive due diligence, and so on.
And while those factors are certainly crucial, we believe
that what happens once the ink has dried is just as
important as the steps leading up to the deal itself.
Understanding the value
of integration
Data has shown that many hospital mergers fall short
of achieving their original goals. Few deals improve
care quality, and an alarming proportion of newly
acquired hospitals—about 1 in 5—actually start to
lose money within two years of the transaction.
There’s a strong consensus across a range of
industries that post-merger integration, which
includes the way you align processes as well as people,
is the largest determinant of a deal’s success.
10 tactics to guide post-merger
integration
In our study of the top performers, here’s what they
do to ensure success in their integration efforts:
1. Begin integration planning long before deal closure.
Rather than holding off until the deal closes,
begin the planning process as early as possible.
Ideally, high-level integration planning begins as
soon as you start evaluating specific targets.
2. Immediately identify a dedicated integration
leader. While the existing leadership team will
certainly contribute to the integration process, the
most successful institutions select an individual
to lead integration efforts on a full-time basis.
3. Assemble a distinct integration team. Because the
transaction process also warrants full-time staffing,
pull together a separate integration team to ensure
sufficient focus on the integration process and enable
integration planning to begin early.
4. Use early wins to establish credibility and build
momentum. Early successes boost morale in a time
of uncertainty, enabling the system to create the
momentum it needs to pursue more challenging goals
across the long term.
5. Pick your battles with IT integration. IT poses one of the
most significant challenges to the integration process.
Best-in-class institutions stage the IT integration
process, prioritizing efforts based on the needs of the
deal at hand.
6. Over-communicate the benefits of integration. A
comprehensive communication plan boosts morale
and ensures that integration plans roll down to all
appropriate constituencies.
7. Establish baseline targets at the outset. Success across
the long term depends on your rigor in monitoring your
integration efforts. Identify performance measures
early on, ideally during the goal-setting process.
8. Instill accountability through defined scorekeeping.
Once you’ve identified baseline targets, designate
scorekeepers and create a clear evaluation process to
establish accountability throughout the organization.
9. Create clear pathways to readjust the integration plan.
The most effective systems establish standardized
processes for gathering and disseminating best
practices to target areas of underperformance.
10. Hardwire learning processes to inform future
integration. Retain best practices by establishing a
permanent integration team or—for those who cannot
justify this investment—by ensuring the business
development team is involved throughout the process.
Our perspective on the issues affecting GROWTH
27. Advisory Board Consulting and Management | 25
Why patient access is a CEO issue
BY JOHN DEANE, PRESIDENT
PATIENT ACCESS IS NOT AS FAMILIAR a phrase as
“population health management,” “patient engagement,”
or “volume growth.” However, when I speak to CEOs
and executive teams around the country, I increasingly
hear that to advance those and other health system
objectives, improving patient access is a critical priority.
As a health system leader, you know that health
systems have a paramount need to grow, both
to increase volumes now and to be competitively
positioned in a future population health environment.
In either scenario, hospitals must get more
patients in the door, and ambulatory clinics are
the way most patients enter the health system.
Learn the definition of
“patient access”
Patients and their families are more involved than ever
before in making decisions about their care, and they
are prioritizing “quality” when selecting a provider.
What our consultants are finding in client practices is
that patients define “quality” differently than providers.
From the patient perspective, quality means receiving
services that meet their needs at the right time and the
right place. This is the very definition of patient access.
CEOs must own the patient access and experience
mandate to make sure they are capturing that
ambulatory market share. What many organizations
do not realize, though, is that access is much
more than scheduling: it touches many different
aspects of strategy and operations. Because
access issues have been plaguing our clients, we
created a framework for how to improve access, a
framework we now use in our engagements:
A Comprehensive Pursuit of Patient Access and Navigation Improvement
Leadership
and Culture
Patient-centered
Facility Accessibility,
Design, and Utilization
Coordinated
System
Staffing
Comprehensive
Operations
and Transitions
Standardized
Information Systems
and Technology
Efficient
28. Advisory Board Consulting and Management takes a multidisciplinary
approach to every engagement by integrating operational and
strategic consulting with industry-leading research and technology.
The mission of our team is to help your organization improve
performance, culture, and the patient experience—and enable
sustainable, positive transformation.
For more information about our services, visit us at
advisory.com/consulting.
PHYSICIAN ALIGNMENT
Transform your physician relationships
for an integrated, coordinated, and high-
performing network.
advisory.com/consulting/alignment
MARGINS
Improve financial performance while
gaining market advantage with payers
and consumers.
advisory.com/consulting/margins
TRANSITION TO VALUE
Invest in the right care models and
payment programs, with the tools
to sustain them.
advisory.com/consulting/value
GROWTH
Build a consumer-relevant network
to compete and grow in today’s retail
marketplace.
advisory.com/consulting/growth
additional RESOURCES
26 | The Advisory Board Company
30. 28 | The Advisory Board Company
firm SUMMARY
FOR MORE THAN THREE DECADES, The Advisory Board Company
has been helping health care get better.
We aren’t just a global research, technology, and consulting firm.
We are a performance improvement partner for 180,000 leaders
in 4,500+
organizations across health care and higher education.
Through our membership model, we collaborate with executives
and their teams to find and implement the best solutions to their
toughest challenges. But it’s not enough just to know the right
answer—we need to solve real-world problems.
That’s why we create performance technology products that tell
members where their biggest improvement opportunities are,
and how to get results.
That’s why our expert researchers analyze thousands of case
studies every year to find and share proven best practices.
That’s why our talent development team offers hands-on training
to cultivate leaders and drive workforce engagement.
And, that’s why our seasoned consultants provide hands-on
support and guidance in health care organizations around the world.
31. Learn more about the
Consulting and Management team
advisory.com/consulting/experts
32. 3102 West End Avenue, Suite 800, Nashville TN 37203
P 615.385.2126 | F 615.620.5020
advisory.com/consulting
29983