Healthcare Sharred Services


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A look at how shared services can improve the ROI of EHR

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  • Date
  • Date At the core of the business case is the evaluation of potential SSC options and the gap between the selected option and the existing operating model. In order to assess the requirements of the Operating model we have developed a framework nicknamed ‘SPORTS’ which covers the main elements of the design. Site evaluation includes space and facilities requirements and is fundamental to the project feasibility and cost. It also has important implications for the ‘modus operandi’ and future evolution of the Center The Integrated Process Model identifies the way the SSC will work and interface with dependent parties (both internal and external). This will define the split of roles and responsibilities and ultimately form the basis of the Service Level Agreement. It will also provide the framework for the technology architecture organization & People identifies organization structure, job descriptions and role allocation, transition and operating policies and the cultural aspects of the new model. Regulatory & Legal is the both to ensure compliance and exploit structuring opportunities (e.g. tax advantageous structures) Technology covers ERP, enabling technology (e.g. E business, scanning, workflow) and infrastructure including networks and comms. Service Management Relationship relates to the management of service levels, charging mechanism assumptions and governance The Business Case needs to assess the scale and timing of benefits provided by the new model and the scale and timing of the associated investment . Undertaking a comprehensive risk assessment is an essential reality check prior to sign off.
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  • Healthcare Sharred Services

    1. 1. Shared Services for Healthcare: Boosting the ROI of EHR Presented by: Pale Rhino Consulting 1
    2. 2. An Example—Hospital Overview  Hospital Overview – Assume we are looking at a large pediatric hospital – Over 8,000 employees – Provides inpatient and ambulatory care services – Several physician practices support patient care, including: • Children’s Healthcare Associates • Children’s Oncology Associates • Children’s Radiology Associates • Children’s Anesthesiology Associates • Children’s Surgical Associates – The hospital is in the process of implementing EHR across the enterprise including several satellite locations © Pale Rhino Consulting. All Rights Reserved.
    3. 3. Hospital Overview(Con’t)  Cultural Overview – Enjoyed lucrative environment – Enjoyed healthy relationships and contracts with payers – Academic medical model – Strong philanthropic support – Financial strength has provided funding for many clinical and supportive programs and systems  Current Economic Forecast – Payers contracts may be cancelled or altered – State and Federal funding at risk – Increase in Charity Care and unreimbursed care – Investments have been negatively impacted – Management looking to reduce costs and improve efficiencies throughout the enterprise © Pale Rhino Consulting. All Rights Reserved.
    4. 4. Current State The Hospital has duplicated departments, processes and technology operating in each of the major organizations. IT applications vary. Current State Hospital IT-EHR HR Billing Finance Scheduling Registration Healthcare Associates IT HR Billing Finance Scheduling Registration Surgical Associates IT-EHR HR Billing Finance Scheduling Registration Radiology Associates IT-EHR HR Billing Finance Scheduling Registration Oncology Associates IT HR Billing Finance Scheduling Registration © Pale Rhino Consulting. All Rights Reserved.
    5. 5. Future State with Shared Services The future state should consolidate departments, workflows and technology into a single organization Potential Future State Hospital Healthcare Associates Surgical Associates Radiology Associates Oncology Associates Shared Services IT-EHR (1 or more) HR Billing Finance Scheduling Registration © Pale Rhino Consulting. All Rights Reserved.
    6. 6. Challenges The hospital faces numerous challenges Limited ability to manage an effective shared services initiative Limited ability to structure an effective shared services business case Limited ability to realize executive buy in Ineffective processes and tools to measure performance Limited experience in defining best practice business processes in a to shared services environment Limited experience in managing enterprse transformation © Pale Rhino Consulting. All Rights Reserved.
    7. 7. Two Approaches to Shared Services—which is best for you? Structured Approach OR • Structured Methodology • Program Management • Risk Management • Project Management • Partner Team • Staff to “do the work” • Accountable for delivery Advisory / Executive Coach • Retainer based coaching • Meet regularly with Project Sponsor • Advise and coach • Partner team • Hospital does the work • Less accountable for delivery PLUS Health Care/Commercial Enterprise Transformation Expertise © Pale Rhino Consulting. All Rights Reserved.
    8. 8. Key Phases of Structured Approach A structured approach with five key phases places great emphasis on Workflow & Change Management Align & Engage Leadership Develop the Strategy & Vision Prepare & Equip the Workforce Transition the Organization & Implement Communicate with Stakeholders & Measure and Monitor Build a coalition of leaders with a common vision and understanding that leads to united action Define organizational vision, change strategies & plans required to enable the intended business results Move the workforce from current assignments and competencies to new assignments/competencies Assess organizational change impact driven by the solution and implement change plans Provide clear, timely messages to foster understanding, involvement and feedback; monitor & measure © Pale Rhino Consulting. All Rights Reserved.
    9. 9. Typical Shared Services Timeline 3 months 4-9 months 10-18 months Develop Strategy/ Vision Transition / Implement Prepare Workforce Communicate Measure Comply Align and Engage Leadership © Pale Rhino Consulting. All Rights Reserved.
    10. 10. Typical Structured Approach Tasks  Design - Process - Organization - Technology  Define Service Level Agreements (SLA)  Align business units on SLAs  Pilot  Baseline  Set up infrastructure  Develop HR processes - Competency identification - Recruitment - Training - Retention…  Redeployment of people arising from set-up of the SSC  Training to enable new roles  Contracting and legal support  Initial transition management (managing additional loads in the initial phase)  Risk management  Structure shared services model - Single or multi-location - Decide on ownership model and level of control  Develop phase planning  Structure legal entity  MIS reporting / dashboards  Run shared services as independent business, monitor financial and operational performance  Ongoing controls improvement (including SOX compliance) Align and Engage Leadership  Secure executive sponsorship  Establish scope of services – processes and business units  Develop initial business case with both quantified (ROI) and qualitative benefits Develop Strategy Vision Prepare Workforce Transition and Implement Communicate Measure © Pale Rhino Consulting. All Rights Reserved.
    11. 11. Key Components of Advisory, Coach Approach Partner Team of Health Care, Shared Services and Commercial Transformation Experts Meet Regularly to Understand Challenges and Coach the Executive Sponsor © Pale Rhino Consulting. All Rights Reserved.
    12. 12. Why a Shared Services Center? Shared Services combine the benefits of both centralized and decentralized operations Decentralized Centralized • Remote from Business •Unresponsive • No BU Control of Central Overhead • Inflexible to BU Needs •Variable Standards • Different Control Environments • Higher Costs • Duplication of Effort Shared • Independent of Business • Common Systems & Support • Bus Maintain • Lean, Flat Control of Organization Decisions • Consistent • Synergies • Dissemination of Forward Looking Practices • Responsive to Client Needs Standards & Controls • Economies of Scale © Pale Rhino Consulting. All Rights Reserved.
    13. 13. The Rationale for Shared Services  Reduce and/or control costs by eliminating workflow duplication  Reduce head-count  Free key resources to focus on strategic and analytical functions  Standardize processes across business units - Consistent reporting and control across business units - New / stricter regulatory framework(s)  Reduce / eliminate non value add activities, improve efficiencies  Align processes / functions with business strategy  Leverage the emergence of enabling technologies  Free up capital for core business operations  Leverage Purchasing Power  Leverage Utility/Energy Spend © Pale Rhino Consulting. All Rights Reserved.
    14. 14. Different Models for Shared Services Eliminate non value-added services and processes Strategic Specialised Transactional Business Corporate Centres of Excellence Service Centre/Call Centre REGIONAL GLOBAL • Strategic activities remain at Corporate Centre including • Overall direction & strategy • Policy & corporate standards • Portfolio management • Common specialist value added activities that require teams possessing deep knowledge and expertise and that leverage regional or global advantage • Efficient processing of high volume, standard activities that provide scaling opportunities • Consolidation of information and transaction based activities • Require one point of contact Business Unit/Divisions • Core business activities including • Customer facing/locally specific activities • Local planning & decision support Physical Models Functional Function 1 Function 2 Function 3 Geographic Function 1,2,3 Function 1,2,3 Function 1,2,3 Hub & Spoke Virtual Hub Centres are organised by function. Centres are geographically dispersed. Parallel centres exist. Organised by Geography. For each centre, there is a single hub, supported by local spokes. There is no physical centre, with all activities performed remotely using web enabled Technology. © Pale Rhino Consulting. All Rights Reserved.
    15. 15. Key Design Issues & Considerations  Shared Services vs. Outsourcing? – Between shared services and outsourcing is a continuum of options that allow varying degrees of control and ownership – and it is important to analyze and arrive at the right model.  Single location vs. multiple locations? – The decision on whether to set up one or more centers depends on important considerations including • The number of business unites from where processes will be consolidated and the resultant complexities within processes • Regional, location or business unit specific unique requirements (driven by market, regulatory or technology constraints) • Regulatory and language requirements • Tax • Need to manage risk • Current locations and resources; the ability to leverage, for example, a current location as a staging post © Pale Rhino Consulting. All Rights Reserved.
    16. 16. Key Design Issues & Considerations  Where do we locate our center(s)? – The decision on location for the shared services center(s) must be taken after analyzing important considerations, including, • Cost and tax structures, including set-up costs • Resource availability – current and future • Tax and regulatory requirements • Assessment of the location’s overall local environment – public services & infrastructure, political climate, regulatory & compliance issues… • Tax, treasury and legal issues with regards to entity set-up, information flow, confidentiality and data protection, intellectual property protection…  Designing a Pilot – Structuring a pilot program that ensures coverage (unique activities are covered as far as possible) as well as depth and helps resolve issues pre go-live. © Pale Rhino Consulting. All Rights Reserved.
    17. 17. Key Design Issues & Considerations  Operating Structure and Range of Services – Migration of services to the Shared Services Center on the basis of business units or processes, or both? • Selecting the range of services offered by the center. Should there be a big bang or phased migration of processes? • Should the phasing be based on process clusters or location, or a mix of both? – Migrate processes in ‘as-is’ state or migrate post process improvement? – Change or enhance supporting technology or applications?  Designing the post shared services operating model – Decisions with respect to • Governance and reporting structures • Resources to retain, redeployment of retained resources • Changes to support and staff functions organizations (IT, Legal, HR, etc.) © Pale Rhino Consulting. All Rights Reserved.
    18. 18. Key Design Issues & Considerations Fundamental to the business case is the assessment of the various operating model options and implementation approaches NEW OPERATING MODEL S P O R T S EXISTING OPERATING MODEL Implementation sequencing and planning Key changes Risk assessment Business Case ‘blue print’ Time Cash flow Site/Location Integrated Process Model Organization & People Regulatory & Legal Technology Service Management Relationship S P O The above is based on Shared Service Methodology © Pale Rhino Consulting. All Rights Reserved.
    19. 19. Trends and Good Practices for Shared Services  Companies are placing more emphasis on “service” rather than “shared”.  Current trends are towards simplification, consolidation and centralization.  Successful centralization is being driven by technology and new IT architectures initiatives such as Service Orientated Architectures and renewed enthusiasm about application service providers.  Clear understanding is required about consolidation economics. Lots of small initiatives and SLA’s are likely to be more successful than large ones.  Competition within the organization is a good thing around individual applications and services. Who provides the best service?  Managing strategic change and changes in the business agenda while maintaining an efficient outsource relationship. © Pale Rhino Consulting. All Rights Reserved.
    20. 20. Good Practices in Shared Services Set-up and Management We list a few of the design principles and good practices for setting up and managing a financial shared services center - Run shared services like a business, and be customer focused - Wherever possible recruit new staff - no “bad habits”, reduced hierarchy - Flat organization reflecting minimal management layers - Organized around teams evolving to self-direction - General management leadership skills rather than functional - One leader for all shared services - Special reward and recognition programs to drive behaviors - Service Level Agreement (SLAs) maintained between provider and customer SSC Structuring By Country 14% By Process 79% Other 7% Source: Published Research commissioned by The Association of Chartered Certified Accountants © Pale Rhino Consulting. All Rights Reserved.