Kenneth Hertz took his first healthcare consulting engagement 10 years ago. On his very first day on the job, he identified some serious issues in the client's organization and panicked. He was reticent to offer up bad news, so he called his boss for advice.
"I explained the situation to him and he said they hire us because we are experts and we don't do the client or ourselves any service if we don't tell them what we see," he said.
Hertz, principle with the Medical Group Management Association, returned the next day resolved to give the client the bad news and the good – so he could help them turn things around.
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Because hearing bad news is often part of working with a business consultant, it is imperative that hospitals work with ones they trust. Healthcare Finance turned to some experts for suggestions on vetting and choosing the right consultant for any organization.
When choosing a consultant, the first step should be talking with peers who have been in a similar situation. This will help reveal consultants with a good reputation in the industry. But organizations should also perform due diligence on any consultants they are considering.
Chris Zaenger, principle of Z Management Group in Elgin, Ill. and a member of the National Society of Certified Healthcare Business Consultants, said he would start with a list of eight to 10 potential firms and whittle it down.
Zaenger said meetings with consultants should be in person. Never hire a consulting group for a major engagement without having them on site first – and not just the sales people. The individual or group doing the work should visit for at least one appointment.
The next step is to get references. It is important to know that a consulting group has performed well for other clients and can document their successes, Hertz said. It is best to find references that had similar challenges to your system, in order to see how the consultants addressed their problems.
James Schafer, a principle at Rehmann, said consultants would only provide positive references. Once those supportive references are checked, he recommends networking to find someone who has worked with the consultants and was not happy with the experience. This will give another picture of how the organization works with clients.
"It is a little extra work, but it's worth it," Schafer said.
Cultural compatibility is more difficult to gauge through reference checks and brief meetings, but it is an important component of the relationship.
"They aren't going to affect it (culture) or stir up what is going on for a temporary moment," Zaenger said. "But if it is a long-term – three to five year – project, the ability of a consulting firm to understand and work within the culture is important."
One way to measure congruence is by bringing someone from the firm into your office for a day. This is done in other industries – pay a day-rate and let the consultant work with your people, Schafer said.
"It is worth the minimal investment upfront," he said. "By spending several thousand for a day, you can save a ton of headaches down the road and make sure you get the right person."
Know what you want
Bringing someone in for a day may also help clarify what the system truly needs upfront.
"Hospitals should clearly understand their goal going in; that may influence who they select," Schafer said. "Most people don't step back and ask what they really want to accomplish…it may be they want to do more than fix an immediate situation; they may need someone with the skill set to re-engineer something."
If you are focusing on revenue cycle management, it may be best to work with a local firm because of the very local nature of healthcare. But if you need investment help, it might be better to cast a wider net.
Zaenger recommends starting with pages of questions before hiring any firm. Be sure to host team meetings with department heads who will be part of the consulting process. They can detail problems and concerns and help create a checklist of questions that must be answered.
Time for change
Even if an organization has consultants they work with regularly, it might be a good idea to re-evaluate every three to five years.
"You will lose creativity and potential for new ideas if you don't open up to other environments," Zaenger said.
That creativity may even be within the firm you are currently using. Firms evolve and they may have brought in new expertise that would be more suited to your organization's needs.
You might also need help in an area in which the current consultants don't have expertise. For instance, you might be working with a group to improve bond ratings for a construction project, and then need help to address cultural and operational issues for an acquisition. The current consultants may do a good job, but others could potentially do better.
"It's like the difference between a general orthopedic surgeon and one that has a hand fellowship," Hertz said. "If there is a general ortho that has done 300 hands and a specialist who has done 600 and a fellowship, you may choose that guy."