Shared Services For Healthcare: Boosting The Roi Of Ehr Paul M. Roemer

Shared Services for Healthcare Boosting the ROI of EHR Paul M. Roemer

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

2

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

3

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 Schedulin g Registrati on

Healthcar e Associate s IT HR Billing Finance Schedulin g Registrati on

Surgical Associate s IT-EHR HR Billing Finance Schedulin g Registrati on

Radiology Associate s IT-EHR HR Billing Finance Schedulin g Registrati on

Oncology Associate s IT HR Billing Finance Schedulin g Registrati on

4

Future State with Shared Services The future state should consolidate departments, workflows and technology into a single organization

Potential Future State Hospital

Healthcar Surgical Radiology e Associate Associate AssociateShared sServices s s IT-EHR (1 or more) HR Billing Finance Scheduling Registration

Oncology Associate s

5

Challenges The hospital faces numerous challenges

Limited ability to manage an effective shared services initiative

Ineffective processes and tools to measure performance

Limited ability to structure an effective shared services business case

Limited experience in defining best practice business processes in a to shared services environment

Limited ability to realize executive buy in

Limited experience in managing enterprse transformation

6

Two Approaches to Shared Services—which is best for you? Advisory / Executive Structured Approach

OR

Coach

• Structured • Retainer based Methodology coaching • Program • Meet regularly with Management Project Sponsor • Risk Management • Advise and coach • Project Management • Partner team • Partner Team • Hospital does the • Staff to “do the work PLUS • Less accountable for work” • Accountable for delivery Health Care/Commercial Enterprise Transformation Expertise delivery

7

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

8

Typical Shared Services Timeline 3 months

4-9 months

10-18 months

Align and Engage Leadership Develop Strategy/ Vision Prepare Workforce

Transition / Implement

Communicate Measure Comply

9

Typical Structured Approach Tasks 





Align and Engage Leadership Secure executive sponsorship

Develop Strategy Vision 

Establish scope of services – processes and business units Develop initial business case with both quantified (ROI) and qualitative benefits

Structure shared services model -

-

Prepare Workforce 

Single or multilocation Decide on ownership model and level of control



Design -

Process

-

Organizatio n

-

Technology



Set up infrastructure

 Contracting



MIS reporting / dashboards



Develop HR processes

 Initial



Run shared services as independent business, monitor financial and operational performance



Ongoing controls improvement (including SOX compliance)

Define Service Level Agreements (SLA)



Develop phase planning



Align business units on SLAs



Structure legal entity



Pilot



Baseline

Communicate Measure

Transition and Implement

-

Competency identification

-

Recruitment

-

Training

-

Retention…



Redeployment of people arising from set-up of the SSC



Training to enable new roles

and legal support transition management (managing additional loads in the initial phase)

 Risk

management

10

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

11

Why a Shared Services Center? Shared Services combine the benefits of both centralized and decentralized operations

Shared Decentrali zed • Variable Standards • Different Control Environments • Higher Costs • Duplication of Effort

• Independent of Business

Centraliz • Common ed• Remote Systems & Support

from Business

• Bus • Lean, Flat Maintain Organizatio • Unresponsive Control of n • Consistent Decisions Standards & • No BU Control • Synergies Controls • Responsive of Central to Client Overhead • Economies Needs • Inflexible to • Dissemination of Scale BU Needs of Forward Looking Practices

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

Different Models for Shared Services Eliminate non value-added services and processes

Strategic

Business

Specialised

Transactional

Corporate

Business Unit/Divisions

Centres of Excellence

• Core business activities including • Customer facing/locally specific activities • Local planning & decision support

• Common specialist value added activities that require teams possessing deep knowledge and expertise and that leverage regional or global advantage

Service Centre/Call Centre • Efficient processing of high volume, standard activities that provide scaling opportunities • Consolidation of information and transaction based activities • Require one point of contact

• Strategic activities remain at Corporate Centre including • Overall direction & strategy • Policy & corporate standards • Portfolio management

REGIONAL GLOBAL Physical Models

Centres are organised by function. Centres are geographically dispersed. For each centre, there is a single hub, supported by local spokes.

Functional Function 1

Function 2

Geographic Function 1,2,3 Function 1,2,3

Function 3

Hub & Spoke

Hub

Function 1,2,3

Virtual

Parallel centres exist. Organised by Geography. There is no physical centre, with all activities performed remotely using web enabled Technology.

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

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.

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.)

Key Design Issues & Considerations Fundamental to the business case is the assessment of the various operating model options and implementation approaches EXISTING OPERATING MODEL

Time

Implementation sequencing and planning Key changes Risk assessment

Business Case ‘blue print’ NEW OPERATING MODEL

Site/Location

S S

Integrated Process Model

P P

Organization & People

O O

Regulatory & Legal

R

Technology

T

Service Management

S

Relationship

Cash flow The above is based on Shared Service Methodology

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.

Good Practices in Shared Services Set-up and Management SSC Structuring  We list a few of the design principles and good practices for setting up and managing a financial shared services center

By

- Run shared services like a business, and be customer Country focused

Other 7%

14%

- 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

By Process 79% Source: Published Research commissioned by The Association of Chartered Certified Accountants