healthcare sharred services
DESCRIPTION
A look at how shared services can improve the ROI of EHRTRANSCRIPT
Shared Services for Healthcare:Boosting the ROI of EHR
Presented by: Pale Rhino Consulting
1
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
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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
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Current State
Current StateHospital
IT-EHRHRBillingFinanceSchedulingRegistration
Healthcare Associates
ITHRBillingFinanceSchedulingRegistration
Surgical Associates
IT-EHRHRBillingFinanceSchedulingRegistration
RadiologyAssociates
IT-EHRHRBillingFinanceSchedulingRegistration
OncologyAssociates
ITHRBillingFinanceSchedulingRegistration
The Hospital has duplicated departments, processes and technologyoperating in each of the major organizations. IT applications vary.
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Future State with Shared Services
Potential Future StateHospital Healthcare
AssociatesSurgical
AssociatesRadiologyAssociates
OncologyAssociates
Shared ServicesIT-EHR (1 or more)
HRBilling
FinanceSchedulingRegistration
The future state should consolidate departments, workflowsand technology into a single organization
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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
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Two Approaches to Shared Services—which is best for you?
• Structured Methodology• Program Management• Risk Management• Project Management• Partner Team• Staff to “do the work”• Accountable for delivery
Structured Approach OR
• Retainer based coaching• Meet regularly with
Project Sponsor • Advise and coach • Partner team• Hospital does the work• Less accountable for
delivery
Advisory / Executive Coach
Health Care/Commercial Enterprise Transformation Expertise
PLUS
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Key Phases of Structured ApproachA structured approach with five key phases
places great emphasis on Workflow & Change Management
Align & EngageLeadership
Develop the Strategy& Vision
Transition theOrganization & Implement
Prepare & Equip the Workforce
Communicate withStakeholders &
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
Assess organizational change impact driven by the solution and implement change plans
Move the workforce from current assignments and competencies to new assignments/competencies
Provide clear, timely messages to foster understanding, involvement and feedback; monitor & measure
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Typical Shared Services Timeline
Develop Strategy/
Vision
Transition / Implement
Prepare Workforce
3 months 4-9 months 10-18 months
Communicate Measure Comply
Align and EngageLeadership
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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)
Secure executive sponsorship
Establish scope of services – processes and business units
Develop initial business case with both quantified (ROI) and qualitative benefits
Align and EngageLeadership
Develop Strategy Vision Prepare Workforce Transition and Implement Communicate
Measure
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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
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Why a Shared Services Center?Shared Services combine the benefits of both centralized and decentralized operations
• No BU Control of Central Overhead
• Inflexible to BU Needs
• Remote from Business
• Unresponsive
• Higher Costs
• Different Control Environments
• Duplication of Effort
• Variable Standards
Shared• Independent of
Business
• Synergies
• Lean, Flat Organization
• Dissemination of Forward Looking Practices
• Responsive to Client Needs
Decentralized Centralized
• Bus Maintain Control of Decisions • Consistent
Standards & Controls
• Economies of Scale
• Common Systems & Support
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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
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REGIONALGLOBAL
Specialised TransactionalStrategic
Corporate Centres of Excellence Service Centre/Call Centre
• 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
Business
Eliminate non value-added services and processes
Physical Models
Functional
Function 1
Function 3
Function 2
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.
Different Models for Shared Services
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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
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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.
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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.)
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Key Design Issues & ConsiderationsFundamental to the business case is the assessment of the various operating model options and
implementation approaches
NEW OPERATINGMODEL
S
P
O
R
T
S
EXISTINGOPERATING MODEL
Implementationsequencing andplanning
Key changes
Risk assessment
Business Case ‘blue print’
Time
Cash flow
Site/Location
Integrated ProcessModel
Organization &People
Regulatory & Legal
Technology
Service Management Relationship
S
P
O
The above is based on Shared Service Methodology
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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.
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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
Source: Published Research commissioned by The Association of Chartered Certified Accountants
SSC Structuring
By Country
14%
By Process
79%
Other7%
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