Healthcare Sharred Services

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Information about Healthcare Sharred Services
Health & Medicine

Published on July 17, 2009

Author: paulroemer

Source: slideshare.net

Description

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

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

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

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

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

Current State 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 The Hospital has duplicated departments, processes and technology operating in each of the major organizations. IT applications vary.

Future State with Shared Services Potential Future State Hospital Healthcare Associates Surgical Associates Radiology Associates Oncology Associates Shared Services IT-EHR (1 or more) HR Billing Finance Scheduling Registration The future state should consolidate departments, workflows and technology into a single organization

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

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

Structured Methodology

Program Management

Risk Management

Project Management

Partner Team

Staff to “do the work”

Accountable for delivery

Retainer based coaching

Meet regularly with Project Sponsor

Advise and coach

Partner team

Hospital does the work

Less accountable for delivery

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 Transition the Organization & Implement Prepare & Equip the Workforce 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 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

Typical Shared Services Timeline Develop Strategy/ Vision Transition / Implement Prepare Workforce 3 months 4-9 months 10-18 months Communicate Measure Comply Align and Engage Leadership

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 Engage Leadership Develop Strategy Vision Prepare Workforce Transition and Implement Communicate Measure

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

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

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

No BU Control of Central Overhead

Inflexible to BU Needs

Remote from Business

Unresponsive

Higher Costs

Different Control Environments

Duplication of Effort

Variable Standards

Independent of Business

Synergies

Lean, Flat Organization

Dissemination of Forward Looking Practices

Responsive to Client Needs

Bus Maintain Control of Decisions

Consistent Standards & Controls

Economies of Scale

Common Systems & Support

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

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 REGIONAL GLOBAL Specialised Transactional Strategic 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.

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

Core business activities including

Customer facing/locally specific activities

Local planning & decision support

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

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.

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.)

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 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 S ite/Location Integrated P rocess Model O rganization & People R egulatory & Legal T echnology S ervice Management Relationship S P O The above is based on Shared Service Methodology

Fundamental to the business case is the assessment of the various operating model options and implementation approaches

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.

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 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% Other 7%

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

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