Jennifer Colamonico
Welcome to Vital Viewpoints on Healthcare, where we explore the biggest challenges and innovations shaping the future of health and human services. We are thrilled to be joined today by two leaders from HMA's strategy and transformation practice, Rebecca Nielsen and Alex Rich. You may not think about them when you think about strategy consulting, but this is exactly why we wanted to bring you this conversation.
Rebecca comes to me with Leavitt Partners, where she has been leading a strategy practice for years, helping health care organizations expand their impact and strengthen their market position. Drawing upon her past experiences at UnitedHealth Group and Optum, Alex comes to me with the focus group, where he and his team have partnered with dozens of health systems and investors to rethink service delivery, drive operational improvements and support mergers and acquisitions.
Together, along with their colleague David Kulick. They co-lead the HMO Strategy and Transformation practice, bringing these sharp insights into what it takes to navigate the complexity and plan strategically in today's health care landscape. So today's healthcare landscape is a great place to start. When we think about strategy, we know most organizations have a strategic plan. Even in normal times, that's always a challenge.
But right now, you know, I can't imagine, anybody would have had a strategic plan that would have predicted where we are today. So maybe I'll just start. You know, first of all, welcome to the call. I'm really glad to have this conversation. Rebecca, what questions are clients asking you right now? Given kind of the state of the world and potentially their strategic plans, and how are you advising them right now on responding in this moment?
Rebecca Nielsen
Jen. You bet. It's a pleasure to be on. So we support a lot of strategy leaders. And when we think of the strategy function as a healthcare organization, they generate strategic plans and identify growth initiatives and validate them. But one of their core responsibilities is to monitor the information that informs those plans and those hypotheses. And right now, the pace of change around some of those assumptions, particularly related to technology policy and regulation, are moving at a very brisk pace.
And because of that, not every healthcare organization has the competencies to manage all of that dynamism. And they often come to us either validate assumptions that are the basis of those plans, or to outsource entirely certain pieces of that report strategy function.
Jennifer Colamonico
So you're having to stay two steps ahead of clients in this instance to, supplement their ability to track these factors.
Rebecca Nielsen
There are some aspects or domains that as strategy function monitors that they're one always one step ahead of us around. And that tends to be the organizational assets and competencies. Who the partners are, what relationships they can lean into. We hope they also monitor what their customers are wanting. But yes, Jen, we do have a bit of an edge in monitoring those external market factors right now that are so turbulent.
Jennifer Colamonico
I mean, of all of the things that are turbulent, what do you what would you say is sort of the biggest thing that, is perhaps, you know, throwing a wrench or making it really challenging for health systems and insurance plans and so forth that you're working with.
Rebecca Nielsen
I think with the advent of the new administration, we're seeing unprecedented changes on the policy and regulatory front. But I think in close second to that, changes on the technology side and health systems have opportunities for technology enabled care delivery. That is unprecedented. And so they're trying to figure out in the context of policy and regulatory change, how they can seize those opportunities.
Alex Rich
Yeah, I just add to that there's a barrage of news and information coming at all of us, you know, in particular our clients, but also a barrage of new tools and new technology. And so how you sift through that and prioritize and figure out what makes the most sense for their team, for their organization at this time, it's that it's, an increasing challenge for all of us.
Jennifer Colamonico
Yeah. Alex, I was going to ask you. I was going to go to your next anyway, which is great. We think about, you know, blind spots. You know, as you're working with folks implementing strategic plans and different kind of organizational transformation, I'm sure there's always those moments where they say, oh, we didn't anticipate this. So what, you know, what do you most often see as kind of these blind spots that, where often you as a, as a consultant are able to, you know, help them, fill those gaps.
Alex Rich
The role of a of a third party is always to kind of help provide an outside perspective, obviously, but really help prioritize the different initiatives, the different ideas and help crystallize them and make them real. So, you know, more so than ever, there's just a variety of different priorities and options that organizations and leaders have. And what we see increasingly is just kind of decision fatigue, right?
Like that. There's so many decisions to make. How can we, as a thought partner and a trusted advisor, leaders think through that in an objective way. We're seeing that kind of we're bringing that skill to bear more so than ever. And another thing I think is just speed, because there are so many priorities. The more that we can accelerate a strategic initiative or a project that might have been internal before, but it has our external support, we can bring some velocity to that and cut through the noise a bit, right?
Because there are so many new projects and things that are constantly intervening with, with especially a big team. Our support often kind of can help accelerate that.
Jennifer Colamonico
Yeah. It's like everything, everything changes all at once, right? These are all priorities. And you mentioned decision fatigue, right? There's so many big changes I think. Do you find that your sort of traditional frameworks and tools hold up in this, in both with the velocity of change and sort of the number of decisions people are having to make on a regular basis here.
Alex Rich
I would say so our approach, which I really respect and value over the years, has always been to create that capability inside of an organization and not to create reliance on third parties or consultants. As we come in, we kind of act as one team, and usually the methodologies and frameworks that we use historically continue to be relevant, but trying to make sure that the broader teams are, using those tools as the skill sets, those frameworks themselves, and really with the goal of kind of making ourselves redundant.
Right. If we can bring that outside perspective, bring unique data, bring insights up front in early, helping the teams build their own muscle on that, has been successful for us.
Jennifer Colamonico
How do you know when an organization is ready to build that capacity? You know, I'm Rebecca. Maybe I'll ask you when you think about, you know, big strategic changes, how do you assess whether they're ready to build that capacity?
Rebecca Nielsen
So, Jen, I'll put that question a little bit. Healthcare stakeholders need to be making strategic changes. The environment calls for it. The question is whether or not they have that capacity or that capability built, as Alex mentioned, or if they need support in getting on that path. There are a number of functions that that strategy entity needs to discharge, but one of them is socializing the information that they're monitoring.
There's a strategist, Clayton Christiansen, who illuminated for us what feels pretty intuitive. And that is an organization strategy, doesn't sit in a binder. We all we all know that the organization strategy is what that company on a day to day basis does in terms of the business conduct and how it interfaces with patients or members or customers.
Rebecca Nielsen
In order to make that strategy live. It has to be socialized. And one of the efforts we undertake is to ensure that not only that chief Strategy officer understands the current market realities, but that that's socialized with the leadership team so that they can make real time strategy aware decisions and even consider how that direction is communicated to the frontline.
Jennifer Colamonico
What structures or systems or approaches have you seen be most effective in communicating that, socializing those those goals to keep everybody kind of living and breathing in?
Rebecca Nielsen
I look forward to hearing Alex's thought about this, but I think the most important context for that socialization is dialog within the company. So oftentimes when, entity engages a consultant, there's some expectations about that bilateral relationship that they'll ask questions. The consultant will provide answers. But what we try and drive, especially when we set high level strategy, is an expectation that those leaders will sit in a big circle.
And the findings that we uncover will be discussed so that at the end of that process, there is a shared understanding of market realities. And I think sitting in a room and calling into question realities about your customers, realities about your own capability to use reality, about what you're hearing on the news and getting aligned in terms of what is fact based goes a long way to pushing that strategy forward.
Alex Rich
Yeah, just to build on that. I mean, the quicker I think where we we see a lot of success coming into either existing projects or net new transformation initiatives, it's seeing how quickly can we cut through the noise but establish that shared understanding of the baseline. You can't really decide exactly where you're going unless you know for a fact where you are.
And it sounds simple to say, but from a from a quantitative standpoint, understanding what are the right measurements and making sure that the cross-functional teams understand those and understand the why behind why those need to change, as well as the how, and even just something as simple as that level of baseline understanding organization and communication upfront, and a project which our teams excel at will help get everyone on the same page from day one.
And really try to make sure that each team member, each stakeholder in the project, understands their role.
Jennifer Colamonico
So I'm thinking about in this world where everybody has revenue pressure, right? Every part of our health care industry, there's revenue pressure, there's challenges all around. It's sometimes it feels like a luxury to all get in a room and sit and talk, right? Everybody's like, oh, I got to go. B, do I have to do things?
I have to, you know, we can't just sit and talk, but you know, why is that so important? Maybe like dig a little deeper there on that kind of early communication. You know, it's easy to, to kind of hear it, but to live it sometimes is challenging. Right. It gets displaced by day to day. So, why is it so important to make sure that's done right?
Rebecca Nielsen
Sitting in the room can take a number of different forms. You know, it can be a strategy leader in all of their communications, underscoring certain fact based market realities about their customers, about market demand, just ensuring that what information that strategy function calls, it's socialized. And so we know systems to send out kind of the weekly must-read one pager about the external market.
So there are different ways you can kind of convene people in that room. Jen, I won't refute the fact that these systems right now need to think about financial resilience. And this is an area where Alex in particular is an expert. But we see dark storm clouds on the horizon and they're well served to prepare so that going forward, they have the latitude to make smart choices and to take opportunities when they surface.
And that usually means being conservative and careful in the near term so that they have that optionality.
Jennifer Colamonico
That's a good topic. Financial resiliency. Right. It's super relevant to I'm sure, anybody listening, how are you navigating that, Alex.
Alex Rich
In one of our guiding principles, has always been thinking about risk and minimizing disruption. There's a lot of ways to grow a business, and I know a lot of leaders are focused on that. And how do you deliver service and care? In a more efficient manner? It's not always linear in terms of how you build up that capacity, how you build up the right skill sets of resources, teams, and and often when, when times are good and everyone's in Gro mode, you know, the teams and departments that are working on different things can kind of proliferate.
Right. And so it's not a matter of kind of blindly shrinking or trying to, cut equally across the board. Our approach is thinking about the customers, the patients first, thinking about how, in this case, like a system delivers care and kind of working back from what would be the least disruptive. Right. Well, and what would what would have the minimal amount of risk or minimal amount of change from, let's say our vendor spend or, you know, an outsourced department that that is kind of grown over time.
And so just trying to think about where there's minimal reliance, a minimal change, and then anchoring that back to the fact base, which we've referenced several times about the costs and expenses, how that's trended over time, and bringing outside perspectives and benchmarks with regard to where, you know, your spend levels really should be.
Jennifer Colamonico
We're we've talked about kind of the notion of disruption. And, and people ideally prefer to minimize disruption, which seems a little bit challenging. Right now where there seems to be a lot of it. Another big word is transformation, right. We talked I think it's we've mentioned it already, transformation. I feel like we've been transforming health care for a really long time.
So when we think about, these types of transformation initiatives, some have worked in, some have, have been less spectacular. But when you think about all of this planning, what do you see that has been the most important factor in succeeding in a bigger transformation? Kind of looking back, clients you've worked with, you know what what has been kind of the special sauce, if you will, in terms of getting to something that you could really, truly call a transformation.
Alex Rich
I'll take a first stab at that, which is, you know, the the programs that Rebecca and I and our team have been a part of have often been kind of larger scale long term, a 12, 16 month projects, etc. and I think more so than ever, there's an experimentation element that clients are wanting to to try. So this test and learn concept is, is has really never been more relevant given AI and different technology tools.
And it's like no one wants to go through a two year implementation and hope that it works. If there's a way to do smaller experimentations that can help transform a business that can have measurable impact on PNL, that's what we're seeing get more traction these days, and that's what our clients are having more interest in, for obvious reasons.
And so it's kind of chunking up transformation. And in these bite sized projects, where you can prove out the value, see that they work, make sure it doesn't disrupt the organization and the kind of move on to the next gen.
Rebecca Nielsen
I'd add that there are also some lessons that these leaders have learned that they can draw upon. The internet revolution can help us understand the AI revolution, and how to manage through Covid can help them understand how to manage through what might be an era of financial austerity. And so I think drawing those analogs can also help the organization make the changes they need to.
Jennifer Colamonico
Talk more about that. I think, you know, the Covid to austerity throughput because I think sense but talk more about the internet to I like it's I see it but it's interesting and and you know where are you seeing that kind of analogy work most effectively.
Rebecca Nielsen
So I think a lot of our clients see that potential for disruption. But they're taking it step wise to use Alex's great digital info. They're kind of chunking it out. So to take a health system, for example, they're looking at how they can deploy. I use cases and addressing administrative tasks, but they do have their eye on the prize for how it could change service delivery, expecting that there could be a future where there's significant advantage in expand in workforce scalability through the deployment, the careful and prudent deployment of that technology.
Alex Rich
Some of our our clients are very dispersed and disparate in terms of how different AI tools and, AI utilization is, is happening across the organization. And then others have really centralized and even gone so far as to declare like an AI czar, right? So who understands the tech component and understands the business component, and having them try to run herd on all the different, use cases and practical applications that are sometimes intentionally occurring throughout the organization and then sometimes unintentionally or indirectly occurring because there's so many different ways to utilize it.
So I think trying to create some central, vetting mechanism and dispatch for, for what is being utilized, for which existing projects or which new projects are coming into the funnel, IT leaders that have done that for years, but increasingly getting that to be across all of the business teams as well.
Jennifer Colamonico
It's critical to thoughts on that. I mean, obviously it's not just a tech problem. It's not like installing a new, you know, software. I mean, it's not a it's a it's a business problem. Which we've been saying about really digital health for a long time. But I most acutely do you, do you feel that that folks because of that are a little less like the sky is falling, you know, fearful of displacement?
I think a lot about health care like, oh, AI is going to displace doctors or, you know, there's sort of this fear based thing versus, you know, it's a business tool and, you know, we're going to optimize it. Do you think we're more quickly able to move to the optimization phase versus the fear phase?
Rebecca Nielsen
It probably varies by industry, but I think in healthcare, because we're so stressed in terms of work core, I think there is some hope that I can line up just as we really kind of lose our hold on having, accessible health care if we rely only on the traditional workforce.
Jennifer Colamonico
Yeah, that makes sense. Much as telemedicine was sort of quickly scaled when we needed to, perhaps that same kind of imperative right now.
Rebecca Nielsen
And, Jen, that's a good point. There are some intermedia. It's up to full AI deployment, right? Right. There's remote patient monitoring. There are other ways to scale the traditional provider, but taking steps towards a future where everyone can access the care they need.
Jennifer Colamonico
Do you find most clients when you think about the long term planning, or are they building a strategic plan? Assuming that that is going to happen, assuming that there will be that point within a five year horizon, or whatever it might be, that you know, there will be a more full deployment of AI, or is it still kind of on the further out beyond five years plan?
Alex Rich
I would say it varies so much from organization to organization. And even just what's been interesting to observe is just the levels of optimism, pessimism and skepticism. It's all across the board, right. And some organizations that we work with fully embrace this have so many different practical use cases. And, you know, doing so, so much beyond just kind of traditional automation.
It is happening. Everyone knows that. And some organizations are kind of feel like they've leapfrogged others. And so it's what we see. So I think a lot of organizations have been burned. A lot of them have fatigue. There's been paper where there's been a lot of reasons to be skeptical of, which new, shiny Penny can actually add value and not completely change the way that the organization works.
So I'd say, like the level of curiosity and optimism that each leader can impose on getting these tools, and working with the right partners to get them implemented is critical.
Rebecca Nielsen
Jen, I think I'd concur and say that I observed healthcare companies investing so that they have a real option that they can exercise later on as it pertains to AI. So lining up with an AI partner or otherwise kind of laying the fiber or laying the pipe so that they have the option to secure the windfall from being prepared.
Jennifer Colamonico
You raise a good point about sort of who you're advising, because obviously you're advising health systems and insurers, but you're also advising these tech companies, presumably, right, that are looking to be those partners. So, you know, given this, this kind of where it fits in the strategic plan, what do you think is most important for, you know, innovators and those with different tools and so forth to know about this, you know, health care market today that you might not have thought about couple of years ago.
Rebecca Nielsen
I can throw out an idea, but I'm really just going to echo what Alex said in a moment ago. I think there is a lot of point solution fatigue, and I'm going to use that term kind of generally, there are so many knocks on the door of the health system leader. They cannot entertain and do not want to entertain all of those inquiries.
And so we see not only among health system leaders, but we see this in other subsectors of health care. They want kind of want an option for a one stop shop. And so that's why a lot of our large regional health systems are lining up with a mega. I provider rather than point solution vendors, in part because, as Alex alluded to earlier, they've got day jobs.
Alex Rich
Yeah. Just add on that. I mean it's it's clearly kind of an arms race across the board for different companies, vendors, etc. who are using those two letters and sometimes great uses of the, of letters, AI and other times just kind of to have it as a, as a buzzword or a moniker. But I think more so than ever for a digital first healthcare company, health care vendor, the foothold in which they prove out their value is more critical than ever, as opposed to the shotgun approach.
And I'll take any of the first five customers I can get. I think the proving out the value with a known brand and a known system, with the right buyer and the right leadership, support, is more important than ever, given that there's just this proliferation of different vendors and companies who are using, you know, the buzzword of the day.
Jennifer Colamonico
Let me, sort of take that to a different place because, you know, obviously when we think about innovation, it's easy to think about technology and shiny objects and all of that. But, you know, then there are things like changes to service delivery, changes to payment, how we're building and systems and partnerships. When you think about the most successful organizations or maybe those the sort of the most promise in the future, you know, how do you rate each of those levers, right?
I don't if technology was going to magically fix health care, I would have done it already. Right? So it's a combination. I know it's nuanced, but, you know, what are your thoughts about how these different levers kind of come into play to really get organizations to a more stable and give them more opportunity in the market?
Alex Rich
Ultimately, healthcare is a people business as much as, technology affects it. And it's not just technology is changing it. So the root driver of transformation, new initiatives, new tools is it's still back to the people and having the right incentives aligned. And from what we've seen, the right individual and departmental incentives are critical to establish a foundation that can drive the ship in the right direction.
I think that is, a lot of times where projects early on start not only making sure teams are have looking at the right baseline and on the right, you know, same page to start, but more so that they have the right incentives in place to, focus their efforts.
Jennifer Colamonico
Rebecca, that's you know, we were loving partners a long time. We've been talking about that for years. Do you agree that it comes down to incentives?
Rebecca Nielsen
I, I definitely agree that of the three items you mentioned, I kind of ducked service delivery at the top in terms of being the most important locus for transformation. Since I think when delivery organizations demonstrate that they've optimized service delivery, payment might follow or can follow and then tech supports in terms of incentives, it reminds me of the beginning of our conversation, where it's optimal to have organizational alignment around where you're headed.
So another word for incentive might be information like you want everyone in the organization to have the same set of information so that you're headed in the same direction. And that's an optimistic view on things. But I concur with that.
Jennifer Colamonico
So what's true for leadership of health care organizations is also true for health care service delivery. If everybody's operating with the same information shared as close to real time as possible, better decisions can be made, right? So, building that alignment, I think what you're saying is in order to have that happen, even from a strategic planning perspective, you got to build that in at the beginning, because otherwise it doesn't just happen on its own.
So in these conversations, we typically ask a question that's a magic wand, right? Where if you had a magic wand, how would you wield it to sort of improve the the dynamics within which you are operating? Maybe for you guys, it's a it's a golden nugget, but sort of what's the it's the magic that happens in a successful strategy in really kind of deploying and realizing, the strategy as it's intended.
What do you think is the most important thing, that sort of golden nugget that organizations could or should realize in order to be successful?
Alex Rich
I would say one of my favorite quotes selection, not compression leaders and companies that we work with are always trying to compress everything into a project, do everything, improve every metric, you know, make every team happy and and have this giant bundle that ends up being almost not actionable. Right? So so selecting and being very precise with 1 or 2 metrics, one mission statement, one goal with obviously detailed actions below that I think is a it's kind of my magic wand to answer for how we think about projects and almost every kind of business situation that we're in.
It's just let's iterate and review as much as we can. What is the main goal and how can we find the most efficient path to that journey?
Rebecca Nielsen
If you'll let me have two magic golden nuggets...
Jennifer Colamonico
Usually I don't, but I'll let you.
Rebecca Nielsen
So the first is that strategy teams and functions monitor the information they need in order to make strategically viable decisions. And in a nutshell, that's understanding their own assets and competency. What demanded in the market that actions and activity that they're competitors who they've got lined up with partners and what relationships they can draw on. And then that external context, which we underscored is changing so rapidly, so that's my first that they keep a focus on that.
And if they can't that they outsourced what they need to ensure that they're making critically viable decisions. The second nugget would be to democratize that information once they have it in hand, so that the leaders in that organization, even the lying members in that organization, it's appropriate. Can act off of good information.
Jennifer Colamonico
I can see that, you know, otherwise people ask why, right? Why are we doing this? But if they have the information, they can understand why these decisions have been made and why this is going to get us there. So I appreciate both of your time today. And, and, I appreciate the work that you're doing. And what is a pretty turbulent environment. So thank you for sharing these insights with us today.
This episode of Vital Viewpoints on Healthcare is sponsored by HMA Information Services. HMAIS is a subscription based service that provides state level data on publicly sponsored programs like Medicaid, from the latest managed care enrollment, market share, and financial performance data to up to date RFP calendars and state by state overviews, HMAIS has all the information you'll need to power your initiatives to success.
This podcast was produced by myself, Jennifer Colamonico along with Tiffany McKenzie in collaboration with our guests. The content is the property of Health Management Associates.
