Many hospitals and health systems look to consultants as number-crunchers who come up with creative cuts to help their bottom lines, but at ECG Management Consultants, Steve Messinger wants partnerships that transcend simple transactions.
Before joining ECG in 2003, Mr. Messinger served as a principal at MedTactics and McManis Associates. He earned a bachelor's degree from Ithaca, N.Y.-based Cornell University and a master's in health administration from George Washington (D.C.) University.
Mr. Messinger took the time to speak with Becker's Hospital Review about how ECG approaches the unique challenges of healthcare consulting.
Editor's note: Responses have been edited lightly for length and clarity
Question: What is the most common issue your clients seek help with today?
Steve Messinger: The most common issue currently is the performance of hospitals and health systems. Operating margins are at historic lows, and provider organizations are searching for ways to expand margin and improve performance. While labor costs are a big part of the issue, lopping off labor costs typically isn't a sustainable answer.
We are busy with a range of things that include operational performance improvement, health plan negotiations to boost revenue, and portfolio reviews of key clinical services to examine which services can drive more margin and are appropriate for further investment. We are also very busy on the ambulatory and medical group side. Many systems are looking to expand investments in ASCs and other ambulatory assets and improve performance of employed medical groups, which are areas of huge and, in many cases, uncontrolled cost growth for hospitals.
Additionally, we are working with clients who are finally considering service line consolidations and decisions about nonperforming clinical programs. The days where health systems can be all things to everyone in their communities are being challenged.
Q: How have client needs evolved since when you first took the reigns at ECG?
SM: Client needs have evolved significantly since I joined the firm in 2003 — [we are seeing need for] much more strategy and operational consulting regarding ambulatory services. Most hospitals did not employ physicians or have ambulatory operations in 2003, and this has been a sea change in how we think about what a hospital is and how these investments affects care delivered by these massively complex organizations.
We are also seeing slow evolution in the shift to value, which has been discussed by health economists since I was in grad school in the 1980s. The shift to value is perhaps one of the most vexing issues confronting leaders today. The early adopters of population health have generally not fared well, and the pace of change is much slower than health system leaders originally thought. Further, health system leaders' capabilities are changing with the opportunity to develop digital strategies and use more analytics to drive or inform decisions. The type of work we are doing today and the opportunities our more junior staff have are so much more complex and interesting than the work I was doing at their career stage.
Q: What is the greatest challenge that comes with growing and scaling up an organization?
SM: ECG Management Consultants is a people-intensive business, and we are only as good as our consultants and corporate personnel. We spend an enormous amount of time training and helping our folks develop the consulting skills necessary to meet the ever-growing, complex challenges of our client partners. Recruiting and retaining highly talented professionals is an evolving challenge when paired with our desire to focus on maintaining our culture and the expectation of excellence in our services. Talented people are in increasing demand in all sectors of our field, including a fast-developing tech sector, so finding and retaining talent is changing how professional services firms operate.
Q: What is the biggest misconception healthcare leaders have about consultants?
SM: One of the things we really try to talk to our clients about is that the product of our work has to be a solution they own. They have to live with it and implement it, and generate buy-in with medical staff and their associates. Even though we try to stand in the shoes of our clients, the best outcome is when our clients partner with us and take ownership of the work so it's their product.
There is a misconception that consultants have all the answers, but in many cases we are on the same journey of exploration as our clients. We have seen a lot but each organization and market is unique and we must adapt our learning to each situation.
ECG is a results-based consulting firm, and we do our best when we can partner with organizations as opposed to being thought of as a vendor. Having a partnership with our clients enables us to better drive results and add more value. Like most talented professionals, our staff want to create change and deliver value for clients. When we partner with clients, our teams want our clients to succeed. Our people get incredibly invested in the client's success and the improvement of care in these communities; this differentiates us from many other firms. Over the course of their careers, our staff want to have a positive impact for those we serve and improve healthcare in communities across the U.S.
Q: What is enterprise strategy and how can it help healthcare organizations?
SM: Enterprise strategy is the development of the overarching health system strategy that informs organizational direction, or what direction the health system will take to succeed in its mission. That strategy must define the big issues and their solutions and bring stakeholders together so executive management has the support to make strategic changes. It will define key resource allocation; organizational design elements of health systems; and revenue, capital spending and cost management.
As an example, we have many clients currently examining their organizing philosophy and trying to determine whether they should migrate to a service line organizational structure and philosophy or remain as a traditional hospital departmental model. Will they consolidate or end various service lines? Will they close specific hospital operations to support clinical activities that are more future-focused? Enterprise strategy is the organizational prioritization of issues to be solved and the solutions available to the organization. This is incredibly complex, especially for multihospital systems that are also asking if they will rationalize care across their provider systems and acutally behave like a system instead of a collection of silos.