“Resistance is a predictable, natural reaction against the process of being helped and against the process of having to face up to difficult organizational problems.” – Peter Block

During client engagement or interacting in the business world, you will one day be faced with resistance from the opposite end. Understanding this resistance will be key to your success when helping to solve a problem.  Resistance comes in multiple forms that may sometimes be easy to detect while other times it may be very difficult to identify.

For example, if the client keeps reminding you that this is the “real world and we have real world problems”, then you may be up against an emotional issue that may lead you to go forward with a more practical approach.

Skills for dealing with resistance:

• Be able to identify when resistance is taking place
• View resistance as a natural process and a sign that you are on target
• Support the client in expressing the resistance directly
• Not take the expression of the resistance personally or as an attack on your or your competence

What types of resistance have you dealt with and what skills did you use to deal with it?

Information System costs have increased significantly as the industry has expanded its primary focus beyond the acute aspects of healthcare into the physician, outpatient and risk arenas.  Costs have also been significantly impacted by the number of applications. The computer has become an integral part of business and clinical processes rather than primarily financial applications limited to a small number of users.

Although the size of an organization can result in some economies of scale the basic number of applications does not increase proportionately with organizational size. In addition, the more integrated solutions can be more cost effective than a “best of breed” approach.

The biggest factor impacting IT costs is the number of “bolt-ons” and the degree of customization made to the solutions provided by the vendors. Organizations need to periodically assess the functionality of their applications to determine if the functionality of a core application has matured to a point where the bolt-ons may no longer be needed and determine when a core application is functionally good enough. Avoiding idealism and thoughts of “the system needs to do it the way we have always done it” are key to optimizing the cost effectiveness of IT solutions. Workflow should be reviewed in the light of the approach designed into the application.

To sort these questions and arrive at a cost effective IT solution requires a mature IT governance and oversight processes. The governance process should reflect the overall strategy and culture of the health system, provide value, manage risk and result in measurable performance. Guiding this process should be a senior IT governance committee that has clear oversight of the capital and operating budget with authority to allocate funds to the various projects and initiatives within parameters set by the board and/or executive team. Major projects over a certain dollar amount should be specifically authorized by the board and/or the senior executive team and reported back on a regular basis to those forums. This oversight committee should be chaired by a key executive such as the COO and have a membership representing the customer base. Finally, process should also incorporate PMO best practices and reporting.

This all comes together via an IT strategy that has a 5-year, 3-year and 12-18 month perspective. The alignment with the organization’s strategic plan should be robust enough to be directionally correct so as to not have significant changes in IT priorities in a 12-18 month period.

An in depth understanding of the IT costs, optimizing each application, focusing on integrated solutions and avoiding idealism are key factors in optimizing a cost effective IT solution. This requires a mature IT governance process led by a dedicated leader with membership representing the customers of information systems to guide the Chief Information Officer and his/her team.

Jim Gravell, Director & Sr. CFO Consultant

The other day I was speaking with one of our recruiters. She is a former chef who would often cook for private house parties. She told me she had to be diligently aware and highly attentive to her manner and behavior when entering a client’s house, while cooking in someone else’s kitchen and serving in someone else’s home. For example, “should I take my shoes off at the front door?” This conversation made me realize this was a great analogy for our on-site consulting assignments.  So what are some good practical tips for positively and constructively stepping into our client’s environment at the start of a new engagement? Here are a few to get us started.

• Study your on-boarding document
• Have a plan, do your homework and research the place you are visiting
• Show the respect of a visitor
• Learn and play by the house rules (shoes off?)
• Avoid the hero persona
• Walk softly until knowing the environment
• Listen more than talking (As my Father used to say, “We have two ears and one mouth so better to listen twice as much as we speak.”)

What tips do you have from your own experience?

In this Business Profile, Doug Fenstermaker, managing partner and executive vice president of health care, Warbird Consulting Partners, shares strategies to leverage outsourced CFO expertise to lead special projects or fill interim roles while recruiting is underway. Read the article in its entirety.

Currently in healthcare, everything that you read and hear is focused on providing higher value, being paid for outcomes, and aligning incentives across away healthcare. The question is no longer, “are we going to move away from being paid for more activity” but “how far and how fast will we move?” As we manage this transition to multiple forms of payments and incentives it is important for us to select strategies that will provide value in multiple environments.  These critical attributes could include strategies that improve patient outcomes, create operational improvements across acute continuum of care, decrease total cost of care, and increase cash flows.  However, it is rare to see current strategies that actually accomplish all of these outcomes.

Expansion into ambulatory pharmacy management and specialty medication management is an example of a service strategy that meets all of the criteria above. Health systems have the opportunity to implement “point of care” pharmacy management that integrates pharmacy skills into the physician clinic setting to provide better specialty medication management for complex patients. These specialty medications cost $10,000 to $100,000+ annually and are growing at a fast rate. According to Drug Trend Report, these prescriptions represent less than 1% of prescriptions written, represent 25% of total prescription spending, and are growing at 17% to 19% annually. For example, in Minneapolis, and Detroit, where Fairview Pharmacy Services partners with the University Medical Center, Fairview and Henry Ford Health System, have demonstrated the ability to manage these medications quicker in alignment with physician care in an ambulatory setting. The results have shown improvement in patient outcomes, reduced total cost of care, and increased profits.

As the transition to more ambulatory care happens there will be less fees for service payments, and re will be a need for higher value CFOs.  These CFOs will need to look at more services outside of the old normal to adjust to the changing industry.

What are your thoughts on current strategies on multiple forms of payments and incentives?

Jim Fox, Director & Sr. CFO Consultant