3. Health care providers increasing. States are
across the United States mandating closures and
face harsh economic consolidations. Yet the
realities. State and demand for patient
federal reimbursement services of improved
and special funding quality and at lower
levels are being cut cost continues to grow.
back. Competition from
traditional and nontra-
ditional providers is
3
4. Accenture’s approach to provider
restructuring is grounded in a
fundamental philosophy—when
the condition is critical, the most
powerful medicine available is the
best prescription.
To overcome such complex challenges
and achieve high performance, providers
need to consider new strategies and
innovative approaches. Every aspect
of provider operations—including
strategy, finance, organizational struc-
ture and services—can benefit from a
thorough analysis to determine optimal
approaches for moving forward.
With market conditions so hostile
that some providers are concerned
about their very survival, it may not
seem appropriate to focus on high
performance. Yet Accenture’s approach
to provider restructuring is grounded
in a fundamental philosophy—when
the condition is critical, the most
powerful medicine available is the
best prescription.
4
5. Providers’ distinctive optimization, operational focus prevailing conditions, they cannot grasp
capabilities in achieving and market strategies. When these current and future opportunities. Their
high performance factors work together, they drive actions are limited as they are uncer-
For Accenture, the term high perfor- sustainable growth. tain where to refocus, how to change
mance has a precise meaning: the or how to manage the potential upheav-
enduring or sustained out-performance The research further shows that hospi- als of any significant action. It’s a set
of an organization relative to ``its tals and hospital systems on the road of circumstances that all too easily can
peers, across business and economic to achieving high performance have lead to business failure.
cycles, often across generations of a strategic vision, a willingness to
leadership, and as measured by widely embrace change and outstanding So in any hospital-in-crisis situation,
accepted performance metrics. It’s a execution skills. there is a need to consider fundamen-
definition demonstrated in reality, and tal strategic options, including a list
tested and validated through ongoing Accenture professionals help providers of possible restructuring approaches:
Accenture High Performance Business move toward these positive outcomes. consolidation, affiliation, merger, acqui-
research. This insight is infused into sition, alliance and remissioning. This
all of Accenture’s work with clients The pursuit of high last possibility refers to a situation where
across multiple industries. performance the current operational purpose of a
The volatile health care delivery and hospital unit or facility is no longer
High Performance Business research funding environment means that pro- sustainable, but an alternative presents
into the health care provider sector in viders can easily find themselves with a viable future.
the United States reveals two funda- the need to restructure to address new
mentals for success: improved patient market, economic or political conditions.
outcomes and business excellence. When providers are out of sync with
Improved patient outcomes are achieved
through enhanced clinical quality and
customer satisfaction. Improved busi-
ness excellence comes from financial
5
6. Whatever restructuring choice or 3. Executing the restructuring plan
choices prove to be appropriate, they Finally, Accenture professionals provide
will essentially be a means to the same comprehensive support throughout the
end—adding value to the enterprise and restructuring implementation phase:
the stakeholders it serves. assessing readiness and establishing
timelines; preparing communication
Accenture helps US providers analyze plans; providing Project Management
and make restructuring decisions, and Office support; and establishing track-
then works with them to help them ing and measurement processes.
achieve interim and long-term objec-
tives by transforming the systems and Provider restructuring creates a transfor-
processes that underlie every facet of mational route away from inappropriate
their performance. strategies and blocked growth paths.
Teaming with a provider, Accenture
A typical provider restructuring project addresses the operation holistically to
consists of three key phases: create an integrated series of solutions
1. Establishing the restructuring to help them move toward high
framework performance. This means using the
2. Conducting the restructuring and three-phase restructuring sequence
redesign planning to address strategies, structures and
3. Executing the restructuring plan other factors that contribute to per-
formance in each domain and to the
1. Establishing the restructuring overall performance of the enterprise.
framework
During this phase, Accenture works The three phases of
with clients to identify restructuring restructuring in action
options and criteria for prioritization ”Unbundling“ a flagship hospital
via a thorough understanding of inter- to enable it to succeed
nal and external factors. The internal Due to a lack of clear corporate strate-
analysis establishes the hospital’s finan- gic direction and funding, the flagship
cial, strategic and operating goals. The hospital in a multi-hospital system saw
external analysis evaluates current and its position diminishing, because it was
future political, economic and market funding losses elsewhere.
environments. From here, the team sets
a guiding strategy. Throughout this Accenture professionals evaluated the
phase, Accenture professionals facilitate impact of alternative operating struc-
decision making and communication. tures on the flagship hospital’s market,
operating and financial position; eval-
2. Conducting the restructuring uated various independent management
and redesign planning and governance models; and modeled
With a guiding strategy in place, the hospital’s financial performance
Accenture provides tools to redesign as a stand-alone provider, including
and refine the financial, strategic and determination of its financial rating.
operational models associated with the
recommended restructuring option.
Figure 1 shows areas that are reviewed
and assessed to create an appropriate
operating model. This phase includes
the identification of possible risks or
barriers to progress, and relevant
solutions. The Accenture team helps
facilitate the required action plan and
helps implement team development.
6
7. Accenture works with clients to
identify restructuring options and
criteria for prioritization via a
thorough understanding of
internal and external factors.
Figure 1. Target operating model
Organization/
Staffing
Processes/ Customers/
Applications Markets
Target
Operating
Model
Facilities/ Products/
Locations Channels
Technology Financials
7
8. Accenture helped guide the health
system’s management away from
potentially costly deals.
Market, operating and financial anal- In the process of reviewing potential market with a key center of excellence
yses indicated that the flagship hospital opportunities, Accenture was asked to in cardiac care. The other served a grow-
could succeed as an independent pro- support the evaluation of a number of ing suburban/rural, mixed economic
vider. So the Accenture team designed proposed deals. Accenture carried out market. Neither was meeting current
a platform for its restructuring on that the financial modeling that included a or future strategic or financial goals.
basis. Accenture then developed the cost-to-close analysis; an alternative Hospital officials wondered if a new
hospital’s baseline strategic plan as an use analysis with a focus on remission- replacement site between the two exist-
independent provider, prepared work ing to non-acute services; and a patient ing sites would support more modern
plans for the restructuring and conver- migration analysis that determined the facilities and resources while continu-
sion, supported external relationship contribution margin of potential volume ing to meet combined service needs.
development, oversaw the transition of shifts from one facility to another.
clinical and nonclinical operations and This initiative helped guide the health To help them determine the right strat-
ran the Project Management Office. system’s management away from egy, Accenture conducted internal and
potentially costly deals. external market analysis, defined the
Evaluating deal options in a nature and characteristics of an opti-
state-wide health care system Stay with two old facilities or build mum future operating model and
A large integrated health care system one new one? prepared market demand models and
recognized that opportunities existed It’s a familiar issue: long-established financial forecasts to test feasibility.
to support and strengthen health care hospitals in antiquated facilities.
in its state by reviewing the strategies Accenture professionals worked with A service-line model, site selection
for acute care entities in its system. two hospitals in this situation. One model, and financial feasibility
hospital served an urban, low-income model helped hospital officials
decide on a future delivery model
based on full information.
8
9. Figure 2. Overview of a typical provider restructuring program, including typical timelines
Estimated 3-6 Weeks 2-6 Months 6-18 Months
Timing:
I. Establish Restructuring II. Conduct Restructuring III. Execute Restructuring Plan
Framework and Redesign Planning
Activities 1. Set Directional Strategy 1. Develop and Implement 11. Prepare Team Charters and 1. Commence Execution Phase
2. Conduct Portfolio Analysis Change of Control Priorities Key Decisions 2. Define and Implement
3. Undertake Market Projections 2. Identify Early Integration 12. Analyze and Define Target Readiness Assessment Program
4. Establish Financial Goals and Business Risks Operating Model 3. Deploy Employee Program
5. Define Top-Level NewCo 3. Undertake Cost-to-Close 13. Assess Gaps, Impacts and 4. Deploy Customer Program
Leadership Analysis Interdependencies 5. Build Integrated Environment
6. Establish Operating 4. Conduct Alternative Uses 14. Develop Team-Level 6. Prepare Integration Events
Benchmarking Analysis Integration Plans Program and Logistics
7. Prepare Financial Projections 5. Conduct Prioritization 15. Plan and Manage Customer 7. Test Integration
8. Plan Decision Criteria Analysis/Modeling Experience 8. Conduct Dress Rehearsals
Development 6. Review Financial Scenarios 16. Plan and Manage Employee 9. Execute Integration Events
9. Establish and Launch 7. Conduct Capacity Planning Experience 10. Conduct Synergy Tracking
Communications 8. Plan and Implement Synergy 17. Develop High-Level 11. Transition to Business-as-
10. Mobilize and Launch Management Organization Usual
Program Management 9. Define and Implement Risk 18. Plan and Manage Culture
11. Develop Redesign Guiding Management Transition
Principles 10. Create Integration Teams 19. Update Redesign Integration
12. Prepare High-Level Redesign Roadmap
Integration Roadmap
Program Management Office (PMO)
Value Creation and Integration Enablement Teams
9
10. Accenture worked with the health
system’s management to develop
and present a thorough review of
the situation, looking at numerous
options to preserve health care in
the community.
Enabling objective decisions contribution margin analysis; a five- This end-to-end approach ensures
around facility losses year P&L model for all entities including continuity throughout all stages of
A regional health center, part of a a five-year cash flow analysis; and a the process, from diagnosis through to
$2+ billion health system, had been cost-to-sell analysis. stakeholder management. Accenture
sustaining losses of more than $10 professionals, onshore or offshore within
million a year for the past 10 years. As a result of the findings, the health Accenture’s Global Delivery Network,
Although it was a financial drain on system and the regional health center are cocreators who team with client
the system, numerous stakeholders were able to make an objective decision personnel, listening as well as talking,
felt that the health system’s mission to close the facility. Accenture contin- absorbing as well as imparting knowl-
was to serve its community, therefore ues to work with the health system edge. The working relationships they
the system should do everything pos- leadership as they move forward. build and the trust they earn produces
sible, including supplementing a losing a solid, provider-wide alignment of
entity, to preserve that mission. A collaborative approach strategic purpose and shared agreement
All of Accenture’s provider restruc- around tactics and objectives.
Accenture worked with the health turing activities are supported by deep
system’s management to develop and industry knowledge about the US health A pragmatic approach
present a thorough review of the situ- care environment and health care pro- Because the political, economic and
ation, looking at numerous options to viders’ issues. As a restructuring project marketplace threats confronting health
preserve health care in the community. moves from diagnosis, conceptual care providers are often dangerous and
The options reviewed included a finan- planning and review of options, to urgent, Accenture has developed a num-
cial and environmental overview of the implementation of redesigned organi- ber of models to fast-track the analyses
last 10 years of operational performance; zational structures and capabilities, required to get to accurate diagnoses
a cost-to-close analysis; an alternative Accenture professionals are able to and plans.
use analysis; a patient migration and provide broad experience and relevant
knowledge while working as committed
members of a collaborative team.
10
11. These models are based on extensive
experience working with hospitals and
other health care organizations to
improve profitability and market posi-
tion by planning and implementing
new organizational structures. The
expertise includes first-hand experience
of the end-to-end hospital remission-
ing process, operational focus on the
critical outcomes that help achieve high
performance, and the proven ability to
link restructuring with economic and
market value.
Accenture’s provider restructuring is a
proven approach for providers to con-
front and overcome many of today’s
tough challenges. In addition, it is a
highly focused approach to help pro-
viders identify and implement future
options that can create real and last-
ing value. The result is that providers
do more than just survive—they move
toward high performance.
11
