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

2
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

3
 Current State
The Hospital has duplicated departments, processes and technology
operating in each of the major organizations. IT applications vary.

Current State
Hospital Healthcar Surgical Radiology Oncology
e Associate Associate Associate
IT-EHR Associate s s s
HR s IT-EHR IT-EHR IT
Billing IT HR HR HR
Finance HR Billing Billing Billing
Schedulin Billing Finance Finance Finance
g Finance Schedulin Schedulin Schedulin
Registrati Schedulin g g g
on g Registrati Registrati Registrati
Registrati on on on
on 4
Future State with Shared
Services
The future state should consolidate departments, workflows
and technology into a single organization

Potential Future State

Hospital Healthcar Surgical Radiology Oncology
e Associate Associate Associate
AssociateShared sServices s s
s IT-EHR (1 or more)
HR
Billing
Finance
Scheduling
Registration

5
Challenges
The hospital faces numerous challenges

Limited ability to manage an Ineffective processes and

effective shared services tools to measure
initiative performance

Limited experience in
Limited ability to structure defining best practice
an effective shared services business processes in a to
business case shared services environment

Limited experience in
Limited ability to realize managing enterprse
executive buy in transformation

6
Two Approaches to Shared
Services—which is best for
you? Advisory / Executive
Structured Approach OR
Coach

• Structured • Retainer based

Methodology coaching
• Program • Meet regularly with
Management Project Sponsor
• Risk Management • Advise and coach
• Project Management • Partner team
• Partner Team • Hospital does the
• Staff to “do the work
work” PLUS • Less accountable for
• Accountable for delivery
Health Care/Commercial Enterprise Transformation Expertise
delivery

7
Key Phases of Structured
Approach
A structured approach with five key phases
places great emphasis on Workflow & Change Management

Align & Engage Build a coalition of leaders with a common

Leadership vision and understanding that leads to united
action
Develop the Strategy Define organizational vision, change
& Vision strategies & plans required to enable the
intended business results
Prepare & Equip Move the workforce from current assignments
the Workforce and competencies to new
assignments/competencies
Transition the Assess organizational change impact driven
Organization & by the solution and implement change plans
Implement
Communicate with Provide clear, timely messages to foster
Stakeholders & understanding, involvement and feedback;
Measure and Monitor monitor & measure

8
Typical Shared Services
Timeline
3 months 4-9 months 10-18 months

Align and Engage

Leadership

Develop
Strategy/
Vision

Prepare Workforce

Transition / Implement

Communicate Measure Comply

9
 Typical Structured Approach
Tasks
Align and
Develop Prepare Communicate
Engage Transition and Implement
Strategy Vision Workforce Measure
Leadership
 Secure  Structure  Design  Set up  Contractingand  MIS reporting /
executive shared infrastructure legal support dashboards
- Process
sponsorship services model
 Develop HR  Initial
transition  Run shared
Single or
- Organizatio
 Establish - processes management services as
multi- n
scope of (managing independent
location - Competency
services – - Technology additional loads business,
identification
processes and - Decide on in the initial monitor financial
business units ownership
 Define Service phase) and operational
- Recruitment
model and Level performance
 Develop initial level of Agreements - Training  Risk
business case control (SLA) management  Ongoing controls
with both
- Retention… improvement
quantified  Develop phase  Align business (including SOX
 Redeployment of
(ROI) and planning units on SLAs compliance)
people arising
qualitative  Pilot from set-up of
 Structure legal
benefits the SSC
entity  Baseline
 Training to
enable new roles 10
Key Components of
Advisory, Coach Approach

Partner Team of
Meet Regularly to
Health Care,
Understand
Shared Services
Challenges and
and Commercial
Coach the Executive
Transformation
Sponsor
Experts

11
Why a Shared Services
Center?
Shared Services combine the benefits of both centralized and
decentralized operations

Shared
Decentrali • Independent Centraliz
of Business
zed
• Variable
• Common ed• Remote
Systems & from
Standards Support
• Bus • Lean, Flat Business
Maintain Organizatio
• Different • Unresponsive
Control of n • Consistent
Control Decisions Standards &
Environments
• Synergies Controls • No BU Control
• Higher Costs • Responsive
of Central
to Client
• Economies Overhead
Needs • Inflexible to
• Duplication • Dissemination of Scale
of Effort of Forward BU Needs
Looking
Practices
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
Different Models for Shared
ServicesStrategic
Eliminate non value-added services and processes
Business Specialised Transactional

Corporate Business Unit/Divisions Centres of Excellence Service Centre/Call Centre

• Strategic activities • Core business activities
remain at Corporate including
Centre including
• Overall direction &
strategy
• Policy & corporate
standards
• Portfolio management
• Common specialist value • Efficient processing of
added activities that high volume, standard
require teams possessing activities that provide
• Customer
deep knowledge and scaling opportunities
facing/locally specific
expertise and that • Consolidation of
activities
leverage regional or information and
• Local planning &
global advantage transaction based
decision support
activities
• Require one point of
REGIONAL
contact
GLOBAL
Physical Models

Functional Geographic
Centres are Parallel centres
organised by Function 1 exist.
function. Function 2 Function 1,2,3
Function 1,2,3 Organised by
Centres are Geography.
geographically Function 3 Function 1,2,3
dispersed.
There is no
For each Hub & Spoke Virtual physical
centre, there is centre, with all
a single hub, activities
supported by Hub performed
local spokes. remotely using
web enabled
Technology.
 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
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.
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.)
Key Design Issues &
Considerations
Fundamental to the business case is the assessment of the various operating
model options and implementation approaches
Business Case ‘blue print’
EXISTING Time NEW OPERATING
OPERATING MODEL MODEL

Site/Location S
S

Implementation Integrated Process

P
P
sequencing and Model
planning
Organization & O
O
People
Key changes
Regulatory & Legal R
Risk assessment

Technology T

Service Management S
Relationship
Cash flow
The above is based on Shared Service Methodology
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.
Good Practices in Shared
Services Set-up and
Management
 We list a few of the design principles and good
SSC Structuring
practices for setting up and managing a financial
Other
shared services center
By 7%
- Run shared services like a business, and be customer
Country
focused
14%
- 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 By
- One leader for all shared services Process
- Special reward and recognition programs to drive 79%
behaviors
- Service Level Agreement (SLAs) maintained between Source: Published Research commissioned by The
Association of Chartered Certified Accountants
provider and customer