Realizing the promised benefits from projects continues to be elusive for many healthcare organizations. Healthcare organizations are faced with challenges associated with evolving models for ensuring patient access, equitable payment and efficient and effective delivery. To address these challenges, providers and payers embark upon a myriad of projects and programs designed to improve clinical outcomes, reduce cost and maximize their finances.
The benefits of a project are based in the business reason or rationale for embarking upon the project. It represents the positive output or result from undertaking the change associated with the project. For example, redesigning the scheduling process of an outpatient clinic should result in improved patient satisfaction and increased productivity of clinic staff with a corresponding decrease in operating expense. Migration from a 30-year old stand-alone claims processing system to a comprehensive integrated system that accommodates the unique characteristics of current payment models and provider contracts should improve the timeliness and accuracy of claims adjudication. The system migration will increase member and provider satisfaction and operational efficiency of the health plan, allowing for a reduction in administrative expense.
Most healthcare organizations have a disciplined methodology for evaluating potential projects to prioritize the use of limited funding and internal resource constraints. The expectation is to fund projects that will deliver the greatest return or benefit to the organization. As a result, prior to project funding, a financial analysis is completed to identify and measure the expected outcomes of the project. However, once the project is funded and initiated, we have seen a general bias within organizations to lose their focus on achieving the benefits that were ‘promised’ during the initial evaluation phase. This trend is more likely in projects that take a long period of time (more than six months) to complete. With each month that passes, a new pressing industry challenge or project will likely grab the attention of the organization, resulting in ‘older’ projects losing the executive scrutiny required for successful completion and realized results.
Based upon our work with both provider and payer organizations, we have identified a list of organizational actions that increase the likelihood of projects achieving the desired benefits. These lessons learned can provide project sponsors with tactics to achieve a project’s identified outcomes:
- Formalize project benefit realization: Prior to finalizing a project’s funding, the project team identifies:
- Specific benefits;
- Target levels by year;
- Means by which the benefit will be measured;
- Specific calculation of the benefit metric; and
- Current baseline value of the benefit metric.
One of our Blues’ plan clients requires this disciplined methodology around achieving project benefits, which needs to be signed off by operations, information technology (if there is a significant technology component) and finance.
- Ensure transparency: Organizations successful at achieving project benefits ensure that the identification, tracking, reporting and realization of project benefits are transparent. At a national health services client, this visibility is reflected in a monthly report and meeting with the senior leadership where benefits realization of their project portfolio is the only agenda item. Projects that are not on track to achieve their benefits must report what their remedial actions will be to ensure the benefits are realized. Another client created a front-page progress report on the organization’s intranet site that allows all employees to review the status of various project benefits realization.
- Establish executive ownership: For all projects with a major benefit associated with them, identify a single senior executive who will be held accountable for achieving the targeted benefit(s). For many of our clients, this is an additional responsibility of the leader who is the project’s executive sponsor. They ensure the organization commits the resources required to achieve a project’s successful completion. A variation of this action is to align the actual benefits realized by a project to an executive’s compensation plan, typically a portion of their annual bonus.
- Budget the benefit: Projects that are targeted to deliver reduced staffing levels or operating expense can be used to adjust the department’s operating budget in the next or appropriate budget cycle. For example, if a project is planned to reduce a department’s operating expense by a certain value by a stated future year, the reduction is incorporated into the next budget cycle. While some organizations may believe this is very draconian, we had a major acute care medical center that was able to realize significant benefits year after year from their projects by using this approach.
For those organizations who want to realize benefits from their project portfolio, there are a number of tactics that can be used. However, the most important one is the executives’ commitment to ensuring their investments provide the necessary payoff. Our experience shows that those organizations disciplined around benefits realization tend to have a higher percent of their projects execute successfully and increase adoption of change by the impacted staff. Success breeds success!