Healthcare Management Consulting 2024
What Firms Are Perceived as Best Suited to Address Top Challenges?

Organizations’ Number-One Need Relates to Strategy, Growth & Consolidation

The current healthcare landscape has undoubtedly proved to be challenging for all provider organizations—no organization is alone in facing this market’s uncertainties. Respondents report numerous pain points stemming from concerns about how to grow their organization, increase revenue, and decrease costs. Since KLAS’ 2018 report, organizational priorities have shifted; whereas value-based care transformation was previously the top need for executives, respondents for this study are most focused on strategy, growth, and consolidation initiatives (the third most-mentioned challenge in 2018). Respondents are looking for help with developing and planning their overall business strategy, particularly as it relates to merging with and acquiring other organizations.

Other commonly mentioned needs relate to financial and clinical performance, such as revenue cycle optimization and financial improvement consulting, though the latter has dropped in priority since 2018 (when it was the number-two focus). For these types of projects, respondents want outside help with negotiating contracts and optimizing revenue cycle systems and processes. Payer/provider consulting is also a focus. This area is a newer need, as previous KLAS research shows payer/provider relations were not top of mind—the change in priority indicates the mounting friction between the two parties, particularly as payers have grown in size and resources over the years. Some respondents have payer/provider consulting needs that are specific to value-based care. However, mentions of this need have decreased since 2018, and the need for assistance with payer negotiations is on the rise.

Human capital consulting is another highly mentioned need, with respondents wanting help with staffing shortages, labor costs, and workforce efficiency (all of which would drive improved financial outcomes). Finally, AI consulting—while mentioned less frequently by respondents—is being considered by those who are still in the early stages of AI and want help with strategic planning to drive tangible outcomes in the future.

Expertise, Cost & References Are Top Factors in Selecting a Management Consulting Firm

Respondents list several factors that influence their decision to select a firm, and other organizations can use these factors to evaluate what they need in a firm partner. The top three factors are expertise, cost, and references. For expertise, the most-mentioned factor, organizations value the depth and breadth of a firm’s healthcare experience, and they often use others’ references (the third most-mentioned factor) to better understand a firm’s expertise and evaluate the qualifications of the individuals working on projects. Organizations that are currently evaluating firms will benefit from thoroughly vetting a firm’s expertise and seeking helpful references from previous clients that had similar business needs. Cost is the second most-mentioned consideration factor, though it is often mentioned as a secondary or tertiary factor. When it is mentioned, some respondents focus solely on the cost while others look at more-specific differentiations, such as whether the firm would provide sufficient value/ROI or whether they offer innovative pricing models (e.g., at-risk contract terms). Factors categorized under relationship, while mentioned less frequently, are no less critical; the more an organization feels they have a strong relationship with their firm, the more likely they are to have a good experience.

With these consideration factors in mind, consulting firms can respond to RFPs with better alignment with prospective clients’ needs and clear communication of the project’s expected outcomes, cost, and value. When firms make these efforts, they demonstrate their ability to have strong client relationships where they understand the client, align with the client’s culture, and partner to drive outcomes.

Large, Well-Known Firms Hold Most Mindshare; Several Firms Being Considered Are Mentioned Only Once

 

Firms That Respondents Perceive as Best Positioned to Address Certain Needs

Note: For each type of need, respondents shared firms that come to mind as being best positioned to help (firms are ordered alphabetically). The following does not represent KLAS-validated engagements or a comprehensive list of the types of work firms are capable of delivering.

Firm Appendix

All firms considered by respondents; ordered alphabetically

About This Report

This report is a perception study designed to help readers understand what challenges are most prevalent for provider organizations and which consulting firms are being considered to address those challenges. For this report, KLAS used a supplemental evaluation to interview 163 healthcare leaders and asked them the following questions:

1. What business issues are you most likely to engage a management consulting firm to help you with in the next two years?
2. What are the top three factors you consider when selecting a management consulting firm?
3. What firms come to mind as being best positioned to help with your organization’s needs?