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Billions and Billions Wasted on Healthcare Consultants

Billions and Billions Wasted on Healthcare Consultants

Several weeks ago The Washington Post ran an article, “Pentagon Buries Evidence of $125 Billion in Bureaucratic Waste.” This article written by Craig Whitlock and Bob Woodward told the story of a study originally authorized by Deputy Defense Secretary, Robert O. Work, in 2014. The study produced results indicating there were opportunities to save $125 billion over five years. Unfortunately, the study was buried and had not seen the light of day until the Post story. The conclusion of those in the Defense Department was it’s too big to fix.

This past week the The New York Times ran a story, “Go to the Wrong Hospital and You’re 3 Times More Likely to Die.” In this article, Reed Abelson reports on a recently produced study in a journal, PLOS One, where researchers looked at medical outcomes. The two most interesting lines in the entire story were as follows: “The study did not disclose which hospitals had which results. Under the terms of the agreement to receive the data, the researchers agreed to keep the identities of the hospitals confidential.”

How are the two stories related? One story's leadership buried the truth and in the other story leadership made the truth so opaque it was worthless. Either way significant effort and resources were spent on findings that are essentially worthless because of leadership failure.

Neither article discloses the cost of the studies. The Defense Department study was led by McKinsey so it is easy to guess it was at least in the seven figure category if not more. The group producing the healthcare study with life and death implications that fails to disclose any information a reader could use to identify organizations to avoid borders on professional malpractice. So the cost isn’t relevant no matter what it was. Whatever happened to the “do no harm” rant in healthcare? Guess that’s no longer applicable.

In both cases, the stories only provide readership aggravation and as of this writing exactly zero return on the cost of either report. So here’s some advice for hospital leaders. For the last three years billions of dollars have been spent on consultants to improve productivity, scheduling, supply chain, revenue cycle, to name just a few. (Writer request: I would like readers to let us know what specific dollar benefit the aforementioned billions have provided forpatients/consumers?) In the event your review is similar to the two aforementioned studies, my recommendation is stop hiring consultants that you don’t want to listen to, stop hiring consultants that are going to tell you something you want to hear, stop wasting money on consultants working on issues you don’t want to fix in the first place and stop spending money on issues influenced so strongly by organizational culture you’re not willing to take the action to allow change to happen.

Here’s a glimpse of the future. An outcomes study is going to be done that names organizations and physicians. As the bottom half of the middle class continues to get larger, as a percent of income health insurance premiums continue to rise, deductibles continue to move toward a five figures, all will make healthcare affordability an even bigger social issue than it is now. Since the defense department can’t reduce payroll because of political influence, imagine the influence of the aging baby boomers regarding Medicare on politicians. Can you say more taxes? What’s a billion here and there of inefficiency anyway???