Nonprofit hospitals spend billions on consultants with no clear effect

boznz

There is a very clear effect, the bureaucrats can distance themselves from any unpopular policies or decisions and blame the consultants.

nitwit005

Good to know I'm qualified. I am confident I can make no measurable difference.

hatthew

Can't access the paper, but I'm curious how they measured statistical significance. I wonder how much to interpret the result as "we didn't measure any effect" (which is a largely meaningless conclusion) versus "no effect exists." The latter wouldn't be a rigorous statement, but it seems to be the conclusion we are being led towards.

laughing_man

There's no such thing as a nonprofit. It's really just a question of whether or not the money goes to the shareholders or the management.

rnxrx

Not to be glib, but is there any industry where management consultants have been shown to make a statistically significant difference either way?

cameron_b

One contributing factor I experience is that keeping competent, opinionated, leadership who are a good fit is an expensive proposition, and the "hold fast" position will always be challenged by whatever board is scrutinizing the budget/plan/forecast. The only play where no top brass has to catch a parachute is to bring in a consultant to scrutinize the business, read the crystal ball, and pitch a plan to weather the coming storm. Medicare funds are dust in the wind, Covid-era opportunities are dead and over, and the big axe has swung so much it needs sharpening. None of these are easy decisions to make and the result of "we're still doing what we're doing" is success.

hahajk

"Hospitals navigating challenging financial and regulatory landscapes may call on these specialists for advice on strategic planning, cost-cutting, reorganizations, or revenue-boosting initiatives." I think it's been stated in this thread, and I learned it reading the comments on HN, but consultants are not hired to optimize processes but instead to provide decision insurance. If you take a big risk by yourself and it goes poorly, your job and reputation are on the line. If you hire a consulting firm that advises you take the risk, and report that the risk is properly characterized and understood, and then it goes wrong - well sometimes the best laid plans fall victim to circumstance.

jimjonescoolaid

False. Consultants made billions of dollars. This is a massive win for the consulting industry.

chmod775

They're just part of the machinery for extracting money from these "nonprofits". Take a closer look at anything these paragons of virtue spend money on, and you'll find rot in every last minute detail of their day-to-day operations.

layoric

Most of the hospital consultancy firms tied to nonprofit hospital management/board for 500 Alex.

snapetom

Don't care. I'm going to name and shame. I worked at Seattle Children's Hospital in tech for a short time. The insane amount of self congratulatory back patting to mask incompetence and tolerance of mediocrity wasted billions that could have gone to patient care. What I witnessed there was damn near criminal.

KLK2019

I did a brief review of the publication. I do think its hard to isolate consulting engagement with broad measures on financial performance, and claims based patient outcomes. With that being said, consultants have no skin in the game, and thier incentives are aligned more towards executive relationship management and seeking out new opportunities for revenue vs. achieving aspirational metrics that ultimately matter to a health system. I work in medtech and a model that I am more hopeful for is attaching consulting servics with capital purchaes. (e.g. siemans, GE). This model puts skin in the game from the manufacturer as outcomes and ultimately future revenue is tied to being able to show improvement on key clinical, financial, and operational metrics. Curious to see if this study design can be applied under this scenario (search for press releases regarding signed partnerhsips with medtech and examine a narrower set of outcomes identified in those press releases).

mchusma

My father used to say "Nonprofit doesn't mean that nobody can make a profit". Seems applicable here.

diogenescynic

I have never seen them consultants that provide a value commensurate with the prices they charge. They seem more like a proxy for fraud. When I worked at PayPal, there was a director who had an army of Deloitte consultants who just so happened to be from her husband's team at Deloitte. It was a clear conflict of interest and even though execs were aware, nothing was ever done. I imagine that's going on all over the place.