Pathstone Partners

Name: Lakshmi Meyyappan

Position: Intern

Where do you go to school and how did you decide your major?

I attend the University of Michigan, where I’m majoring in Public Health Sciences, and minoring in Business and Music. I found my interests aligning with Public Health through its focus on factors affecting an individual/community’s health outside of a hospital. What I love about this field is that it’s largely interdisciplinary – it not only has a focus on the natural sciences, but also emphasizes the role of data analytics, social justice, and many other important subjects that influence one’s health. I chose the minor in Business because as someone who has always been interested in pursuing a health-related career, I knew that having this technical background would allow me to understand the operations of the healthcare field better. I’ve been playing the violin from a young age, and I wanted to continue with my performance experience, so I chose to minor in Music as well.  

Why are you interested in healthcare consulting?

Coming from a clinical background, I wanted to explore more of the business and operational side of hospitals. What I really like about healthcare consulting is that it’s at the intersection between public health and business, and the end goal is to improve the quality and affordability of healthcare. I was drawn to the idea that we could use analytical skills to improve operations of hospitals, which would consequently improve patient outcomes. There are many ways to make an impact on how our healthcare system operates, and I wanted to learn more about the management aspect, which is where I believe a lot of change can happen.

What stood out to you most about Pathstone during the interviewing process? What made you interested in doing an internship here?

What stood out to me about Pathstone was the close-knit team, and their passion for improving healthcare. Their vision of enabling healthcare organizations to provide high quality and affordable healthcare to their patients was very clear throughout my interactions with the team. I loved seeing the sense of community and teamwork, and knew that this would be an environment I’d enjoy working in – where everyone supports one another and has a team-goal oriented mindset.

What are you hoping to get out of this internship?

At the end of this internship, I hope to have a better understanding of how hospital management works, and creating relationships with professionals who work in a variety of fields. In my few short weeks here, I’ve gotten the chance to be in meetings with many different people – from supply chain, to accounting, to clinical work – and am hoping to learn more about managing relationships with them. I’m also looking forward to understanding more of how healthcare systems operate, and the roles of key players within them.  

Now that you’ve completed your first week on the job, what is the most challenging adjustment from college to work life?

The most challenging adjustment to work life is all the new terminology and excel functions! Just in my few short weeks, I’ve already learned so much about things such as RFPs, GPOs, charity care, revenue cycle, and more. Although it has been a challenge (and google has been my best friend), I find it exciting that even though I’m in a working environment and not a classroom, I’m still continuing to learn about different topics.

What are you looking forward to doing most in Chicago this summer?

I’m looking forward to exploring the city and trying new restaurants! While I’ve visited Chicago a few times prior, I’m excited to spend a couple of months in the city and visit its various neighborhoods. Chicago is such a beautiful city with lots to do, so I’m excited to take advantage of that on my days off!

What is something you’re passionate about, and why?

I’ve become very passionate about environmental health, and the major role that one’s environment has on an individual’s health (even prior to being born). I took a class on environmental health, and it showed me how many health disparities result directly from marginalized populations inhabiting areas with high air pollution/waste/noise pollution. I participated in a community research initiative focused on environmental health in Detroit, which is heavily polluted, and I hope to engage in more environmental advocacy for these communities nationwide.

What’s a fun fact about yourself that people might not know about you?

I’m trained in a type of Indian Classical dance, and I’m a huge Spotify playlist enthusiast!

Name: Mehak Monga

Position: Intern

Where do you go to school and how did you decide your major?

I go to Northwestern University and am majoring in Economics with minors in Business Institutions and Global Health. I came into college with more of a business-centric mindset and wanted to study Economics to be able to not only grasp the concepts that encompass the way the world is changing, but also form my own opinions and judgements of those variables. The web of variables like politics and international affairs that coexist in the field is fascinating to me. At the micro level, I want to understand the internal mechanisms, organizational structures and catalysts that result in corporate success.

Why are you interested in healthcare consulting?

I’ve spent a huge part of the last few years discovering new ways of helping people. While having explored many different professional opportunities, the one common denominator for me was being able to create a positive impact in people’s lives, and healthcare does exactly that. Healthcare consulting exists precisely at the crossroads of my two passions – working with businesses to improve efficiency and making sure that those businesses are improving society in one way or another.

What stood out to you most about Pathstone during the interviewing process? What made you interested in doing an internship here?

Pathstone is unique in its values-driven approach to consulting. During both the interview process and in conversations with the team after onboarding, I’ve become aware of the importance the company places on always doing the right thing. The team here shares many of the values I have developed over the years and is passionate about helping others. Aside from the core values and integrity that resonate with me, the smaller company structure also provides unparalleled exposure, opportunities to work closely with both the team and clients, and develop professional skills that can be applied to any career. I am able to understand the implications of my work, see material results and go home each day with a sense of accomplishment.  

What are you hoping to get out of this internship?

By the end of these 10 weeks, I hope to have contributed to and gained from the team in equal amount. Aside from developing my technical skills and attention to detail, and learning about the healthcare and pharmaceutical spaces, I want to be able to think strategically and innovatively about potential new initiatives. I also hope to gain exposure to client-facing work and share my analyses and research with them to develop my communication and presentation skills. Lastly, I want to learn about client relationship management -- something that Pathstone prides itself on.

Now that you’ve completed your first week on the job, what is the most challenging adjustment from college to work life?

For one, the daily commute from Evanston can be quite taxing, and the rigidity in timings can be tough at times, but the office here is beautiful with a really encouraging, welcoming environment. Other than logistical hurdles, it can be tough to understand the terms that are used in meetings and client calls at first, but this is also not too difficult if you ask questions and Google basic jargon. It has been just a week, but I’m already starting to wrap my head around the industry mechanisms, the supply chain, various stakeholders and their relationships with one another, as well as innovative ways to create a lasting impact on clients.

What are you looking forward to doing most in Chicago this summer?

Northwestern’s campus is North of Chicago, in Evanston, which is a 30-40 minute drive away. Over the last 3 years of college, I’ve had the chance to explore the city and its incredible food scene. What I’m most looking forward to, however, is spending the summer in the city! I’ve never been around late enough in the school year to be able to experience the beautiful weather, go to the beaches and just make the most of how vibrant this city can (and is proving to) be when it’s not facing a polar vortex.

What is something you’re passionate about, and why?

I want to make a positive difference in the world both through my career and outside of it. I love helping people, giving back to society and making a difference in people’s lives. I hope to take full advantage of my privilege and resources to do exactly that moving forward.

What’s a fun fact about yourself that people might not know about you?

Name: Chris Ix

Position: Intern 

Where do you go to school and how did you decide your major?

I am a junior at Northwestern University majoring in Biology. I find it fascinating how nature and all its complexity can be explained by deconstructing things into a system of simpler biological processes.

Why are you interested in healthcare consulting?

Healthcare consulting gives the perfect blend of business and science. I have the opportunity to expand my knowledge of businesses and non-profits while working with material relating to my interests in biology.

What stood out to you most about Pathstone during the interviewing process? What made you interested in doing an internship here?

The small firm structure was something that stood out to me that would make my internship experience unique. I felt the hands-on experience I would gain working for a smaller company would allow me to take on more responsibility within the company and further develop my own skills as a consultant.

What are you hoping to get out of this internship?

At the end of this summer, I hope to have a greater understanding of the lifecycle of a cost reduction project. I am excited to watch how the relationship between the firm and the client evolves through different stages of our engagements. Additionally, I hope to further develop my communication and analytical skills.

Now that you’ve completed your first week on the job, what is the most challenging adjustment from college to work life?

I believe there is more room for creativity in the work force. Transitioning from the classroom to the office, questions shift away from “solve this problem” to “how should we solve this problem.” While this shift brings more responsibility to the problem solver, I am excited by the added ability to find a creative and effective solution.

What are you looking forward to doing most in Chicago this summer?

I am really excited to check out the Architecture boat tour! I am new to the area and almost everyone I know has recommended it. A day on a boat learning about the beautiful city, what’s not to love!

What is something you’re passionate about, and why?

I am really excited about and interested in the alternative protein space. I think companies creating plant-based foods and eventually ones grown from stem cells have massive potential to mitigate the environmental crisis and global inequality.

What’s a fun fact about yourself that people might not know about you?

Name: Max Collopy

Position: Director 

Where did you go to school and how did you decide your major?

I went to Penn State University and majored in Supply Chain Management & Information Systems. I knew I wanted to be within the realm of business and choose a major that gave me the best opportunities in terms of future employment options and variety of work. After speaking with professors, I learned that PSU had a well-respected supply chain program, and that the major was becoming more in demand.

How did you choose healthcare consulting?

My first internship was a six-month co-op with a pharmaceutical company working on a procurement team. This was my first-time experiencing healthcare because supply chain is typically focused on other industries. I really enjoyed the mix of the two, which piqued my interest to look more into the healthcare sphere. I also had some mentors that were within the consulting industry and through my discussions with them, my interest grew. I was able to acquire an internship with PwC that paired my interest in healthcare and consulting.

 Can you tell me more about your work experience prior to Pathstone?

After completing a Summer internship with PwC, I joined them full time and spent about four years within the healthcare advisory practice focused on the provider side of healthcare. Eventually, I was staffed on an integration and cost optimization project, which also happened to be my first major project. From there, I found that my interests aligned with supporting healthcare providers in tackling these types of challenges.

 From your experience, what makes working for Pathstone different from working for other firms?

The culture/people – I had great experiences at both my previous places of employment, but at Pathstone, I have really enjoyed having an open team-based and people-first culture. This allows you to take on additional responsibilities early on in your career, especially with us being a boutique firm. Also, taking into consideration work-life balance and matching these two things with a continued interest in healthcare.

 What do you think makes a good leader?

Listening – not only to your team, but also to the client. We all bring our own unique skill sets and experiences, which is beneficial to the project, but with consulting, being a team-based environment is important to understand where the team/client excels. What are their strengths? Where are the areas that they want to grow? How do you set everyone up for success? You can make all the assumptions in the world, but it will make it difficult to set the team up for success. Listening helps shapes where the project ends up.

 What is the most helpful piece of advice you can give to a new team member?

Building relationships is one of the most crucial things I’ve learned in consulting. Healthcare specifically is such a small industry; you find yourself working with people at all different levels who move around all the time. It’s important to build and maintain strong relationships because you never know when your path’s will cross again. If you can establish a strong relationship, no matter what occurs during the project, you will be in a better position to navigate whatever arises and move forward down a more successful path. Also, just be an honest and kind person with people and invest in the relationship not just at the forefront, but long term with them.

 What accomplishment are you most proud of?

Being able to see the growth of the team since joining the firm four years ago. We are a very different firm from then to now. This all overlaps with recruiting, client relationships, and team development. I have had the opportunity to take a lead role in the recruiting process which has allowed me to influence the building of our own Pathstone brand. I’m most proud of how we have provided the opportunity to grow each year while maintaining our key culture and values at the firm. I believe this is what has allowed us to continue our success.

 You are very passionate about the dive bars of Chicago. What is your favorite and why?

My favorite has got to be Archie’s. They have free cheese puffs and any place that has something free helps get my foot in the door. Archie’s is a local neighborhood watering hole that has been here for decades. What I like so much is traditionally these types of establishments have really provided a community gathering spot specific to it’s respective neighborhood/community, which makes each one so unique. You can walk in and see your neighbors and really feel the pulse of the community. This is something I really enjoy, so hopefully once we are past this unfortunate pandemic these places can still thrive. As much as the world has become more virtual every single day, it’s still difficult to replicate that in-person interaction. I’m really looking forward to getting back to that.

 What would be your last meal on earth?

Name: Hanna Kenney

Position: Associate

Where did you go to school and how did you decide your major?

I went to University of Wisconsin-Madison. I loved math and science in high school so studied mechanical engineering. It really started off as “let’s just do it and see if I like it”, and then I just kept on doing it. Mechanical engineering is essentially physics. It is how things work, forces, aerodynamics, fluids, a lot of math and sciences. The engineering part comes in when we apply it to building and design.  

How did you choose healthcare consulting?

In college, I did both of my internships at medical device companies. One was a manufacturing engineering internship; one was a design engineering internship. When it came to choosing a full-time job position, I did not see myself reaching my full potential in an engineering setting. I think one of my strongest assets are my social skills, and, unfortunately, I did not feel I would be able to portray these strengths if I stuck to engineering. By having exposure to these internships, I realized I really enjoyed learning about medical devices and, more specifically, had a passion for healthcare. With that in mind, and having always been interested in business, I started looking into consulting.

 What was your recruiting process like in college?

At the beginning of senior year, I was willing to take my previous internships’ full-time offer. When I started my recruiting process, I did not know what consulting was. Companies started coming in for info sessions, where I was able to ask questions and learned more about consulting. After getting a feel for the field, I started applying to a several consulting companies.

When Pathstone reached out to me, I immediately liked the smaller company feel. During both my first and second round interviews, I easily clicked with people I was having conversations with. During the interviews, I was able to have normal conversations and connect on a different level. Football would be brought up, which is not a topic of conversation I expected during any interview process!

 How did you know what you wanted in a company?

There were two main areas I was looking for in a company:

1.       Mutual respect. I did not want to be just being a number in a big company. Personal growth was important to me, so I asked myself “where am I going to achieve that”. Pathstone has become a community to me. During the interview process, Pathstone labeled themselves as a big family. All my coworkers truly want everyone to achieve their highest ability.

2.       Work life balance. I wanted an environment where if need to take time off for a personal reason, it would be understood by my supervisors and peers.

 Any advice for seniors currently in the interview process?

Go with what feels right to you. You might be getting offers from multiple places, but if one company speaks to you over another, there must be a reason for that.

 Its been 3 months on the job now. Is this job what you expected it to be?

Yes and no!

Yes, this is consulting, so of course we are working many hours and collaborating with each other.

But also, no! Coming in, I did not know what type of work I would be doing. The biggest shock was that everything we do is centered around Excel and PowerPoint. With engineering we did not do in depth Excel analysis, so I am glad it is a skill I am acquiring. I also did not realize how I would be interacting with stakeholders who are high up in the hospital ladder, like VPs and other executives. It was an exciting shock because it has helped me build my public speaking skills. At a larger consulting company, I doubt I would have the opportunity to do this.

What is one thing you are good at/proud of, but doesn’t really matter to anyone else?

I am proud of being a role model to my younger siblings. I am the oldest of 5, and there is 8 years between me and the youngest… so there are a lot of eyes looking up at me. I feel like I have done a good job leading the way!

 Have you developed any new hobbies since staying at home due to COVID?

I have picked up reading again! In college, there was rarely a chance for me to enjoy leisure reading. I picked up a new book today – The Institute by Stephen King.

If you had one superpower, what would it be?

Teleportation because I am super lazy at times. Want to go to the grocery store? We’re there!

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Name: Maria Tkacz

Position: Associate

Where did you go to school and what was your major?

I went to undergrad at Northwestern and majored in Anthropology and Psychology. My Human Biology Anthropology concentration encompassed the pre-med track I was doing. My classes ranged from human evolution to cultural anthropology to linguistics, but my favorite classes were medical anthropology and global health-related ones. They made me think critically about why some groups of people get sick compared to others, and about ways to mitigate healthcare inequalities. This helped inspire me to pursue my healthcare administration master’s degree.

My Master’s in Healthcare Administration provided more perspective on what the healthcare landscape looks like currently and introduced me to different strategies for approaching the healthcare problem. The program had a strong business perspective, where they talked about strategies in leadership positions such as negotiations and exposed us to different leadership styles through class exercises and various internships. I was able to learn a lot of technical skills but also soft skills.

Can you tell me more about your work experience prior to Pathstone?

I went directly from my undergrad to my master’s program. Typically, in the healthcare administration field, people who go directly into their master’s program are recommended doing a one- or two-year fellowship at a healthcare organization before diving into one department specifically. I transitioned into a fellowship at Maine Medical Center. During the fellowship, you get to work with a lot of administration and clinical leaders to learn about multiple initiatives across the organization, through shadowing and mentoring and leading certain projects. I had the opportunity to develop business plans and develop a passion for children’s health.

In my full-time job as a Project Manager, I focused mainly on women’s and children’s health. My focus was to improve workflows, operations, and work through a clinical challenge to ultimately improve clinical outcomes. For example, I worked with a population of babies that were withdrawing upon birth because they were exposed to opioids during pregnancy. We were able to develop a program spanning outpatient and inpatient that promoted skin to skin contact in a dark room, which directly correlated with less morphine being administered for these babies and an earlier discharge.

  What attracted you to healthcare consulting?

I liked the type of work that consulting is about. It’s a more analytical approach to problems. In my previous role, some tasks felt nebulous with too many variables in play, prolonging the time it took to see results. I wanted a job that was more controlled, but still impactful. Consulting reflects my values and allows me to solve problems in the healthcare space.

What drew me to Pathstone was the smaller firm. There’s a sense of nimbleness and genuine collaboration, and I’m a part of the strategy development, and have a voice in what we do next.

  What is the most helpful piece of advice you’ve ever received?

There was a tough moment when I was trying to figure out which job offer to take after my fellowship. My mentor and I were talking through it, and I knew I was being very hard on myself. My mentor gave me great advice and told me to with my gut and passion. We can try to do the right thing in the present moment, while accepting that in the future our perspective may change. In the moment, you just have to go with all the information you have and feel confident because you did your due diligence.

  What is something you are passionate about and why?

Engaging the patient in the healthcare process. The way I’ve thought about healthcare has really evolved over time, but I’ve noticed how the patient is often left out of the important conversations. In my career, I want to ensure the decisions made about the patient also involve the patient.

  You’ve spent quite some time traveling. What is the favorite place you’ve been and why?

Eastern Europe – this is where my family is from (Poland), and traveling to this part of the world gives me a lot of nostalgia. My favorite city in the area is Budapest, which is full of great food, culture, saunas, and things to do outside and indoors.

Right before I started Pathstone I also did some traveling and really enjoyed my time in Thailand. I loved it there because it felt like a whole different world and really stimulated the senses with all there was to eat and do and see.

What’s a fun fact about yourself that people might not know about you?

I did Polish folk dancing for 11 years. It’s the hobby I’ve stuck with for longest time and it gave me lifelong friends. It also allowed me a great way to hold onto my roots. It gave me a great foundation for learning other types of dancing and I still dance from time to time, but not with the same group. Now I’m more into swing dancing. It’s been a nice way to interact with people in the Chicago area!

This picture is a more recent fun thing I got involved in while I lived in Portland, Maine. For three years I was part of the city’s first community garden.

In this time of self isolating, what have you been doing to keep busy?

I’ve been trying to do more art to counter all the technical areas I’ve been working on at work! I’ve been starting to get into ukulele and guitar. I was taking group guitar classes but they’re on Zoom now, which makes it more challenging. The teacher is trying hard to make it work and we try to play in a group, but the connection on Zoom isn’t optimal for guitars playing simultaneously. Now, we have to work harder at playing individually. Before when we were in class, our mistakes wouldn’t be noticed because we would tune each other out, but now you can really hear it!

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Name: Katie Corcoran

Position: Senior Associate

Where did you go to school and how did you decide your major?

I went to Indiana University (the best school in Indiana). I didn’t know anything about Indiana but applied because I wanted to go to a Big 10 school and the campus was pretty. I unknowingly applied to the Kelley School of Business, and got in direct admit into the program, but didn’t know anything about the business school’s good reputation.

I started as a finance major because I was good at math. However, I knew I wanted to have a more balanced focus on both math and people. I talked to my counselors, and they suggested supply chain. I’ve stuck with it ever since.

How did you choose healthcare consulting while in the business school at IU?

I’ve always liked working with people with special needs. I started volunteering at Misericordia in 8th grade, continued with similar programs through high school, and worked as a camp counselor and inclusion aid for the Chicago Park District. I thought healthcare would be the closest industry. I have a very logistical way of thinking, so supply chain played well into that.

I had no interest in consulting junior year when I was looking at internships. I thought consulting was just a daunting word, because who am I to help someone else with their job when I have never done it myself? However, during my internship at Cardinal Health, I was able to help with a few projects, had the opportunity to build some tools and even teach them to others. I enjoyed that experience and started to think differently about the idea of consulting.

Can you talk about your recruiting process?

I had a semi offer from Cardinal Health after my internship. I was told to go back to them in March/April to work out that role, so I knew I had that fallback plan. When I went through recruiting senior year, I was able to cast a small net without worrying whether something would stick. The work I was doing with Cardinal Health was focused on operations analytics, far from patient impact, which was important to me.

I applied to Pathstone in November and received an email from Pathstone about an interview. I had a great initial conversation! Andy came down to IU for on-campus recruiting, so I was able to do the case interview in person.

How did you know what you wanted in a company?

I didn’t actually know what I wanted in a company, but I knew what words I was looking for: supply chain, healthcare, consulting. I was looking for buzz words.

I naturally started leaning towards smaller, more specialized companies. I had the opportunity to meet with several companies that specialized in different areas. Though they were great conversations, they were not the perfect fit I found in Pathstone.

While recruiting, it’s important to pay attention to the people you talk to. It should feel natural, especially since we’re a small team. At some of the bigger firms you may not have the same opportunity to meet the types of people you would be working with in the interview process, but I had some interviews with other companies I did not feel a strong connection.

Any advice for seniors currently in the interview process?

Pay attention to the people – when I talk to other friends in the workforce, they say that the people you work with is the most important part of what you do. Our recruiting process gives you a good opportunity to meet a lot of people in the company. Many bigger companies you just meet with HR and you don’t get a good sense of the culture. You could be doing your dream job, but if you’re with people you don’t like, then you’ll be miserable. The Pathstone team has been my favorite part of the job. There’s a strong feeling of investing in each other, investing in the client, and doing the best that you can.

What is one thing you’re good at/proud of, but doesn’t really matter to anyone else?

Making extremely complicated analysis for things that aren’t important to anyone else. It’s fun!

Consulting has opened your food palate since you’re frequently on the road eating out. What is one food you didn’t have before you starting consulting, but now cannot live without?

Avocado. I even bought it for the first time and ate it at my apartment. I made tacos and avocado toast, and they were both beautiful.

I’ve definitely also tried foods that have not landed. Jackfruit tacos. Never again. Raw oysters. It was fine. I feel like I’ve still stayed pretty true to my palate.

You grew up around the Chicago area. If you had a weekend in Chicago, what would you recommend to do?

It depends on the time of year. Right now? Sit inside and do nothing since it’s so cold!

Kidding! If it's rainy and cold, there’s many great museums in the museum campus, like The Field Museum, Shedd Aquarium, or The Museum of Science and Industry. Baseball or football games are also a lot of fun! But preferably on the south side.

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Name: Karlee Long

Position: Associate

Where is your hometown?

I grew up in Colts Neck New Jersey.

Where did you go to school and what was your major?

I went to Penn State, where I majored in supply chain management and information systems.

What attracted you to healthcare consulting?

I wasn’t sure about what I wanted to do, and in supply chain there aren’t a ton of people facing opportunities. I wanted to talk to people, communicate with them- not just sit in a cubicle all day crunching numbers. That’s what drew me to consulting, the balance between working with numbers and people.

Going into my senior year at Penn State I had an internship at a company that worked with hospitals, and it was an experience I really enjoyed. I felt like I was making a difference and doing meaningful work that impacted patients.

What is something that you liked about Pathstone while recruiting?

I liked that it was a smaller firm because there’s a lot of room for personal growth. You can work at your own pace and take on unique opportunities that you might not get at a big firm.

What is the most helpful piece of advice you’ve ever received?

That it is okay to make mistakes as long as you own up to them and learn from them.

What is something you are passionate about and why?

I’ve always been passionate about sustainability. I like to ski and run and have taken classes at Penn State that focus on sustainability/the environment. One of the classes focused on strategies to convince companies to enforce sustainability metrics, such as cutting back on carbon emissions. I love being outdoors and don’t want that to change.

If you could travel anywhere in the world, where would you go first?

Australia, I’ve always wanted to go there.

What accomplishment are you most proud of and why?

I would say graduating from Penn State with honors despite encountering a lot of health issues along the way.

What are you most looking forward to doing while living in Chicago?

I’m excited to check out the different neighborhoods within the city. I’m coming to realize there’s a lot to see and explore, more than I initially thought.

If you could have any superpower what one would you choose?

I would choose to fly. That would be way cool.

For all of those Penn State Alums out there - What is your favorite creamery flavor?

Cookie dough!

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Name: Bridget Moroney

Position: Associate

Where is your hometown?

Cleveland, OH

Where did you go to college and what did you major in?

I went to Notre Dame, where I majored in chemistry and Spanish.

What attracted you to healthcare consulting?

As a chem major, I was directed towards doing research as a career. I spent two and a half years doing research for chemistry and realized that I missed the opportunity for collaboration other career paths offered. I wanted to go into a career where sharing is encouraged instead of frowned upon, and soon realized that I feel most fulfilled when working in a people-oriented setting.

When it comes to my interest in healthcare, the biggest connection comes from family. We have a lot of nurses in our family and I grew up with a healthcare mindset as a result. When I found Pathstone it seemed familiar. I liked knowing I would be working directly with hospitals, and it provided the people-centered feel that I was looking for.

What is the most helpful advice you’ve ever received?

A big one for me is knowing when to say yes versus no, that way when you say yes to something you can fully dedicate yourself to it. It comes down to being honest with yourself and setting clear priorities. When you are more discerning about making commitments, you end up being more present for yourself and others.

What is something you are passionate about and why?

I really love hiking. I feel like a little kid again when I’m on a hike and get to enjoy the scenery, it gives me a sense of awe. One of the best hikes I’ve been on was in the upper peninsula in Michigan. Hiking reminds me of friends and family which is another reason why it’s special to me.

My bucket list hike is in Arizona and is on an Indian reservation. It’s a 2-3-day long hike and takes a lot of planning because you have to get a permit in order to go. The permit goes on sale kind of like concert tickets, and it’s difficult to get one. The place is called Havasu falls, and it’s beautiful.

If you could travel anywhere in the world, where would you go first?

I really want to go to Peru. South America, in general, is a place I would really enjoy visiting. It’s different and unique.

What is an accomplishment you are most proud of?

I have two, the first being when I cooked salmon successfully for the first time in my adult life. It's so difficult to cook, and when I got it right by myself, I was so happy.

On a more serious note, during my sophomore year in college, I was the Vice President of my dorm at Notre Dame. The President and I started an event that benefitted Riley Children’s Hospital in Indianapolis. It’s called Riley at the Rink, and it still takes place every year! It's cool to have a legacy like that, especially when it's for such a worthwhile cause. To be honest, it could be considered my first consulting project, but I didn’t know that yet.

What are you looking forward to doing while living in Chicago?

Meeting new people, there are so many opportunities to connect with a wide range of people when you live in a big city. It’s going to be so cool to meet people I otherwise never would have met if I weren’t in Chicago. Also, the food here is a huge plus.

What is a unique fact/story about yourself?

This isn’t a fun fact as much as it is a story, but I used to be a huge fan of the show ‘Dragon Tales’ when I was a child. My dad had this paperweight that looked like the magical stone from the show, and I was convinced it was real. So, I would take the paperweight and try to go to dragon land like the characters did. Sadly, it never worked.

Finally, if you could have any superpower, which one would you choose?

I would like the ability to teleport

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Name: Sarah Tsung

Position: Associate

Where did you go to school and what was your major?

I went to the University of Michigan, where I majored in Business and English. I always loved to read and write, so I studied English alongside business for my own personal enjoyment and sanity.  

What is your favorite book then?

My four favorites are Defining Decade by Meg Jones, The Good Earth by Pearl S Buck, 19 Minutes by Jodi Picoult, and Paper Towns by John Green.

What attracted you to healthcare consulting?

On healthcare:

I am tired of seeing people not have adequate healthcare coverage in the US. We are so behind the rest of the world when it comes to healthcare, and people shouldn’t have to choose between paying rent and their hospital bills. Although I am only one person, I want to do my part in making affordable healthcare accessible to communities in need.

On consulting:

I chose to go into consulting because I wanted a job that wasn’t the same routine every day. In consulting, you aren’t sitting at the same office desk day in and out. You travel, and there is a wide variety of projects you can be involved in at any time. I like the challenge and spontaneity.

What is the most helpful piece of advice you’ve ever received?

When you are looking for a job, you must consider 3 aspects. People, price, and project. For me, the biggest thing I look for is the people. You are going to spend a lot of time with your coworkers, so it’s important that you enjoy spending time with those people. That is one of my favorite things about Pathstone so far, everyone I’ve met is so willing to help you.

What is something you are passionate about and why?

Dance. I’ve been dancing since I was around 3 or 4 years old. I began to take it more seriously in high school, where I joined a competitive team and put together dances for culture and talent shows. In college, I joined the Michigan Ballroom Dance Team, who have won the national collegiate title for the last 14 years! I also taught dance (ballet, jazz, and lyrical) at a local studio for the last 4 years. Apart from dance being an amazing creative outlet, it taught me so many life lessons, such as learning how to support others while simultaneously being your best self, the importance of teamwork, and ongoing persistence and resilience.

What’s an accomplishment you are most proud of and why?

There was a consulting class I took in college, which was worth 9 credits. I was on a team with 4 MBA students; all came from different countries. We were placed on a project with a large toy manufacturing company and ended up generating around a confirmed $4M in savings. One of my favorite things I did was write up the final deliverable that was 60 pages long. I felt that my interests in writing and business were aligning well. And, everyone on the team is still in touch. It serves as a great example of effective teamwork that left everyone feeling very accomplished.

For dance, I got a teaching certificate from the American Ballet Theatre in New York. It was the hardest thing I’ve ever done because their standards are so high, and the program is super rigorous. It’s hard to demonstrate your skills in front of such experienced teachers. You really have to put your best foot forward.

If you could travel anywhere in the world, where would you go first?

I have two answers. First, I would go directly under the Eiffel tower in Paris. I know some basic French and want to put those skills to use. Second, I would go to the “outback” in Australia. Apparently, unicorns live there with the kangaroos.

What’s a fun fact about yourself that people might not know?

I really like awful jokes, like dad jokes or bad knock knock jokes. A good pun will make my day.

Do you have any jokes you could tell me now?

Time flies like an arrow and fruit flies like a banana.

What are you looking forward to doing while living in Chicago?

I’m looking forward to taking a lot of hot yoga classes, a birthday dinner at Alinea, and playing with my roommate’s cat.

Finally, if you could have any superpower what one would you choose?

The ability to read minds. I’m always curious to know what people are thinking.

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Name: Colin King Position: Manager

Where did you go to School and how did you decide your major?

I went to Notre Dame and majored in business consulting and theology – a balance of a practical skill set and something I enjoy.

You have a unique career path – can you tell me a little more about it?

I’ve had the opportunity to join Pathstone twice – first as a recent college graduate and second after seeing other work environments. I initially joined Pathstone because of the challenging interview process and the authenticity of the team and rejoined because of the strong team, work/life balance, and intriguing work.

Why healthcare consulting?

Our work is the right balance of strategy (critical, creative, out-of-the-box thinking) and implementation (driving outcomes from start-to-finish and building day-to-day relationships with clients). It’s rewarding to lead healthcare providers toward lightbulb moments regarding their processes and bottom line.

What’s something that happened that can only happen here at Pathstone?

The college football banter – Go Irish! – there’s a palpable sense of team spirit here. A couple years ago a coworker who was a Michigan alumnus brought a UM flag during white-elephant gift exchange, hoping I would choose it, and, as you can see in the picture above, I selected his gift.

What do you think makes a good manager?

Good managers put others first. They must be intentional about team members’ growth. Several managers at Pathstone have inspired me to grow as a leader – they have invested in my growth and success in self-giving manner.

What would you recommend to someone who is interested in consulting?

Talk to as many people in consulting and other jobs to learn what drives/motivates them and see if that aligns with your interests!

What is one thing you’re really proud of, but doesn’t really matter to anyone else?

I won an amateur boxing tournament in college! A close friend and mentor of mine told me that you really learn about your character/resiliency when you take a punch in a boxing ring, so I joined ND’s intramural boxing club, Bengal Bouts, and trained for 2 years. The club’s motto is “Strong bodies fight, that weak bodies may be nourished,” and raises $100K+ annually for Holy Cross missions in Bangladesh.

What would be your last meal on earth?

A cheeseburger or the duck fried rice at Duck Duck Goat – it’s a roll of the dice.

If you had a weekend in Chicago, what would you recommend to do?

Attend a street festival like Taste of Randolph, grab a beer at a local brewery like Half Acre, and eat at one of many of Chicago’s great restaurants (especially those by our office the West Loop!).

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Co-Authored by Joanna Guziak and Joseph Jang

Pathstone Partners is a management consulting firm that collaborates with hospital providers to identify and implement sustainable non-labor financial benefit. In the past five years Pathstone has partnered with over 100+ hospitals across 32 states delivering $100M+ annual benefit for our clients.

Does this scenario sound familiar to you?

Your hospital is undergoing budget planning for the new fiscal year, and the organization is required to find ways to reduce non-labor expenses by 10%. If unsuccessful, labor reductions may be next.

As a leader within the organization, this is all too familiar to you. You have already successfully led cost reduction efforts in the past but at this point implementing additional savings without sacrificing quality of products and services is a daunting challenge.

You recognize there are several ways to reduce non-labor expenses, but know there are many moving parts that are essential in building a foundation to proactively transform your cost structure over the long-term.

These are common challenges we frequently hear our clients face. Most hospitals have skilled teams focused on delivering cost savings, but they are constantly challenged to deliver value on a recurring basis.

In these situations, a comprehensive approach that identifies value by addressing non-labor financial benefit from multiple angles, or what we call “value levers”, is necessary for financial success. While this is easier said than done, such an approach is the most effective way to identify and prioritize opportunities with the greatest benefit to the organization, especially in complex product and purchased services categories that are difficult to impact.

In the past 5 years, Pathstone has worked with 100+ hospitals delivering $82M+ in financial benefit by utilizing a comprehensive value lever framework. Over the next several months Pathstone will post a series of short articles addressing each value lever in the framework outlined below.

The series will demonstrate the broad applicability of the value lever framework to any health system seeking sustainable financial benefit across various spend categories. We will explore how to evaluate opportunity within each value lever and outline key success factors to deliver on the identified opportunities.

Co-Authored by Joanna Guziak and Joseph Jang

Pathstone Partners is a management consulting firm that collaborates with hospital providers to identify and implement sustainable non-labor financial benefit. In the past five years Pathstone has partnered with over 100+ hospitals across 32 states delivering $100M+ annual benefit for our clients.

In this first edition of the series, Pathstone will be diving into value generated with a focus on pricing.

What is Pricing?

Pricing opportunity can be defined as optimizing the price paid for a good or service, which can be achieved through incumbent supplier negotiations or competitive sourcing activities. Accurately identifying pricing opportunities can be challenging due to several variables such as unique product/service specifications, quality, volume, technology advancements, and local market factors. As a result, most benchmarking exercises can leave hospital leaders with misleading perceptions of price competitiveness. Although pricing may be viewed as a straightforward value lever that is routinely reviewed by hospital supply chain, Pathstone finds many hospitals have yet to maximize pricing opportunities in more complex categories such as various purchased services.

Successful implementation of pricing opportunities delivers the following benefits to health systems:

Financial benefits ranging 5-25% depending on the category

One of the quickest and least disruptive paths to financial improvement

More visibility into cost drivers of goods or services

Key Opportunity Indicators:

1) Supplier Relationship Not Reviewed: If your supplier contract has not been evaluated for price competitiveness in the last 3-5 years, this can indicate there may be opportunity. Supplier relationships with hospitals can change over time. Expansions of supplier scope in an organization can be an advantageous leverage point to bring into the pricing negotiations. Furthermore, supplier markets evolve and change the dynamics of how they do business with their hospital clients. Many clinical areas, for example, are impacted by demographic changes (e.g. aging baby boomers), population health challenges (e.g. new diseases) or development of new technology (e.g. telehealth), all of which may affect the demand for certain supplies or services. As a result, continuous vigilance is important.

Client Example: In our experience, perfusion services is an example of a complex area that is challenging to identify pricing opportunity for many of our clients. The demand for perfusion services has been growing driven by the increase of open-heart surgeries for an aging population. As a result, many hospitals have seen their perfusion service volumes jump by 30-50% over the last several years. In such situations, Pathstone can help clients evaluate pricing opportunities with current market intelligence across our widespread client base.

2) Not in-line with Price Benchmarks: One common indicator of opportunity is identifying higher pricing when benchmarked against peers. Utilizing available resources such as group purchasing organizations (GPOs) or databases to perform the benchmarking can provide a good directional perspective on potential pricing value. However, hospitals should proceed with price benchmarking cautiously. Our experience has shown that when hospitals have the ability (often through third-party partnerships) to contextualize and customize benchmarks – this creates the best data and ultimately drives the most value.

Client Example: Benchmarking services are anything but straightforward. Pathstone often helps our clients benchmark their services both internally and externally. Pathstone provides external price benchmarks that are contextualized based on the health system’s volume, geography, specific service requirements, and unique operational considerations to determine an accurate and tailored cost savings opportunity.

3) Hospital Growth and Expansion: Within the healthcare industry, hospital consolidation and integration activity has been increasing. If integration has already occurred or may be imminent for your organization, then it presents a ripe opportunity to re-evaluate pricing for goods and services. Through integration, your volume may change (likely increase) which creates leverage to help drive more competitive pricing.

Client Example: Pathstone has worked with hospital systems that have merged, acquired new sites, or expanded service lines. A benefit of any consolidation activity is the ability to combine purchasing activities of two different organizations to create leverage with suppliers. For example, a newly merged health system was using two different dialysis service providers, and in turn, had varying pricing for the same dialysis services. In some cases, hospital sites were even using the same service provider through separate contracts but with very different pricing. Consolidated purchased volumes in the newly merged health system created leverage to negotiate better pricing with the chosen provider.

4) Prices are Higher than Reimbursement Rates: For certain goods or services where the hospital is receiving reimbursement, it can be a beneficial exercise to compare pricing against reimbursement. If the pricing is significantly higher, this data point can potentially be leveraged in supplier pricing negotiations.

Key Success Factors:

1) Maximize Resources: Hospitals have a variety of resources at their fingertips but determining how best to maximize those resources is challenging. The use of Group Purchasing Organizations (GPOs), market databases, and/or consultants seem to be some of the best options for a hospital to obtain benchmarking information. Appropriate use of this information can create valuable metrics for internal KPI tools to identify opportunities.

2) “Test” the Market: There are various approaches your organization can take to “test” the market. A competitive process like a Request for Proposal (RFP) or Request for Information (RFI) are common approaches. At times, just the initiation of a competitive process can motivate your suppliers to provide a significant reduction in current pricing in hopes you avoid looking at competitors. However, when going to the market an organization needs to have conducted its initial due diligence on the market and have an appetite for potential supplier conversion.

3) Find the Right Fit: Hospitals often struggle with finding a quality product/service at the right price but also one that fits that organization’s needs. When pursuing price opportunities, it is important to maintain focus on quality. Establishing cross-functional work teams that can evaluate both pricing and quality is key. Additionally, developing service level metrics can help reinforce quality expectations with suppliers. Lower prices don’t always mean it will yield lower quality. Quality can remain the same or improve while pricing decreases as long as the work team maintains focus on this balance.  

4) Benefit your Supplier: Obtaining the most competitive price is usually the result of a mutually beneficial partnership with your supplier. It is important to understand your supplier’s goals and look for ways to benefit your supplier through your relationship while still achieving your financial objectives. Challenge yourself as the customer to provide feedback to your supplier not only on the areas that require improvement but also on the areas in which they have met or exceeded expectations.

Next in our series, Pathstone will discuss utilization, which is also a lever that is often not maximized by hospitals.

Co-Authored by Joanna Guziak and Joseph Jang

Pathstone Partners is a management consulting firm that collaborates with hospital providers to identify and implement sustainable non-labor financial benefit. In the past five years Pathstone has partnered with over 100+ hospitals across 32 states delivering $100M+ annual benefit for our clients.

In this edition of the series, Pathstone will be diving into value generated with a focus on utilization.

What is Utilization?

Utilization can be defined as the extent to which hospitals are making use of products or services. Many hospitals have historically focused on savings related to pricing and standardization. However, with seemingly relentless financial pressures, utilization opportunities are the next wave to spark interest of savvy hospital executives. Opportunity for improvement in utilization can exist due to over, under, or improper use of a hospital’s goods, equipment or services. Being able to conduct an accurate assessment of current operations to determine if utilization opportunities exist is a challenge for most hospital leaders due to several factors such as unreliable data and constantly evolving market options for products and services.

Successful implementation of utilization opportunities delivers the following benefits to an organization:

Financial benefits ranging 7-15% depending on the category

More efficient use of time and resources

Discovery of other deep issues within a category, often quality related

Key Opportunity Indicators:

1) Poor Asset Management:  In today’s environment hospitals have a broad mix of assets across the organization. Understanding the true total cost of those assets is a challenge. Total cost of ownership for each asset includes not only the acquisition cost but also ongoing expenses related to maintenance, service and consumables. Furthermore, with hospital service lines experiencing continuous evolution, it’s difficult to maintain current lists of assets, let alone track service and maintenance records. As a result, an organization may find many inefficiencies or low returns on investments when true total cost of ownership is revealed.

Client Example: In our experience, clinical engineering often comes up in client discussions as an area to review due to its costly asset acquisitions, large asset inventory, and significant recurring spend on service and maintenance. Optimizing service levels on under-utilized or low-risk devices can drive utilization improvement. As an example, in outsourced maintenance agreements for ultrasounds, there may be significant savings to move from a platinum to silver or bronze support levels when in-house maintenance capabilities exist or sufficient inventory is available to swap out devices as equipment downtime occurs.

2) High Volume of Add-on Charges: For outsourced services, expenses can mount quickly due to “add on” charges for line items such as over-time, out of scope requests, volume commitment penalties, etc. These situations can result when service requirements were not anticipated when the agreement was created or if an organization experiences operational changes that impact how the services are now used. For these reasons continuous utilization reviews are important.

Client Example: Within our client’s clinical purchased services spend, such as dialysis, we discovered a high volume of “delay” charges that increased over several years. This led us to identify an operational bottleneck that was occurring with the patient transport process for treatments performed in the dialysis suite. Once the problem was understood, the transport process was redesigned, resulting in improved patient flow and a significant reduction in delay charges.

3) Misalignment with Key Performance Indicators (KPIs): Although the process for determining utilization opportunities does not rely on data alone, using Key Performance Indicators (KPIs) to monitor high level utilization trends is helpful.  KPIs are multi-dimensional, data-driven measurements of key operational data that highlight performance relative to targets. KPIs are a good first place to look for unfavorable utilization trends that may be a symptom of a larger underlying operational issue. We find implementing a KPI reporting tool that ties operational performance to cost can bring more awareness to potential utilization improvement opportunities and ultimately help drive and sustain change.

Client Example: Appropriate linen utilization is a common issue for many hospitals, and an opportunity that our clients typically believe exists based on operational practices they witness.  However, determining just how much utilization opportunity there is can be difficult to pinpoint. In our experience, a KPI that effectively measures linen utilization levels, including linen loss, reported in a metric of pounds per adjusted patient day helps our clients identify utilization improvement opportunities.

Key Success Factors:

1) Establish Multi-Disciplinary Teams: Discovering utilization opportunity requires a long-term, multi-faceted approach more complicated than identifying opportunities in pricing or standardization, which are common focuses for traditional value analysis teams. Therefore, it helps to have a dedicated team that understands the nuances of the specific utilization elements. Multi-disciplinary teams including nursing, finance, support services and supply chain are most effective. For many organizations, engaging a third party to determine team composition, establish charters, facilitate initial meetings and help cultivate working relationships on the team, has been very beneficial to expediting efficient and effective utilization projects.

2) Leverage Multiple Tools and Processes: Identifying utilization opportunities is a comprehensive evaluation process. There is no one tool, process or metric that leads to successful utilization-based initiatives. It is often a combination of many tools that effects sustainable change over the long-term.

3) Find the Right Change Agent(s):  One of the most difficult aspects to pursuing utilization opportunities is effecting lasting operational changes.  Once opportunities are identified and an implementation strategy is defined, an important next step is gaining support of those involved in the operation that change is necessary.  An influential leader that can gain organizational support for change – whether it is a change in practices, processes or technologies – is crucial for transformation.  Individuals need to feel well supported in the direction the organization is taking, especially when that direction requires change. Success will be elusive without stakeholder buy-in and support.

4) Improve Continuously: Continuously re-evaluating operations by looking to leading practices inside or outside your organization is important to maintain proper utilization. Take advantage of healthcare industry associations, roundtables and whitepapers that are regularly published to stay aware of key trends. Utilization opportunities, unlike pricing, are not proprietary and can typically be shared through collaborative discussions with peers.

Next in the our series, Pathstone will discuss standardization, which is also a lever that is not often maximized by hospitals.

Co-Authored by Joanna Guziak and Joseph Jang

Pathstone Partners is a management consulting firm that collaborates with hospital providers to identify and implement sustainable non-labor financial benefit. In the past five years Pathstone has partnered with over 100+ hospitals across 32 states delivering $100M+ annual benefit for our clients.

Previously, we discussed how we can tap into additional savings by evaluating the utilization of products and services. In this edition of the series, we will be diving into value generated with a focus on standardization.

What is Standardization?

Standardization can be defined as the extent to which hospitals are making use of the same products, services and processes. Due to the sheer number of suppliers and products available in the market combined with a diverse array of end-user preferences, hospital leaders often find they have a variety of similar products and services being used across the organization.

Standardization delivers the following benefits to an organization:

Financial benefits ranging 15 - 30% depending on the category

Leveraging system purchasing power

Improved consistency of service levels across the organization

Improved patient care and access

Key Opportunity Indicators:

1) Supplier Fragmentation: The use of multiple suppliers providing similar products and services may be a strong indicator for standardization opportunities. A closer review may reveal differences in both pricing and quality amongst the suppliers.

Client Example: Pathstone worked with a large health system that used multiple suppliers for over the phone interpretive services. By consolidating its supplier base through a competitive bid process, the client was able to leverage the health system buying power to negotiate market competitive prices and save over 25% in annual costs.

2) Product Fragmentation: The use of multiple products or services that fulfill a similar need can be another indicator of potential standardization opportunities. Different end-user preferences are a key contributing factor to product fragmentation, which can lead to varying price points for similar products and services. A thorough review of purchase orders or supplier invoice data can be a good starting point to understand the degree of product fragmentation.

Client Example: Pathstone recently reviewed print services for a client and discovered over 40 different copier models being used across the organization, resulting in variable device leases and cost per page rates. A deeper analysis showed over half of the devices had similar functionality but were billed at different rates. By standardizing devices, the client was able to achieve significant savings.

3) Incomplete Category Definition:  An incomplete understanding of a total product or service category due to extensive fragmentation can lead to missed opportunities to take advantage of key supplier relationships. If there is a narrow view of a category and its scope, it can significantly restrict the hospital’s leverage in negotiating key supplier contracts.

Client Example: Revisiting our previous example, the key driver behind the client’s fragmented supplier base was its decision to allocate business based on the type of interpretive services, such as in-person, over the phone and video interpretation services. Pathstone worked collaboratively with the client to identify suppliers with capabilities for all types of services, thereby generating more leverage for negotiations with existing and new suppliers.

4) Varying Service Levels: Disparate service level expectations across departments or facilities may also suggest opportunities to achieve cost or service efficiencies. This is often an overlooked identifier but can drive more consistent service delivery at a lower cost overall.

Client Example: In the same example as mentioned above, Pathstone discovered varying break/fix Service Level Agreements (SLAs) for the copiers across departments, resulting in inconsistent service and higher staffing costs due to the vendor’s inability to implement standardized practices. By standardizing and aligning break/fix SLAs with actual needs, the client was able to not only reduce costs but also improve service levels by optimizing staff deployment based on the “density” of areas (the volume and devices at a certain location).

Key Success Factors:

1) Utilize a Data-Driven Process: High-performing organizations remain disciplined in utilizing data as a foundation to identify opportunities for change. Since standardization requires a change in end-user preferences for suppliers, products and services, data is crucial for an objective approach to arrive at the best solution. Without the use of data, organizations may resort to anecdotal information that will not drive optimal results.

2) Increase Knowledge of Complex Categories: Understanding the strengths and weaknesses of suppliers, products and services enables organizations to select the best solution that meets internal objectives. By conducting market due diligence, organizations can evaluate a wide range of options considered by their peers. Partnering with third party consultants such as Pathstone may be beneficial to access market intelligence and provide assistance in determining what change is truly best-in-class and beneficial to the organization.

3) Engage Key Stakeholders Early: Any standardization initiative that does not have support and buy-in from key stakeholders is bound to fail over the long-term. A strong leadership team that participates in initial decision making and ongoing management is essential to reduce costs and improve service levels. When working with clients on standardization initiatives, Pathstone proactively identifies champions that can engage end-users and hold them accountable. By doing so, initiative benefits can be sustained over the long term.

Next in our series, Pathstone will discuss make vs. buy, which is often an overlooked lever by hospitals.

Co-Authored by Joanna Guziak and Joseph Jang

Pathstone Partners is a management consulting firm that collaborates with hospital providers to identify and implement sustainable non-labor financial benefit. In the past five years Pathstone has partnered with over 100+ hospitals across 32 states delivering $100M+ annual benefit for our clients.

Previously, we discussed how standardization is a value lever that can complement outcomes of other value levers such as price and utilization. In this edition of our article series, we will be discussing a unique value lever, make vs. buy.

What is Make vs. Buy?

Make vs. buy can be defined as the extent to which hospitals choose to use in-sourced or out-sourced resources.  Many clients often do not pursue this lever because each evaluation is unique; it requires robust data analysis, deep operational knowledge, change management and a longer timeline to successfully implement. However, the benefits that come with the make vs. buy lever can be enormous to any healthcare organization:

Key Opportunity Indicators:

1)  Significant Change in Volumes: A significant change in volumes, regardless if products or services are outsourced or provided in-house, can be a good signal it is time to evaluate the make vs. buy value lever. As demand changes, hospitals need to determine if either a make or buy model is best suited to maintain costs and quality levels over the long-term. Often, an increase in volume can serve as a strong leverage point for negotiations with suppliers. Conversely, with a significant decrease in volumes, organizations need to evaluate if its service delivery model has a flexible cost structure that can match current demand or if it is heavily burdened by fixed costs.

Client Example: Pathstone recently worked with a large health system that was experiencing continuous growth in annual bed rental spend. Although renting beds provided benefits such as procurement flexibility and third-party maintenances services, our analysis showed the increase in volumes was large enough that an investment in purchasing hospital beds was more favorable to the organization. As a result of our recommendations, the health system was able to reduce rental costs by 20%.

2) Increasing Program Costs & Decreasing Quality: If annual costs related to a service are increasing while quality is decreasing, it may be worth evaluating make vs. buy opportunities. From a cost perspective, organizations need to understand the key drivers of increased costs. Is it price, volume or productivity? Furthermore, hospitals can partner with third parties (GPO, consultants, benchmarking service, etc.) to determine how costs compare to the market. From a quality perspective, performance on key service level agreements (SLA) and end-user feedback can be gathered to understand key drivers of decreasing quality levels. Is it bandwidth, staff capabilities or limited resources?  By understanding the current state, hospitals can then effectively evaluate the benefits of transitioning to a make or buy model.

3) Fragmented Service Delivery Models: If your organization has a different mix of service delivery models, it may indicate opportunities to generate value. Fragmented service delivery models lead to differing levels of productivity, cost and quality, potentially impacting patient care and operations. By selecting a standard make or buy model for a given product or service, an organization is essentially applying another form of the third value lever we’ve covered, standardization.

Client Example: Pathstone has encountered several clients that have fragmented models for courier services which led to differing levels of staffing, service quality and cost, all of which can also make daily operations challenging to manage. In several of those situations, a decision was made to outsource courier services by working closely with key stakeholders across the health system, leading to more consistent service delivery and lower costs.

Key Success Factors:

1) Develop Business Cases: Organizations that utilize a comprehensive business case to evaluate the pros and cons of an in-sourced or outsourced model will increase their chance of success. The business case is a fact-based tool that allows teams to have an open and objective dialogue when selecting the best strategy.  For complex categories, engaging third parties to develop business cases can provide market information and objective analysis necessary to make the best decision.

Client Example: Pathstone has a proven methodology for business case development that includes a comprehensive fact-based analysis to determine various options for a given product or service category. In addition, we engage key stakeholders throughout the business case process, ensuring necessary operational context is understood and support from decision makers is present, which is crucial during the implementation process.

2) Evaluate Program on an Ongoing Basis: Since costs, quality and performance of programs can change over time, organizations that continuously evaluate make vs. buy opportunities position themselves to generate more value over the long-term. Continuous self-assessment can uncover opportunities resulting from minor improvements in supplier relationships to complete transformations for an organization’s service delivery model. For example, one important question for an organization to ask about an insourced operation is: “What else can we do with these resources?” The opportunity cost of those resources can help identify alternatives that drive more value for the organization. Furthermore, alignment of the service with the organization’s overall mission should be evaluated.

3) Access to Market Intelligence and Best Practices: Hospitals that have conducted extensive market research are well positioned to evaluate existing outsourced or internal programs.  Market intelligence on leading practice cost metrics and performance indicators can be an effective barometer to measure financial, quality and operational performance. Partnering with third party providers that can provide insight on market benchmarks can help an organization set the right targets to measure the competitiveness of existing programs.

We are now past the halfway mark of Pathstone’s “Healthcare Supply Chain Value Lever Series”. In future articles we will cover more complex value levers. In the next article, Pathstone will discuss the value lever of revenue.