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Performance Transformation Assessment and Creditor / Lender Advisory Support
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April 02, 2024
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FTI Consulting was engaged to perform a comprehensive performance transformation assessment of a newly merged Health System to identify expense management and revenue enhancement opportunities and accelerate benefit realization. Additionally, FTI Consulting supported IHS with consultation and the preparation of financial reporting to manage creditor / lender relationships.
Q1 2024 Healthcare Quarter in Review Read Now
Following the merger of two health systems, the organization was experiencing financial pressure. The combined organization was required to take prompt action and initiate a turnaround effort. FTI Consulting was engaged to conduct a comprehensive assessment, including workforce management, ambulatory care & physician practices, payer contracting, clinical operations, perioperative services, supply chain & purchased services, pharmacy, information & technology, and financial operations. Simultaneously, FTI Consulting leveraged deep turnaround expertise to assist IHS in communication with creditors / lenders and the development of key financial documentation to fulfill creditor / lender obligations and facilitate negotiation.
Our Role
- Leveraged labor productivity benchmarking analysis and expert insights to identify opportunities
- Assessed medical group operations and identified opportunities to improve capacity, address underperforming providers, and enhance structure and compensation strategy
- Conducted a prevailing fee study and market rate assessment for top commercial payers and provided negotiation strategies based on results
- Assessed clinical operations and perioperative services care delivery model with a focus on cost, safety, and outcomes
- Evaluated supply chain, purchased services, and pharmacy spend to identify opportunities to reduce costs and enhance service levels
- Assessed current state IT cost model and integration strategy
- Reviewed current state financial operations structure and integration efforts to date
- Assisted with the development of projected financial statements, financial improvement model, and integrated banking model
- Advised on IHS ability to achieve necessary financial performance improvements and supported creditor communications and negotiations
Our Impact
- Identified opportunity range of $82M - $180M across all workstreams; supported validation and incorporation into financial improvement model
- Identified opportunity range of $16M - $34M in FTE consolidation / redeployment; provided workforce strategies by functional area to realize opportunity and ensure sustainability
- Identified commercial market rate opportunity range of $24M - $70M; provided detailed benchmarking analysis and tactics to support negotiation
- Supported the development of the financial improvement plan and communication to lenders. Engagement is ongoing and may include debt restructure and lender negotiation advisory support.
FTI Consulting was subsequently engaged to implement many of our recommendations; that effort is in progress and is expected to be completed in the coming months.
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Published
April 02, 2024
Key Contacts
Senior Managing Director, Leader of Healthcare Provider Practice