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Organizational Excellence

We help healthcare clients improve their organizational health so they can improve their performance.

Implementing organizational change is hard, but it's particularly challenging in healthcare. Yet ever-rising costs, technology advances, and reform initiatives are making change mandatory in most healthcare organizations.

By combining its extensive healthcare experience with the organizational expertise developed in its corporate work, McKinsey brings an unparalleled level of knowledge and skill to help healthcare clients implement large-scale change programs.

We also help these clients ensure that their organizational design supports optimal performance and evaluate whether mergers or joint ventures make sense. And we help improve their leadership skills—from the C-suite to the front line—so people can do their jobs more effectively. Specifically, we work in four major areas:

Transformational change

Given industry dynamics, most healthcare organizations today must undertake transformations—significant organizational changes that improve performance, build capabilities, and strengthen behavior. The transformations must address both organizational performance and health (i.e., culture, leadership, ability to change).

McKinsey helps clients identify the changes they need to make, design a transformation program, and build the organizational capacity to sustain the changes. For example, we have helped:

  • hospitals increase care quality while decreasing wait times
  • health systems integrate care delivery more closely
  • payors meet the challenges of healthcare reform

Our unique approach to developing transformation programs ensures success because all activities are well resourced, structured, supported, and measured. We use a variety of proprietary tools, including our Organizational Health Index survey, to identify problems and develop actionable insights. We also help clients deepen a wide range of capabilities, from functional skills (e.g., operations, pricing) to basic leadership capacity, to ensure the transformation's sustainability.

Organization design

Organization design encompasses all the elements that can reinforce—or hinder—a client's strategic aims, including its operating model, organizational structure and forums, business processes, decision rights, and culture. When poor organizational design prevents a client from achieving its goals, McKinsey can identify the underlying issues, determine what changes will produce the strongest results, and help the client firmly embed those changes in all relevant departments.

For example, we have helped:

  • a hospital chain create a stronger corporate center to better control costs
  • a local payor develop a new organizational structure and clearer decision rights to unlock the power of its scale
  • a regional health system revise its operating model in response to government mandates

Merger management

Many healthcare organizations today are considering mergers or joint ventures, but there is no one-size-fits-all answer when it comes to whether such deals make sense. We help clients identify the right acquisition targets and think through the integration process. And once the deal goes ahead, we help clients oversee their post-merger integration efforts.

The types of mergers and joint ventures we have consulted on include:

  • payors contemplating acquisitions to obtain new capabilities for a post-reform world
  • hospitals investigating whether consolidation could eliminate subscale service provision
  • payors and providers weighing joint ventures to better integrate care
  • regional health systems pondering affiliations with community care providers to better coordinate service delivery

Human capital

In an industry as labor-intensive as healthcare, success requires a strong human capital strategy. Performance management, talent recruitment and retention, workforce productivity and role design, benefits management, and leadership development are all crucial.

McKinsey has helped:

  • national and regional health systems develop blueprints for the workforce of the future
  • hospitals reduce costs and improve staff retention by enabling nurses to practice at the top of their license
  • payors strengthen their performance by creating joint and individual leadership plans

Using our proprietary HR 360 assessment tool, we help clients evaluate and redesign their HR operating model to maximize performance. When appropriate, we can also analyze the local labor market and determine the best locations for centers of excellence.

FEATURED EXPERTS

Jocelyn Grahame

Partner, New Jersey

Celia Pohani Huber

Senior Partner, Silicon Valley

Impact stories

By creating a performance-driven culture, a health system lowered costs and raised quality of care

A lean transformation with rigorous performance management can produce a significant and sustainable return on investment.

Making change happen at an academic medical center

Performance transformation program reduces cost and increases efficiency, producing savings of $35 million in the first year.

Supporting merger integration for two payors

An effort to find synergies and support the integration of two regional payors creates a new organization that successfully competes with national insurers.

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