Performance Transformation

Helping healthcare businesses drive sustainable results by transforming performance through capability building, strategic repositioning, and technology enablement

A rapidly changing healthcare environment calls for action to transform. We support healthcare organizations from end to end across growth, performance, and innovation topics in a way that achieves sustainable results. Our proven approach and unequaled pool of expertise has helped distill the critical ingredients needed for organizations to achieve velocity in a transformation.

What we do

Holistic transformation

We use a holistic, proven approach with unparalleled expertise to support large-scale, structured transformation programs to drive growth, spur innovation, and turn around operational performance of payers, providers, and healthcare-services organizations.

Performance improvement

We tailor our transformation approaches to a healthcare organization’s situation and goals, and work with an organization to alter its performance, health, and capabilities completely when the aspiration is a radical step up in performance. In other instances, we apply a unique approach that provides flexibility but still generates significant improvement in execution, capability, and growth.We frequently conduct M&A and strategy transformations in targeted situations.

Opportunity identification

We have considerable experience in conducting diagnostics across functional areas to understand transformation opportunity at a granular level. We complement our hands-on work with proprietary, rapid diagnostic tools and concepts that tackle a range of healthcare challenges. Further, we use a proven recipe of practices and governance to ensure that the identified opportunities progress from ideas to well-developed implementation plans to support healthcare organizations.

Implementation

During the implementation phase of a transformation, we engage experts in growth, consumer journeys, digital, corporate finance, supply chain, back-office functions, patient access, and clinical operations alongside dedicated delivery and implementation resources (including interim management, when appropriate) to drive differentiated levels of performance and growth.

Featured capabilities

Our proprietary tools support performance-transformation efforts from end to end.

Proprietary, tech-enabled diagnostic tools: Our scalable offerings across provider and payer areas enable rapid, valuable insights and identification of opportunity levers for functional areas (for example, labor optimization, supply classification, revenue excellence, and payer commercial growth).

McKinsey Academy: Our organizational program helps develop health-system leaders and build management capabilities across the organization.

Nebula platform: We developed a scalable, cloud-based data platform to process client data quickly and enable faster insights and action.

Wave: Wave combines a proven program-management platform with expert services to ensure that companies can execute large-scale transformation programs that deliver maximum impact and can benchmark progress against peers.

Examples of our work

We have undertaken more than 500 major performance-transformation projects for leading healthcare organizations, resulting in more than $6 billion in medical-cost savings.

Rapid enterprise transformation

When a large not-for-profit health system in the United States was struggling with a budget deficit and physician and patient retention, we helped drive immediate wins across labor, supply-chain, purchased-services, and growth-operations areas, leading to more than $77 million in cost reduction and $15 million in revenue growth over the course of a year.

Postmerger turnaround

A metropolitan US hospital system involved in a recent merger was facing financial and cultural challenges, so we helped it launch a clinical-operations-improvement program, identified revenue-driving opportunities, and developed a team to run and monitor turnaround activities. These efforts ultimately exceeded financial targets, growing earnings before interest, taxes, depreciation, and amortization by 25 percent and free cash flow by $100 million.

Business-unit transformation

We worked with a major business unit within a regional health plan that was seeking to improve operating margins and establish a robust process to generate and implement performance-improvement ideas. We partnered to deliver a new operating model that enhanced the business unit’s strategic position, which helped it exceed operating-margin targets by more than 25 percent.

Growth

When a large payer with strong historical performance was looking to sustain growth through uncertainty and strengthen organizational health, we focused on building a digital foundation for growth. Our efforts overdelivered on cost-saving and growth targets, identifying 10 to 15 percent in administrative-cost savings.