If hospitals spend billions of dollars on management consultants, they will at least get:
- A) stronger finances
- B) better quality of care
- C) streamlined operations
- D) none of the above
The correct answer: D as in Deloitte! You guessed it, at least according to a new study in JAMA.
- Researchers analyzed 2,343 non-profit hospitals in the U.S. from 2009 to 2023, finding that they collectively spent over $7.8B on management consulting over that period.
- More than 20% of the hospitals brought on consultants, and the hefty total in the previous bullet means they spent an average of $15.7M for their services.
Here’s what that got them. Researchers compared 306 hospitals that enlisted management consultants for the first time during the study period to 513 matched hospitals that toughed it out on their own.
- Despite the substantial investment, the study found “little evidence of substantial, statistically significant, or systematic improvements” attributable to the consulting engagements.
Consultants couldn’t catch a break. The analysis showed that the hospitals that hired them saw no significant impact across any of the primary measures.
Not the financial measures.
- Net patient revenue was down 2.22% (P = .14).
- Total margin was down 0.19 percentage points (P = .71).
Not the operational measures.
- Inpatient length of stay was up 1.71% (P = .10).
- Total inpatient days were up 0.29% (P = .85).
Not the quality measures.
- All insignificant, besides 30-day stroke readmissions: up 1.37 percentage points (P = .03).
Big results, with limitations. An accompanying editorial applauded the analysis, but pointed out that struggling hospitals are also more likely to seek outside help. Future research should investigate this selection bias and “the factors that predict a hospital’s decision to hire a consulting firm.”
The Takeaway
High P-values don’t mean that management consultants aren’t making an impact. They just mean that the most notable study to investigate the impact couldn’t find one…
