By Richard M. Klass

Most healthcare executives have experienced the fallout of hiring a vendor that delivers disappointing results. A poor vendor choice can quickly become a highly visible failure that leadership remembers — especially when it leads to financial loss, compliance exposure, reputational damage, or strategic setbacks like delayed technological modernization and lost competitive advantage.

Avoiding a bad vendor selection decision starts with answers to upfront questions:

• What specific problem resolution are we targeting?
• Who are the internal stakeholders and project owners, and how will performance be measured and success be determined?
• What is the total budget, inclusive of both hard and soft costs?
• Do we require a vendor with healthcare experience?

Understanding the answers to these questions leads to developing filters for identifying the right vendor. Filters consider issues such as size of the entity, depth of healthcare experience, history with the organization, and vendor team that will participate in the engagement and the day-to-day project managers that will ensure desired result.

• Boutique vendor versus a known larger vendor is the classic risk-versus-reward dilemma. Larger vendors with healthcare experience are better able to navigate complex environments or where engagements require specialized expertise. They also offer better “political cover” if sub-optimal results are achieved but are comparatively costly. It’s hard to get fired if you contracted with the “best in breed”!

• By contrast, boutique firms often assign their top talent to projects and bring deep specialization in a specific operational, financial, technology, or marketing discipline. They can also deliver greater value because more of the fee goes toward expertise rather than overhead and layers of senior managers and partners that review project deliverables.

If you are unsure how to evaluate vendor options, consider issuing a request for information (RFI) or request for proposal (RFP) to several vendors. To maintain control of the process, require responses to specific questions and set page limits for each answer.

Finding the Right Vendor

The best place to look for qualified vendors is within your organization. If colleagues don’t have institutional knowledge of prior contracted entities, go to your procurement department for a listing of entities that worked on similar engagements.

Industry-specific channels are a preferred option. Your peers that work for other entities and personal contacts on LinkedIn are good sources to query. LinkedIn has specialty groups; members may provide good leads to qualified individuals.

Healthcare professional associations offer connections with vendors who have verifiable, healthcare-specific experience and a proven track record of handling industry-specific challenges like revenue cycle management and other complex payer dynamics, HIPAA compliance, and information technology issues. Here are examples: American College of Healthcare Executives (ACHE); American Association of Healthcare Administrative Management (AAHAM); American Medical Group Association (AMGA); American Health Information Management Association (AHIMA); The Healthcare Business Management Association; (HBMA); Healthcare Financial Management Association (HFMA); Health Information Management (HIM) professionals and the Health Information Management Systems Society (HIMSS).

Professional societies are good places to identify candidates to investigate. For healthcare attorneys, there is the American Society of Medical Association Counsel (ASMAC®) and the American Bar Association (ABA) Health Law Section. For accountants, besides the HFMA, the American Institute of CPAs (AICPA) – Healthcare & Medical Accounting Section, and the National Association of Healthcare Accountants (NAHA) are industry specific.

University Healthcare Department Professors often have consulting firms they’ve formed to tackle specific operational, policy and managerial issues.

Healthcare business conferences and trade shows offer the opportunity to meet and compare vendors side by side. Key conferences include Becker’s Conferences (operations, finance, strategy); HIMSS Global Conference (IT, cybersecurity, digital health); SHSMD [society part of the American Hospital Association] Connections (marketing, PR, communications; HFMA Annual Conference (revenue cycle, finance).

Non-healthcare professional associations provide good leads to finding qualified vendors. If you’re looking for marketing/advertising assistance, the largest associations include Association of National Advertisers (ANA); American Advertising Federation (AAF); American Association of Advertising Agencies (4A’s), and the American Marketing Association (AMA).

Richard Klass, President, 2CY, Inc., can be reached at rklass@2cy4u.com.