Health care consulting industry is enjoying boom times

Just as demand for health care services has increased in recent years, so has demand for advice about those services.

The health care consultant industry is in the middle of what one report says is a striking growth period, with an 8.5% estimated compound annual growth rate from 2004 to 2009, according to a new report from Kennedy Information, which provides research about different professional services.

The Peterborough, N.H.-based company's report on the health care consulting marketplace says the cash value of industry services will jump from $17.3 billion in 2004 to $26.6 billion in 2009.

The statistics reflect growth among consultants serving all facets of health care, including insurance and pharmaceutical industries, but experts say there is a surge among consultants who help physicians as well.

To physicians, the boom means more choices to draw from when seeking consultants and more specialized expertise. There is little evidence that the cost of those services will change significantly, though certainly a competitive market could lead to competitive prices.

If nothing else, knowing that there are more consultants offering advice can give physicians some reassurances as they embark on new projects.

"It gives me peace of mind, and I've learned from good experience that when there's a significant decision to be made and a significant buy-in from the practice, having a good consultant on board legitimizes what we're trying to do," said Robert W. Yelverton, MD, chief executive and medical director of Tampa Bay Women's Care, which has 66 ob-gyns in the Tampa, Fla., area.

Dr. Yelverton has hired a consultant to advise his group about purchasing an electronic medical records system. He believes that new technology is driving demand for consultants to doctors. Indeed, experts say technology is one of the influences driving the trend, as is the aging population, emerging subspecialties and creation of new facilities.

"It's pressuring [physicians] when they don't know how to respond to it," said Jim Morell, past chair of the American Assn. of Healthcare Consultants and president of the Northbrook, Ill., consulting firm Morell & Associates.

"And from a [physician's] standpoint, management teams in place today have not had to deal with these issues in place at the same time."

The ever-complex regulatory environment only clouds the picture further, said Michael Fleischman, principal at the Atlanta consulting firm Gates Moore & Co. and chair-elect of the AAHC.

"Thank the federal government because [it has] made our lives much more complicated," said Fleischman, citing the advent of HIPAA and the rules governing ancillary services.

As the industry has become more complex, Fleischman said, there has emerged a new breed of specialized health care consultants who tend to concentrate on one type of expertise, such as information technology or ancillary services.

"It's almost like the practice of medicine itself," Fleischman said. "It's gotten very focused on specific areas."

But experts point out that the growth is widespread even among consultants who offer more general services.

"I don't think it's only about specialty consultants, though certainly as people have specialty demand you have growth," said Deborah Bowen, who is executive vice president and chief operating officer of the Chicago-based American College of Healthcare Executives.

ACHE has seen evidence of the growth in its own ranks. It breaks down some of its members into specialty areas. Bowen said the number of consultant members has doubled in the last 10 years to comprise nearly 9.5% of ACHE's membership.

Of course, figuring out who to count as a consultant can be difficult.

It is possible to become credentialed as a health care consultant through AAHC. Some might be certified in specific fields, such as coding. But Fleischman said he was unaware of any legal requirement for certification before opening a consulting business. "Anybody can hang their shingle out and say, 'I'm a consultant,' and get some clients," he said.

With a growing number of health care consultants available and no uniformity of what should be expected of their credentials, it can be hard for physicians to ensure that they are finding the right person to help them. Bowen suggested relying on the gold standard of professional services shopping: word of mouth.

"Ultimately people find out about consultants [as] they find out about a lot of services. They find out from their colleagues, they do reference checks, and certainly experience speaks as well," she said.