May 18th, 2007
Packaged Services in a Complex Environment
I’ve written numerous times about how packaged (or productized) services and can improve alignment between the interests of consultants and their clients. The New York Times reports that the packaged approach is now being tested by a hospital group in Pennsylvania. From the article:
The group, Geisinger Health System, has overhauled its approach to surgery. And taking a cue from the makers of television sets, washing machines and consumer products, Geisinger essentially guarantees its workmanship, charging a flat fee that includes 90 days of follow-up treatment.
Even if a patient suffers complications or has to come back to the hospital, Geisinger promises not to send the insurer another bill.
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Geisinger stands out as a group that has transformed the way it delivers care, said Dr. Donald M. Berwick, the chief executive of Institute for Healthcare Improvement, a national nonprofit organization whose goal is better patient care.
In almost no other field would consumers tolerate the frequency of error that is common in medicine, Dr. Berwick said, and Geisinger has managed to reduce the rate significantly. “Getting everything right is really, really hard,” he said.
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In reassessing how they perform bypass surgery, Geisinger doctors identified 40 essential steps. Then they devised procedures to ensure the steps would always be followed, regardless of which surgeon or which one of its three hospitals was involved.
Geisinger has created a true packaged service: fixed-price, defined scope, and strict timetable for service delivery. They even have a well-planned process methodology to ensure consistent and efficient execution across their multiple locations.
Next time a services vendor says your project is too complex to define a fixed price, ask whether it’s more complex than heart bypass surgery. If packaged services can successfully be applied to surgery, they can be applied to enterprise software implementations.
Michael Krigsman is CEO of Asuret, Inc., a software and consulting company dedicated to reducing software implementation failures. Click here to discuss this post with him on Twitter. See his full profile and disclosure of his industry affiliations.
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