With hundreds of hospitals in deep financial trouble, turnaround consultants are being stretched to their limits.
At issue is whether one firm can provide high-quality services to dozens of customers at the same time.
Most companies specializing in rescuing troubled organizations have a core group of managers and stringers they use on an as-needed basis, said Corbett Price, a management expert with Kurron, a New York-based turnaround firm.
"The real question mark would be whether or not the people they bring in on a temporary basis have the prerequisite skills and are familiar with the way the firm operates," he said.
One such company whose mettle is being tested is the Hunter Group, based in St. Petersburg, Fla. The firm's 10 to 15 cases range from small, interim-management assignments to massive makeovers of big-name institutions.
In recent weeks, the Hunter Group has accepted numerous high-profile assignments, promising to shore up some of the nation's most financially precarious institutions.
Assignments include the following:
* Founder David Hunter was named interim administrator of UCSF Stanford Health Care last week after two top executives resigned (See story, above).
* David Coats, the Hunter executive who orchestrated the financial overhaul of eight-hospital Detroit Medical Center, last month assumed a new role as interim chief executive officer of University of Illinois at Chicago Medical Center (Aug. 2, p. 18).
* Carondelet Health Network, a three-hospital system based in Tuscon, Ariz., tapped William Fuchs, a senior associate at Hunter, as interim CEO this spring.
* University of Pennsylvania Health System, Philadelphia, which suffered a $91 million operating loss on revenues of $1.8 billion in fiscal 1998, has hired the firm to stop Penn's financial free fall.
* Ten-hospital BayCare Health System in Clearwater, Fla., another Hunter client, is trying to squeeze savings from two of its money-losing hospitals: Bayfront Medical Center and St. Anthony's Hospital, both in St. Petersburg.
* Until earlier this year, CEO Art Dunn, another Hunter Group specialist, was at the helm of Centura Health, Colorado Springs, Colo. Because the firm remains under contract, a system spokesman declined comment on that situation.
Hunter said he recognizes the danger of being spread too thin, noting that the firm has turned down several jobs in recent months. It relies on a core group of roughly 60 professionals, including owners, employees and managers hired on a per-diem basis, but won't use anyone who hasn't been thoroughly trained, he said.
"If I do something that is jeopardizing my company's credibility, we've basically bought the farm in terms of my ability to get new work," Hunter noted. "We are very careful to not take an engagement if we can't field a team."
Another firm whose business is booming is Deloitte Consulting, where hospital turnaround management has become a "significant piece of business," said Larry Neiterman, the firm's Boston-based healthcare practice director.
Neiterman said the firm strives for longer-term client relationships, rarely accepting jobs requiring immediate, drastic measures.
Ernst & Young, which specializes in process improvement, soon will announce an alliance with Jay Alix & Associates, a corporate turnaround firm known for making over Fortune 1000 companies. Jay Alix is now branching into healthcare.
Oxford Health Plans, the Norwalk, Conn.-based HMO, was involved with Jay Alix's first step into healthcare.
Donn Szaro, partner and national director of healthcare industry services in Ernst & Young's New York office, said the alliance marries the Big Five accounting firm's healthcare expertise with the turnaround firm's ability to revive complex, multiorganization companies.
Those skills will come in handy in the coming months. Szaro's operation conducted an in-house financial assessment of healthcare organizations that identified 40 to 50 "crisis" situations nationally. Fourteen are in the tri-state area of Connecticut, New Jersey and New York.