Richard Helppie is chairman and CEO of Santa Rosa Consulting.
Tell me about yourself and the company.
I’ve been in IT since 1974. I’ve been exclusively in healthcare since 1981. I founded Superior Consultant in 1984 and took that through the entire life cycle from a one-person startup through a fast-growth private company to a public company, where we did pretty well there. Then I sold it to a Fortune 500 company.
I’ve done some other things along the way. Lately I’ve been investing in driving Software-as-a-Service companies outside of healthcare. And then of course where my passion lies, with Santa Rosa Consulting.
A little about Santa Rosa. We are a consulting firm with a full range of services — strategic advisory services, implementation, and integration. We have a staffing arm in recognition of the commodity basis of some of the things that used to be high differentiation. We have a solutions arm, and in our solutions arm today, we have Sandlot Solutions.
How would you differentiate Santa Rosa from your competition?
Santa Rosa is that trusted advisor and the strategic partner to get the work done.
The driver for starting the company was that I’d sold the company, Superior, in 2005. I had attempted retirement. I was terrible at retirement, by the way — I was just not good at it that all. I started growing other companies, again mostly in cloud-based computing.
But I kept hearing from my clients that, “Hey, I don’t have that trusted advisor, that go-to partner anymore. If you ever get back in this, call me.” Similarly, I heard from many of the colleagues that I’d had the pleasure working with over that Superior run and they said, “You know, I’m working but I’m really not inspired. If you ever get back into this, call me.”
Then we saw that there was a bifurcation in the market. In those acquisitions in the early part of the decade — with Superior going to ACS, now Xerox, and First Consulting going to CSC — you had this barbell. You had some very, very large firms on one end – Dell, IBM, Xerox, Deloitte, Accenture. All good firms, but firms that also need very, very large engagements to feed that engine. On the other end, you had a lot of very good firms that were maybe $5 to $40 million in revenue. Good at what they did, but not really big enough to move the needle for a client.
Where Santa Rosa comes is that we’re in that sweet spot in the middle, where we are large enough to move the needle, yet we don’t need the $80 million engagements in order to run a good business.
The lifecycles of both consulting firms and also the people who started them is fascinating, where someone starts a firm, sells it to someone bigger, sits out a bit, then comes back and does it again, sometimes more than once. It happened with three of the best companies back in the day — Healthlink, Superior, and FCG. What’s the message when people want to follow the founder of the firm rather than the acquired firm itself?
I think people are going to response differently to that. My experience has been that people like the passion. They like the commitment. They like the institutional knowledge and the comfort of working with somebody that’s been around a few decades. I had 3,000 clients at Superior and I think I could go back to 2,999 of them and they would be happy to see me coming.
Superior was a breakthrough company in its time. When I formed that company, the consulting business was set up like the CPA model. You had offices. The Tampa office didn’t talk to the Washington, DC office and so forth. I remember going to the shootouts early on in that business. The question would be planted by my competitors, you know, “How many offices do you have?” and I’d say, “I don’t have any.” That was considered breakthrough thinking at that time, that we had literally built that company from the computers to be connected electronically. E-mail was a competitive advantage.
We also did a number of other things that were considered breakthrough. The consulting business at that time was all about advising and writing papers. When I founded Superior, I said, “Anything that we advise on, we’re going to be able to implement.” That “advise and do” model was a breakthrough. I wish I had saved them, but I had editorials written against me at that time, and the established consultants criticizing me from the podium because consultants shouldn’t actually be doing work.
Why do people turn to us? Trust factor. Competency. Longitudinal view. Those would be some of the answers.
Superior arguably created the independent healthcare IT advisory business back in the 1980s. Now everybody wants to move away from that to implementation and staff augmentation. Are you happy with the way consulting has transformed?
Yes, I am. I think that we’re going to a new business model. I’ve done due diligence on companies. I’ve looked at it from the bonus structures and those types of things and I say, gosh, I wrote this thing. I remember one fellow looked at me and said, “Oh, it’s an industry standard,” but it was all the stuff that we had to create back at the time.
I think all businesses are going to be a mix of service and solutions. The client wants a job done. They want a result. They want to be able to say, we’ve partnered with or delegated responsibility for a particular result, and we are looking for a group to do it. I think you’re going to see further blurring.
All the traditional independent software providers have big service arms. When you look at the first wave that we’re seeing finally of cloud computing, there’s a heavy service component around that. I think it’s going to be more and more blurred as we go to this next wave of consulting.
When I think of Superior, I think of really sharp thought leader type people who would help you with the vision and then let you decide what to do with it. Does that still have value, or are you sorry if it doesn’t?
I believe that model has value. I always believe that you give the client the choice.
We only get hired as a consultant for one of three reasons. One reason is as you described — help me with an analysis, an objective opinion, help frame a decision for me. The second reason you get hired is the client says, “Hey, I’ve got the expertise, but I don’t have the workforce to pull this off. My people are busy.” Then the reverse of that is the third reason, “I’ve got the workforce, but I don’t have the expertise. I need some experts to come in, work side by side with my people, do knowledge transfer, and get me to a quality endpoint.”
I believe you do the work for the client, you deliver the value to the client, and you don’t try to take a canned approach and cram it down a client’s throat. Some clients just want advice and that’s what you do. If some of them want you to go shoulder to shoulder with them, that’s what you do.
It seemed in the old days that only the largest hospitals were paying for shoulder to shoulder work, at least the ones I worked for weren’t doing that. Now it’s almost a given that if you’re doing a big implementation, you bring in a bunch of bodies from one or more consulting firms to cover the hump of work needed to go live. I assume people realize it’s valid to pay a premium for that expertise knowing you’ll need it only for a limited time.
Exactly. Our clients are considerably more sophisticated and considerably more capable.
I hate to keep going back to the early days of the pioneering in this industry, but when I formed Superior, one of the drivers was that I saw independent software products being sold and I knew that the body of work that the software supplier was going to do and what the health system could do was going to leave a big gap. I went and marketed to folks who would look at me kind of quizzically and say, “Well, why would I even need a firm like yours?” They turned out, of course, to be some of my biggest clients.
Another thing that we had pioneered was actually going to the software suppliers and saying that, look, you’re going to need us as a partner. We’re going to be objective. The way we’re going to make sure we’re objective is going to work with everybody. You guys don’t want to get tied up doing the intricate work it takes to blend your product into the workflow of every one of those individual clients.
Back then, we had to evangelize that. Today, people expect that they’re going to use a consulting firm. Therefore, some of what we do is frankly quite commoditized. People know how to buy it today. There’s lot of folks who know how to build a company to deliver it. It’s always going to be about price and delivery, and oftentimes it’s about price.
What work are you doing most of these days at Santa Rosa?
A lot of it’s in the strategic advisory services. If you would have asked me that 18 months ago, it was absolutely heads-down for Meaningful Use 1. It was get Epic implemented, get Meditech implemented. That was the lion’s share of the work.
Today, it’s more of what’s coming on the next horizon. It’s ICD-10. It’s what you’re going to do about HIE. How are you going to be an accountable delivery system? How are you going to be able to manage risk?
I think there’s two megatrends that are running through the industry right now that I think bode well for consultants. By the way, I’ve read the whole Obamacare bill, the Patient Protection and Affordable Care Act officially. You’ve got providers that now need to manage risk, and whether they know it or not, fee-for-service is drilled deep into the DNA of their organization. They might employ 10,000 people and everybody is operating like it’s a fee-per-service world. All their technology support is designed around a fee-per-service world, yet they’re going to have to now manage risk and manage a population.
Coming around the other side, the health plans — which much of their value has been obviated by the Act — they’re now seeing their future. They have to be good at helping the providers manage clinical flow. And guess what? They don’t have that in their DNA, either. They’re good at claims management after the fact, saying, “This care shouldn’t have been delivered,” or, “This medication should have been prescribed.” But they aren’t very good at managing that clinical flow.
That’s where I think their huge opportunity is over this next immediate horizon.
If you look out five to 10 years, what industry changes do you expect to see?
I expect to see our health system much more like every other phase of our lives. I carry a smartphone. More and more and my life is inside that device, yet very little of my interaction with the healthcare system is there. I think the combination of the ubiquitous Internet, generations getting comfortable operating in the cloud, the cost pressures … I think you’re going to see healthcare look more and more like any other industry, and I think that will be a good thing.