At the end of March, President Obama signed major healthcare reform into law. In April, John Distefano joined Ernst & Young as leader of the firm’s healthcare practice of its Advisory Services Group. How’s that for timing? Distefano will put his 30-plus years of healthcare consulting experience to work help companies looking for assistance with integrating this new law into their overall strategy. (Prior to his current role at Ernst & Young, Distefano was a Principal with Deloitte Consulting, serving as a major accounts leader and member of the firm’s Health Plan Advisory Board.) Consulting sat down with Distefano to discuss the healthcare industry, the law, the reform and what it all means to the firm’s bottom line.

Consulting: You came to Ernst & Young right after the legislation was signed into law. Where do you see the most opportunities?

Distefano: I think where we are looking at the greatest opportunity is the tailwind and the incentive to change—the call to action if you will—that was created by healthcare reform. That will certainly challenge our clients and challenge us to deliver what they need. Healthcare reform was first and foremost a catalytic event; it sparked action and it sparked dialogue, but then it quickly became divisive—the payers vs. providers, who is going to win and who is going to lose? That’s not the right way to think about this.

Consulting: And now?

Distefano: Well, now I think we’re coming to terms with it and realizing that in order to get through this successfully, and make sure we’re preserving margins and addressing quality, we need to take a much more collaborative approach. There will be new service opportunities. In the past, the idea of bringing together payers and providers into a common data structure was not all that common. Sure, there were absolutely examples of that, but those were always the exception and the innovation of the industry, not the rule. But what we’re going to see now is that this collaboration will become the standard practice two or three years from now. That’s a good thing. And being a part of the innovation is a new opportunity for us; we can bring to bring together two separate healthcare constituents that haven’t had a history of collaboration before.

Consulting: Did having healthcare on the public docket make it any easier?

Distefano: It really has. Initially, it was about helping clients understand the legislation, and we had a lot of conversations about that and are still working through it, but now we’ve shifted to understanding the implications of if the law. It’s an ongoing educational process, and that’s very much allowed us to be pro-active with our clients, brought us to the table and opened up a dialogue with them. Those conversations were already happening on some level, but there’s no question that healthcare reform provides a burning platform and accelerates the dialogue. Clients are no longer thinking they have eight or ten years, but two or three years. They realize they have major risk and exposure to their business models if they don’t align over the next 24 or 36 months.

Consulting: What areas will E&Y be doing the majority of its work?

Distefano: We see four key areas: health insurance access and funding reform, and that’s largely around payers. Secondly, we see substantial elements around care delivery reform and that’s predominantly provider, but there are collaboration opportunities there, as well. The third is regulatory reporting reform, which hits both, and finally, reimbursement reform, which also hits both. We’re going to market with a balanced set of services that not only looks at payers and providers separately, but also with an eye toward this historic opportunity at collaboration. It’s an exciting time from that perspective, particularly where payer and providers intersect and collectively strive to serve patients better.

Consulting: So, do you think the work will be split pretty evenly between payer and provider?

Distefano: I do think the business of delivering care will look substantially different five years from now, while the business of financing care may not look that much different. That will drive fundamental change. The majority of dramatic change is on the provider side, so that is a tremendous area of growth for us, and we’re doubling down on that aspect.

Consulting: What will it all mean to the bottom line?

Distefano: I can’t really disclose revenue figures or even projected growth percentages, but I can say that from a staffing perspective, we looking to increase our FTEs in healthcare 30 to 40 percent and you can make some correlations about our revenue growth from that. We’re very excited, and it’s a very substantial growth platform for us and the firm.

—Joseph Kornik