The Advisory Board Company

  • Overview
THE SCOOP


Members only
D.C.-based Advisory Board Company is a membership-based professional services firm that provides best practices research, analysis, executive education and leadership development, software tools and installation support services, primarily to the health care industry.  Membersâ€"who are charged a fixed annual fee for access to the firm's servicesâ€"include more than 2,800 hospitals, health systems, pharmaceutical and biotech companies, health care insurers, medical device companies and universities.  Among the members are the top-18 hospitals as ranked by U.S. News & World Report, and 95 of the country’s 100 largest health care delivery systems.  Since late 2007, the firm has also expanded its operations to include academic institutions, working with university provosts, heads of student affairs and administration leaders. 

In 2009, the firm was able to expand its services even further by acquiring the management and consulting firm Southwind.  This acquisition, coupled with the firm's business intelligence platform Crimson, allows the firm to provide tools and services in hospital-physician alignment and performance management.  Southwind specializes in aligning hospitals and physicians through a comprehensive set of physician employment, clinical integration, and information technology deployment solutions.  Most of the Advisory Board's membership is located in the United States, however, the firm has expanded internationally, picking up new members abroad in the United Kingdom, Norway, India, Australia, New Zealand and the Middle East.

For its members, the Advisory Board’s research and services focus on business strategy, operations and general management issues.  Recent research has looked at enhancing the quality of care through best-in-class physician engagement strategies and infection control efforts; looking at the impact of emerging clinical technologies on hospital economics and operations; and understanding how increased transparency in the health care sector affects consumer behavior and decision making.

From big picture to niche provider
Back in 1979, when the firm was founded as the Research Council of Washington, its five employees promised to answer “any question for any company for any industry.† Most likely recognizing the enormity of that call to action, in 1983 the firm narrowed its focus to research for the financial services industry, at which point it also changed its name to the Advisory Board Company.

In 1986, the firm planted the seeds for what would ultimately become its primary focus: a strategic research division dedicated to the health care industry that was available to members under the name Health Care Advisory Board (HCAB).  By 1997, the Advisory Board spun off its more corporate and financially focused membership group, the Corporate Executive Board, as an independent company, and went public four years later under the ticker symbol, ABCO.  In 2003, the firm launched its first business intelligence software platform, allowing CFOs in hospitals to provide clear data and analytics around revenue cycle management, and in 2007, the firm developed its first membership programs in higher education: the Student Affairs Program for student and academic affairs executives, and the University Provost Program for provosts.


Penny for your thoughts
The Advisory Board believes it can offer the same kind of high-quality services (if not better) that other consultancies offer, but at a lower price.  By providing a standardized set of services via its membership model, the firm says it is able to spread its largely fixed program cost structure across the entire list of participating organizations.  Members participate in the research and analysis of the programs, and though a few programs include direct billable expenses, the majority have a flat-fee structure based on a member's size and the total number of program memberships selected.

Membership programs are broken down into six areas: strategy and operations research, clinical research, leadership development, business intelligence and analytics, physical performance, and health care industry and international offerings.  By early 2009, there were 40 programs in all to choose from, including the recently developed health care programs in hospital/physician alignment, infection control, supply quality and emergency department operations.  Members also draw on the firm’s library of proprietary research and tools, which contains more than 34,000 strategic and operational tactics, 150 service line forecasts, and 5,000 new technology profilesâ€"all of which are disseminated via reports and briefings, meetings and teleconferences, access to Advisory Board experts, implementation toolkits, and custom-designed tools and calculators.  Much of the research is gleaned from member executives themselves.

The model appears to be working: For eight years running, the member renewal rate has been near or at 90 percent.  The firm attributes the high renewal rate to its ability to fulfill client needs.  At the same time, deferred membership revenue and membership renewals make up 80 percent of the firm’s annual revenue, making it easier to forecast the firm’s financial health in tough economic times.  That’s good news for members and investors alike.

Separating the good from the great with business analytics
Advisory Board research indicates that, within specific terrains, what often separates the good companies from the great companies is access to better, more timely and more accurate information.  To help organizations gain greater visibility into their performance, the Advisory Board has developed web-based business intelligence tools that provide members with real-time decision support, robust data collection, advanced analytical capabilities and quantitative research.  The firm currently sponsors 11 ROI-driven business intelligence tools, along with best practice support and services.  The firm's aim is to help individual hospitals and health systems convert their endless streams of data into actionable solutions to enhance business performance and provide best practices to other organizations.

C*onsulting with H*Works
Separate from its membership programs is H*Works, the Advisory Board’s more traditional consulting arm that works with hospitals to design and implement new strategies.  Offerings include emergency department performance, workforce management, revenue management, technology strategy, inpatient and surgical management, nurse staffing, margin enhancement and growth in particular service lines.

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The Advisory Board Company


2445 M Street, NW
Washington, DC 20037
Phone: (202) 672-5600
Fax: (202) 672-5700
www.advisoryboardcompany.com

STATS


  • Employer Type: Public
  • Stock Symbol: ABCO
  • Stock Exchange: NASDAQ
  • CEO: Robert W. Muslewhite
  • 2010 Employees: 1,200

Major Office Locations

  • Washington, DC

Key Financials

  • 2010 Revenue: $290 million

SALARY FINDER

SALARY FINDER

Health Service Administrator

  • $0
  • 25
  • 50
  • 75
  • 100
  • 100+
Yearly Salary Range (US$ Thousands)