doi:10.1111/imj.14634 PERSONAL VIEWPOINT Are external management consultancies effective in healthcare improvement, do they reflect value for money and what are the alternative models? Helen Skouteris, 1 Ian Kirkpatrick, 2 Graeme Currie, 2 Jeffrey Braithwaite 3 and Helena Teede 1 1 Monash Centre for Health Research and Implementation, School of Public Health and Preventive Medicine, Monash University, Melbourne, Victoria, 3 Australian Institute of Health Innovation, Macquarie University, Sydney, New South Wales, Australia, and 2 Warwick Business School, University of Warwick, Coventry, UK Key words healthcare improvement, consultancy, academic health science centre, research translation, health system. Correspondence Helen Skouteris, Monash Centre for Health Research and Implementation, School of Public Health and Preventive Medicine, Monash University, Level 1, 43–51 Kanooka Grove, Clayton, Vic. 3168, Australia. Email: helen.skouteris@monash.edu Received 23 March 2019; accepted 15 April 2019. Abstract Despite the increasing use and costs associated with external management consultancy for healthcare improvement, there is a paucity of formal evaluations examining impact. This paper aims to: (i) discuss the potential benefits and disadvantages of external con- sultancies in addressing complex healthcare challenges and delivering healthcare improvement in Australia; and (ii) explore potential alternative models, including inter- nal consultancy and hybrid models delivered through platforms of collaborative exper- tise. We propose that the substantive reliance on high cost external management consultancies without demonstrating value or benefit, is unsustainable. An integrative approach that embeds research and capacity building within healthcare services may be of value. Despite increasing use and costs of external consultancies in health systems, demonstrated sustained improvements are limited. In this paper, we explore whether external manage- ment consultancy (EMC) is effective in healthcare improvement (HCI) and whether costs are justified. These questions are pertinent and timely given that EMC appear not to improve UK National Health Service (NHS) efficiency, 1,2 and that top down Australian restructuring of teaching hospitals, promoted by EMC at great cost, has had no measurable benefit. 3 Here, we also explore potential alternatives, including new integrated collabo- rative platforms designed to embed research and capacity building within the health system, to drive HCI. 4 External management consultancies in health In the US and UK, healthcare has become highly profit- able for EMC. 1 Large, sometimes global firms focus on healthcare, claiming to redesign workforces, processes and procedures, and embed performance-improvement and outcomes-driven approaches. 1 Global fees for EMC in healthcare now total $6 billion annually, although this is likely an under-estimate. 1 Multiple factors contribute to increasing EMC use in healthcare. The scale and complexity of healthcare and the emerging challenges has generated growing HCI demand. EMC use potentially relates to perceived effi- ciency (economies of scale and scope) and access to commercial sector expertise, 5 potentially fuelled by per- ceptions of government failure, 6 and costs and barriers for effective internal consultancy (a theme we return to below). Government motivation to use objective evidence to inform policy is also complex, as outlined by the Pro- ductivity Commission. 7 Arguably, greater transparency and accountability in public fund expenditure on EMC and increased use of objective evidence by policy makers are both needed. Rationality of clients in EMC use may also be problematic, with demand driven by factors including political pressures, ‘quality’ for external stake- holders, or funders (e.g. by employing branded, high rep- utation firms) and the desire and ability to guide and influence outcome. 8 The scope of work, identified Funding: None. Conflict of interest: None. Internal Medicine Journal 49 (2019) 1451–1455 © 2019 Royal Australasian College of Physicians 1451