WSJ Piece on Billing Models and What It Means for Healthcare Consulting
By Courtney Hennigan, VP of Operations, HBS
The Wall Street Journal published a piece last week that quietly signals a very loud shift for professional services: as AI takes over more routine work, the billable hour is becoming economically untenable.
When a system can review thousands of documents in minutes instead of weeks, or generate complex analysis in seconds instead of hours, time stops being a meaningful proxy for value. And when that happens, billing by the hour stops making sense.
At HBS, we’ve seen this shift up close.
As a healthcare consulting organization that has made significant investments in automation, process redesign, and now AI, one truth has become unavoidable: under traditional Time-and-Materials models, the more efficient you become, the less revenue you’re allowed to keep. That creates a structural disincentive to innovate, precisely when innovation is most needed.
Flat-rate and scheduled billing turn that dynamic right-side up again.
For healthcare systems, this approach brings budget certainty, predictable forecasting, and dramatically lower administrative friction. Projects move faster because efficiency is finally rewarded instead of quietly penalized. Delivery risk shifts away from the client and onto the consulting firm, where it belongs. Instead of paying for hours, clients pay for outcomes.
For consulting firms, it creates the margin stability needed to invest in better tools, smarter delivery systems, automation, AI, and high-caliber expertise—bringing the right talent to the work instead of rationing it by the hour. Incentives align around performance instead of timekeeping, enabling a business model that can scale.
The legal implications matter too. Flat-rate agreements bring clearer scopes, cleaner obligations, fewer billing disputes, stronger audit defensibility, and far less room for interpretation. When the commercial structure is clean, relationships stay focused on outcomes, not invoices.
What the WSJ article ultimately highlights is this: as AI absorbs more of the task work, the real premium shifts to human judgment, insight, and connection.
And none of those things scale linearly with time.
In healthcare especially, we cannot afford pricing models that penalize speed, inflate administrative burden, blur accountability, or quietly reward slower work. As delivery models evolve and the focus on tech-infused patient care increases, pricing structures must evolve with equal intention.
The future of consulting won’t belong to the firms that log the most hours.
It will belong to the firms that deliver the most value—predictably, transparently, and efficiently.
Source: “Say Goodbye to the Billable Hour, Thanks to AI,” Rita Gunther McGrath, Wall Street Journal, December 4, 2025
Link to Article: Say Goodbye to the Billable Hour, Thanks to AI - WSJ
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