Service-Line Care in a Post COVID-19 World
Authored by Chuck Stokes, BSN, MHA, FACHE
Service-line models have been around for more than two decades with numerous variations of design, executive leadership and operational success. Conventional wisdom would say, if an organization focused it's talent, financial resource and marketing efforts, it should be a home run for the clinical service. However, lack of clear goals, allocation of sufficient resources, internal executive and medical staff politics often sub-optimize expected outcomes.
If organized properly, they can present a competitive advantage by creating a service differentiation of real value for the organization and the consumer. The service-line has the opportunity to become the internal "disruptor" if it can overcome the traditional pitfalls that have historically plagued this model, mainly the internal politics of the organization.
With the constant threat of disruption, the shift to value-based care and rapid consolidation of market players as healthcare systems merge, the ability to anticipate trends and lead with strategic precision will be necessary, especially as healthcare organizations emerge from COVID-19. Healthcare organizations must navigate the razor’s edge between the need to raise quality, reduce costs, and increase revenues in the face of declining reimbursements, demographic shifts, and the acceleration of technological advancements.
Non-traditional investors are pursuing high margin services with disruptive models of care that promise efficient delivery, high-quality care, and improved patient experiences, traditional health systems must respond. Service-line models offer a framework for the reconfiguration of health system delivery services to respond to these competitive threats.
A Service-line model organizes care and designs a patient experience such that the healthcare encounter is seamless and efficient to navigate. This new way of organizing service requires a shift in the focus and power-base of the organization from hospital-centric to patient-centric. The “focused factory,” an idea popularized by Regina Herzlinger, organizes all the resources to provide a single care “product.”
Successful Service-Line Models
“The traditional leadership structures in which a manager is responsible for a single department serve as obstacles to optimizing efficiency and the patient experience.” - Editor, Compass Clinical Consulting.
Ultimately the business objective of a service-line is to attract more patients with a specific need, in order to increase revenues and improve margins. In order to accomplish this, a successful service-line requires predictable and measurable deliveries with superior quality outcomes at a competitive cost. Specifically, the service-line model manager is responsible for coordinating patient care and information flow in a comprehensive manner along with coordinating the patient’s journey of care, including the course of care and the providers working within many departments or facilities of the organization that impact the patient’s care. The traditional, siloed-manager model will not work in this design. Service-lines often fail when the organization does not define the service-line goals nor the new leadership roles needed to properly administer the service-line.
The following are but a few benefits of successfully launching Service-line Care:
Lower costs than the previous model demonstrating consumer value
Total cost transparency to the payer and the consumer
Superior clinical outcomes
Reduction in clinical harm
Improved consumer loyalty, experience and access
Worth the Organizational Effort
The growing threat of external disruptors, the shift to value based care and continued consolidation of our healthcare system, make a service-line model a key strategic initiative for organizations emerging from their post COVID-19 doldrums. Nontraditional investors are pursuing high margin services with disruptive models of care that promise efficient delivery, high quality and improved patient experiences. The service-line model offers a framework for reconfiguration of the health system to respond to competitive threats. This model organizes care and designs the patient experience such that healthcare encounters are seamless and efficient to navigate.
Executing a Service-Line Strategy
This model requires a shift in the focus and power base within the organization from hospital-centric to consumer-centric care. This will require a significant restructuring of the traditional reporting lines within the executive team. To be effective, the service-line executive should have total accountability for the service with a direct reporting line to the top executive within the organization, usually the COO or CEO depending on the size of the organization. This includes profit/loss responsibility, growth strategy, marketing, service array decisions, geographic placement, capital allocation, oversight of the medical staff leadership and the hiring of the service-line team. This does not mean that they "spin in their own orbit" independent of the rest of their team. Collaboration and alignment of service-line strategies must be incorporated into overall system goals. Many service-line models have failed because the leader did not have support of their CEO, team members and medical staff due to competing interest and other competing clinical services. Another reason for failure is that organizations try to organize too many service-lines and outstrip the organization's capacity or resources to manage.
Ultimately, the CEO must determine the priority service-line/s based on their leadership capabilities, medical staff talent, and their willingness to work collaboratively, practice evidence- based medicine and willingness to embrace technology such as telemedicine and virtual visits in order to become more consumer-centric. The medical staff must improve their accessibility by having more flexible office hours including after hours and weekends.
Obviously, not every clinical service should be a service-line. This structure should only be considered after careful consideration and collaboration with governance, leadership and the medical staff. This structure should be based on community need, medical staff talent, leadership talent and the organizational commitment to improve access, quality, safety, consumer experience and reduce costs of care.
This is not a journey for the faint of heart. Going "half-in" on service-line strategy could cause more disruption within the leadership team, medical staff and send a confusing message to the community about the capabilities of the organization.A successful service-line model is clearly defined on all fronts, containing the right infrastructure to truly integrate and coordinate care and delivering better economic and clinical value due to the metrics and leadership in place. With the support of the executive suite, such a model is poised to deliver the economic means desired and oftentimes needed within a healthcare organization.