Emerging Service Lines
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Hospitals that lead the way in emerging service lines may find themselves positioned to be market leaders in the future. Here's a look at which services are emerging and why.
Most leaders have a pretty good sense of which service lines will carry the hospital for the next few years. The big service lines—orthopedics, cardiovascular, oncology, and neurosciences—have steady demand and generate enough revenue to keep them at the top of the priority list for a while.
But healthcare is constantly evolving, and new service lines in niche or emerging fields are becoming a bigger part of most offerings. Even within the more established service lines, subspecialties and disease-specific programs are replacing the more traditional models.
What new service lines does the future hold? How will existing service lines change? Where, perhaps most important, will hospitals invest in the next few years?
Some pretty clear trends have started to emerge. For one, service lines of all sorts are becoming more specialized and interdisciplinary. Cardiovascular programs, for instance, are being segmented into women's heart programs or multidisciplinary approaches that integrate interventional radiologists and vascular surgeons. Oncology service lines are being drilled down into specific tumor sites, and Illinois-based Sg2 predicts hospital service lines will continue to evolve around specific patient care needs, rather than physician specialty designations.
The trend can already been seen in hospitals' focus on populations of patients. Women's health and senior health programs group a wide range of specialty services under one umbrella that targets a specific demographic. Even men's health service lines are beginning to emerge, if only as a virtual grouping on hospital Web sites for now. Niches and ancillary services also add value, even if they aren't poised to become a top revenue generator anytime soon.
Here are four emerging service lines to keep an eye on.
Emerging Service Line No. 1: Genomics
Personalized medicine—also known as bioinformatics or genomics—is widely thought to be the next evolution of medicine. Yet that future is years away for most hospitals. Although recent scientific advancements have significantly broadened the types of genetic tests and treatments available to patients, genomics is cutting its teeth primarily in academic medical centers (a common point of origin for new services) before expanding to other settings.
Except at El Camino Hospital, which this year launched what it calls the first-of-its-kind Genomic Medicine Institute. It's no surprise that the first community hospital to experiment with personalized medicine would be the 542-bed acute care, nonprofit hospital that serves Silicon Valley, a hotbed of high-tech and innovative businesses. Many of the companies breaking new ground in genomics testing are located just down the road.
That proximity allows El Camino to act as a broker between physicians and patients interested in personalized medicine and the companies offering the tests and treatments. The hospital doesn't conduct any tests of its own—although that may change—but instead provides clinical support to physicians and patients.
For example, the Genomic Medicine Institute focuses heavily on education to help physicians make informed decisions about the nearly 2,000 tests available and become early adopters. Through a partnership with San Francisco-based DNA Direct, a private genetic testing company, board-certified genetic counselors are available for pre- and posttherapy patient counseling.
"We help people figure out where to get the test, how to get the test, whether their insurance will reimburse for the test, and assist them in communicating with their insurance company so it increases the chance it gets reimbursed," says Jon Friedenberg, vice president at El Camino.
Genomics isn't really a standalone service line at the hospital, but it supports the hospital's existing service lines. Most genomic treatments currently available are related to cancer, but the offerings on the testing side span gastroenterology, cardiology, psychiatry, and neonatology.
Although the Genomic Medicine Institute doesn't generate a lot of revenue on its own, it enhances other key service lines and will position El Camino as a leader as the market develops, says Friedenberg.
Take the impact on breast cancer services. In addition to tests that can predict a woman's risk for breast cancer, there are also procedures for assessing the effectiveness of chemotherapy as a treatment option. Nearly 20% of women derive virtually no clinical benefit from chemotherapy, and offering the option to foresee its ineffectiveness and plan an alternative (such as surgery) has the potential to make a hospital a destination of choice for breast cancer patients.
"I believe that the tidal wave is coming, and we're just trying to get out ahead of it. Over the next five, 10 years, it's going to transform the practice of medicine, and we'd rather be ahead of the curve than behind the curve," says Friedenberg. "It has enormous potential to be a market differentiator. If you're a hospital with no competition, perhaps you can afford to lag behind. But I believe it's a way to differentiate our service lines from those of our competitors."
Emerging Service Line No. 2: Wound care
The value of wound care is ultimately tied to diabetes. Although wound care programs usually cover the full gamut of services for wounds and skin diseases—from arterial venous insufficiency to fungus infections to amputations—the growth in diabetes-related complications ensures high demand for the future.
Nearly 24 million Americans—or about 8% of the population—have diabetes, and the number of new diagnoses has been rising rapidly in the past decade. Direct medial expenditures on the disease have reached about $116 billion per year, according to the American Diabetes Association. "With diabetes [patients] becoming a larger portion of population . . . and with patients living longer and suffering more vascular issues, you'll find these wound care clinics popping up to meet the needs of a growing patient population," says Kevin Moore, director of rehab and wound care services for St. Mary Mercy Livonia, a 304-bed hospital in Livonia, MI.
St. Mary Mercy has had a wound care service line for about six years, but it only began consistently generating positive margins in the past couple of years, after administrators figured out some of the keys to the service line, Moore says.
The turning point was the addition of hyperbaric medicine. The initial startup cost for a hyperbaric chamber was nearly $200,000, but the increase in volume it brought ensured a positive ROI within a couple of years, he says.
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