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Hospitals Rethink the Service Line

Joe Cantlupe, for HealthLeaders Media, March 25, 2013

This article appears in the March issue of HealthLeaders magazine.


See Also: The Cardio Service Line, Rebooted


Amid economic turbulence and regulatory changes, service lines are becoming more integrated into hospital strategic plans, where these areas of specialization can thrive—although many healthcare leaders are checking the vitals of their service lines to see what treatment may be needed.

While general surgery, cardiovascular care, and orthopedics still head the list of service lines with strong positive margins, more areas of specialization are popping up or expanding, such as geriatrics or plastic surgery, depending on the demographics and needs of a region. Hospitals large and small are reviewing their service lines, with some leaders feeling the need to revisit these programs to take advantage of multidisciplinary approaches, subspecialties, or technological advances.

Various models are being implemented to improve coordination and data collection that allow hospital and health system leaders to scrutinize the direction of their service lines for greater ROI. Throughout the country, leaders have been retooling their service lines by changing strategic plans and evaluating demographic and coordination needs while using technology to eliminate waste and improve patient engagement.

Officials of Allina Health—a Minneapolis-based nonprofit that serves Minnesota and western Wisconsin and includes 11 hospitals, 42 clinics, and 1,677 beds—began revamping clinical service lines several years ago to overcome what they called "fragmented care delivery" in the programs, says Penny Wheeler, MD, chief clinical officer for Allina Health.

Using a medical process to align physicians and facilities, Allina Health has imposed changes leading to cost savings—millions of dollars over the past three years—while reducing length of stay and readmissions. In its revamped structures, Allina worked to coordinate programs from wellness to palliative care, Wheeler says.

Leaders at Indianapolis-based Indiana University Health, a nonprofit organization with 3,326 licensed beds, also thought they had a disjointed system. They consolidated oversight of 19 hospitals—each with its own institutional board. The prior lack of full systemwide integration shortchanged delivery and income, says Doug Schwartzentruber, MD, system medical director for cancer services and associate director of clinical affairs for IU Health's Melvin and Bren Simon Cancer Center.

The demographics of a market also are a driving force for strategy, physician alignment, and growth, says Mark Loos, system vice president for clinical services at the 1,138-licensed-bed nonprofit Palmetto Health in Columbia, S.C. To accommodate the needs of an older population, for instance, the importance of working with employed and independent physician groups to provide appropriate access to care has never been greater, Loos says.

Organizations are finding that technology can play a critical role in improving service line care. Hackensack (N.J.) University Medical Center relies on technology to improve patient engagement with its cardiology service line, which helped prevent hospital readmissions and improved patient satisfaction, says Louis E. Teichholz, MD, chief of cardiology at the 775-licensed-bed hospital.

Despite the complexities, the potential for service lines is enormous, especially with the need to eliminate wasteful spending, says Peggy L. Naas, MD, MBA, vice president of physician strategies for VHA Inc. based in Irving, Texas. VHA includes more than 1,400 not-for-profit hospitals and 25,500 nonacute healthcare organizations.

Service lines can overcome work flow waste and unexplained variations in clinical processes and operations, Naas says. Even service lines that may have originated from a marketing and sales inspiration can tell a community, "Look! Our hospital specializes in this area," according to Naas. Now, she sees more hospitals being concerned about service line care delivery and tightening their organizational structures and management.

"Much of healthcare happens outside the hospital; a real unmet opportunity point is in the transition and in the continuum of care," says Naas.

Revised strategic vision

Allina Health, Indiana University Health, and The Christ Hospital, a 555-bed not-for-profit acute hospital in Cincinnati, are among the healthcare organizations that found it necessary to revamp their clinical service lines to overcome inconsistency of care by changing their strategic vision.

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