Service Lines Growing, But Aligning Physicians is Tough

As the latest HealthLeaders Media intelligence report shows, most healthcare leaders anticipate that their service lines will grow over the next few years, with a big Baby Boomer-fueled push for oncology, orthopedic, and cardiology needs. And younger patients will generate the demand for wellness or neurological care, with new service lines to come.

Yet hospitals shouldn't automatically count on ROI. There's great angst among hospital leaders, the survey shows, in plans to integrate physicians to deliver that bottom line.

Indeed, hospital systems are pushing vigorously to capture a burgeoning market with new service lines, from inpatient to outpatient. Over the next two years, 75% of hospitals say they plan on expanding their existing service lines, such as heart and oncology programs, and 50% say they will establish new service lines.

The MemorialCare Health System in Fountain Valley, CA is among the hospital systems exploring various pathways of service lines, not only for the overall system, but for individual hospitals. As the hospital system explores population health and accountable care programs, they are "morphing into larger service lines," depending on the needs and demographics of the communities served, Steve Geidt, CEO of Saddleback Memorial Medical Center in Laguna Hiills, CA. told me recently. He participated in an interview with other members of the MemorialCare system who agreed to address the findings in the intelligence report.

At Saddleback, for instance, hospital leaders are exploring more geriatric and palliative care service lines to address a "very high concentration of very old seniors who are frail," Geidt says. "Our emphasis has been on disease management and end-of-life care."

At the Long Beach Memorial Medical Center, officials are looking into expanding pediatrics, wellness, neurosurgery, and neurology service lines, says Diana Hendel, PharmaD, CEO, of Long Beach Memoriial Medical Center, the Children's Hospital Long Beach and Community Hospital Long Beach.

"As we are transforming healthcare from a more traditional diagnosis and treatment program to include prevention and wellness, expanding those service lines isn't surprising," Hendel says.

Hospitals' push to expand service lines face obstacles in putting together physician teams to accomplish their goals, and in the transition from fee-for-service to value-based care.  The intelligence report shows that more than half—54%—of health leaders say it is difficult to attain physician alignment with organizational goals, and 8% say it is very difficult. Along those lines, 41% say it is difficult to develop physician compensation strategies.

As hospital systems work on aligning physicians in service lines, 74% say they are developing standard clinical and operational procedures. But only 35% say they involve physicians in fiscal oversight of organizations. Leaders reveal that their top three service line challenges all involve physicians and finances, the survey shows.

Building physician teams 'not a simple process'
Geidt says he's not surprised by those findings. "It's hard," he says, referring to putting a physician team together for a service line. "It requires a lot of vision, a lot of capital and a lot of energy, " Geidt says.  Not only are hospital systems working to improve that physician-hospital integration through electronic medical records, there's the human element. "There's a lot of independent physicians involved, and there's a lot of politics. It's certainly not a simple process," he explains.

Despite Geidt's cautionary comments, MemorialCare Health System's alignment with physicians may be considered relatively smooth compared to other systems, because it has for years incorporated physicians into the process of hospital leadership and service line oversight.

At Memorial Care, a medical foundation and physician society were established to develop physician leadership programs, which have resulted in doctors "getting a true involvement in key decision-making areas, " says Barry Arbuckle, PhD, President and CEO of the MemorialCare Health System and lead advisor for the HealthLeaders Media intelligence report.

The foundation and society help develop clinical guidelines, prioritize technological needs and collaborate in financial and capital planning for the hospital system, Arbuckle explains.

Establishing data programs to help physicians within the system has been a key element in improving protocols, says Hendel, but so has the importance of working on physician relationships with each other and with hospital leadership—areas that other hospital and physician leaders are sometimes too slow to embrace.

"Culture eats strategy for lunch," Hendel says, referring to the importance of people-to-people programs in physician alignment within a hospital system. "We've had a two-pronged effort here," she adds. "We have the data and strategic parts of aligning with physicians, but we've also been sensitive and aware of the cultural alignment aspects, with our physician society leading the way on a shared vision, a shared mission, a shared understanding and involvement where we—as a health system—should be focused."

"That has helped pave the way. We have a lot of work to do, but we have a great basis to start," Hendel says.