Understanding the Service Line Strategy

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American College of Healthcare Executives Service Line Ins and Outs – Making the Strategy Work 2009 ACHE Congress on Healthcare LeadershipBill Vanaskie - COO, Maricopa Integrated Health System, Phoenix, AZ Cecily Lohmar - Principal, New Heights Group, Huntersville, NC*

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American College of Healthcare ExecutivesSession ObjectivesUnderstand the challenges in implementing service line management in healthcare and its implications on the organization Learn how to determine the most appropriate approach to service line management for your organization Identify strategies for addressing the key barriers to successful implementation of service lines *

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American College of Healthcare ExecutivesThe ChallengesFully understanding the strategy and implications Focusing on the right structures and services Engaging physicians Integrating service lines with traditional structures and functionsSource: 2008 survey of strategy executives sponsored by New Heights Group/ Healthcare Forum for Strategy*

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American College of Healthcare ExecutivesUnderstanding the Service Line Strategy*

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American College of Healthcare ExecutivesThe FundamentalsAn organizational model borrowed from other industries (think P&G, Saturn) More closely aligns operating units with the customer base (patients) Traditional hospital model aligns with staff and physicians Has been adapted for use in healthcare In its adaptation, basic intent has been forgotten: To design, organize, and manage a distinct area of the enterprise to create a product of greater value *

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American College of Healthcare ExecutivesNursingProfessional ServicesSupport ServicesQuality and Medical AffairsFinanceProgram Planning and Execution Human Resources Chief Information Officer Cardiac/ SurgicalWomen’s HealthMedicine OncologyOrtho and NeuroCase Management ServicesPsychiatric ServicesEmergency ServicesRadiologyLabsMedical Records and ArchivesPharmacyTherapeutic Services: Rehabilitation Respiratory TherapyIn House AgencyMaterials ManagementFood ServicesEnvironmental ServicesPatient Escort and SecurityProperty ManagementFacilities and EngineeringClinical EffectivenessHospital EffectivenessMD Staff Office and ResearchTreasuryInternal AuditFinancial Planning and AnalysisFinancial Operations and AdmittingProgram AdministrationMarketing and CommunicationsPhysician Support and OutreachPlanning and Market ResearchOrganization DevelopmentHR Planning and CommunicationsPersonnel AdministrationInformation SystemsPresident and Chief Executive OfficerCorporate DevelopmentOffice of General CounselFoundation Strategic Planning Nursing DevelopmentBiomedical EngineeringChief Operating OfficerAmbulatory Care ServicesThe traditional healthcare silos established to support the staff, not the patients*

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American College of Healthcare ExecutivesPresident and CEOVP of Corporate DevelopmentVP of Managed CareVP of Systems and FinanceVP of Medical AffairsExecutive VP and COOVP of Human ResourcesVP of Facilities DevelopmentVP of Support ServicesVP of Patient Care ServicesDirector of Cardiology ServicesDirector of Oncology ServicesDirector of Behavioral Health ServicesDirector of Women/ Children ServicesDirector of Long Term CareService lines bring a different mix of staff together to support patients*

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American College of Healthcare ExecutivesWhen is a Service Line Strategy For You?*

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American College of Healthcare ExecutivesWhat is Your Objective?Greater focus on “mission critical” services - those services of most importance to organizational success (core service lines) Strategic ‘watchdog’ to monitor and respond to market changes Enhanced operational efficiency Greater alignment with physicians More appropriate allocation of organizational resources – human and capital Expedited decision making; enable organization to assess vulnerable areas and adjust rapidly to changes in submarkets Keep up with the other guy*

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American College of Healthcare ExecutivesWhat Constitutes a Service Line?In practice, no consistent definition applied. Delivery settings (rehabilitation) – do stroke patients go through similar continuum as sports patients? Demographic populations (women’s) – are needs of young women at all similar to those of older women Revenue centers (surgery) – is the continuum of care even similar for trauma as it is for pediatric ENT? A patient population that travels through the same continuum of care; typically defined by group of diagnoses (cardiovascular) Beginning to see subgroups of service lines develop (thoracic, vascular) *

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American College of Healthcare ExecutivesSelecting the Service Line Model That’s Right for You, Not Them*

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American College of Healthcare ExecutivesService Line Models - The ContinuumImplementation ChallengeAbility to Create/Add ValueHighHighLowLowHybrids adapted for healthcareConsumer industry models*

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American College of Healthcare ExecutivesService Line MarketingFocus: marketing only No authority/ accountability across functional areas or departments*

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American College of Healthcare ExecutivesJones Hospital *

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American College of Healthcare ExecutivesCritical Success Factors – Service Line MarketingDo Validate that your product is worth marketing Prove you can deliver on any promises Try to get at least one physician behind your efforts See a longer vision – is this the endgame or a means to a different end? Seek to understand your service line market before your campaign Don’t “Dump” this in marketing’s lap; leadership must still own service and strategy Market without measurable performance objectives – volume, payer mix, etc.*

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American College of Healthcare ExecutivesService Line LeadershipService line leaders are champions and thought leaders Matrix relationships across organization Support by planning, marketing, finance, recruitment, other staff functionsCEOPlanning/MarketingFinanceNursingAncillariesService LinesService Line Support*

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American College of Healthcare ExecutivesCarnegie Hospital*

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American College of Healthcare ExecutivesService Line Management Service line managers have accountability over operational departments affecting their service line Service line managers both operational and strategic leaders Typically report directly to COO or CEO Senior leadership active support critical*

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American College of Healthcare ExecutivesSt. Somewhere Health System*

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American College of Healthcare ExecutivesCardiovascular Service Line Management*

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American College of Healthcare ExecutivesService Line OrganizationComplete organizational redesign Functional departments become support to service lines; no independent identities Multiple campuses run by site administrator who ensures service line needs are met on site Senior leadership take on dual roles – site administrator and service line leader *

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American College of Healthcare ExecutivesHealth System LeaderCardiologyPediatricOncologyOB / GYNAmbulatoryBehavioral HealthPROSService line teams are important in obtaining institutional support from key players Avoids ambiguity over authority and accountability Technical specialists with knowledge in one area are brought together Scarce or expensive resources can be best utilized Aligns service specific patient care requirements across the continuumCONSInformation systems overhaul needed to support change Service line managers’ lack of authority over physicians and functional departments limits ability to increase revenues and control costs Relies on integrated systems to manage the flow of information Changes medical staff structure Matrix structure often confusing Outpatient services can be difficult to fit in to service lines and system structure Culture change VERY difficult*

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American College of Healthcare ExecutivesAll Saints Medical Center*

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American College of Healthcare ExecutivesFocusing on the Right Things: Portfolio Analysis *

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American College of Healthcare ExecutivesComponents of a Portfolio AnalysisHard components: Market assessment Financial assessment Soft components: Operational Quality Softer still Physician leadership Physician interest The foundationUsed in rating services and determining actions and priorities*

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Last Updated: 8th March 2018

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