“Service lines” are all the rage in healthcare. Almost every system has a litany of them, but the term is relatively new to the health care delivery environment. Service lines permeate almost every cutting-edge system in the country, but what does the term really mean? What, exactly, is a “service line?” What are the functions, etymologies, meanings, syntactical, and idiomatic uses of the term?
As hospitals saw the need to become comprehensive healthcare systems, and MBAs began to permeate administrative roles, healthcare was introduced to words like “sustainability” and “robust,” which, without context, have little substance. Professional organizations brought the term “patient-centered medical home” and, as Terry McGeeney, MD, the first leader of TransforMED, aptly stated, that’s not like Coca-Cola, with an instantly recognizable name in which one pops the top and knows in advance the taste of the carbonated refreshment that will flow forth. Medicare and third-party payers wittingly drive the use of new terms through payment and reimbursement. Was “navigator,” in the clinical sense, really intended to mean an individual who directs people to enroll in health exchanges? Was consumer driven-healthcare meant to mean high deductible plans structured to support the profitability of insurance companies by shifting more costs to consumers?
Service lines – how does the term manifest itself in the world of modern healthcare? More importantly, what opportunity does it create for the evolving healthcare enterprise? How and where are service lines positioned in, or on, the organizational chart of a health system? Internet searches catalog “scholarly articles” on the topic. Healthcare research and watchdog groups like The Advisory Board, SG2, and other “consultants” promulgate best practices, defining service lines as no more than business units. Health systems buy this advice and remain stuck as they continue to chase revenues. To that end, the high-performing service line will build specialty market share of high tech, high margin services.
Typically, health systems developed service lines with a goal to compete for, capture, and develop high margin services and market share. An unintended consequence of this approach has been the creation of new silos, focused upon a division’s own specialty growth with service and program expansion, both local and regional. The Advisory Board has outlined responsibilities and competencies for service line leaders and called for dedicated senior system executive leadership. Despite the stated emphasis upon strategic and culture alignment and collaboration, models of performance metrics and associated incentive plans are often times limited to conventional metrics of current operations of the business units of each service line.
As health systems are challenged to anticipate the changes in reimbursement and associated demands to deliver value, service lines should evolve as the vehicle by, and through, which programs to support care coordination and population health management evolve; moving from a hub-and-spoke, payment- per-click fundamental, to the execution of a vision as a regional system of care, consistent with the precepts of the Triple Aim. The working design principle is that the decisions, tasks, and workflows crucial to optimizing patient care must be the organization’s primary focus. Service lines may lead development of a compulsive process redesign with attention to the sequence of tasks, decisions, and interventions that lead to the resolution of a patient’s and population’s health opportunity.
What, then, is the role and obligation of senior system leadership in defining strategy and vision and orchestrating service line activities? How must the service lines then be resourced? The system governance is responsible for strategic and business plan development and implementation guidance. Together with service line leaders, they should shape and prioritize service line strategies and initiatives and provide requisite resources in planning, marketing, and finance to execute. The new charge, then, is to move past service lines, becoming new silos focused upon their own specialty growth and expansion, to advancing integrated coordinated care, driving and rewarding value and investment in an integrated, multidisciplinary model of team based care. Governance should articulate a vision and enable the service lines’ ability to transform the care model. System senior leadership shall create an environment of innovation. Neither lean or A3 concepts, nor a focus on making problems better, are the innovations that Deming intended. As Henry Ford may have said, focus groups, patient partners, and a series of A3s would have worked to develop a faster horse. Creating a physician compensation methodology that supports alignment of this key stakeholder group is on the top list of “to do’s.” Senior leadership shall also provide necessary clout, while ensuring individual efforts are appropriately balanced and reflect system goals, thereby reinforcing a value stream approach by the service lines that is centered on a patient-focused care delivery model. The charge of the senior system executive to the service lines, then, is more than “a report” or manager.
The senior executive engages service line leaders to create a roadmap to realize a value stream approach to service lines. The senior executive will guide the evolution of system planning, budgeting, and organizational expectation, such that the system board may feel secure and know how to monitor this new course and its performance. The system board must evolve beyond the classic approach of annual periodization of capital and budgeting processes to be nimble enough to invest in innovation that supports the new model. This executive resource orchestrates the facilitated discussion between service line leaders and senior system leadership to articulate a compelling vision and approach and secure the necessary investment resources. It will be no small task for the senior executive to develop consensus and comfort as a leaner matrix of decision-making is enabled, instilling stewardship and accountability.
Understanding the finance challenges that health care systems face, the “service line as business unit” orientation is appropriate. Improving care, while increasing margins and volumes, funds and supports pursuit of the overarching mission. The long view, however, should be to have service lines support the organization’s evolution to become an active health network to realize the vision of a comprehensive network of clinical and ancillary resources. The result? One integrated/coordinated team that supports a shared population of patients, in sickness and for health.