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Is your orthopedic service line keeping up with the changes in healthcare? How does orthopedics fit with the shift to greater accountability for quality and cost? How should you be adapting the service line to market changes? Find out about the next generation of service lines and some key strategies for succeeding under more accountable care, including organizational models and skill sets. About the Speaker: Ms. Lohmar is a founding Principal with New Heights Group. With over 25 years in the industry, Ms. Lohmar brings to client engagements specialized expertise in strategic planning, service line planning and development, integration/consolidation strategies and physician strategies, as well as facilitating organizational retreats and planning sessions. She is a frequent speaker on organizational service line development, and business planning for key service lines as orthopedics and neurosciences.
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Managing Orthopedic Episodes of Care
2
Cecily Lohmar
New Heights Group
The Next Generation
of Service Lines
3
Is your service line evolving?
Elements of evolution:
1. Definition
2. Continuum & integration
3. Value & metrics
4. Physician alignment
5. Leadership
OR
4
Service line definitionsNew vs. old
HealthCare Advisory Board 2011
82%
76%
53%
44%
70%
23%
48%
23%
83%
71%
54%49%
77%
70%
84%
49%
CardiovascularServices
Orthopedics Back/Spine Care Neurosciences Oncology Wellness &Preventative
Medicine
Primary Care Geriatrics
Now In Five Years
“The Old Standbys” “The New Arrivals”
Where does 70 y.o. CHF fit?
5
Clarify YOUR service linesWho’s in, who’s not
Relationship with other service lines
Ambulatory
Primary care Orthopedics
Oncology
Cardiovascular
Women’s
Pediatrics
Post acute
Behavioral health
DiagnosesSettings
Demographics
6
Invest in the continuum
Make Buy Partner
Organizational
expertise?Strong Good Poor
Facilities? Available Not available Not available
Is there a
market leader?No No/Yes Yes
What is market
demand?High Medium Medium
Barriers to
entry?Low Moderate Medium
Cost to
provide?Low Low High
Organizational
culture?Same Different Different
7
Address chronic care
Strategy Pros Cons Examples
Integrate into
existing
Service line
definitions remain
centered on similar
patient groups.
Different clinical
paths acute vs.
chronic.
CHF in
cardiovascular
service line
Create chronic
care service
line
Critical mass of
resources focused
on higher
cost/complex
patients.
Integrating with
‘true’ service
lines.
Group of
diagnoses/dise
ases based on
high
volume/cost
Create disease
specific
“service
line”/program
Ability to ‘drill down’
on select high cost
diseases.
Integrating with
“true” service
lines.
Diabetes
8
Integrate wisely
Coordinate Integrate Consolidate
Market
Markets served by the entities Diverse Similar Similar
Distance between entities Far Near Near
One entity maintains a well-known image No No Yes
Demand for service consistency Low Medium High
Financial
Payor demands for system-wide pricing Low Medium High
Payors looking for case rates No Yes Yes
Number of at-risk contracts Low Medium High
Priority placed on cost reduction Low Medium High
Political/Cultural
Institutional culture Diverse Similar Coincident
Ease of recruiting and retaining clinical staff High Medium Low
Skilled service line manager / leader No No Yes
Multiple medical staffs Yes Yes No
Need for local control High Medium Low
9
Redefine the value equation
Value = Cost + Quality
• Cost
– Copays
– Fee scales
– Warranty (e.g, Geisinger ProvenCare®)
• Quality
– Return to function
– Pain
– Caring
“What is value to the customer may
be the most important question for a
business, and the one that is asked
least often.”
-- Peter Drucker
10
Rethink performance metrics
Old
• Market share
– Percent of procedures
• Processes
– What did I do?
• Financial
– Profit by episode
New
• Market share
– Percent of SL pop
• Outcomes
– How did it work?
• Financial
– Cost per pop
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Next generation alignment - greater
integration and broader scope
Information
System
Networking
Joint Ventures
Full
Integration
Collaborative Branding
& Marketing
Practice
Development
Support
Professional Services
Agreements
Co-Management
Scope of Activities
Deg
ree o
f In
teg
rati
on
Advisory Councils
Joint
Contracting
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Consider multiple medical directors
Approach Examples
By specialty Medical & surgical
By
disease/program
Total joint, sports medicine
By population Geriatric, pediatrics
By function Quality, technology
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Position for rapid change
Product line managers have control over:
• Operations
• New product development
• Technology acquisition
• Full “continuum”
• Pricing
14
Administrative/clinical leadership teams
necessary to manage complexity
23%15%
26%
36%
0%
5%
10%
15%
20%
25%
30%
35%
40%
RegisteredNurse
BusinessManagement
HealthcareAdministration
Physician
Zismer, Daniel K. and Wegmiller, Donald C. “Clinical Service Lines: Mapping the Future of Community Health”,
C-SUITE Resources.
15
Match autonomy and authority with
strategic goals
4.5%
55%
36%
4.5% Coordinator: no formal authority overpersonnel in the service line, nobudget authority.
Matrix: authority and influence arebalanced between hospital leadershipand service line manager.
Manager: service line personnelreport to service line manager; hasbudget authority over service linebudget.
Other
Zismer, Daniel K. and Wegmiller, Donald C. “Clinical Service Lines: Mapping the Future of Community Health”, C-SUITE Resources.
16
Organizational structure Im
ple
men
tati
on
Ch
allen
ge
Ability to Create/Add Value
High
HighLow
Low
Service line organization
Service line execution
Service line leadership
Service line promotion
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Selecting the right structure
Promoter Leader Executive Organization
Culture
Entrenched in
traditional culture.
Focus on
departments, not
patient groups.
Beginning to shift
focus from internal
depts. to market.
Market oriented
culture; adapts easily
to change.
Strategic
Orientation
Focus on revenues. Focus on growth,
quality.
Achieve dominance in
key service lines;
focus on growth,
quality, cost.
Population health
management.
Management
Leadership
Equate service lines
with
packaging/promotion.
Recognize service
line value, remain
organized around
departments.
Management team
understands and
‘thinks’ service lines.
Very strong, visible,
accountable.
Physician
Leadership
Medical staff not
aligned.
Good leadership
potential but still
new to ‘job’.
Physician leadership
focused on quality &
processes.
Strong leadership,
clinically integrated
medical staff.
Market
Dynamics
Limited competition;
visibility is primary
need.
Losing market share
to “centers of
excellence”.
Strong competition;
market sophistication
rising.
ACO’s, bundled
payments, VBP driving
market.
Information
Systems
Limited ability to
analyze service line
performance.
Basic financial and
market
performance
available at service
line level.
Full P&L available by
service line.
Information systems
must cross campuses,
settings, and
departments.
18
COO skill sets needed
• Strategy
• Operations
• Entrepreneur
• Change management
• Financial management (beyond budget
management)
• Partnership development/Negotiator
• Process re-engineering
19
Next generation physician leaders driving
change
• Physician engagement
• Physician recruitment/retention
• Quality
• Evidence based practices
• Utilization management
20
Getting to the next generation
1. Are your service line definitions still valid?
2. Are your performance metrics value based?
3. Have you integrated the full continuum into
your service line discussion?
4. Do you have tailored alignment options?
5. Does your service line leadership dyad/triad
have the needed authority to create change?
6. Do your service line leaders have the needed
skill sets?
7. Is your service line structure clear to all?
21
22
Contact
Cecily Lohmar, Principal
New Heights Group
252 249 1225
www.reach-newheights.com
Managing Orthopedic Episodes of Care
