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Castling Partners

80 S 8th Street, Suite 900

Attn: Elliot Zismer

Minneapolis, MN 55402

612-888-1160

80 South 8th Street
Minneapolis, MN, 55402
United States

(612) 888-1160

Global Healthcare Perspectives

Converting collections of employed physicians to organized, coordinated and collaborative clinical service lines

Daniel Zismer, Ph.D.

In a survey conducted by Zismer and Wegmiller (a) 85% of 40 health systems reported being in the clinical service line business or are heading in that direction. While definitions of clinical service line design and management differ across healthcare organizations, common characteristics are emerging:
  1. the focus is typically on higher-profile and strategically valuable clinical programs such as: cardiovascular, cancer care, orthopaedics, women’s health, etc.;
  2. consistency of standards of access, clinical practice, outcomes management and approaches to ongoing care are maintained across participating sites;
  3. clinicians and managers collaborate to identify, adopt and adapt best practices across sites;
  4. a common performance scorecard is used;
  5. a common brand strategy is deployed;
  6. patients can expect a well-coordinated and seamless experience when cared for across sites;
  7. service lines are typically led by using a “dyad model” (a lead clinician working with a lead administrative partner); and
  8. financial, operating and strategic performance is evaluated at the site and service line level.
The brand promise for patients is the expectation of “best practices delivered consistently from provider-to-provider and site-to-site”.

So, what are the challenges with implementation (especially when physicians are independent members of an affiliated hospital medical staff)? Discussions with health system leaders surfaced a number:
  1. Health systems formed largely by community hospital affiliations have, historically been under-girded by a “promise” that challenges a basic clinical service line design tenet; “when you join our system, the design and delivery of clinical care will be kept local, after all you know best what your community needs”.
  2. If physicians are independent (not integrated by employment) their approach to clinical care within their specialty is self-directed, and while quality of care may be sufficient, it’s challenging to present a well-coordinated care experience, especially if a team approach is required to optimize care over time.
  3. Absent full integration of all components of a clinical service line across multiple sites, it is challenging to execute on direct contracting strategies with payers; especially contracts where the health system assumes financial risk for chronic conditions for defined populations.
  4. Clinical service lines require a modified approach to accounting; an approach that sufficiently captures operating revenues and direct operating expenses within and across participating sites.
  5. Health systems operating larger-scale, geographically distributed clinical service lines need to be tolerant of a matrix-like management model led by the “dyads” as cited. Dyads must interact successfully with site leaders (e.g. CEOs of hospitals that host service lines) and be sensitive to the “local” cultures and other clinical services and programs operating. 
Clinical service lines can create psychological stress within sites. One CEO wondered whether he had become the “hotel manager”; operating the house where clinical service lines (led by others) lived.

So, from the perspective of the patient point of view, clinical service line models as described here seem to make sense. For the classically trained hospital leaders and the traditional hospital-centric organizational structures, they can prove to be a shock to “the system”.  

(a) Zismer, D.K., Wegmiller, D.C.; “Clinical Service Lines: Mapping the Future of Community Health”; Monograph Published by C-Suite Resources, 2011, Mpls., MN