Service-line management/bottom-line management

To survive in the sturm und drang of health care administration, hospitals and health care systems will have to restructure themselves in ways that emphasize their specific clinical strengths, control their costs, and manage the delivery and outcomes of care. Structuring the organization along clinical lines of service (e.g., oncology, cardiology, rehabilitation) cedes total bottom-line authority for all aspects of that service to the service, or product, line manager. This article discusses the qualifications, compensation, and responsibilities of service-line managers in well-integrated health care systems and describes how they and managed care organizations view each other. It also suggests which organizations will, and will not, benefit from restructuring along service lines.

Creating corporate advantage

What differentiates truly great corporate strategies from the merely adequate? How can executives at the corporate level create tangible advantage for their businesses that makes the whole more than the sum of the parts? This article presents a comprehensive framework for value creation in the multibusiness company. It addresses the most fundamental questions of corporate strategy: What businesses should a company be in? How should it coordinate activities across businesses? What role should the corporate office play? How should the corporation measure and control performance? Through detailed case studies of Tyco International, Sharp, the Newell Company, and Saatchi and Saatchi, the authors demonstrate that the answers to all those questions are driven largely by the nature of a company's special resources--its assets, skills, and capabilities. These range along a continuum from the highly specialized at one end to the very general at the other. A corporation's location on the continuum constrains the set of businesses it should compete in and limits its choices about the design of its organization. Applying the framework, the authors point out the common mistakes that result from misaligned corporate strategies. Companies mistakenly enter businesses based on similarities in products rather than the resources that contribute to competitive advantage in each business. Instead of tailoring organizational structures and systems to the needs of a particular strategy, they create plain-vanilla corporate offices and infrastructures. The company examples demonstrate that one size does not fit all. One can find great corporate strategies all along the continuum.

The effect of managed care on hospital marketing orientation

Marketing is a central activity of modern organizations. To survive and succeed, organizations must know their markets, attract sufficient resources, convert these resources into appropriate services, and communicate them to various consuming publics. In the hospital industry, a marketing orientation is currently recognized as a necessary management function in a highly competitive and resource-constrained environment. Further, the literature supports a marketing orientation as superior to other orientation types, namely production, product and sales. In this article, the results of the first national cross-sectional study of the marketing orientation of U.S. hospitals in a managed care environment are reported. Several key lessons for hospital executives have emerged. First, to varying degrees, U.S. hospitals have adopted a marketing orientation. Second, hospitals that are larger, or that have developed strong affiliations with other providers that involve some level of financial interdependence, have the greatest marketing orientation. Third, as managed care organizations have increased their presence in a state, hospitals have become less marketing oriented. Finally, contrary to prior findings, for-profit institutions are not intrinsically more marketing oriented than their not-for-profit counterparts. This finding is surprising because of the traditional role of marketing in non-health for-profit enterprises and management's greater emphasis on profitability. An area of concern for hospital executives arises from the finding that as managed care pressure increases, hospital marketing orientation decreases. Although a marketing orientation is posited to lead to greater customer satisfaction and improved business results, a managed care environment seems to force hospitals to focus more on cost control than on customer satisfaction. Hospital executives are cautioned that cost-cutting, the primary focus in intense managed care environments, may lead to short-term gains by capturing managed care business, but may not be sufficient for long-term success and survival. Understanding consumer needs and perceptions, and using appropriate marketing strategies to ensure greater customer satisfaction and repeat business, will be among the key tasks for hospital executives in the future.

Focused factories. Are you ready for the competition?

Dinosaurs--big body, little brain. That's how one entrepreneur sizes up today's general hospitals. Some analysts and investors agree. They're betting on "focused factories," hospitals that specialize in heart care, orthopedics, and other services. But the so-called dinosaurs are fighting back.

Providers: hold yourself accountable before payers, others do it for you

Financial performance data: Drilling down into comparative data can help health care providers quickly identify where costs are out of line. See samples of easy-to-read graphs you can adopt for your organization for everything from broad hospital measures to specific physician ordering practices.

Enhancing care delivery through cross-disciplinary collaboration: a case study

This exploratory research investigates the factors contributing to and detracting from collaboration across professional groups that are working within an academic medical center. Examined within the context of three recently created service lines, the study uses both objective performance data and perceptual data obtained from the physicians, nurses, and administrators. A similar set of factors emerged across all three service lines and professional groups. These factors were highly correlated with the perceived success of the collaborative efforts in producing positive outcomes in both quality and efficiency of care, patient satisfaction, and improved work environment. Findings of the study highlight the importance of shared values, trust, and personal engagement--all empirically demonstrated to be linked with the participants' perceptions of successful collaboration. The study, however, failed to find improvement in the objective performance data analyzed. In addition, individual professional groups were found to have differing views of the collaborative environment, raising important issues for the management of collaborative efforts in the hospital setting.

Creating a center of excellence

Being able to identify your facility as a Center of Excellence characterized by quality of patient care and services, outcomes and financial performance-sets your hospital apart from others. St. Luke's Episcopal Hospital in Houston developed a three-pronged approach to quality improvement which has helped the hospital establish and maintain its position as such a Center. Other institutions can modify this approach for their own use. Service line management is the hospital's first avenue of approach, a means of aligning and coordinating staff efforts and services for a particular patient population, to achieve a better integrated service delivery system. St. Luke's also uses a case management model, a system of planning, coordinating, monitoring and delivery care on a case-by-case basis, to provide the best care at the lowest possible cost. A third strategy is outcomes management, which uses outcomes assessment information to track the experience of an aggregate patient population. A collaborative practice team oversees the research, data evaluation and determination of changes to be implemented. It also establishes the desired outcome for the patient population. St. Luke's has used these initiatives to improve care, particularly among cardiovascular patients. Ultimately, the hospital changed its methods of care as a result of this assessment. Change took time to gain favor with hospital physicians. In 1991, St. Luke's applied to HCFA's Bypass Demonstration project, in which Medicare distributes a lump sum to cover surgeons, cardiologists and other disciplines for Medicare-eligible DRG 106 and 107 patients. St. Luke's joined the project in 1993. As a result of participation in the project, Medicare allows selected sites to call themselves a Medicare Participating Center of Excellence.

Building knowledge of health care as a system

A system is a functionally related group of interacting, interrelated, or interdependent elements forming a complex whole with a common aim. This article presents a method--a 10-step exercise--for building knowledge of the elements of an interdependent system of health care. Those who seek to improve the work of a system can use this exercise for designing and relating new improvement efforts to the general work of the organization.

Worker's comp meets managed care. In the quest for lower costs, a new niche emerges

Niche markets such as Medicare, Medicaid and behavioral healthcare are looking to managed care to control costs and increase the quality of care provided. Now workers' compensation officials are looking to managed care with the same goals in mind. As managed care organizations begin marketing to these special populations, the information glut is growing. Information technology can aid managed care officials in the collection, organization and dissemination of the data.

Interdisciplinary professional practice leadership within a program model: BC Rehab's experience

In restructuring from a departmental to a program management model, BC Rehab successfully developed the role of professional practice leader to address clinical standards of practice and other concerns related to individual disciplines. A review of the role of professional practice leader is presented. Practice leaders are in a unique position to promote interdisciplinary, client-focused service. Because practice leaders' mandates cross program boundaries, they are able to keep the broad scope and goals of rehabilitation in the forefront, offering a balance to the program-specific perspective. It is imperative for practice leaders to maintain connections to operational and clinical issues to avoid isolation.