Developing Service Lines in a Healthcare System: It has been the executive director of the Women’s and Children’s Hospital for the past 10 years
at Best Health Memorial Hospital, which is the flagship hospital in a major healthcare system. Five
other hospitals in the healthcare system are located within a 50-mile radius of Best Health
Memorial Hospital. As executive director, Ella provides leadership to approximately 600
professional staff members who report directly to 12 different managers. The managers also report
to 5 directors who provide leadership for the women’s surgical areas; labor, delivery, recovery,
at Best Health Memorial Hospital, which is the flagship hospital in a major healthcare system. Five
other hospitals in the healthcare system are located within a 50-mile radius of Best Health
Memorial Hospital. As executive director, Ella provides leadership to approximately 600
professional staff members who report directly to 12 different managers. The managers also report
to 5 directors who provide leadership for the women’s surgical areas; labor, delivery, recovery,
and prenatal services; maternal and infant services; and neonatal intensive care services. In
addition, one director is responsible for professional development and research and supervises the
clinical nurse specialists who are assigned to each of the clinical areas.
clinical nurse specialists who are assigned to each of the clinical areas.
Developing Service Lines in a Healthcare System; Ella reports directly to the CNO, who also is responsible for executive directors of other major
divisions, including acute care (including oncology, orthopedics, and general medical-surgical
care), critical care and emergency services, rehabilitative services, and home health and hospice
services. Ella is one of four nurse leaders who direct women’s and children’s services for the
hospital in the Western Regional Health System. The Women’s and Children’s Hospital at Best
Health is the largest in the healthcare system, and the other hospitals include the following: (1) one
suburban hospital with a small delivery rate of approximately 900 annual deliveries; (2) one urban
hospital with an annual delivery rate of approximately 1,500; (3) an urban hospital with an annual
delivery rate of approximately 3,500 and a level II neonatal intermediate intensive care nursery;
and (4) one suburban hospital located approximately 50 miles from Best Health with a strategic
plan to develop a new maternity service line with a level II neonatal intermediate intensive care
nursery. All of the other hospitals have transfer agreements with Best Health’s Women’s and
Children’s Hospital for high-risk perinatal and neonatal transports for tertiary care. Beyond the
transfer agreements, there is very little coordination of efforts or sharing of resources among the
five hospitals. For more, please visit Source
Developing Service Lines in a Healthcare System; Ella has assumed the informal leadership among the other directors of maternity and newborn
services at the other hospitals, and she is respected for her national reputation as a leader in
women’s and children’s services. Ella is a frequent speaker at national conferences associated with
maternal newborn health and children’s health services. She has recently attained her PhD in
nursing with an emphasis on nursing leadership, is certified by the American Nurses Credentialing
Center (ANCC) and the American Organization of Nurse Executives (AONE) in nursing
leadership, and is certified in high-risk perinatal services by the Association of Women’s Health,
Obstetric and Neonatal Nurses (AWHONN). Ella is also a frequent contributor to journals specific
to maternity, newborn, and women’s services.
Developing Service Lines in a Healthcare System; The president of Western Regional Health System and his executive team have decided to
develop specialty-focused service lines for women’s and children’s services, cardiac services,
orthopedic services, and cancer services. Other service lines will be developed in the future
depending on the effectiveness of these four service lines in reducing variation in care, redundancy
of services, and costs associated with patient care protocols. It is also hoped that the service-line
structure will improve market share and recognition for excellence with improvements in quality
outcome indicators, physician and patient satisfaction, and coordination of care across both
inpatient and outpatient services related to each of the specialties. To initiate the vision for service-
line integration, four corporate vice president positions are announced with star performers in each
of the service lines selected for the new role.
Developing Service Lines in a Healthcare System;
Ella, the star performer for women’s and children’s services, was appointed as the corporate
vice president (VP) for women’s and children’s services. Although surprised and excited about
this new role, Ella had mixed feelings about leaving her executive director position at Best Health
Memorial Hospital’s Women’s and Children’s Hospital. She and the other newly appointed
corporate vice presidents will be relocated to the corporate offices rather than having an office at
any one of the five health system hospitals. A new executive director will be recruited for Best
Health’s Women’s and Children’s Hospital. The president of Western Regional Health System
announced the new organizational structure, vision for system integration, and a newly appointed
senior vice president for Service-Line Integration position. The new senior VP is a physician who was recruited from an academic position on the East Coast and who has some experience with a large healthcare system developing a service-line structure. All of the new corporate VPs report
vice president (VP) for women’s and children’s services. Although surprised and excited about
this new role, Ella had mixed feelings about leaving her executive director position at Best Health
Memorial Hospital’s Women’s and Children’s Hospital. She and the other newly appointed
corporate vice presidents will be relocated to the corporate offices rather than having an office at
any one of the five health system hospitals. A new executive director will be recruited for Best
Health’s Women’s and Children’s Hospital. The president of Western Regional Health System
announced the new organizational structure, vision for system integration, and a newly appointed
senior vice president for Service-Line Integration position. The new senior VP is a physician who was recruited from an academic position on the East Coast and who has some experience with a large healthcare system developing a service-line structure. All of the new corporate VPs report
directly to Dr. Thomas, the new senior VP.
Needless to say, these organizational changes created absolute chaos among each of the entity
hospitals’ executive and leadership teams because they were uncertain how the new system
structure would affect their strategies and decisions related to the service lines within their own
entities. Some of the executive and leadership teams are fearful that they will lose autonomy in
decision making related to the service lines. The leaders of the smaller hospitals are pleased that
they might have more resources allocated to them as a result of the system change because they
often did not receive as many resources as were allocated to the larger hospitals in the system.
There is significant scuttlebutt around the organization as to how the corporate VPs were chosen
independent of the usual process of opening positions and allowing inside and outside applicants
to be considered. The unilateral decision by the president and his executive team upset many of
the leaders in the healthcare system, who voiced concern that this same process might be used for
other key positions in the future. Several are concerned that their own power and authority base
will be undermined by these newly appointed corporate VPs, and ultimately by the senior VP for
Service-Line Integration. The entity leaders are also concerned that their roles and responsibilities
in physician recruitment, program development, financial management, and philanthropy will be
minimized with the new service-line structure.
The chaos and confusion regarding the new organizational structure are often blatantly apparent
at the system-wide executive meetings chaired by the president of Western Regional Medical
Center. He finally informs the CEOs of each of the entities that they must put a positive spin on
their communication to their leadership teams as well as the staff at each of their hospitals. He
provides as much information as possible regarding the position descriptions for the senior VP and
the corporate VPs and has several open discussions about his vision for service-line integration
across the system. He also suggests that the CEOs read several articles written by national leaders
in healthcare integration and authors of books on “systemness.” Over the next months, the
president invites national speakers to present at Western Regional Healthcare System’s corporate
offices with invitations for the entity leaders to attend and discuss system integration that has been
successfully implemented at other major healthcare systems throughout the United States.
Ella becomes excited about her new role, and she reads everything possible about vertical and
horizontal integration of healthcare systems. She begins to meet with the new senior VP and the
other corporate VPs who are now her peers. Her position description includes service-line
development, integration, and innovation with an emphasis on improving quality and financial
indicators by reducing variation and redundancy. She also meets with data analysts to assess the
volume, financial, and quality outcome data for each of the entities. Because she had enjoyed a
very positive relationship with each of the entity’s directors of Women’s and Children’s Services,
she expected to continue this positive relationship in her new role. She also meets with the CNO
who was involved in the development of new women’s and children’s services at the outlying
hospital.
When she meets with each of the directors at the respective entities, she is surprised to receive
a less than positive reception. Suddenly, her colleagues who had worked with her so well in the
past seem distant and negative in their interaction toward her and her ideas related to service-line
integration of women’s and children’s services. With the exception of the CNO who was
developing women’s and children’s services from scratch, the others strongly emphasize their
desire to maintain their autonomy in the direction of their services instead of centralizing decision making related to women’s and children’s services. It seems to Ella that they have no concept of
Needless to say, these organizational changes created absolute chaos among each of the entity
hospitals’ executive and leadership teams because they were uncertain how the new system
structure would affect their strategies and decisions related to the service lines within their own
entities. Some of the executive and leadership teams are fearful that they will lose autonomy in
decision making related to the service lines. The leaders of the smaller hospitals are pleased that
they might have more resources allocated to them as a result of the system change because they
often did not receive as many resources as were allocated to the larger hospitals in the system.
There is significant scuttlebutt around the organization as to how the corporate VPs were chosen
independent of the usual process of opening positions and allowing inside and outside applicants
to be considered. The unilateral decision by the president and his executive team upset many of
the leaders in the healthcare system, who voiced concern that this same process might be used for
other key positions in the future. Several are concerned that their own power and authority base
will be undermined by these newly appointed corporate VPs, and ultimately by the senior VP for
Service-Line Integration. The entity leaders are also concerned that their roles and responsibilities
in physician recruitment, program development, financial management, and philanthropy will be
minimized with the new service-line structure.
The chaos and confusion regarding the new organizational structure are often blatantly apparent
at the system-wide executive meetings chaired by the president of Western Regional Medical
Center. He finally informs the CEOs of each of the entities that they must put a positive spin on
their communication to their leadership teams as well as the staff at each of their hospitals. He
provides as much information as possible regarding the position descriptions for the senior VP and
the corporate VPs and has several open discussions about his vision for service-line integration
across the system. He also suggests that the CEOs read several articles written by national leaders
in healthcare integration and authors of books on “systemness.” Over the next months, the
president invites national speakers to present at Western Regional Healthcare System’s corporate
offices with invitations for the entity leaders to attend and discuss system integration that has been
successfully implemented at other major healthcare systems throughout the United States.
Ella becomes excited about her new role, and she reads everything possible about vertical and
horizontal integration of healthcare systems. She begins to meet with the new senior VP and the
other corporate VPs who are now her peers. Her position description includes service-line
development, integration, and innovation with an emphasis on improving quality and financial
indicators by reducing variation and redundancy. She also meets with data analysts to assess the
volume, financial, and quality outcome data for each of the entities. Because she had enjoyed a
very positive relationship with each of the entity’s directors of Women’s and Children’s Services,
she expected to continue this positive relationship in her new role. She also meets with the CNO
who was involved in the development of new women’s and children’s services at the outlying
hospital.
When she meets with each of the directors at the respective entities, she is surprised to receive
a less than positive reception. Suddenly, her colleagues who had worked with her so well in the
past seem distant and negative in their interaction toward her and her ideas related to service-line
integration of women’s and children’s services. With the exception of the CNO who was
developing women’s and children’s services from scratch, the others strongly emphasize their
desire to maintain their autonomy in the direction of their services instead of centralizing decision making related to women’s and children’s services. It seems to Ella that they have no concept of
the president’s vision for service-line integration or what systemness would look like. Despite her
frequent meetings with them and developing an organizational structure for women’s and
children’s services with them, she seems to receive only cordial and superficial coordination of
services rather than a commitment to true integration.
Developing Service Lines in a Healthcare System; Ella’s experience is not unique, and the other corporate VPs report similar reactions with the
exception of the orthopedic service line. In one of the service-line meetings, Ella mentions that the
hospitals are acting more as a confederation of hospitals rather than as a healthcare system. Each
of the entity hospitals struggles to maintain as much autonomy in decision making as possible
while the corporate system leaders attempt to integrate service lines to create a total and
comprehensive system of care for the community with branding of the Western Regional
Healthcare System as a name for healthcare excellence.
The orthopedic service line seems to be more advanced in its integration of services because
there are few threats among the orthopedic surgeons and nursing leadership at each of the entity
hospitals. They see system integration as an opportunity to obtain more resources for capital
equipment, marketing and promotional services, and specific leadership for the specialty beyond
the current immersion in general acute care services at each of the entities. The cardiac service line
struggles with the system integration initiative because each of the entities desires to be named the
premier cardiac center within the healthcare system, and several of the interventional cardiologists
are direct competitors for market share within the region. Because there are two cancer centers in
the healthcare system, the cancer service line also struggles with how to manage competing centers
of excellence with physicians and leaders who have no incentive to integrate their services or
referral systems. In fact, physician and entity leaders for the cancer service line voice their
discontent with the system initiative, stating that it reduces their ability to enhance their market
share coming from the smaller hospitals within the system.
Ella continues to review the literature related to the development of systems in general and
healthcare systems specifically. She realizes that for the women’s and children’s service line, she
needs to demonstrate the value that could be added by the integration of services across the entities
in contrast to each entity acting alone. She also realizes that it is important to identify areas where
autonomy in decision making is legitimate and to support each of the entity leaders in their efforts
to maintain entity autonomy in their specific region within the city. She recognizes that it will be
difficult for each of the entities to give up its respective individual branding within its community,
so she advocates at the system meetings for the development of a system brand that also allows
for entity branding as a developmental step in the overall goal of system integration. Because each
of the entities also provides services to different cultural groups, Ella suggests that these diverse
cultures be highlighted in the branding of each of the entity’s programs and services. This action
recognizes each of the entities for a unique contribution to the system as a whole.
Several different actions and initiatives to develop system integration are tried, and many
succeed, whereas others are not so successful. Ella tries to analyze the forces at play in each of the
successes and failures. One area that is very successful is the development of a system
organizational structure for women’s and children’s services for the service line that was designed
by the entire group of entity leaders. System-wide councils were developed using successful
models of shared governance reported in the literature. The following councils were developed:
(1) Operations Council, which focused on financial and productivity goals and supply and capital
acquisitions; (2) Quality Council, which focused on nurse-sensitive indicators and other quality
outcome indicators; (3) Professional Development and Education Council, which focused on the integration of all educational materials for patients and families and the standardization of clinical protocols for patient education across the system.
frequent meetings with them and developing an organizational structure for women’s and
children’s services with them, she seems to receive only cordial and superficial coordination of
services rather than a commitment to true integration.
Developing Service Lines in a Healthcare System; Ella’s experience is not unique, and the other corporate VPs report similar reactions with the
exception of the orthopedic service line. In one of the service-line meetings, Ella mentions that the
hospitals are acting more as a confederation of hospitals rather than as a healthcare system. Each
of the entity hospitals struggles to maintain as much autonomy in decision making as possible
while the corporate system leaders attempt to integrate service lines to create a total and
comprehensive system of care for the community with branding of the Western Regional
Healthcare System as a name for healthcare excellence.
The orthopedic service line seems to be more advanced in its integration of services because
there are few threats among the orthopedic surgeons and nursing leadership at each of the entity
hospitals. They see system integration as an opportunity to obtain more resources for capital
equipment, marketing and promotional services, and specific leadership for the specialty beyond
the current immersion in general acute care services at each of the entities. The cardiac service line
struggles with the system integration initiative because each of the entities desires to be named the
premier cardiac center within the healthcare system, and several of the interventional cardiologists
are direct competitors for market share within the region. Because there are two cancer centers in
the healthcare system, the cancer service line also struggles with how to manage competing centers
of excellence with physicians and leaders who have no incentive to integrate their services or
referral systems. In fact, physician and entity leaders for the cancer service line voice their
discontent with the system initiative, stating that it reduces their ability to enhance their market
share coming from the smaller hospitals within the system.
Ella continues to review the literature related to the development of systems in general and
healthcare systems specifically. She realizes that for the women’s and children’s service line, she
needs to demonstrate the value that could be added by the integration of services across the entities
in contrast to each entity acting alone. She also realizes that it is important to identify areas where
autonomy in decision making is legitimate and to support each of the entity leaders in their efforts
to maintain entity autonomy in their specific region within the city. She recognizes that it will be
difficult for each of the entities to give up its respective individual branding within its community,
so she advocates at the system meetings for the development of a system brand that also allows
for entity branding as a developmental step in the overall goal of system integration. Because each
of the entities also provides services to different cultural groups, Ella suggests that these diverse
cultures be highlighted in the branding of each of the entity’s programs and services. This action
recognizes each of the entities for a unique contribution to the system as a whole.
Several different actions and initiatives to develop system integration are tried, and many
succeed, whereas others are not so successful. Ella tries to analyze the forces at play in each of the
successes and failures. One area that is very successful is the development of a system
organizational structure for women’s and children’s services for the service line that was designed
by the entire group of entity leaders. System-wide councils were developed using successful
models of shared governance reported in the literature. The following councils were developed:
(1) Operations Council, which focused on financial and productivity goals and supply and capital
acquisitions; (2) Quality Council, which focused on nurse-sensitive indicators and other quality
outcome indicators; (3) Professional Development and Education Council, which focused on the integration of all educational materials for patients and families and the standardization of clinical protocols for patient education across the system.
Ella led the process of developing each of the councils with respective charters, deliverables, and reporting structure to a system-wide steering council composed of physician leaders in women’s and children’s services and the entity directors at each of the hospitals. It seems that over time the entity directors moved from simply coordinating efforts at each of the hospitals to actually working toward integrating some of their professional education offerings and patient education materials and activities. They also began to assume responsibility in developing a new women’s and children’s service program at the outlying hospital. Ella begins to realize that system integration could not simply be mandated by system leaders but rather that systemness is a developmental process. Reflecting over the past few months, Ella notes that moving toward systemness has several identifiable steps that include developing trust among the service-line and entity leaders; sharing information and resources across the hospitals; coordinating services and programs across the system; and, finally, developing strategic thinking from a systems perspective instead of the individual entity level.
Questions