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,
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. 
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 SourceDeveloping 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; 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
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
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.
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

  1. How do you think that the president’s announcement to move to a service-line platform and the centralized decision to appoint service-line vice presidents in contrast to an open recruitment process affected the system service-line initiative?
  2. What do you perceive the differences are between a confederation of hospitals and a fully integrated healthcare system?
  3. How would you strategize to minimize the fears and anxiety of entity leaders in the development of a system-wide service line?
  4. In this case, what are the apparent barriers and contributors to system integration for the service lines?
  5. In your opinion, how much autonomy in decision making and marketing and promotions should each entity have in an integrated healthcare system?
  6. What are the factors that might affect the decision to honor entity autonomy in contrast to system integration and centralization of decision making and marketing and promotional activities?

 

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