Building a solid business case for service line optimization


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Reconfiguring services line location is a growing need among most integrated delivery systems. In this context, it is important to remember that strategic decisions such as opening new facilities and closing others include both functional and emotional factors. This is also called
speaking to the “mind” and “heart.” The effective combination of these factors results in faster
decisions and a higher level of commitment to seeing these changes through. Through this illustrative case study, we will explore how to effectively integrate the
components together as part of the same stream of decision-­‐making.

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Building a solid business case for service line optimization

  1. 1. Building  a  Solid  Business  Case     For  Service  Line  Optimization     1                                                                                                                 1  This white paper is based on a webinar presentation delivered through The Beryl Institute by Froedtert Health and Gelb Consulting   Gelb Consulting, An Endeavor Management Company 2700 Post Oak Blvd Suite 1400 Houston, Texas 770567     P + 281.759.3600 F + 281.759.3607
  2. 2. Building  a  Solid  Business  Case     For  Service  Line  Optimization     Introduction and Overview Reconfiguring  services  line  location  is  a  growing  need  among  most  integrated  delivery   systems.    As  mergers  and  acquisitions  continue,  fueled  by  changes  to  our  US  healthcare   delivery  model,  strategic  planners  must  be  very  deliberate  about  which  data  to  gather  and  how   to  present  such  for  effective  decision  making.   In  this  context,  it  is  important  to  remember  that  strategic  decisions  such  as  opening  new   facilities  and  closing  others  include  both  functional  and  emotional  factors.    This  is  also  called   speaking  to  the  “mind”  and  “heart.”    The  effective  combination  of  these  factors  results  in  faster   decisions  and  a  higher  level  of  commitment  to  seeing  these  changes  through.       Through  this  illustrative  case  study,  we  will  explore  how  to  effectively  integrate  the   components  together  as  part  of  the  same  stream  of  decision-­‐making.     You  will  see:   • • • • Patient  and  physician  “stories”  help  build  support  for  change   Demand  estimation  tools  are  sophisticated,  but  necessary   Multi-­‐million  dollar  decisions  require  some  investment  in  data  acquisition   Buy-­‐in  throughout  –  process,  insights,  and  actions  is  critical   Background   Froedtert  Health  sought  to  examine  and  redesign  orthopedics,  orthopedic  surgery  services,   and  the  rehabilitation  unit  into  a  musculoskeletal  service  line.    This  new  design  would   streamline  the  treatment  process  by  organizing  existing  assets  of  communication,  clinical  care,   and  care  coordination  based  on  an  understanding  of  the  ideal  patient  experience.    Given  the   variety  of  interests  with  internal  stakeholders,  common  alignment  around  patient  needs  and  a   collaborative  approach  was  required.    These  needs  included,  identifying  problems  and  creating   solutions  to  the  problems.     The  desired  changes  are  not  insignificant  as  Froedtert  Health  is  the  only  academic-­‐community   partnership  in  southeastern  Wisconsin.    The  system  includes  over  772  beds,  admits  over   40,000  patients,  and  completes  almost  850,000  outpatient  visits  per  year.     ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  2  
  3. 3. Building  a  Solid  Business  Case     For  Service  Line  Optimization     Approach     A  framework  focused  on  the  customer  experience  was  paramount  to  gaining  alignment.    By   concentrating  insights  and  strategic  decisions  on  the  direct  impacts  to  patients/families  and   their  community-­‐based  physicians,  a  holistic  view  can  be  achieved.       Our  customer  enchantment  model  serves  to  align  the   various  aspects  of  achieving  exceptional  experiences.     These  include  customer  expectations  of  the  brand,   leadership  setting  expected  behaviors  and  priorities,   and  ensuring  the  culture  supports  such.     Ideally,  we  look  to  design  experiences  that  create   resonance  to  encourage  patients  and  physicians  go  to   out  of  their  way  to  recommend  you.    This  is  beyond   simple  satisfaction  and  likelihood  to  purchase.   This  strategic  decision-­‐making  required  the  following   inputs:   • Utilization  review   • Site  visits   • Patient  and  physician  experience   interviews   • Trade-­‐off  research  (quantitative)  to   assess  true  impacts  of  change       ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  3  
  4. 4. Building  a  Solid  Business  Case     For  Service  Line  Optimization     Utilization Review   Examining  the  inventory  of  current  services  provided,   frequency  of  use,  geographic  spread  and  profitability  is   paramount  to  understand  whether  reconfiguring  is   possible.    In  some  circumstances,  this  data  might  suggest   a  full-­‐optimized  system;  in  others,  it  becomes  clear  that   services  are  underutilized.       Additional  analysis  can  be  performed  to  look   prospectively:       • Effects  of  internal  cannibalization     • Condition  incidence  rates  and  corresponding   services  (from  you  and  competitors)   • Site  location     • Staff  models  and  movement  across  locations   • Lease  expiration  timing   Site Visits   Site  Visits  can  provide  a  meaningful  way  to  assess  what  customers  see  and  whether  locations   require  updates.    A  chair  exercise  can  be  used  for  this  purpose.    During  such,  you  sit  in  every   chair  that  patients  sit  –  from  parking  lots  to  exam  rooms  –  and  take  pictures  from  their   perspective.    This  exercise  produces  insights  regarding  what  patients  see  and  also  how  many   different  environments  patients  sit  during  a  single  encounter.     Across  multiple  sites,  it  will  also  be  important  to  review  how  distinct  or  common  these   physical  environments  are.    If  there  is  one  service  line  program,  many  of  the  touchpoints   should  be  the  same,  especially  if  the  patients  visit  more  than  one  location.    Examples  of  this   consistency  might  include:    Way  finding,  signage,  waiting  area  amenities,  privacy  at  reception   desks,  exam  rooms,  and  other  common  areas.       ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  4  
  5. 5. Building  a  Solid  Business  Case     For  Service  Line  Optimization       Parking  can  be  more  difficult  at  larger   facility  (and  result  in  appointment   cancellations  when  the  weather  is  bad)       Unique  options  for  therapy  exercises   Specialized  treatment…hand  therapy   area   Co-­‐location  of  therapists  and  physicians   is  beneficial  for  patients       Consider  this:    During  this  exercise,  it  is  often  very  useful  to  take  advantage  of  the  time  onsite   and  discuss  experiential  successes  and  barriers  with  staff  members.    They  often  have  great   ideas  but  obstacles  in  their  way  to  implement  such.   Experience Mapping Interviews   Experience  mapping  interviews  are  organized  using  an  experience  map  –  a  visual  cue  to  aid   respondents  to  recall  specific  episodes  of  their  journey.    This  aids  interviewers  in  identifying   activities  and  the  variety  of  touchpoints  customers  encounter.    These  maps  can  be  used  for   staff,  patients,  and  physicians.    In  addition  to  gathering  inputs,  the  experience  map  later  serves   as  a  framework  for  action  –  from  front-­‐end  marketing,  communication,  through  transition  of   care.    The  intent  is  to  understand  the  nature  of  the  current  experience,  define  functional  and   emotional  needs  at  each  step,  and  elicit  recommendations  for  improvement.               ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  5  
  6. 6. Building  a  Solid  Business  Case     For  Service  Line  Optimization     These  interviews  yield  powerful  audio  clips  and  comments  to  ensure  planners  understand   functional  and  emotional  needs.         Through  this  process,  you  will  identify  a  number  of  key  patients  and  physicians  who  can  later   provide  marketing-­‐related  testimonials  if  their  stories  are  compelling  and  align  with  your   brand.       “I  want  the  patient  to  have  an  efficient  experience,       like  an  appointment  in  a  timely  manner.       The  quality  of  therapy  is  expected.”         Referring  Physician       Initial Insights   Through  the  empathy  building  approach,  it  is  easier  for  executives  to  understand  WHY  change   is  required.    For  this  particular  case  study,  there  were  several  strategic  insights  discovered,   which  then  provided  support  to  fund  additional  exploration  regarding  HOW  the  changes  will   take  place.     In  particular:     • Patients  were  highly  satisfied  with  their  current  therapist,  but  had  mixed  feelings  about   changing  sites  and/or  therapists  in  the  middle  of  treatment.     • The  keys  to  therapy  success:    Motivation,  expertise  and  thorough  explanations.     • While  information  regarding  the  program’s  capabilities  is  available,  such  was  not   getting  in  the  hands  of  patients  (which  is  both  facility  and  physician  driven).    In   addition,  there  were  inconsistencies  across  the  facilities  in  terms  of  the  materials   distributed.   • Community  physicians  also  expressed  concern  with  the  duplication  of  services.    In   addition,  they  were  not  aware  of  the  variety  of  services  provided  under  the  program.   • For  on-­‐going  treatment,  physicians  sought  to  obtain  information  or  build  relationships   with  individual  facilities  and  professions  to  match  patients  with  the  most  appropriate   therapist  (this  was  not  only  clinical,  but  also  approach).   • Toward  that  end,  physicians  prefer  to  be  co-­‐located  with  the  outpatient  services  group.     ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  6  
  7. 7. Building  a  Solid  Business  Case     For  Service  Line  Optimization     Leadership Business Case for Decision Support   To  organize  collective  thinking  about  information  gaps  and  decisions  to  be  made,  insights  were   organized  into  two  categories,  reflecting  the  sources  of  insight:    Experience  and  Economics.           As  a  result  of  developing  empathy  with  their  customers,  executives  came  to  the  following   conclusions:     There  is  a  burning  platform  to  carefully  examine  the  current  patient  experience  and  identify   opportunities  for  streamlining  operations:     • Economics:    Internal  competition  for  referrals   • Experience:  Confusion  around  facilities  located  closely  together     The  ideal  design  will  support  the  identification  and  translation  of  best  practices  across   locations  so  that  this  service  line  does  things  consistently,  regardless  of  where  the  patient   accesses  care.     There  was  commitment  to  championing  changes  required  to  achieve  these  objectives.   Trade-off Analysis (Quantitative)   To  mitigate  risks  between  both  economic  and  experiential  factors,  trade-­‐off  techniques  such  as   adaptive  conjoint  analysis  can  be  used.    Conjoint  analysis,  meaning  considered  jointly,  provides   a  research  mechanism  to  force  decisions  based  on  a  set  of  features/benefits/brands/costs.    For   healthcare,  it  is  often  the  case  that  cost  considerations  involve  –  distance  traveled  and  co-­‐ location  of  services  (number  of  visits  to  accomplish  the  same  programmatic  outcome).       To  inform  this  set  of  decisions,  we  designed  an  executed  conjoint  survey  to  examine  the   choices  that  patients  and  physicians  make  regarding  episodes  of  care.             ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  7  
  8. 8. Building  a  Solid  Business  Case     For  Service  Line  Optimization     An  example  of  these  trade-­‐off  or  purchase  simulation  exercises  is  featured  below:       Through  this  analytical  process,  the  following  results  can  be  determined:     • Impact  of  brand  (i.e.,  who  provides)   • Need  for  co-­‐location  of  services  (i.e.,  number  of  services  under  one  roof)   • Distance  trade-­‐  offs  (e.g.,  how  far  from  home/work)   • Estimated  demand  for  services  given  competitive  choices   • Identification  of  attractive  segments     In  the  examples  below,  relative  importance  of  attributes  is  highlighted  and  the  drop  offs  for   demand  with  changes:     Healthcare  provider  (Brand)  trumps  other  factors:         ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  8  
  9. 9. Building  a  Solid  Business  Case     For  Service  Line  Optimization     To  maximize  demand,  location  is  more  important  than  co-­‐location,  even  for  referring   physicians:   Key Insights   • • • Froedtert  Health  has  the  strongest  brand  in  the  market  for  these  services     Physicians  share  the  same  perceptions  as  patients  for  proximity  (even  to  the  20   minutes  drop  off)     Co-­‐location  becomes  less  of  an  issue  when  trade-­‐offs  are  required     Key Strategic Inputs   • • • • •     Consolidation  possible  as  long  as  changes  optimize  around  20  minutes   A  freestanding  facility  is  attractive  with  limited  scope  of  services   Alignment  of  services  is  important  to  maintain/increase  market  share   Future  growth  can  be  driven  by  market  potential  and  from  whom  to  take  market  share   Employee  communication  will  focus  on  long-­‐term  commitment  to  solidifying  market   leadership  position  and  patient/physician  access   ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  9  
  10. 10. Building  a  Solid  Business  Case     For  Service  Line  Optimization     Strategic Plan Highlights   Patient-­centered  Design   • Multidisciplinary  teams  led  by  a  Steering  Committee   • Voice  of  the  patient  is  a  required  input   • Functional  design  based  on  needs  of  the  patient   • LEAN  workflows  for  staff  /  physicians  developed  prior  to  construction     Operations     • Consolidate  rehab  services  into  a  single  organizational  structure  at  health  system  level   • Reduce  the  number  of  sites  in  over-­‐served  markets  and  ensure  smooth  transition  for   patients   • Define  system-­‐wide  musculoskeletal  service  line  structure,  leadership  and  objectives   • Complete  construction  of  free-­‐standing  facility  (January  2014)  and  service  line   deployment  plan   • Identify  additional  initiatives  to  optimize  service  line  to  best  meet  the  needs  of  our   patients  and  providers     Communications   • Current  and  future  patients   • Referring  physicians  (internal  and  external)   • Orthopedic  specialists   • Rehab  services  leaders  and  staff   • Community  members  at  large   • Health  system  leaders  and  staff   • Medical  group  practice  leaders  and  physicians       ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  10  
  11. 11. Building  a  Solid  Business  Case     For  Service  Line  Optimization     About Endeavor   Endeavor  Management,  is  an  international  management  consulting  firm  that  collaboratively   works  with  their  clients  to  achieve  greater  value  from  their  transformational  business   initiatives.  Endeavor  serves  as  a  catalyst  by  providing  pragmatic  methodologies  and  industry   expertise  in  Transformational  Strategies,  Operational  Excellence,  Organizational  Effectiveness,   and  Transformational  Leadership.     Our  clients  include  those  responsible  for:     • Business  Strategy   • Marketing  and  Brand  Strategy   • Operations   • Technology  Deployment   • Strategic  Human  Capital   • Corporate  Finance     The  firm’s  40  year  heritage  has  produced  a  substantial  portfolio  of  proven  methodologies,   deep  operational  insight  and  broad  industry  experience.  This  experience  enables  our  team  to   quickly  understand  the  dynamics  of  client  companies  and  markets.  Endeavor’s  clients  span  the   globe  and  are  typically  leaders  in  their  industry.       Gelb  Consulting,  a  wholly  owned  subsidiary,  monitors  organizational  performance  and  designs   winning  marketing  strategies.  Gelb  helps  organizations  focus  their  marketing  initiatives  by   fully  understanding  customer  needs  through  proven  strategic  frameworks  to  guide  marketing   strategies,  build  trusted  brands,  deliver  exceptional  experiences  and  launch  new  products.     Our  websites:   ©  2013  Endeavor  Management.  All  Rights  Reserved.       Page  11