Are You Prepared? The Next Generation of Orthopaedic Service Lines


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Is your orthopedic service line keeping up with the changes in healthcare? How does orthopedics fit with the shift to greater accountability for quality and cost? How should you be adapting the service line to market changes? Find out about the next generation of service lines and some key strategies for succeeding under more accountable care, including organizational models and skill sets.
About the Speaker:
Ms. Lohmar is a founding Principal with New Heights Group. With over 25 years in the industry, Ms. Lohmar brings to client engagements specialized expertise in strategic planning, service line planning and development, integration/consolidation strategies and physician strategies, as well as facilitating organizational retreats and planning sessions. She is a frequent speaker on organizational service line development, and business planning for key service lines as orthopedics and neurosciences.

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Are You Prepared? The Next Generation of Orthopaedic Service Lines

  1. 1. ManagingOrthopedicEpisodesofCare
  2. 2. 2 Cecily Lohmar New Heights Group The Next Generation of Service Lines
  3. 3. 3 Is your service line evolving? Elements of evolution: 1. Definition 2. Continuum & integration 3. Value & metrics 4. Physician alignment 5. Leadership OR
  4. 4. 4 Service line definitions New vs. old HealthCare Advisory Board 2011 82% 76% 53% 44% 70% 23% 48% 23% 83% 71% 54% 49% 77% 70% 84% 49% Cardiovascular Services Orthopedics Back/Spine Care Neurosciences Oncology Wellness & Preventative Medicine Primary Care Geriatrics Now In Five Years “The Old Standbys” “The New Arrivals” Where does 70 y.o. CHF fit?
  5. 5. 5 Clarify YOUR service lines Who’s in, who’s not Relationship with other service lines Ambulatory Primary care Orthopedics Oncology Cardiovascular Women’s Pediatrics Post acute Behavioral health DiagnosesSettings Demographics
  6. 6. 6 Invest in the continuum Make Buy Partner Organizational expertise? Strong Good Poor Facilities? Available Not available Not available Is there a market leader? No No/Yes Yes What is market demand? High Medium Medium Barriers to entry? Low Moderate Medium Cost to provide? Low Low High Organizational culture? Same Different Different
  7. 7. 7 Address chronic care Strategy Pros Cons Examples Integrate into existing Service line definitions remain centered on similar patient groups. Different clinical paths acute vs. chronic. CHF in cardiovascular service line Create chronic care service line Critical mass of resources focused on higher cost/complex patients. Integrating with ‘true’ service lines. Group of diagnoses/dise ases based on high volume/cost Create disease specific “service line”/program Ability to ‘drill down’ on select high cost diseases. Integrating with “true” service lines. Diabetes
  8. 8. 8 Integrate wisely Coordinate Integrate Consolidate Market Markets served by the entities Diverse Similar Similar Distance between entities Far Near Near One entity maintains a well-known image No No Yes Demand for service consistency Low Medium High Financial Payor demands for system-wide pricing Low Medium High Payors looking for case rates No Yes Yes Number of at-risk contracts Low Medium High Priority placed on cost reduction Low Medium High Political/Cultural Institutional culture Diverse Similar Coincident Ease of recruiting and retaining clinical staff High Medium Low Skilled service line manager / leader No No Yes Multiple medical staffs Yes Yes No Need for local control High Medium Low
  9. 9. 9 Redefine the value equation Value = Cost + Quality • Cost – Copays – Fee scales – Warranty (e.g, Geisinger ProvenCare®) • Quality – Return to function – Pain – Caring “What is value to the customer may be the most important question for a business, and the one that is asked least often.” -- Peter Drucker
  10. 10. 10 Rethink performance metrics Old • Market share – Percent of procedures • Processes – What did I do? • Financial – Profit by episode New • Market share – Percent of SL pop • Outcomes – How did it work? • Financial – Cost per pop
  11. 11. 11 Next generation alignment - greater integration and broader scope Information System Networking Joint Ventures Full Integration Collaborative Branding & Marketing Practice Development Support Professional Services Agreements Co-Management Scope of Activities DegreeofIntegration Advisory Councils Joint Contracting
  12. 12. 12 Consider multiple medical directors Approach Examples By specialty Medical & surgical By disease/program Total joint, sports medicine By population Geriatric, pediatrics By function Quality, technology
  13. 13. 13 Position for rapid change Product line managers have control over: • Operations • New product development • Technology acquisition • Full “continuum” • Pricing
  14. 14. 14 Administrative/clinical leadership teams necessary to manage complexity 23% 15% 26% 36% 0% 5% 10% 15% 20% 25% 30% 35% 40% Registered Nurse Business Management Healthcare Administration Physician Zismer, Daniel K. and Wegmiller, Donald C. “Clinical Service Lines: Mapping the Future of Community Health”, C-SUITE Resources.
  15. 15. 15 Match autonomy and authority with strategic goals 4.5% 55% 36% 4.5% Coordinator: no formal authority over personnel in the service line, no budget authority. Matrix: authority and influence are balanced between hospital leadership and service line manager. Manager: service line personnel report to service line manager; has budget authority over service line budget. Other Zismer, Daniel K. and Wegmiller, Donald C. “Clinical Service Lines: Mapping the Future of Community Health”, C-SUITE Resources.
  16. 16. 16 Organizational structureImplementation Challenge Ability to Create/Add Value High High Low Low Service line organization Service line execution Service line leadership Service line promotion
  17. 17. 17 Selecting the right structure Promoter Leader Executive Organization Culture Entrenched in traditional culture. Focus on departments, not patient groups. Beginning to shift focus from internal depts. to market. Market oriented culture; adapts easily to change. Strategic Orientation Focus on revenues. Focus on growth, quality. Achieve dominance in key service lines; focus on growth, quality, cost. Population health management. Management Leadership Equate service lines with packaging/promotion. Recognize service line value, remain organized around departments. Management team understands and ‘thinks’ service lines. Very strong, visible, accountable. Physician Leadership Medical staff not aligned. Good leadership potential but still new to ‘job’. Physician leadership focused on quality & processes. Strong leadership, clinically integrated medical staff. Market Dynamics Limited competition; visibility is primary need. Losing market share to “centers of excellence”. Strong competition; market sophistication rising. ACO’s, bundled payments, VBP driving market. Information Systems Limited ability to analyze service line performance. Basic financial and market performance available at service line level. Full P&L available by service line. Information systems must cross campuses, settings, and departments.
  18. 18. 18 COO skill sets needed • Strategy • Operations • Entrepreneur • Change management • Financial management (beyond budget management) • Partnership development/Negotiator • Process re-engineering
  19. 19. 19 Next generation physician leaders driving change • Physician engagement • Physician recruitment/retention • Quality • Evidence based practices • Utilization management
  20. 20. 20 Getting to the next generation 1. Are your service line definitions still valid? 2. Are your performance metrics value based? 3. Have you integrated the full continuum into your service line discussion? 4. Do you have tailored alignment options? 5. Does your service line leadership dyad/triad have the needed authority to create change? 6. Do your service line leaders have the needed skill sets? 7. Is your service line structure clear to all?
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  22. 22. 22 Contact Cecily Lohmar, Principal New Heights Group 252 249 1225
  23. 23. ManagingOrthopedicEpisodesofCare