Service Line Management (SLM) has been used by many hospitals in different ways, but many hospitals struggle to realize the potential benefit that SLM offers.

This article, the first in a series on service line management, builds upon the concept that service line management in hospitals is similar to brand management in other industries. Successful implementation of SLM requires making the cultural adjustments necessary to add a new organizing concept to the existing hospital culture.

Is Service Line Management Right for Your Organization?

Before discussing how service lines operate, hospitals should consider service line management only if a strategic commitment exists to do a better job of coordinating service delivery for patient populations.

While this goal seems like one that should apply to all patients and all services, realistically, the commitment to develop a service line is economically and operationally realistic only when the target patient population is large enough to sustain the investment.

Three Distinct Goals of Service Line Management

Service line management provides a vehicle to focus the attention of multiple discrete departments into a singular clinical program that can achieve higher levels of performance in three distinct areas:

  1. Improving the patient’s experience of care.
  2. Improving the health of patients.
  3. Reducing the cost of providing excellent care.

In addition to having enough volume to sustain SLM, a service line should have homogeneity relative to the patient population served. For example, some service lines might be segmented by disease states, such as cancer or heart disease. Other service lines might be organized to address populations with unique needs, such as women, children, or geriatric patients.

In some hospitals, service lines are organized around clinical interventions, such as radiology or surgery. We discourage the latter as an organizing principle because, being patient focused, we believe that these service lines should be built around patient populations with similar needs, rather than services offered. These areas may be better thought of as a patient care processes that need to be organized, rather than service lines.

The Patient Experience Over a Lifetime of Care

To us, there is a difference between a process and a service line. A process is designed to organize care and influences the patient’s experience for an encounter (which may last several months). A service line is designed to affect the patient’s experience over a lifetime of care. Because service lines provide seamless care for patients and make navigating the healthcare system easier, the patient’s experience of care is improved, which builds loyalty to the service line and institution.

In a service line model, the service line manager is responsible for coordinating patient care and information flow in a comprehensive manner along the patient’s journey of care. During a course of care, patients are cared for by providers in many departments or facilities of the healthcare system.

The traditional leadership structures in which a manager is responsible for a single department serve as obstacles to optimizing efficiency and the patient experience.

Two Choices for Delivering Better Care

Organizations have two choices for structuring their care delivery programs to provide better care. The “focused factory,” an idea popularized by Regina Herzlinger, organizes all the resources to provide a single care “product.” Although there are specialty hospitals that operate this way, this is not realistic for general hospitals.

The alternative is to coordinate the resources of multiple departments into a matrix management structure that is led by a service line manager. This type of structure is unusual in hospitals, which typically operate using a vertical line of accountability. Matrix management requires departments to be accountable to both their “line” supervisor as well as to the service line.

This unusual structure has several implications for the organization. A matrix structure requires cultural and operational changes to support the matrix organization’s goals and operations. These will require changes to a wide array of systems, including budgeting, financial reporting, manager performance evaluations, manager selection and training, and competency design.

Matrix Manager Leadership Skills

Also, leadership skills for a matrix manager are considerably different from those of a “line” manager. The service line manager has to rely heavily on engagement and collaboration skills because each department has its agenda and priorities. In addition to more traditional management skills such as financial management and project management, service line managers must be able to lead marketing efforts for the service line. Thus, management development and selection activities in the organization will have to consider these new requirements.

Part II of the “Service Line Management” series will take a closer look at the key skills needed to be an effective service line leader.


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