Four Areas to Incorporate in Your Hospital Service Line Strategic Planning

Most healthcare organization today see strategic planning as an imperative. For many, it includes an annual process of looking forward, discussing ways to address current and future challenges, and responding to potential threats in the competitive landscape. However, one often neglected area in these global strategic reviews is drilling down to the service line level. While it is critical to push global strategic plans from the top down, it is also imperative that individual service lines have their own plans, both to support the global strategic plan and to help achieve their specific aims.

Following are four major areas to incorporate in service line-specific planning:

  1. Adding new services
  2. Augmenting existing services
  3. Discontinuing current services
  4. Responding to changes in the competitive landscape

Adding New Services

The impetus for offering a new service often comes from many different points of view, such as patients who desire certain services, physicians who want to provide additional services, or payers that require the completion of certain elements in-house. For example, it is not uncommon for hospitals to add imaging and other diagnostic services to accommodate patient need and maximize revenue. For many reasons, service line-specific strategic planning should consider services that they could or should add. This assessment also provides an opportunity to request feedback from an array of constituents whose input may be helpful and inspiring in unique ways other than just adding new services.

Augmenting Existing Services

Often, hospitals have existing service lines that they can optimize. Options include both cutting back and expanding or refining current capabilities to reach their maximum level of performance. For example, one hospital client is developing a total joint center of excellence within its orthopedic service line. This initiative demands the organization to enhance the measurement of both clinical outcomes and costs beyond its previous measurements and using the data collected to drive continuous process improvement in the service line, particularly for its total joint program. The higher value (defined as quality per unit of cost) delivered through this effort will boost the organization’s position as the market leader in total joint replacement. This illustration demonstrates the importance of considering how to improve the current services as part of the strategic planning process.

Discontinuing Current Services

Ending a service can be a highly emotional decision. In a community hospital, when margins become razor thin, it is likely that the hospital must make radical changes to improve performance. For instance, after careful analysis and vetting, a hospital decided to close its obstetrical service line. This meant that no new babies would be born in the hospital, which was difficult for some to accept, including many staff members who themselves were born at that same hospital. Though this decision was wrought with emotion, it was necessary to protect the hospital’s viability. Most decisions to discontinue services are less emotional than this one. However, any decision to terminate a service must occur after sufficient analyses, backed by quantitative data, with consideration of any unintended consequences, and factored into the overall strategic plan for the service line, and likely, if a significant service, for the entire organization.

Responding to Changes in the Landscape

Changes in the market can require definitive action at the service line level. One hospital decided not to expand its cardiovascular services after the competing hospital increased its emphasis on these same services. Instead, the cardiovascular service line decided to maintain, but not grow, its services. This position made sense at a service line level, but it also meant that the hospital could then dedicate additional resources to another service line (in this case, oncology) that would serve the community better and have a positive impact on the bottom line. Thus, changes in the competitive and payer landscapes should also occur at the service line-specific strategic planning level. As you begin your own strategic planning efforts, be sure to consider these four categories. The global strategy for the organization should be set at the highest levels of the organization but then allowed to develop at the service line level with input from front-line staff. It is imperative that all initiatives are in accord with the organization’s global strategic plan as the service lines’ own strategic and tactical plans are enacted.

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