Orthopaedic surgery as a medical subspecialty has experienced significant progress over the past decade, contributing to the advancement of enabling surgical technologies and robotics, the propagation of ambulatory surgery centers, the evolution of the surgeon and vendor company relationship, and the upswing of gain-sharing models and surgeon co-management of growing orthopaedic businesses. As the demand of orthopaedics continues to rise, orthopaedic service lines are evolving and transforming delivery of patient care through standardized care pathways while curtailing cost. This is especially relevant during the current climate of healthcare reform that has shifted towards value-based care. Orthopaedic surgeons must be conscious of outcomes and resource utilization within their practice because failure to address clinical shortcomings may result in financial implications. This chapter focuses on the process of establishing and building a successful orthopaedic service line.

The concept of healthcare service lines strategies was introduced in the late 1980s in an effort to gain market share due to significant interhospital competition.¹ As the driving forces of health care advancement have progressed over time, interhospital competition has diminished with the introduction of specialty hospitals and ambulatory surgical centers.²,³,⁴ Over the past decade, there has been a renewed focus on establishing streamlined service line management due to an increasing
focus on value-based health care. Providing high-value care for patients has shifted to become the primary goal, with value defined as quality of care and outcomes relative to cost.⁵ Because value is dependent on outcomes achieved, rather than volume of services rendered, there has been an ideologic paradigm shift within health care and orthopaedics, changing the focus from volume to value.⁶

Value improvement has shown to benefit patients, physicians, hospitals, and payers while further increasing health care economic sustainability.⁵ Specialized service lines allow both hospital administrators and physicians to monitor outcomes objectively and allow resource allocation while delivering optimal patient care.⁴,⁷,⁸ A notable trend has been reported in the establishment of orthopaedic service lines across large health systems nationally to achieve high quality care at lower expense.⁴,⁷,⁹,¹⁰

An orthopaedic care transformation service line allows health care providers to adopt an integrated, streamlined patient care pathway, track relevant clinical and patient data, and allocate resource consumption efficiently. A streamlined care pathway through the establishment of a horizontal hierarchal system is critical, which allows simultaneous multidisciplinary patient management, especially those requiring subspecialty services.⁴ Increased collaboration among clinicians can improve patient safety throughout the episode of care and generate better outcomes by using evidence-based practices and minimizing variations in care. However, physician alignment is one of the greatest challenges to a successful service line as multiple physicians and physician groups may have different ideas, goals, and priorities. Independent physician practices often have competing investments in ancillary services including ambulatory surgery centers, physical therapy, and imaging facilities that can further obscure a common vision with a hospital service line. Hospital administrators must be able to demonstrate to orthopaedic surgeons on staff at their facilities how a care transformation service line can directly benefit both physician and patient outcomes and further improve quality of care.

The value of orthopaedic service lines is embedded in the idea of value-based health care, which focuses on optimizing both clinical and economic success. Clinical success is measured through patient-reported outcome measures, complications, patient experience, and procedural survivorship.¹¹,¹² Economic success is based on financial profitability for both hospitals and physicians alike, contribution margins, and overall market share.⁴ A relatively new idea is that economic success is also based on saving the healthcare system and society money which can be passed along to patients through decreased premiums. It is critical for hospital administrators, payers, and surgeons to ascertain common goals before investing varying time, effort, and resources into establishing practices. The close working relationship with orthopaedic surgeons and vendor representatives can lead to the introduction of new, expensive products and technologies.¹³ If hospital administrators and surgeons are not aligned in common principles and cost-containing strategies, the surgeon and hospital relationship can become strained if surgeons begin to view hospitals as inhibitors to progress.¹³

Identification of contributions of various personnel involved in the service line along with physician leaders among the health care providers enables greater alignment of goals and further allows clinicians to serve distinct leadership roles. Leaders from various specialties involved in orthopaedic patient care delivery, including anesthesiology, emergency medicine, internal medicine, physical therapy, and case management necessitate key involvement in service line implementation. The multidisciplinary integration and alignment encourages physician advocacy while maintaining transparency during program inception and through changes during development.¹⁴ Different subcommittees are often necessary to focus on different aspects of optimizing orthopaedic care both clinically and financially. A close working relationship is important in establishing a successful service line.¹³ Key stakeholders in and key elements of an orthopaedic service line are depicted in Figures 1 and 2, respectively.

Hospital merger and acquisitions (M&A) have substantially increased over the past decade, with healthcare systems aiming to create large corporations that optimize strategic and financial value.¹⁵ The primary drivers of M&A include achieving economies of scale and decreasing cost while improving outcomes through increased volume.¹⁵ Hospitals and physicians who perform procedures at hospitals that are newly acquired by larger health systems may often struggle with changes that transpire with M&A. Cost containment and streamlining patient care strategies can sometimes harbor resistance among clinicians and administrators. After M&A, it is especially critical to establish strong working relationships with
surgeons to help align them with the health care system’s service line mission statement and core values. By directing the focus toward optimizing patient care and improving outcomes, health care systems can show clinicians who are part of hospitals that are acquired that a teamwork approach is of utmost importance. Prior to implementing and expecting change within hospitals that have been merged with larger systems, it is critical for administrators to listen to surgeons’ concerns and consider how a larger health system can help improve the surgeon and patient experience. Furthermore, creating gainsharing programs that financially reward high quality of patient care can also incentivize surgeons toward adoption of streamlined service line care pathways.