Within the past 3 decades, a recent trend in the growth of musculoskeletal service lines has been seen nationally. Orthopedics offers an appealing concourse for implementation of service-line care. Within this review, the authors address the components involved in planning and building a musculoskeletal service line. The authors also address methods by which orthopedic surgeons can maintain the efficacy of their service lines by examining how orthopedic surgeons can navigate their service line through recent advents in health care reform. Finally, the authors review successful examples of musculoskeletal service lines currently in practice within the orthopedic community.
Key points
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A musculoskeletal service line can be defined as a structure used in health care organizations allowing health care providers and administrators to deliver integrated patient care, track relevant data, and manage resources and expenses.
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Identification of service-line purpose, key stakeholders, registry management, and administrative principles are becoming a necessity in the management tool kit of orthopedic surgeons as they steer musculoskeletal service lines through the era hospital-physician alignment.
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Comanagement and joint ventures serve as 2 management models that orthopedic surgeons may adopt to maintain autonomy in musculoskeletal service-line initiatives.
Introduction
The concept of service lines was first introduced to the health care industry in the 1980s. As health care executives noted successes from other industry leaders, such as Proctor & Gamble, Toyota, Motorola Corporation, and the Product Line Model from General Motors, speculation of how to apply such strategic principles in health care delivery gained further attention. In the first installment of service-line strategies within the health care setting, the primary driving force was interhospital competition. In the mid 1980s, a discernable prevalence of the marketing capability of service lines was seen in health care systems in which a specific service line, such as total joint replacement, may have been used to entice patients to choose one hospital over another. Additionally, the establishment of fixed reimbursement payment models in the 1980s prompted managed care organizations to use this mechanism to promote their market share. As the health care industry progressed into the 1990s and 2000s, interhospital competition became a secondary focus with the establishment of specialty hospitals, ambulatory surgical centers, and physician-owned medical facilities. Within the past decade, there has been a resurgence in the interest of service-line management. Moreover, hospitals have realized that they cannot depend on volume alone to maintain financial stability. Rather, delivery of health care must meet nationally recognized quality standards. Thus, service lines became a model allowing both hospital administrators and physicians the ability to monitor outcomes and resource allocation while delivering optimal care.
Within orthopedics, a notable trend has been seen in the establishment of musculoskeletal service lines that achieve high-quality care at lower costs. This review addresses the processes involved in planning and building a successful musculoskeletal service line.
Introduction
The concept of service lines was first introduced to the health care industry in the 1980s. As health care executives noted successes from other industry leaders, such as Proctor & Gamble, Toyota, Motorola Corporation, and the Product Line Model from General Motors, speculation of how to apply such strategic principles in health care delivery gained further attention. In the first installment of service-line strategies within the health care setting, the primary driving force was interhospital competition. In the mid 1980s, a discernable prevalence of the marketing capability of service lines was seen in health care systems in which a specific service line, such as total joint replacement, may have been used to entice patients to choose one hospital over another. Additionally, the establishment of fixed reimbursement payment models in the 1980s prompted managed care organizations to use this mechanism to promote their market share. As the health care industry progressed into the 1990s and 2000s, interhospital competition became a secondary focus with the establishment of specialty hospitals, ambulatory surgical centers, and physician-owned medical facilities. Within the past decade, there has been a resurgence in the interest of service-line management. Moreover, hospitals have realized that they cannot depend on volume alone to maintain financial stability. Rather, delivery of health care must meet nationally recognized quality standards. Thus, service lines became a model allowing both hospital administrators and physicians the ability to monitor outcomes and resource allocation while delivering optimal care.
Within orthopedics, a notable trend has been seen in the establishment of musculoskeletal service lines that achieve high-quality care at lower costs. This review addresses the processes involved in planning and building a successful musculoskeletal service line.
Defining a musculoskeletal service line
A musculoskeletal service line can be defined as a process used by health care organizations allowing providers to adopt an integrated patient care pathway, track relevant data, and manage resource consumption. The service may incorporate one or all procedures involved in musculoskeletal care, including but not limited to total joint arthroplasty (TJA), hip fracture management, and spinal care, among others. Regardless of procedural variation, service lines share the fundamental centralization of the organization’s efforts and allocation of resources to specific patient-population requiring specialty care. Orthopedic care has consistently been viewed as low maintenance amidst hospital administrators, with surgeons requiring minimal administrative oversight despite high costs, advanced technology, and complicated patients. Furthermore, orthopedic outcome measures serve to be easily marketable, allowing administrators to establish trust and proven care within their hospital infrastructure.
Components of a musculoskeletal service line
Another asset provided by a musculoskeletal service line is the establishment of a horizontal hierarchical system of care. Instead of distinct departments that are separately involved in patient care, a service line establishes parallel management of patients requiring specialty service. Therefore, musculoskeletal service lines have all needed personnel and required resources to streamline processes involved. Each service line has a dedicated system that allows involved stakeholders access to physician leaders (champions) or service-line administrators. As a result, necessary concerns are conveyed leading to enhanced team communication and reporting structure. Within the past 2 decades, a substantial push toward adding value to patient care has woven its trademark in the health care industry. Identification of value is more easily discerned in orthopedic practices, as care is results driven. Consequently, value in musculoskeletal service lines is defined by clinical and economical success measures. Clinical success relates to patient care outcomes. Economic success, on the other hand, measures profitability, contribution margins, and market share. When planning a service line, it is imperative that administrators and surgeons establish common ground based on the delineated principles before investing resources and time into such practices.
Regardless of surgical procedure, defining a central purpose for a musculoskeletal service line is imperative to its success. Many organizations choose a standard Diagnostic Related Group designation that corresponds to related procedures, whereas some service lines choose the International Classification of Diseases , 9th or 10th edition, code classifications for inclusion criteria. Whichever mechanism is used, a shared vision that identifies designated metrics helps determine service-line achievement. Gee suggests that the success of a service line is greatly governed by its comparability to the market. In essence, a musculoskeletal service line should have the capability of being objectively evaluated by the hospital or health care system stakeholders through well-defined and established performance metrics. Such metrics may be qualitative, including patient-reported outcomes and satisfaction, hip or knee scores, and community perception of service lines. Furthermore, quantitative measures, such as net revenue, mortality rate, and postoperative complications, may help further define the effectiveness of a service line. Service-line administrators and physicians often establish goals by identifying success measures based on the Agency for Healthcare Research and Quality (AHRQ) or Centers for Medicare and Medicaid services (CMS) criteria. Measurement of any quality improvement (QI) service-line initiative has become a necessity with recent trends toward publicly reporting data and use of Hospital Compare Scores.
Identification of contributions of various stakeholders involved in a musculoskeletal service line is another fundamental step in enabling greater alignment with service-line goals. Identifying physician leaders among health care providers allows clinical leaders to serve distinct roles in the process. Some champion physicians serve as service-line medical directors or official medical advisors. Leaders from various specialties involved in musculoskeletal care delivery, including anesthesiology, emergency medicine, hospitalist medicine, and surgery, may be involved in the service-line production. This interspecialty alignment encourages needed physician advocacy once the program is implemented while simultaneously supporting process transparency. Furthermore, decision-making bodies and work groups may be necessary to identify approaches to optimize musculoskeletal care. Various committees’ levels and structures may be required that specialize in clinical care, QI, business planning, marketing, and finance, among other focuses. Another valuable role is that of service-line chief financial officers (CFOs). A CFO is typically a senior health care finance leader that is responsible for determining the profitability of a service line. Lang and Powers suggested that a health care finance leader should pair with at least one orthopedic surgeon champion, service-line administrator, and vendor to analyze and make financial decisions in establishing the service line.
Building a musculoskeletal service line
Perhaps one of the greatest challenges facing the establishment of a musculoskeletal service line is garnering a relationship between orthopedic surgeons and hospital administrators. Service-line leadership may consist of several stakeholders, including administrators, nurse managers, and medical directors, all of whom play an integral role in developing an institutional culture embracing and supporting service lines. Health systems implementing musculoskeletal service lines require active involvement of orthopedic surgeons at all stages of process development. Early and active involvement by stakeholders ensures service-line sustainability and allows orthopedic surgeons to make informed decisions that are clinically and financially responsible. On planning the development of a musculoskeletal service line, orthopedic surgeons and administrators use various management accounting models that allow stakeholders to track resources and revenue (discussed further later). In many hospital settings, a musculoskeletal service line is primarily used as a means of tracking adverse outcomes in one or more designated metrics by the hospital administration. The service-line administrator typically responds to such outcomes by developing interventions to address costly resources and sources of waste. Intuitively, orthopedic surgeons often drive utilization of resources, in an attempt to lead to patient outcome optimization. Thus, administrators face the challenge of optimizing the financial aspect of surgical practices without compromising individual surgeon preference.
The ability of service-line administrators to understand surgeon’s preferences extends into assessing the relationships of surgeons and operating room (OR) case representatives. The working relationship between an orthopedist and a case representative may result in new and expensive product utilization. When hospitals and orthopedic surgeons are not commonly aligned with regard to surgical equipment, surgeons may be less inclined to cooperate with service-line initiatives. A case representative can play an integral role intraoperatively by offering technical assistance or advice that allows surgeons to perform difficult cases. Lang and Powers note that a skilled case representative can become an organization’s or surgeon’s right hand by filling a void that is often unaddressed by the surgical team or OR staff. Nonetheless, the OR should be a sales-free zone in which measures that control the introduction of new technology in the OR are negotiated by stakeholders vested within the process. Evidence-based decision-making is necessary to guide instrument and implant selection. Several studies assessing the survivorship and patient functionality scores of various implant designs must be considered before investment of resources. Therefore, it is critical that early in musculoskeletal service-line development, a clear and concise method to implement surgical instrument selection be available for orthopedic surgeons and various stakeholders to review.
Such resource-control and budgeting strategies permit service-line stakeholders to create an implant selection process. In order to optimize efficiency in patients’ surgical care and address the needs of orthopedic surgeons, service-line administrators must harness surgeons’ input and collaboration through a committee that includes representation from champion orthopedic surgeons. Hospitals pay different prices for similar implants according to the negotiated rates between institution and supplier. As orthopedic implant devices comprise a considerable share of the cost for the procedure, careful selection might warrant maintenance of high-quality care while at the same time decreasing associated costs. Coincidentally, the implant is also the driver of revenue for orthopedic vendors; therefore, a selected consultant should serve as a liaison for communication. Oftentimes, a surgeon will advocate for a preferred vendor based on implant preference. Such claims should be recommended through peer corroboration, documentation, or other justified means. A qualified third-party member may offer helpful navigation through difficult interactions that may develop between surgeons and service-line administrators. Hospitals in which surgeons lack such managerial experience are challenged by increased operational risks, inventory control, storage issues, and ultimately higher costs. Thus, an implant selection strategy allows a service line to have limited vendor convolution, better aligning the service lines’ focus on patient-centered care while improving resources utilization.
Establishing an open forum for communication is a challenging task within the setting of musculoskeletal service lines. Success depends on creating a meaningful dialogue between stakeholders invested in the process. Amidst recent legislative changes, institutions are shifting from being volume and margin driven to quality and performance metrics. Interestingly, physicians often lack administrative training in their medical education, resulting in vulnerability of their autonomy. A discussion of various management models will allow orthopedists to play an active role in the creation and implementation of a musculoskeletal service line. Involvement of all stakeholders not only addresses concerns of all vested interests but also ensures compliance.
Hospitals match revenue from services rendered with associated costs or expenses to determine profits in a given period of time. In musculoskeletal service lines, the CFO typically tracks hospital discharge volumes or surgical caseloads representing the “sale of service.” The service-line CFO often determines the cost-allocation that is generally divided into the scheme provided in Table 1 . Eventually these costs help calculate the financial impact of a given musculoskeletal service line to a hospital. The most robust marker to determine such impact is the contribution margin that represents the profitability of the given musculoskeletal service line (see Table 1 ). Once indirect expenses are covered, hospitals tend to report net profit on their investment. If indirect expenses are unable to be covered, CFOs are left to examine expense management, identify inefficiencies, and consider efforts that may add volume or harness indirect expenses. Some financial leaders have recognized that the greatest expense to a service line is the human component. In order to track such expenses, stakeholders must assess the time and activity-driven costs in order to effectively isolate wastes within the service line. If service lines continue to be unprofitable, evaluating accounting practices may improve the financial outcomes of the musculoskeletal line. Such evaluations require comprehensive and consistent documentation of the entire patient-care spectrum within a specified service line.
Related posts:
Approach to Decrease Infection Following Total Joint Arthroplasty
Patient Centeredness in Total Joint Replacement
Anterior Cruciate Ligament Injuries in Children and Adolescents
Reducing 30-day Readmission After Joint Replacement
Tibial Stress Fractures in Athletes
Thumb Ligament Injuries in the Athlete
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