PRACTICE MANAGEMENT
Clinical Service Lines Which model is right for you? BY DANIEL K. ZISMER, PHD, GARY S. SCHWARTZ, MD, MHA
T
he U.S health care marketplace is at an interesting inflection point, and this time it more specifically implicates career decisions for certain physician subspecialties, especially clinical specialties that operate primarily in the ambulatory care arenas. Particularly implicated are specifically identified clinical service lines (CSLs) that are not wholly dependent upon referring physicians for patients. Successful CSLs operate with effective brand positioning strategies which strive to predetermine patient choice, e.g., the patient has made up their mind where to go for care before the need arises, e.g., “If I get cancer, I’m going to the [xyz] cancer center.” Practical experience demonstrates that referring physicians are not likely to persuade patients to do something other than their expressed choice for specialty care.
Clinical service lines (CSLs) Before moving forward with the central theme of this article, CSL model decision-making for clinical specialists, it’s useful to begin with a common definition and understanding of a CSL. A clinical service line is a grouping of related clinical services and programs dedicated to an identified constellation of related diagnoses and conditions,
designed to produce and deliver a superior course of care, over time, based upon evidenced-based best practices for defined clinical populations. Now, back to the inflection point discussion. Specialty CSLs are at the top of the strategies list for three very different models of delivery. Examples of CSL getting the most attention and investment dollars include: orthopedics, cancer care, eye care, heart care, wellness, sophisticated urgent care, behavioral health, industrial medicine, dental care and oral surgery, GI, ENT, urology, a range of pediatric subspecialties and primary care networks. Are there common denominators here? There are a few that make sense, at least when looking through the lens of strategy and finance. All these generate most of earned revenue in the outpatient arenas. The anatomy of the grouped revenue streams include: professional services, imaging diagnostics, interventional procedures and some forms of retail products and services sales. Demographic trends favor future growth in service demand. Moreover, the operating economics available lend well to effective productivity management and targeted strategic investment strategies.
Three types of CSL organizational designs The three types of organizational designs operating in and competing for the CSL markets and related rewards include: • Larger, integrated community health systems. • Academic health centers.
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• Specialized, independent physician groups that consolidate and aggregate subspecialty providers to achieve sufficient size, scale, scope and geographic reach and to attract required levels of investment capital.
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All three models can succeed with capable leadership, focus and commitment. The question for the physician specialist is “which model is right for me?” The balance of this article presents a framework for practice option decision-making. First, we consider a brief comparison of the three organizational designs.
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The integrated, community health system (IHS)
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Typically, the IHS will identify and aggregate a number of related physician specialties and related clinical programming under the system brand; independent and employed providers may be involved in the brand strategy. The IHS typically owns the CSL, including the larger portion of the associated revenue streams. It capitalizes the start-up, and IHS senior leadership oversees operations and performance. Most typically, the IHS operates as a not-for-profit organization under the U.S. Internal Revenue Code. Independent physician groups may become affiliated with the strategy and practice alongside providers employed by the health system. Independent physicians may also enter into for-profit partnerships and joint ventures with IHS service lines, ambulatory surgery centers, for example.
The academic health center (AHC) www.mppub.com 16
JANUARY 2022 MINNESOTA PHYSICIAN
The AHC is usually, but not always, university affiliated. They exist to serve a three-pronged mission strategy: teaching, research and clinical care. They
