Building a solid business case for service line optimization

Building a Solid Business Case For Service Line Optimization

Gelb Consulting, An Endeavor Management Company 2700 Post Oak Blvd P + 281.759.3600 Suite 1400 F + 281.759.3607 Houston, Texas 770567 www.endaevormgmt.com/healthcare

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1 This white paper is based on a webinar presentation delivered through The Beryl Institute by Froedtert Health and Gelb Consulting


© 2013 Endeavor Management. All Rights Reserved.

Introduction and Overview

Reconfiguring services line location is a growing need among most integrated delivery systems. As mergers and acquisitions continue, fueled by changes to our US healthcare delivery model, strategic planners must be very deliberate about which data to gather and how to present such for effective decision making.

In this context, it is important to remember that strategic decisions such as opening new facilities and closing others include both functional and emotional factors. This is also called speaking to the “mind” and “heart.” The effective combination of these factors results in faster decisions and a higher level of commitment to seeing these changes through.

Through this illustrative case study, we will explore how to effectively integrate the components together as part of the same stream of decision-‐making.

You will see:

• Patient and physician “stories” help build support for change • Demand estimation tools are sophisticated, but necessary • Multi-‐million dollar decisions require some investment in data acquisition • Buy-‐in throughout – process, insights, and actions is critical

Background Froedtert Health sought to examine and redesign orthopedics, orthopedic surgery services, and the rehabilitation unit into a musculoskeletal service line. This new design would streamline the treatment process by organizing existing assets of communication, clinical care, and care coordination based on an understanding of the ideal patient experience. Given the variety of interests with internal stakeholders, common alignment around patient needs and a collaborative approach was required. These needs included, identifying problems and creating solutions to the problems. The desired changes are not insignificant as Froedtert Health is the only academic-‐community partnership in southeastern Wisconsin. The system includes over 772 beds, admits over 40,000 patients, and completes almost 850,000 outpatient visits per year.



Approach A framework focused on the customer experience was paramount to gaining alignment. By concentrating insights and strategic decisions on the direct impacts to patients/families and their community-‐based physicians, a holistic view can be achieved.

Our customer enchantment model serves to align the various aspects of achieving exceptional experiences. These include customer expectations of the brand, leadership setting expected behaviors and priorities, and ensuring the culture supports such. Ideally, we look to design experiences that create resonance to encourage patients and physicians go to out of their way to recommend you. This is beyond simple satisfaction and likelihood to purchase. This strategic decision-‐making required the following inputs:

• Utilization review • Site visits • Patient and physician experience

interviews • Trade-‐off research (quantitative) to

assess true impacts of change



Utilization Review Examining the inventory of current services provided, frequency of use, geographic spread and profitability is paramount to understand whether reconfiguring is possible. In some circumstances, this data might suggest a full-‐optimized system; in others, it becomes clear that services are underutilized. Additional analysis can be performed to look prospectively:

• Effects of internal cannibalization • Condition incidence rates and corresponding

services (from you and competitors) • Site location • Staff models and movement across locations • Lease expiration timing

Site Visits Site Visits can provide a meaningful way to assess what customers see and whether locations require updates. A chair exercise can be used for this purpose. During such, you sit in every chair that patients sit – from parking lots to exam rooms – and take pictures from their perspective. This exercise produces insights regarding what patients see and also how many different environments patients sit during a single encounter. Across multiple sites, it will also be important to review how distinct or common these physical environments are. If there is one service line program, many of the touchpoints should be the same, especially if the patients visit more than one location. Examples of this consistency might include: Way finding, signage, waiting area amenities, privacy at reception desks, exam rooms, and other common areas.



Parking can be more difficult at larger facility (and result in appointment cancellations when the weather is bad)

Unique options for therapy exercises Specialized treatment…hand therapy area Co-‐location of therapists and physicians is beneficial for patients

Consider this: During this exercise, it is often very useful to take advantage of the time onsite and discuss experiential successes and barriers with staff members. They often have great ideas but obstacles in their way to implement such.

Experience Mapping Interviews Experience mapping interviews are organized using an experience map – a visual cue to aid respondents to recall specific episodes of their journey. This aids interviewers in identifying activities and the variety of touchpoints customers encounter. These maps can be used for staff, patients, and physicians. In addition to gathering inputs, the experience map later serves as a framework for action – from front-‐end marketing, communication, through transition of care. The intent is to understand the nature of the current experience, define functional and emotional needs at each step, and elicit recommendations for improvement.



These interviews yield powerful audio clips and comments to ensure planners understand functional and emotional needs. Through this process, you will identify a number of key patients and physicians who can later provide marketing-‐related testimonials if their stories are compelling and align with your brand.

Initial Insights Through the empathy building approach, it is easier for executives to understand WHY change is required. For this particular case study, there were several strategic insights discovered, which then provided support to fund additional exploration regarding HOW the changes will take place. In particular:

• Patients were highly satisfied with their current therapist, but had mixed feelings about changing sites and/or therapists in the middle of treatment.

• The keys to therapy success: Motivation, expertise and thorough explanations. • While information regarding the program’s capabilities is available, such was not

getting in the hands of patients (which is both facility and physician driven). In addition, there were inconsistencies across the facilities in terms of the materials distributed.

• Community physicians also expressed concern with the duplication of services. In addition, they were not aware of the variety of services provided under the program.

• For on-‐going treatment, physicians sought to obtain information or build relationships with individual facilities and professions to match patients with the most appropriate therapist (this was not only clinical, but also approach).

• Toward that end, physicians prefer to be co-‐located with the outpatient services group.

“I want the patient to have an efficient experience, like an appointment in a timely manner. The quality of therapy is expected.”

Referring Physician



Leadership Business Case for Decision Support To organize collective thinking about information gaps and decisions to be made, insights were organized into two categories, reflecting the sources of insight: Experience and Economics. As a result of developing empathy with their customers, executives came to the following conclusions: There is a burning platform to carefully examine the current patient experience and identify opportunities for streamlining operations:

• Economics: Internal competition for referrals • Experience: Confusion around facilities located closely together

The ideal design will support the identification and translation of best practices across locations so that this service line does things consistently, regardless of where the patient accesses care. There was commitment to championing changes required to achieve these objectives.

Trade-off Analysis (Quantitative) To mitigate risks between both economic and experiential factors, trade-‐off techniques such as adaptive conjoint analysis can be used. Conjoint analysis, meaning considered jointly, provides a research mechanism to force decisions based on a set of features/benefits/brands/costs. For healthcare, it is often the case that cost considerations involve – distance traveled and co-‐location of services (number of visits to accomplish the same programmatic outcome). To inform this set of decisions, we designed an executed conjoint survey to examine the choices that patients and physicians make regarding episodes of care.



An example of these trade-‐off or purchase simulation exercises is featured below:

Through this analytical process, the following results can be determined:

• Impact of brand (i.e., who provides) • Need for co-‐location of services (i.e., number of services under one roof) • Distance trade-‐ offs (e.g., how far from home/work) • Estimated demand for services given competitive choices • Identification of attractive segments

In the examples below, relative importance of attributes is highlighted and the drop offs for demand with changes: Healthcare provider (Brand) trumps other factors:



To maximize demand, location is more important than co-‐location, even for referring physicians:

Key Insights

• Froedtert Health has the strongest brand in the market for these services • Physicians share the same perceptions as patients for proximity (even to the 20

minutes drop off) • Co-‐location becomes less of an issue when trade-‐offs are required

Key Strategic Inputs

• Consolidation possible as long as changes optimize around 20 minutes • A freestanding facility is attractive with limited scope of services • Alignment of services is important to maintain/increase market share • Future growth can be driven by market potential and from whom to take market share • Employee communication will focus on long-‐term commitment to solidifying market

leadership position and patient/physician access



Strategic Plan Highlights Patient-centered Design

• Multidisciplinary teams led by a Steering Committee • Voice of the patient is a required input • Functional design based on needs of the patient • LEAN workflows for staff / physicians developed prior to construction

Operations • Consolidate rehab services into a single organizational structure at health system level • Reduce the number of sites in over-‐served markets and ensure smooth transition for

patients • Define system-‐wide musculoskeletal service line structure, leadership and objectives • Complete construction of free-‐standing facility (January 2014) and service line

deployment plan • Identify additional initiatives to optimize service line to best meet the needs of our

patients and providers Communications

• Current and future patients • Referring physicians (internal and external) • Orthopedic specialists • Rehab services leaders and staff • Community members at large • Health system leaders and staff • Medical group practice leaders and physicians



About Endeavor Endeavor Management, is an international management consulting firm that collaboratively works with their clients to achieve greater value from their transformational business initiatives. Endeavor serves as a catalyst by providing pragmatic methodologies and industry expertise in Transformational Strategies, Operational Excellence, Organizational Effectiveness, and Transformational Leadership. Our clients include those responsible for:

• Business Strategy • Marketing and Brand Strategy • Operations • Technology Deployment • Strategic Human Capital • Corporate Finance

The firm’s 40 year heritage has produced a substantial portfolio of proven methodologies, deep operational insight and broad industry experience. This experience enables our team to quickly understand the dynamics of client companies and markets. Endeavor’s clients span the globe and are typically leaders in their industry. Gelb Consulting, a wholly owned subsidiary, monitors organizational performance and designs winning marketing strategies. Gelb helps organizations focus their marketing initiatives by fully understanding customer needs through proven strategic frameworks to guide marketing strategies, build trusted brands, deliver exceptional experiences and launch new products. Our websites:

www.endeavormgmt.com www.gulfresearch.com

Building a solid business case for service line optimization

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