Which service lines have the most growth potential? 3 hospital execs weigh in

Hospitals and health systems across the nation are looking for ways to expand their footprints and offset financial strain tied to the COVID-19 pandemic, making it more important than ever to be laser-focused on service lines with the most growth potential. 

Service line growth was one of the topics experts discussed during a session at the Becker’s HIT + Revenue Cycle Virtual Event on Oct. 7. The panel included: 

  • Amy Schroeder, chief strategy officer at Lexington (Neb.) Regional Health Center 
  • Pamela Ott, CFO, Northwestern Indiana, Franciscan Health Hammond, Dyer and Munster Hospitals
  • Shelly Schorer, CFO of Chicago-based CommonSpirit Health’s Northern California Division 

Here’s an excerpt from the conversation, edited for clarity. To view the full session on-demand, click here

Question: Which service lines has your organization focused on growing in recent years? Why? 

Shelly Schorer: We’ve focused on the main service lines, cardiovascular, neuro, orthopedics, gynecology, general surgery and oncology. No matter how we do changes in healthcare through technology, and we know that many of our service lines are moving to an outpatient setting, these are still going to require some acute services, both in the inpatient and outpatient setting for the continuum of care for the patient. We have been trying to grow those service lines. They obviously have nice margins, for the most part, with the commercial business that helps us cover indigent care. We are a Catholic organization, so we have a mission to cover indigent care. We also have to focus on the margins of the other service lines to help us cover those. We’re finding it’s a challenging thing — every year it’s different. We see a lot of the DRGs move from inpatient to outpatient and remove things from the hospital setting to the ASC setting. It requires different strategies. 

Over the years, the focus of those service lines have been consistent, but the changes in the way that we approach them in our strategic direction and vision has shifted through partnering with other organizations, looking at outpatient settings, how can we still provide the service to the patient, but maybe in a different way than we did five years.

Amy Schroeder: Anytime we’re looking to expand our service lines here at Lexington Regional Health, our primary care providers are the driving force behind that. They hear directly from the patients, what their needs are. We do have a community of patients that has some poor social determinants of health, so we really try and focus on being the safety-net hospital, so to speak, to meet those needs and to provide services locally to them. 

One of the service lines that we really made a heavy investment in over the past three or four years is our surgery line. We’ve partnered very closely with a surgical group that actually is out of state. They fly in state a couple times a month to do surgeries here. We did make a very significant financial investment in our operating room suites, and we have seen the benefit from that. But I really believe that our primary care providers are really the driving force behind helping us identify what service lines are necessary.

Pamela Ott: For us in Northwest Indiana, really the three primary service lines, similar to what Shelly was saying, as she had mentioned some of these, are orthopedics, oncology and cardiology, at least in my three hospitals. To share a little bit about my patient service areas, in Franciscan Alliance, we’ve got the three hospitals that I oversee right up against the border of Illinois, but we have a hospital pretty close in Illinois, in South suburban Chicago. And then we have two other hospitals, what we call in the Northern Indiana region. We used to do open heart surgeries, but because of the close proximity of all of our hospitals, in that Northwest Indiana service area we’re focusing on being centers of excellence, primarily for those three service lines. We’ve got some other hospitals, in close proximity, where we basically make certain to consolidate the resources and have the open heart surgeries be the center of excellence in one of our other hospitals, that’s probably within 15 minutes of us.

Those are basically the three that we are really focusing on. And also too, it’s been a little bit fragmented in our market. We wanted to really work on that and address it and grow that. So it was a little more focused effort, a little more seamless, hopefully for the patients. We are a Catholic healthcare organization and also, in particular one of our hospitals, we do serve the indigent. We do see quite a few patients that really are in need of healthcare services, but don’t necessarily have the means to pay for them, but it is aligned with our mission and our vision. Even though we’ve got those service lines, we really have a strong emergency room presence. And our one hospital, that’s really what drives the volume, is that emergency room and the number of patients that we do see there. It’s a little bit different amongst all three.

We do rehab also — it’s a strong service line for us too — and behavioral health. We’re going to be opening another inpatient rehab unit within the next probably month and a half, at one of our other hospitals. But we really kind of have that center of excellence, for that also.

More articles on healthcare finance:
6 recent hospital credit downgrades
OIG tags California hospital for erroneous billing
7 hospitals with strong finances

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.