Hospital boards must 'let go' to realise benefits of service-line management

If the benefits of service-line management (SLM) are to be realised then hospital boards must be prepared to cede power and control to clinical teams, despite the difficult financial climate, says a report published today by The King’s Fund.

SLM – under which a hospital trust is divided into specialist clinical areas that are managed as distinct operational units – offers an important approach to improving quality and productivity by giving clinical leaders a clearer understanding of the cost and performance of services. However, while tightening budgets should be an incentive for trusts to push ahead with SLM, researchers found that, in fact, the opposite is true, with some trusts reverting to central control.

Researchers found significant variation in how SLM is being applied by different trusts: in some trusts it is driving service change, while in others it is having little impact. There is also significant variation between different service lines in the same trust, with clinical leadership often seen as the most important factor behind this.

Researchers conducted interviews with board members, clinicians and finance staff in seven hospital trusts to evaluate how SLM was being used to drive improvements in quality and efficiency. They found that to realise the benefits of SLM the key to ‘getting it right’ was in skillful implementation.

• Buy-in at all levels is crucial to enable effective devolved decision-making
  SLM must be pivotal in a trust’s management approach and be championed at board level. Clinical engagement is also crucial, and clinical leads and executives should work together to help develop confidence in decision-making.

• Effective use of data
  Gathering credible and reliable data is critical to effective service-line reporting (SLR) and SLM. Clinicians need to identify useful data sources, reports need to be tailored and everyone should understand that improving data quality is an ongoing task.

• Continuity is crucial for momentum
  Rolling training programmes can ensure that growing momentum for SLM is not lost when personnel change and help to foster greater trust in the process.

The research also revealed some tensions and challenges that need to be addressed to enable effective implementation. Managing expectations is an important example of this. The report suggests that SLM cannot be simplistically sold to clinicians as a means to retain and reinvest their own service-line surpluses, which was the case in some trusts. There are also some inherent risks to the SLM approach that need to be understood. It can, for example, lead to trusts narrowing their focus on to their own services’ profitability and becoming inward-looking.

Finally, the report suggests that in time SLM and SLR methods could be adapted to work across organisational boundaries to support integrated care.

Catherine Foot, Senior Fellow at The King’s Fund and the report’s lead author, said:

‘It is clear that hospitals need to resist any temptation to row back from progress made in service-line management. Quite the contrary, increasing pressure for efficiency savings should drive hospital boards forward as SLM offers a means by which to gain a clear picture of a hospital’s activity and performance. This, in turn, allows informed and effective choices and decisions to be made.

‘The majority of those interviewed for the research recognise the value of SLM and SLR to the management of the trust. However, a balance needs to be struck between realising the benefits from implementing these approaches and understanding they are only part of a wider solution to improve quality and efficiency. Trusts must be careful not to oversimplify or oversell these approaches and must continue to look beyond their walls towards whole system efficiency.’

• Read the paper: Service-line management: Can it improve quality and efficiency?