Product Line Development

Abstract

Academic medical centers, which have traditionally been relatively inefficient, have increasing difficulty in meeting the missions of patient care, teaching, and research in a progressively competitive medical marketplace. One strategy for improved efficiency in patient care while keeping quality high is utilization of a product line matrix. This study addresses the outcome of utilizing a product line strategy consisting of 3 service lines during the past 5 years at the University of Wisconsin Hospital and Clinics (UWHC). Service lines in heart and vascular surgery, oncology, and pediatrics have been organized since 2001, and report directly to hospital leadership as a product line. Service line leadership consists of a combination of medical leaders plus representatives of hospital administration, and service lines are allowed direct access to resources for program development, marketing, and resource allocation. Measurements of patient numbers, market share, length of stay, net margin, and patient satisfaction have been gathered and compared with the preproduct line era. In the 3 service lines, UWHC has seen variable but steady growth in patient numbers, enhanced market share, positive net margins, and improved patient satisfaction during the period of measurement. During this same period, the insurance milieu has resulted in consistent downward pressure on reimbursement, which has been offset by improved patient care efficiency as measured by length of stay, enhanced preferred provider status, and gains in market share. Scorecard measures of quality are also being developed and show enhanced teaching and research opportunities for students and trainees as well as improved Press Ganey patient satisfaction scores. At UWHC, the development of a product line matrix consisting of 3 service lines has resulted in more patient care efficiency, enhanced patient satisfaction, improved margin for the hospital, and enlargement of teaching and research opportunities. The key to successful implementation of the product line concept is a close working relationship between the hospital administration and service line medical leadership.