The Institute Structure as a Strategic Initiative: From Inception to Maturation

Chartered in July 2008, The Heart Institute at Cincinnati Children’s Hospital Medical Center (CCHMC) was charged with integrating clinical cardiovascular medicine and basic science research to foster innovations in care of congenital heart patients. The vision was “to be the elite academic program for family-oriented pediatric cardiac care, research and education.” The multidisciplinary leadership team, representing the medical, surgical, and research divisions, developed a strategic plan for the evolution of the institute over a five-year span. Utilizing structured focus groups, the mission, and goals of this initiative were identified and refined.(1)

A key component of the evolution of three separate, independent divisions into one cohesive Institute was to clearly define the organizational and financial structure. All research, clinical, surgical, and business support functions would centrally report up through a trio of Executive Co-Directors in addition to a Vice President of Finance and Operations. A consolidated financial statement was developed to measure the success of the Institute as a whole. This allowed for fiscal management to a single contribution margin encompassing all activities of the three divisions, inclusive of hospital billing and operations, professional services, sponsored research, clinical trials, and philanthropic gifts, thus gaining significant financial independence over time. An integrated implementation plan addressing recruitment, capitalization, infrastructure, and market opportunities also was created and executed. Subsequent five-year planning iterations built upon the progress from the initial guide. Since inception, the results of this strategy include: an increase in the contribution margin by 590%, faculty growth from 26 to 78 FTEs, and external collaborative relationships with seven regional hospital systems. The financial organization of the Institute served as the catalyst, allowing the structure to be leveraged to remove some of the bureaucracy that delayed decision-making within large hospital systems, and facilitated speed to action.

The intent of the strategic initiatives over time was to develop durable relationships with patient populations, external providers, and healthcare systems to generate increasing, and predictable, tertiary encounters. Success presumed interested and willing partners were aware of the array and quality of the clinical care and therapeutic services available within the CCHMC system. Key elements included desired clinical services, capacity, an appropriate site of care, direct access by providers to providers, and the subsequent coordination of communications. Additional considerations incorporated patient and family transportation options and second-opinion consultations.

As the Institute evolved, productivity and growth expectations were identified based on market and demographic data, with standardized metrics and clear reasonable market capture expectations. A timeline to reach each milestone was established specific to geography and medical specialty. Performance (i.e., market capture, return on investment) was assessed over a defined period using standardized metrics.

Methodology

Subsequent discussions refined resource commitment and initial tactical targets to develop depth and breadth of human capital; market gaps in local, regional, and national services; research core expansion; and advancing academic excellence. The tactical steps were categorized by investment or funding sources, Heart Institute internal processes, or broader impacts on the medical center structure (Figure 1).

Figure 1. Strategic expansion process.

Elements associated with the initial discussions were:

• Creating an awareness of services(2);

• Evaluating the potential market(s)(3);

• Developing new offerings in response to an unmet or unrecognized need(4);

• Identifying sites of care, medical specialties, and modalities;

• Defining the role of the physician in communications; and

• Establishing the service factor commitments to patients, families, and institutions.(5)

The most important aspect of developing a “system to system” relationship with area institutions was the foundation established through “physician to physician” communication. The role of the provider, as an agent representing the institution to colleagues, set the tone for subsequent administrative interactions and established initial credibility. Once contact occurred with an associated referral and an unmet need was communicated, the lead physician worked with the administrative lead to initiate all downstream activities necessary to enact an appropriate assessment, transfer, financial review, authorization, and family support functions.

Resources were allocated to an Institute clinical team as necessary to facilitate uniform progress and realistic performance expectations.

This level of engagement produced three deliverables, the first of which, as a prerequisite, was the institutional commitment to the provision of a defined set of services. This commitment was based on an evaluation of the strategic and financial potential with the partner. Next, resources were allocated to an Institute clinical team as necessary to facilitate uniform progress and realistic performance expectations. Finally, the process expectations were clearly communicated to the participating divisions or service lines in addition to the potential partner. These service factors represented the CCHMC commitments to care delivery.

Planning for Service Delivery

Markets were defined geographically and by the presence of competitors. The preliminary analyses focused on the demographic breakdown of the territory, the expected disease incident rate(s), existing draw, and the presence or absence of a physical competitor.

The planning exercise encompassed multiple functions, departments, and endpoints. Specifically, following the confirmation of the services offered and modalities (e.g., physical footprint, telehealth, remote diagnostics), the clinic schedule and frequency were developed based on the planning data and realistic growth and market penetration projections. Clinic frequency and growth expectations were ramped over a three- to five-year period, based on the specific services, demographics, and level of competition in the market. Engagement with other CCHMC hospital departments such as Planning, IT, Real Estate, Legal, Payor Relations, and Compliance was critical, entailing a common project prioritization and timeline commitment. The communications infrastructure supporting the physicians reflected a consideration of two alternatives: physician-to-physician referral and self-referral. The physician-initiated process required clear and timely support following the clinical disposition and acceptance of the patient. The logistics, estimates, and authorizations were obtained for all referrals with the same expectations and subsequently communicated clearly to the referring physician, system, or patient. The service expectations, such as same-day telehealth visits, new patients seen within three days for physical encounters, four-hour diagnostic interpretations, same-day second opinions, and more, necessitated a commitment within CCHMC across divisions and support services. Marketing campaign development was a key tenet facilitating local awareness, emphasizing rapid access and “care close to home.”

Execution and Operationalization

The institute construct reflects a long-term growth strategy, with each phase differentiated by the emphasis on varying sets of tactics (Figure 2). The initial phase, human capitalization, required two years and created the capacity to deliver an expanded set of subspecialty and primary clinical services. The second phase emphasized continued human capitalization and resource investment with a focus on unique subspecialty program offerings. Simultaneously, some geographically defined markets were entered via community-based satellite sites, complemented by an early effort in telemedicine with remote diagnostic testing supervision and interpretation.

Figure 2. Strategic initiative lifecycle. The Institute’s long-term growth strategy, with each phase differentiated by the emphasis on varying sets of tactics.

The third phase of the lifecycle was characterized by two elements. The first targeted specific catchment areas, resulting in a proliferation of geographic expansions, including timeshares, CCHMC medical office buildings, and a mobile clinic. In parallel, formal collaborations and contractual arrangements were created with adult-oriented systems, proposing CCHMC as their “pediatric partner.” The current situation reflects resetting the tactical approaches, effectively identifying a new foundation as a platform for the next growth cycle.

The Heart Institute as a Strategic Initiative: Contribution Margin Evolution

With respect to the community-based expansion efforts, depending on the frequency (time share vs. full-time), modalities (telehealth vs. physical exam), and clinical scope (array of medical specialties participating), the timeline for execution was three to four months if existing space was utilized. If a build-out was necessary, the timeline was extended significantly, and interim space often was sought. The key elements affecting the timeline were:

• Lease negotiations;

• Fair market valuation;

• Credentialing;

• Payer contracting;

• Construction;

• IT—connectivity and EMR build; and

• Staff capacity.

These elements were pursued in parallel rather than sequentially. The process evolved and was further streamlined by ensuring that the right resources were in place well ahead of execution and operationalization. Economies were derived by building standardized approaches.

Results

Within the first four years, eight new clinical programs were established, with a 69% increase in clinical and 83% increase in research faculty. Approximately 20,000 square feet of outpatient clinical space was added to segregate adult and pediatric patient flows. Clinical pods incorporated features that were designed to support multidisciplinary teams of medical specialists. The Cardiac Intensive Care Unit (CICU) and Acute Care Cardiology Unit (ACCU) were defined and incorporated within the institute structure with respect to medical management, operating and capital budgets, and patient populations.

From the academic perspective, the fellowship program was redesigned and expanded by 33% for the basic three-year cardiology fellowship, with eight additional fourth-year tracks developed to reflect subspecialized clinical experience. Subsequently, the categorical fellowship was further increased by 25%, with seven more PG4 and PG5 positions added as well. Peer-reviewed publication annual volumes increased by 371% from 2009 (89) to 2021 (420). Clinical growth for key revenue drivers is summarized in Figure 3.

Figure 3. Clinical growth for key revenue drivers for fiscal years 2009 to 2020.

The contribution margin (see Figure 2), reflecting total institutional impacts across all cost centers, increased 501% between fiscal years 2008 and 2021, even though the latter years were affected by the COVID-19 pandemic.

The foundation elements for a successful outreach strategy were: remaining data driven and physician-led, relying on internally centralized funding, and facilitating speed to market, while recognizing that the approach is not a “one size fits all” with health system partners. Although physician-to-physician interaction was necessary for success, it was not sufficient to ensure a positive outcome. An infrastructure, activated by the physician lead with a single point of contact, managed the communications surrounding the logistics associated with encounter scheduling, patient transfer, authorizations, transportation, and so on. This focal point was the portal for self-referred patients and families as well.

As described, the core structure entailed:

1. The establishment of an infrastructure for centralized resources and funding;

2. Planning and Business Development engagement in the market evaluation processes to determine the array of services and types (e.g., on-site, telehealth);

3. Integrating a concierge approach for complex multidivision encounters; and

4. Increasing access to, and funding for, centralized support services such as Legal, Facilities, Real Estate, and so on.

Corollary aspects involved recruiting clinically oriented specialists and developing and incentivizing the internal business talent to engage in collaborative growth strategies across divisions and departments. As a balancing measure, Patient Family Experience(5) surveys were routinely employed to establish service and performance baselines with subsequent routine monitoring application.

Summary

The life cycle of the cardiovascular service line highlights the importance of mechanisms for aligning activities and resources across the organization. Challenges remain with the kinds of disarticulated decision processes that are typical for large organizations. In addition, accountability systems for monitoring performance and transparent or “public” reporting to senior leadership should be developed and required.(6) Entering the fourth planning cycle, the focus shifts to the integration of technologies, real-time communication strategies, developing multiservice offerings, and system-level collaborations in multiple regional and national markets. Resource concentration shifts from “adding” to emphasizing access to specialized skills rapidly to identify and effect relationship initiations.

References

1. Krawczeski C, McDonald M. Developing a heart institute: the execution of a strategic plan. J Med Pract Manag. 2013;28:351-358.

2. Haskell T, Hudgens M, Statile C, Poe D, Kleier K, McDonald M. Mitigating cardiac healthcare inequities in underserved pediatric populations via practice acquisition. Abstract presented at: CHOP Cardiology 2020. In: Select Abstracts From Cardiology 2020: 23rd Annual Update on Pediatric and Congenital Cardiovascular Disease. World J Pediatr Congenit Heart Surg. 2020; Feb 11;2150135120904324. DOI: 10.1177/2150135120904324

3. Haskell T, Hobing R, Kleier K, Statile C, Hudgens M, McDonald M. Practice acquisition in an underserved market: planning implementation and challenges. J Med Pract Manage. 2020;35(6):321-330.

4. Martins R, Siegel R, McDonald M. Creating a sustainable obesity management program: The Center for Better Health and Nutrition. J Med Pract Manage. 2016;32:39-44.

5. Haskell T, Hanke S, McDonald M, Kleier K. Acquiring a multi-site cardiology practice: evolving patient-family experience outcomes. In: Select Abstracts From Cardiology 2020: 23rd Annual Update on Pediatric and Congenital Cardiovascular Disease. World J Pediatr Congenit Heart Surg. 2020; Feb 11;2150135120904324. DOI: 10.1177/2150135120904324.

6. Clarke-Myers K, Cooper D, Hanke S, et al. Development of a system to measure and improve outcomes in congenital heart disease: Heart institute safety, quality, and value program. Jt Comm J Qual Patient Saf. 2019;45:495-501.