Thought leadership

Developing Physicians as Service Line Team Leaders

Developing Physicians as Service Line Team Leaders

The future vitality of health systems depends on the intersection and intervention of teams—especially those lead by talented physicians. It’s easy to say, but difficult to do.

As boards and C-suite executives consider investments in service line development, increasingly senior executives will invite physicians into service line leadership roles, usually as part of a dyad structure. Service line management, however, requires a positive blend of skills and experience that enables both physician and administrative leaders to understand clinical information—such as metrics to evaluate care processes and outcomes—as well as such business disciplines as marketing, human resources and budgets.

One of the most difficult challenges facing service line physician leaders involves how best to master matrix management structures.[1] These structures force service lines to compete for marketing, human resources, physician recruitment, cost accounting support and payer contracting staff. Negotiating competencies and leveraging team performance are essential for the success of service line and delivery site management.

The wisdom expressed more than five years ago in Becker’s Hospital Review[2] still rings true today. Health systems do well to look for service line leaders who exhibit the ability to:

1. Develop relationships. Nurture good diplomatic skills with a view of the entire organization's structure and responsibilities. As hospitals and physicians continue to align, these diplomatic skills become even more important. Health systems need a close partnership between physicians and the hospital to meet quality and cost demands of today's healthcare market. Service line leaders used to function merely as the go-to people to keep physicians happy. The era of physicians behaving as challenging customers has matured such that physicians now serve as partners. Savvy leaders recognize that communication and negotiation between physicians and hospitals is essential.


2. Think outside the box — literally. Service line leaders must collaborate not only with physicians within their organization, but also with physicians, clinicians and community members outside the organization. In transitioning to risk-based payment, service line leaders must partner outside the hospital — with home care, post-acute care and independent physician offices — to help manage patients across the care continuum.

Under a value-based purchasing program, providers are penalized for an excess of preventable or inappropriate readmissions. To prevent such readmissions, health systems must improve the discharge process and coordinate with post-discharge providers to ensure follow-up care meets patient and family needs.

3. Analyze data. Among the service line leader's primary responsibilities is analyzing quality, financial, and operational data to identify weaknesses and to create strategies for improvement. Service line leaders must process significant amounts of data, translate it into actionable information, and develop plans to mobilize clinicians and other staff to deliver patient-centered care.

Boards may ask how each service line will leverage nationally collected metrics specific to that specialty. Cardiology, for example, reports door-to-balloon time—the interval between a heart attack patient's arrival and treatment. Other metrics cross multiple service lines. Each service line can calculate cost per case, which includes both fixed costs, such as the facility, and variable costs, such as medical devices. Metrics allow service lines to meet goals of standardized, high-quality care at the best value.

A clinical background may help service line leaders understand these metrics and determine solutions. While a service line leader often partners with a medical director to operate the service line, the leader gains credibility and trust by sharing clinical knowledge with the physicians and staff he or she is managing.

4. Determine strategic direction. Physician service line leaders' ability to analyse data is important because these leaders increasingly are called to make strategic decisions that affect the service line and the entire hospital. Service line leaders must drive the changes that create value.


To effectively drive strategy, service line leaders must cultivate transparency with the service line's medical director, physicians and staff. Transparency fosters trust, which builds buy-in to strategies designed to improve quality and costs.

Competency based service line leadership drives organizational wellbeing

Industry leaders identify three essential behaviours that successful service line leaders across all specialties demonstrate.[3]

1. Negotiating. The ability to negotiate and persuade physicians, staff and other leaders to embrace new initiatives and change habits is necessary to meet short- and long-term goals of the service line. Defusing arguments constructively promotes a productive and safe working environment.

2. Understanding finance. Seeing the larger financial picture is another important skill for hospital service line leaders to create a fiscally sustainable operation.


3. Managing projects. A service line leader's projects often are part of a larger project. If the smaller projects are not completed correctly the first time and have to be reworked, they could delay the larger project.

Service line vitality therefore is dependent on boards, C-suite and physician leaders working together to forge an enduring consensus on these five factors:

  1. A strategic business plan for each service line, guided by market-driven demand forecasts and patient-centered care pathways that map superior patient and family service experiences.
  2. Clearly established staff and business development support from matrix service departments.
  3. Investments into physician leader competency development, in conjunction with dyad partners.
  4. Performance planning and management systems that use recognition and reward systems to optimize the alignment of physician leader behaviour and performance.
  5. A culture of celebration that continuously reinforces the engagement and alignment of inter-disciplinary teams to accomplish service line imperatives.

How intentional are the conversations you have among your board, executive, and physician leaders to support decision-making that helps your organization face the future with confidence?

Learn more about how to develop physicians as service line leaders. Contact James Rice, practice leader for Gallagher’s Governance and Leadership consulting team, Jim_Rice@ajg.com.

James A. Rice

Jim Rice, PhD, FACHE is the Managing Director & Practice Leader with the Governance & Leadership service line of Gallagher’s Human Resources & Compensation Consulting practice. He focuses his consulting work on strategic governance structures and systems for high performing, tax-exempt nonprofit, credit union and health sector organizations and integrated care systems; visioning for large and small not-for-profit organizations; and leadership development for Boards and C-Suite Senior Leaders. 

Dr. Rice holds masters and doctoral degrees in ...

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