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Product line management, a concept borrowed from industry in the early 1980s, already has proven its mettle in health care. When applied to the right clinical services in the appropriate organizations, product line management has improved market share, contributed to cost control and enhanced patient care.
But like everything else in health care, product line management is undergoing changes that require a different set of skills and expertise. Unfortunately, health care organizations have not been quick to recognize or hire professionals who possess these talents.
Instead, these organizations are persisting in past hiring philosophies and practices that will put them at a disadvantage in the health care marketplace of the future.
Basics of product line management
Where product line management is used in health dare, clinical service areas are organized as discrete profit centers, each one under a separate product line manager (or PLM).
A management structure "with all related services falling under one person, is the most viable approach today," said John Enright, heart center administrator at Philadelphia's Albert Einstein Medical Center.
Product line managers monitor the quality, cost appropriateness and marketing of services and their delivery. A PLM also is responsible for developing business and strategic plans, cultivating relations with physicians, and facilitating communications between the organization's administrative and medical staffs.
The clinical lines most commonly headed by a PLM are historical revenue generators, such as oncology, women's health services and heart services (cardiology, cardiovascular surgery and cardiothoracic surgery). Some organizations also are adopting product line management for orthopedic, pediatric and other services.
Paradoxically, product line management offers health systems the advantages of both centralization and decentralization. While individual lines of services are managed by a single individual, product line management flattens and decentralizes the organization, since it gives fewer executives more latitude in decision making.
In some cases, the future may hold even further opportunities to flatten the organizational structure. For example, Patrick Dyson, senior vice president for corporate development at Borgess Medical Center in Kalamazoo, Mich., sees his role over the PLMs "being eliminated in the future, with service line managers reporting only to a senior executive decision-making body on budgetary issues or major programmatic changes."
In some organizations, the demands of successful product line management are causing a split...