A framework for service distribution
Weigh different service characteristics to find the right distribution
Health care leaders need to make service distribution decisions that optimize growth, quality, and cost goals. However, those goals often conflict. For example, centralizing a service to one or a few sites increases site volumes and specialization, contributing to higher quality. But dispersing a service enables convenient access, contributing to growth. When considering whether to centralize or disperse, system leaders need to balance those goals against one another.
Six factors to consider
To identify the right distribution for a particular service, consider six factors. Each of these characteristics shapes the extent to which distribution contributes to growth, quality, and cost goals. For a given service, consider the:
- Level of fixed costs
- Relationship between quality and volume
- Need for multidisciplinary teams
- Commoditization in your market
- Time-urgency of treatment
- Need for frequent, in-person encounters
The first three considerations point towards greater centralization: services that depend on fixed cost investment, volumes for quality, or multidisciplinary teams can benefit from centralization. Conversely, facing a commoditized market, requiring urgent treatment, or frequent in-person encounters point towards dispersion.