Three service line moves every health system must make now
Article | December 10, 2025
Reading time: 5 mins
As health systems face intensifying financial pressure, shifting care patterns, workforce shortages and the encroachment of nontraditional competitors, the role of service lines is undergoing a profound shift. No longer merely engines of volume growth or operational standardization, service lines are increasingly expected to shape enterprise strategy, drive systemness and serve as connective tissue across clinical, operational and market-facing priorities.
A recent Becker’s Hospital Review webinar — featuring Michelle Kannapel, system vice president, strategy and growth, Norton Healthcare; Rebecca Limestall, principal, Vizient; and Janelle Kwan, associate principal, Vizient — underscored how this evolution is unfolding and what health systems should prioritize to position their service lines for long-term impact. Three themes emerged as the most critical for organizations seeking to elevate strategy and performance.
1. Service lines must now lead strategy, not just execute it
Historically, service lines played a supporting role: launching new programs, standardizing clinical pathways and driving discrete operational improvements. But as health systems grow in complexity (and as competitive threats multiply) service lines must become proactive strategy architects.
Norton Healthcare made this philosophical shift explicit. Service line leadership roles previously had oversight for significant operational responsibilities; today, operations have been centralized to ensure leaders can focus squarely on crafting and owning strategy across their domains. This distinction matters. It allows service line leaders to:
- Capitalize quickly on emerging growth markets
- Prioritize investments based on systemwide value
- Assess innovation opportunities
- Build future-state workforce models
- Facilitate cross-continuum care redesign
In practice, these leaders are now acting as “organizational pivot points,” translating the system’s strategic aims into coordinated action while ensuring frontline concerns and innovation ideas move upstream.
This shift demands ownership of certain key competencies: market insight, specialty expertise, data fluency, partnership-building and comfort making tough prioritization calls. Health systems that continue to view service lines solely as operational stewards will struggle to keep pace.
A market leader in Kentucky and Indiana, Norton Healthcare has over 480 locations, nine hospitals, over 2,200 beds and nearly 24,000 employees. The system has eight defined service line leadership roles, which include heart and vascular, neurosciences/orthopedics, surgical services, women’s services, hospital-based services, pediatrics, primary care/ behavioral health, and cancer.
2. Systemness is no longer aspirational — it’s the core work
If there is a single word defining today’s service line reality, it’s systemness. As Kannapel emphasized, service lines must champion systemness in a way few other parts of the organization can.
Systemness is more than aligning clinical protocols. It requires hard, often uncomfortable choices: deciding what services belong where based on community need, while balancing capital restrictions, financial pressures and limited resources across a distributed footprint.
Norton Healthcare’s recent experience offers a compelling example: Five of its nine hospitals sit within a five-mile radius of each other. Without deliberate system-level planning, duplication would be inevitable. Service lines help to guide and lead the analysis of how resources, capabilities and care pathways should differ — or be shared — across facilities.
At the same time, Norton Healthcare has introduced provider-level budgeting, giving service line leaders, hospital administrators and clinicians visibility and accountability across sites. This more granular approach not only strengthens ownership but also reveals true systemwide opportunity costs.
Ultimately, systemness is a discipline. Health systems that build the service line structures, leadership norms and governance processes to sustain it will be better equipped to advance quality, access and affordability.
- Enterprise-wide capital prioritization
- Unified analytics strategy
- Service line–led OR optimization
- Shared provider-level performance metrics
- Cross-service-line collaboration (e.g., NICU between pediatrics and women’s health)
3. Experience and access are emerging as the true differentiators
Clinical excellence is essential, but it’s also expected. What increasingly differentiates market leaders are patient experience, ease of access and the ability to deliver care closer to home.
Norton Healthcare’s CARE strategy framework — Clinical Quality, Access, Retention, Ease of Use — places these elements at the center of each service line’s priorities. Particularly notable is the system’s relentless focus on new patient access, which Kannapel described as a daily refrain. As consumer expectations intensify, service lines must prioritize:
- Advanced access models
- Team-based care and APP-led clinics
- Virtual and telehealth modalities, especially in regional care settings
- Experience-enhancing strategies like simplified scheduling and reduced steps per visit
These capabilities not only attract and retain patients but also support workforce sustainability, which is critical in the face of persistent physician shortages.
Looking ahead: Service lines as strategic integrators
The future of service lines lies in their ability to integrate: Integrate markets. Integrate data. Integrate clinical practice. Integrate workforce strategy. Integrate the organization’s near-term operational realities with its long-term vision.
Health systems that empower their service line leaders with clear scope, aligned metrics and a structured role in strategic planning will be best positioned to meet that challenge. Those that fail to elevate service lines from operational units to strategic power centers risk falling behind in an increasingly competitive healthcare landscape.
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