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Reading Rehab Hospital has experimented with a popular concept in health care--patient-focused care--intended to increase quality and reduce costs by organizing care delivery around particular diagnoses or "service lines," rather than around the functions or disciplines of the care providers. It is equivalent to a product rather than a process focus. Unfortunately, it is not clear whether the benefits of this new healthcare model are sufficient to compensate for the drawbacks.

Reading Rehab Hospital has experimented with a popular new concept in health care--patient-focused care--intended to increase quality and reduce costs by organizing care delivery around particular diagnoses or "service lines," rather than around the functions or disciplines of the care providers. It is equivalent to product rather than process focus. Rehabilitation involves multiple disciplines which must share information about their evaluations of the patient, about planned treatments, and about patient progress. The decisions and actions of one care provider depend on those of another. This case illustrates the effects of a problem fundamental to service operations--variable demand and the limitations of organizing production by service lines under conditions of uncertain demand, due to the loss of pooling. Finally, its methods, for achieving the coordination benefits of service lines under conditions where the level or stability of demand is insufficient to justify the use of service lines.