Service design for the complex customer: An empirical analysis of mental health integration at Intermountain Healthcare

In 1998 Intermountain Healthcare instituted a mental health integration program in its primary care clinics. Mental health patients typify complex customers: those who supply multiple inputs into service processes whose inputs can expand across multiple service providers or multiple service visits. In this study, customer complexity is measured on a continuum by the number of co-morbidities of the patient (customer). It is hypothesized that complex customers receive better service from integrated service offerings than modular service offerings because complex customers have the most difficulty coordinating and combining services. The intensity of service integration is defined by the amount of coordination and combination of disparate service processes done by the service provider on behalf of the customer; in this study integration is measured by the practices' compliance to Intermountain Healthcare's mental health integration program This study tests the hypothesis that integrated clinics decrease patients' healthcare asset usage, which is assumed to also correlate with better care. The theory is tested by contrasting two patient cohorts: one serviced in integrated clinics and the other serviced in nonintegrated clinics. The patients' medical records are followed for 3 years, and the hypothesis tests are performed using hierarchal models based on the Negative Binomial Regression for count outcomes. These findings offer support for the hypothesis that more integrated service offerings require complex patients to use fewer medical assets. The main study reveals two important theoretical contributions to the service management literature: an examination of integration and modularity of service design and recognition of the complex customer. While integration and modularity of product design are prevalent in the literature, this study examines integration and modularity in service design. Services can be integrated along both location and coordination, potentially offering swifter and more even flow through the service process. In attempting to coordinate disparate service processes, the complex customer acts as co-designer of the service supply chain. Recognition of the complex customer requires service management to look at service supply chains as part of a natural service supply chain that requires coordination with other service's processes outside the firm before the service can be completed.