Management Principles for Health Professionals

Management Principles for Health
Professionals
Seventh Edition
Joan Gratto Liebler, MA, MPA, RHIA
Professor Emerita
Health Information Management
Temple University
Philadelphia, Pennsylvania
Charles R. McConnell, MBA, CM
Consultant
Human Resources and Health Care Management
Ontario, New York
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Library of Congress Cataloging-in-Publication Data
Names: Liebler, Joan Gratto, author. | McConnell, Charles R., author.
Title: Management principles for health professionals / Joan Gratto Liebler, Charles R.
McConnell.
Description: Seventh edition. | Burlington, MA : Jones & Bartlett Learning, [2017] | Includes
bibliographical references and index.
Identifiers: LCCN 2015048788 | ISBN 9781284088007 (pbk. : alk. paper)
Subjects: | MESH: Health Services Administration | Health Facility Administration | Health
Personnelorganization &
administration | United States
Classification: LCC RA393 | NLM W 84 AA1 | DDC 362.1068dc23 LC record available at
http://lccn.loc.gov/2015048788
6048
Printed in the United States of America
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Contents
Preface
About the Authors
Whats New in the Seventh Edition
Chapter 1 The Dynamic Environment of Health Care
The Dynamic Environment of Health Care
Client/Patient Characteristics
Trends Relating to Practitioners and Caregivers
The Healthcare Setting: Formal Organizational Patterns and Levels
of Care
Laws, Regulations, and Accrediting Standards
The Impact of Technology
Reimbursement and Patterns of Payment
The Managed Care Era
Who is Really Paying the Bills?
Reimbursement System Weaknesses
Social and Ethical Factors
The Role Set of the Healthcare Practitioner as Manager
Management as an Art and a Science
Exercise: Becoming a Split-Department Manager
Notes
Chapter 2 The Challenge of Change
The Impact of Change
The Manager as Change Agent
Review of Successful Change
Change and Resistance to Change
One More Challenge: The Patient Protection and Affordable Care
Act of 2010
Case: In Need of Improvement?
Chapter 3 Organizational Adaptation and Survival
The Organization as a Total System
The History of Management
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The Systems Approach
Formal Versus Informal Organizations
Classification of Organizations
Classification of Healthcare Organizations
Classic Bureaucracy
Consequences of Organizational Form
The Clientele Network
Clients
Suppliers
Advisers
Controllers
Adversaries
Coalitions for Building Community and Client Involvement
Example of Clientele Network for a Physical Therapy Unit
Introducing Organizational Survival Strategies
Bureaucratic Imperialism
Co-Optation
Hibernation and Adaptation
Goal Succession, Multiplication, and Expansion
Organizational Life Cycle
Notes
Chapter 4 Leadership and the Manager
Change and the Manager
Why Follow the Manager?
The Concept of Power
The Concept of Influence
The Concept of Formal Authority
The Importance of Authority
Sources of Power, Influence, and Authority
Restrictions on the Use of Authority
Importance of Delegation
Leadership
Some Final Thoughts about Authentic Personal Leadership
Case: Authority and Leadership: Rising from the Ranks
Case: Discipline and DocumentationHere She Goes Again
Notes
6
Chapter 5 Planning and Decision Making
Characteristics of Planning
Participants in Planning
The Planning Process
Planning Constraints or Boundaries
Characteristics of Effective Plans
Core Values, Philosophy, Heritage Statement, and Mission
Overall Goals
Objectives
Functional Objectives
Policies
Procedures
Methods
Rules
Project Planning
Elements and Examples of Major Projects
The Plan and the Process
Decision Making
Decision-Making Tools and Techniques
Exercise: From Intent to Action: The Planning Path
Exercise: Plans Are What?
Exercise: Goals, Objectives, and Procedures
Case: Paid to Make Decisions?
Notes
Chapter 6 Organizing and Staffing
The Process of Organizing
Fundamental Concepts and Principles
The Span of Management
Line and Staff Relationships
The Dual Pyramid form of Organization in Health Care
Basic Departmentation
Specific Scheduling
Flexibility in Organizational Structure
The Organizational Chart
The Job Description
The Management Inventory
The Credentialed Practitioner as Consultant
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The Independent Contractor
Guidelines for Contracts and Reports
Exercise: Creating Organizational Charts
Exercise: Developing a Job Description
Appendix 6A: Sample Contract for a Health Information
Consultant
Appendix 6B: Sample Cover Letter and Report
Chapter 7 Committees and Teams
The Nature of Committees
The Purposes and Uses of Committees
Limitations and Disadvantages of Committees
Enhancement of Committee Effectiveness
The Committee Chairperson
Committee Member Orientation
Minutes and Proceedings
Where Do Teams Fit In?
As Employee Involvement Increases
Employee Teams and Their Future
Exercise: Committee Structures
Case: The Employee Retention Committee Meeting
Chapter 8 Budget Planning and Implementation
The Revenue Cycle
The Budget
Uses of the Budget
Budget Periods
Types of Budgets
Approaches to Budgeting
The Budgetary Process
Capital Expenses
Supplies and Other Expenses
The Personnel Budget
Direct and Indirect Expenses
Budget Justification
Budget Variances
The General Audit
Sample Budget: Health Information Service
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Exercise: Adjusting the Budget
Chapter 9 Training and Development: The Backbone of Motivation and
Retention
Employee Development
Orientation
Training
Mentoring
Clinical Affiliation/Clinical Practice Program and Contract
Exercise: What to Do When Budget Cutting Threatens Training?
Case: The Departments Know-It-All
Appendix 9A: Training Design: Release of Information
Chapter 10 Adaptation, Motivation, and Conflict Management
Adaptation and Motivation
Theories of Motivation
Practical Strategies for Employee Motivation
Appreciative Inquiry
Motivation and Downsizing
Conflict
Organizational Conflict
Discipline
The Labor Union and the Collective Bargaining Agreement
Labor Unions in Health Care: Trends and Indicators
Case: A Matter of Motivation: The Delayed Promotion
Case: Charting a Course for Conflict ResolutionIts a Policy
Notes
Appendix 10A: Sample Collective Bargaining Agreement
Chapter 11 Communication: The Glue That Binds Us Together
A Complex Process
Communication and the Individual Manager
Verbal (Oral) Communication
Written Communication
Communication in Organizations
Orders and Directives
Case: The Long, Loud Silence
Case: Your Word Against His
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Notes
Chapter 12 The Middle Manager and Documentation of Critical
Management Processes
The Strategic Plan
The Annual Report
The Executive Summary
Major Project Proposal
Business Planning for Independent Practice
The Due Diligence Review
Exercise: Preparing Your Business Plan
Appendix 12A: Newman Eldercare Services, Inc.: Strategic Plan
Appendix 12B: Annual Report of the Health Information Services
Appendix 12C: Executive Summary: Annual Report of the Health
Information Services
Appendix 12D: Sample Project Proposal for Funding
Chapter 13 Improving Performance and Controlling the Critical Cycle
Quality, Excellence, and Continuous Performance Improvement
The Search for Excellence: A Long and Varied History
The Management Function of Controlling
Benchmarking
Tools of Control
The Critical Cycle
Exercise: Choosing an Adequate Control MechanismWhat Fits
Best?
Exercise: Promoting Total Quality Management
Note
Chapter 14 Human Resources Management: A Line Managers Perspective
Personnel Equals People
A Vital Staff Function
A Service of Increasing Value
Increase in Employee-Related Tasks
Learning about Your Human Resources Department
Putting the Human Resources Department to Work
Some Specific Action Steps
Further Use of Human Resources
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Wanted: Well-Considered Input
Understanding Why as Well as What
Legal Guides for Managerial Behavior
An Increasingly Legalistic Environment
Emphasis on Service
Case: With Friends Like This …
Case: The Managerial Hot Seat
Note
Chapter 15 Day-to-Day Management for the Health Professional-asManager
A Second and Parallel Career
Two Hats: Specialist and Manager
A Constant Balancing Act
The Ego Barrier
The Professional Managing the Professional
Leadership and the Professional
Some Assumptions about People
Style and Circumstances
The Professional and Change
Methods Improvement
Employee Problems
Communication and the Language of the Professional
An Open-Ended Task
The Next Step?
Case: Professional BehaviorThe Bumping Game
Case: Delegation DifficultiesThe Ineffective Subordinate
Notes
Index
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Preface
This book is intended for healthcare professionals who regularly perform the classic
functions of a manager as part of their job dutiesplanning, organizing, decision
making, staffing, leading or directing, communicating, and motivatingyet have
not had extensive management training. Healthcare practitioners may exercise these
functions on a continuing basis in their roles as department directors or unit
supervisors, or they may participate in only a few of these traditional functions, such
as training and development of unit staff. In any case, knowledge of management
theory is an essential element in professional training, because no single function is
ever addressed independently of all others.
In this book, emphasis is placed on definitions of terms, clarification of concepts,
and, in some cases, highly detailed explanations of processes and concepts. The
examples reflect typical practices in the healthcare setting. However, all examples
are fictitious and none are intended as legal, financial, or accreditation advice.
Every author must decide what material to include and what level of detail to
provide. The philosopher and pundit Samuel Johnson observed, A man will turn
over half a library to make one book. We have been guided by experience gained in
the classroom, as well as in many training and development workshops for
healthcare practitioners. Three basic objectives determined the final selection and
development of material:
1. Acquaint the healthcare practitioner with management concepts essential to
the understanding of the organizational environment within which the
functions of the manager are performed. Some material challenges
assumptions about such concepts as power, authority, influence, and
leadership. Some of the discussions focus on relatively new concepts such as
appreciative inquiry approaches to motivation and conflict management,
cultural proficiency and diversity training, changes in credentialing, and job
duties of technical support personnel. Practitioners must keep abreast of
developing trends in management, guarding against being the last to know.
2. Provide a base for further study of management concepts. Therefore, the
classic literature in the field is cited, major theorists are noted, and terms are
defined, especially where there is a divergence of opinion in management
literature. We all stand on the shoulders of the management giants who
paved the way in the field; a return to original sources is encouraged.
3. Provide sufficient detail in selected areas to enable the practitioner to apply
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the concepts in day-to-day situations. Several tools of planning and control,
such as budget preparation and justification, training design, project
management, special reports (e.g., the annual report, a strategic plan, a due
diligence assessment, a consultants report), and labor union contracts, are
explained in detail.
We have attempted to provide enough information to make it possible for the
reader to use these tools with ease at their basic level. It is the authors hope that the
readers will contribute to the literature and practice of healthcare management as
they grow in their professional practice and management roles. We are grateful to
our many colleagues who have journeyed with us over the years and shared their
ideas with us.
Joan Gratto Liebler
Charles R. McConnell
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About the Authors
Joan Gratto Liebler, MA, MPA, RHIA, is Professor Emerita, Health Information
Management, at Temple University, Philadelphia, Pennsylvania. She has more than
36 years of professional experience in teaching and research in healthcare settings.
In addition to teaching, her work and consulting experience include engagement
with community health centers, behavioral health settings, schools, industrial clinics,
prisons, and long-term care, acute care, and hospice facilities. She has also been an
active participant in area-wide healthcare planning, end-of-life care coalitions, and
area-wide emergency and disaster planning.
Ms. Liebler is also the author of Medical Records: Policies and Guidelines and
has authored numerous journal articles and contributed chapters relating to health
information management.
Ms. Liebler holds the degrees of Master of Arts (concentration in Medical
Ethics), St. Charles Borromeo Seminary, Philadelphia, Pennsylvania, and Master of
Public Administration, Temple University, Philadelphia, Pennsylvania. She is a
credentialed Registered Health Information Administrator.
Charles R. McConnell, MBA, CM, is an independent healthcare management and
human resources consultant and freelance writer specializing in business,
management, and human resources topics. For 11 years he was active as a
management engineering consultant with the Management and Planning Services
(MAPS) division of the Hospital Association of New York State (HANYS), and he
later spent 18 years as a hospital human resources manager. As author, coauthor,
and anthology editor, he has published more than 30 books and has contributed
several hundred articles to various publications. He is in his 35th year as editor of
the quarterly professional journal The Health Care Manager.
Mr. McConnell received a Master of Business Administration and a Bachelor of
Science degree in Engineering from the State University of New York at Buffalo.
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Whats New in the Seventh Edition
Management Principles for Health Professionals, Seventh Edition continues to
present foundational principles of management in the context of contemporary
health care. The Seventh Edition reflects current issues by linking them to basic
principles. Newly added examples include corporate compliance, standards of
conduct and mandatory reporting, eHealth (its expansion, plus issues relating to
reimbursement), revenue cycle considerations, cultural competency and diversity
training, and comparative effectiveness reviews. There is continuing expansion of
material relating to the Health Insurance Portability and Accountability Act
(HIPAA), electronic health records/personal health records, due diligence reviews,
and healthcare reform legislation.
Examples and exhibits have been updated throughout. Examples reflect a wide
variety of settings, including acute care, observation units, urgent care, rural critical
access care facilities, neighborhood health centers, secure personal care units,
continuing care facilities, and rapid treatment centers. These examples feature
various patient groups, including the frail elderly, at-risk youth, and homeless
youths and adults. A full-scale plan, with 500-day implementation schedule, is
included to illustrate project management. Newly emerging jobs/positions are
included, such as compliance officer, privacy specialist, data quality and analysis
specialist, and contractual management teams.
SPECIFIC CHAPTER UPDATES
Chapter 1, The Dynamic Environment of Health Care, presents a template for
analyzing megatrends in health care with attention to clients, families as caregivers,
professional practitioners, the healthcare marketplace and settings, the impact of
technology (including eHealth and virtual health), data mining, the health
information exchange, and social/cultural factors. An expanded section on financing
and reimbursement is included. The characteristics of the effective manager are
delineated.
Chapter 2, The Challenge of Change, includes detailed examples relating to the
continued implementation of the electronic health record (including outreach
campaigns and meaningful use initiatives), the organizational restructuring resulting
from marketplace forces, and continuing impact of healthcare reform legislation.
Chapter 3, Organizational Adaptation and Survival, includes expanded
15
discussion of competition and adversarial relationships. Extensive analysis of the
effects of mergers, partial or full closure of a facility, and the final stages in the
organizational life cycle is made. The main features of the managers concerns and
activities during this phase are amplified.
Chapter 4, Leadership and the Manager, was formerly Chapter 12, Authority,
Leadership, and Supervision. The material concerned with knowing ones own
leadership style has been expanded. Information presented on orders and directives
has been moved to Chapter 11, Communication, and the discussion of supervision
and discipline has been moved to Chapter 10, Adaptation, Motivation, and Conflict
Management.
Chapter 5, Planning and Decision Making, adds material relating to the
consequences of delaying decision making or not making decisions at all, along with
the second- and third-order impact of decisions. More examples of the after-action
report are included. Under the topic of planning, project management is presented,
including the role of the project manager along with project evaluation through
process and outcome reviews. A complete project, coupled with a 500-day
implementation plan, is provided to illustrate the extensive nature of project
delineation, activity description, and evaluation cycles.
Chapter 6, Organizing, provides additional discussion of the job analysis,
classification, and job description interrelationship. New/emerging/changing job
titles and responsibilities are included (e.g., corporate compliance officer, data
quality specialist, privacy officer). Standards of conduct and mandatory reporting
are added to the orientation module. The role and function of the external, contract
management team is delineated. The changing characteristics of the work force are
highlighted. The management inventory to forecast staffing needs is developed. The
consultant report reflects current issues relating to transition from hard copy to
electronic health records, and the resulting legacy systems, changes in data entries,
studies relating to shorter stay admissions compared to balance-of-life admissions in
skilled care, the necessity of studies relating to patterns of readmission to acute care,
and studies about secure personal care units (including suspected elder abuse
because of involuntary seclusion).
Chapter 7, Committees and Teams, offers refined and expanded information
concerning employee teams and their legality and advice and guidance for building
and maintaining a departmental team.
Chapter 8, Budget Planning and Implementation, is essentially the same as the
former Chapter 7, Budgeting: Controlling the Ultimate Resource.
Chapter 9, Training and Development: The Backbone of Motivation and
Retention, includes new material that reflects diversity and cultural competence.
New material has also been added to address the mutual responsibilities, and the
elements of an affiliation agreement/contract between the healthcare organization
16
and external academic programs for clinical practice rotations. Additional aspects of
the training design are included to reflect the needs assessment for training, aspects
of interpersonal skills, and challenges associated with difficult client interaction.
Chapter 10, Adaptation, Motivation, and Conflict Management, includes an
explanation of motivational strategies for dealing with crisis incidents. The impact
of downsizing is explained in detail, including the environment created when layoffs
occur, the effects on employees who must be released, and the reactions of
survivors who are expected to do more with less at a time when morale and
motivation have been adversely affected. Labor union trends and issues are
highlighted, and the sample labor contract has been updated.
Chapter 11, Communication: The Glue That Binds Us Together, formerly
Chapter 14, stresses plans and preparations for addressing communication during a
crisis via the need for disaster planning. Material concerning the grapevine and the
managers role in rumor control is presented, and information concerning orders and
directives has been moved here from an earlier chapter.
Chapter 12, The Middle Manager and Documentation of Critical Management
Processes, includes full-scale examples of reports, strategic plans, and due
diligence reviews. Current points of emphasis, including regional health information
exchanges, telecommuting issues, upgrading job titles and content (including
certifications and qualifications), participation in clinical practice programs, and
achievements related to external rating reviews (e.g., Medicare Five-Star rating) are
described.
Chapter 13, Improving Performance and Controlling the Critical Cycle,
discusses ideas for topics for studies that reflect current issues such as comparative
effectiveness evaluation, outcome measurement, Recovery Audit Contractor audits
and payment error reviews, American Health Information Management Association
(AHIMA) governance principles, issues specific to critical access/rural facilities
(e.g., use of and reimbursement for telehealth, swing bed usage, pattern of transfer
to regional tertiary centers), no-show and cancelled appointment patterns, and
cultural and linguistic services. Seven categories of performance improvement
studies are also described. In addition, selected strategies of improvement processes
are noted, including rapid cycle improvement, waterfall/cascading impact reviews,
and root cause analysis. An application of dashboard reporting is given, reflecting its
use in a disaster situation. Three examples are given to reflect the unanticipated
consequence of planning: when an improvement fails and negative outcomes occur.
Chapter 14, Human Resources Management: A Line Managers Perspective,
formerly Chapter 13, is essentially unchanged from the previous edition, although
laws applicable to employment are reviewed for updates.
Chapter 15, Day-to-Day Management for the Health Professional-as-Manager,
has been slightly expanded to address the development and management of ones
17
own career.
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CHAPTER 1
The Dynamic Environment of
Health Care
CHAPTER OBJECTIVES
Describe the healthcare environment as it has evolved since the middle to
late 1960s with attention to the dynamic interplay of key factors.
Examine megatrends in the healthcare environment with attention to:
Client characteristics
Professional practitioners and caregivers
Healthcare marketplace and settings
Applicable laws, regulations, and standards
Impact of technology
Privacy and security considerations
Financing of health care
Social and cultural factors
Identify the role set of the healthcare practitioner as manager.
Review the classic functions of the manager.
Define and differentiate between management as an art and a science.
Conceptualize the characteristics of an effective manager.
THE DYNAMIC ENVIRONMENT OF HEALTH
CARE
The contemporary healthcare environment is a dynamic one, combining enduring
patterns of practice with evolving ones to meet challenges and opportunities of
changing times. The healthcare organization is a highly visible one in most
19
communities. It is a fixture with deep roots in the social, religious, fraternal, and
civic fabric of the society. It is a major economic force, accounting for
approximately one-sixth of the national economy. In some local settings, the
healthcare organization is one of the major employers, with the local economy tied
to this sector. The image of the hospital is anchored in personal lives: it is the place
of major life events, including birth and death, and episodes of care throughout
ones life. Families recount the stories of remember the time when we all rushed to
the hospital … and similar recollections. The hospital is anchored in the popular
culture as a common frame of reference. People express, in ordinary terms, their
stereotypic reference to the healthcare setting: He works up at the hospital, Oh
yes, we made another trip to the emergency room, or I have a doctors
appointment. Popular media also uses similar references; television shows
regularly feature dramatic scenes in the acute care hospital, with the physician as an
almost universally visible presence. Care is often depicted as happening in the
emergency department.
On closer examination, one recognizes that, in fact, many changes have occurred
in the healthcare environment. The traditional hospital remains an important hub of
care but with many levels of care and physical locations. The physician continues to
hold a major place on the healthcare team, but there has been a steady increase in the
development and use of other practitioners (e.g., nurse midwife, physical therapist as
independent agent, physician assistant) to complement and augment the physicians
role. A casual conversation reflects such change; a person is just as likely to go to
the mall to get a brief physical examination at a walk-in, franchised clinic as he or
she would be to go to the traditional physicians office. One might get an annual
flu shot at the grocery store or smoking cessation counseling from the pharmacist
at a commercial drug store. One might have an appointment for care with a nurse
practitioner instead of a physician. Instead of using an emergency service at a
hospital, one might receive health care at an urgent care service or clinic.
Although the setting and practitioners have developed and changed, the
underlying theme remains: how to provide health care that is the best, most
effective, accessible, and affordable, in a stable yet flexible delivery system. This is
the enduring goal.
Those who manage healthcare organizations monitor trends and issues associated
with the healthcare delivery system in order to reach this goal. Thus, a manager
seeks to have thorough awareness and knowledge of the interplay of the dynamic
forces. It is useful, therefore, to follow a systematic approach to identify, monitor,
and respond to changes in the healthcare environment. The following template
provides such a systematic approach. The starting point is the client/patient/recipient
of care. This is followed in turn by considerations of the professional practitioners
and caregivers; healthcare market place and settings; applicable laws, regulations,
and standards; impact of technology; privacy and security considerations; financing;
20
and social-cultural factors.
CLIENT/PATIENT CHARACTERISTICS
The demographic patterns of the overall population have a direct impact on the
healthcare organization. For example, the increase in the number of older people
requires more facilities and personnel specializing in care of this group, such as
continuing care, skilled nursing care, and home care. Clinical conditions associated
with aging also lead to the development of specialty programs such as Alzheimers
disease and memory care, cardiac and stroke rehabilitation, and wellness programs
to promote healthy aging. At the other end of the age spectrum, attention to neonatal
care, healthy growth and development, and preventive care are points of focus.
Particular attention is given to adolescents and young adults who engage in contact
sports, where concussion, permanent brain injury, fractures, and sprains are
common. In all age groups, there is a rising rate of obesity; type 2 diabetes; and
addictions to substances, such as heroin, opioids, methadone, and assorted street
drugs.
Diseases and illnesses are, of course, an ever-present consideration. Some
diseases seem to have been conquered and eliminated through timely intervention.
Some recur after long periods of absence. Tuberculosis, polio, smallpox, and
pertussis are examples of successes in disease management and prevention.
Sometimes, however, new strains may develop or compliance with immunization
mandates may decrease so that these types of communicable diseases reappear.
Decades of use of antibacterial medicines has given rise to superbugs, resistant to
the usual treatment. Another element of concern is the appearance of an almost
unknown disease entity (e.g., Ebola or a pandemic agent). New clinical conditions
may also arise within certain age groups, necessitating fresh approaches to their
care. By way of example, consider the rise in autism and childhood obesity.
Other characteristics of the client/patient population reflect patterns of usage and
the associated costs of care. The identification of superuserspatients who have
high readmission rates and/or longer than average lengths of stay or more
complicationsgives providers an insight into practices needing improvement (e.g.,
better discharge planning or increased patient education). The geographic region that
constitutes the general catchment area of the facility should be analyzed to identify
health conditions common to the area. Examples include rural farm regions, with
associated injuries and illnesses; heavy industry, with work-related injuries; and
winter resort areas, with injuries resulting from strenuous outdoor activity (e.g.,
fractures from skiing injuries).
21
TRENDS RELATING TO PRACTITIONERS AND
CAREGIVERS
The trends and issues relating to practitioners and caregivers cluster around the
continuing expansion of scope of practice, with the related increase in education and
credentialing. The traditional attending physician role has given way to the inpatient
physician, the hospitalist. The one-to-one physicianpatient role set continues to
shift from solo practice to group practice and team coverage. Licensed, credentialed
nonphysician practitioners continue to augment the care provided by the physician.
These physician-extenders often specializefor example, the physical therapist in
sports-related care, the occupational therapist in autism programs, the nurse
practitioner in wellness care for the frail elderly, the nurse midwife, the nurse case
manager in transition care, and the physician assistant in emergency care.
Educational requirements include advanced degrees in the designated field.
There is a related shift in the practice settings for these various practitioners. The
move away from inpatient-based care leads to an increase in independent practice.
Sometimes the franchise model is favored over self-employment. Regional and
national franchises provide a turnkey practice environment with the additional
benefits of a management support division.
The Family as Caregiver
Although the provision of care by family members is a practice that long predates
formal healthcare models, these caregivers are the focus of renewed attention. As
shorter stays for inpatient care, or subacute care to reduce inpatient care, become the
norm, the role of the family caretaker intensifies. The patient care plan, with
emphasis on the discharge plan, necessarily includes instruction to family members
about such elements as medication regimen, wound care, infection prevention, and
injection processes. If the patient does not have a family member who is able to
assist in these ways, or if the patient (often a frail, elderly person) lives alone,
coordination of services with a community agency or commercial company is
needed. This gives rise to related issues. Can family members be reimbursed by
insurance providers? If so, what is needed by way of documentation and billing?
And there is yet another related issue: how can employers assist workers to meet the
demands of work as well as help the family member? Practices such as flexible
work hours and unpaid leave become both desirable and necessary elements.
Changes in Management Support Services
Behind the scenes, there is the wide network of management support services within
22
the healthcare organization. The trend toward specialization increases within these
ranks, with new job categories being developed in response to related trends. With
regard to finances and reimbursement, chief financial officers (or similar
administrators) augment their teams with clinical reimbursement auditors, coding
and billing compliance officers, physician coder-educators, and certified medical
coders. The regulatory standards manager specializes in coordinating the many
compliance factors flowing from laws, regulations, and standards. The chief
information officer augments that role with specialized teams, including nurse
informaticians, clinical information specialists, and information technology experts.
Patterns of Care
Improvements in patient care services, the utilization of advanced technologies such
as telemedicine, and the financial pressures to reduce the length of stay for inpatient
care have resulted in shorter stays, more transitional care, and (possibly) a higher
readmission rate. To offset a high readmission rate, additional attention is given to
the discharge plan. The increased use of the observation unit in the emergency
department also helps reduce admission and readmission rate. These issues and
trends lead to a discussion of the healthcare setting.
THE HEALTHCARE SETTING: FORMAL
ORGANIZATIONAL PATTERNS AND LEVELS
OF CARE
Each healthcare setting has a distinct pattern of organization and offers specific
levels of care. Characteristics include ownership and sponsorship, nonprofit or forprofit corporate status, and distinct levels of care. These elements are specified in
the license to operate as well as in the corporate charter. Ownership and sponsorship
often reflect deep ties to the immediate community. A sector of the community, such
as a fraternal organization, a religious association, or an academic institution,
developed and funded the original hospital or clinic, almost always as nonprofit
because of their own nonprofit status. These organizations purchased the land, had
the buildings erected and equipped, and provided continued supplemental funding
for the enterprise. Federal, state, city, and county units of government also own and
sponsor certain facilities (e.g., facilities for veterans, state behavioral care facilities,
county residential programs for the intellectually disabled). For-profit ownership
and sponsorship include owner-investor hospital and clinic chains; long-term care
facilities; franchise operations for specialty care (e.g., eye care, rehabilitation
centers, retail clinics in drugstores and big-box retailer stores). Over the past several
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decades, sponsorship by religious or fraternal organizations has diminished, with the
resulting sale of these healthcare facilities to other entities. The original name is
often retained because it is a familiar and respected designation in the community.
Provider Growth: Mergers, Joint Ventures, and
Collaborative Partnerships
Healthcare organizations periodically change or augment their service offerings,
with a resulting change in corporate structure. This restructuring may take the form
of a merger, a joint venture, or a collaborative partnership. Why do healthcare
organizations seek restructuring? The reasons are several:
The desire to express an overall value of promoting comprehensive, readily
accessible care by shoring up smaller community-based facilities, keeping them
from closure
The need for improved efficiencies resulting from centralized administrative
practices such as financial and health information resource streamlining or
public relations and marketing intensification
The desire and/or need to penetrate new markets to attract additional clients
The desire and/or need to increase size so as to have greater clout in
negotiations with managed care providers who tend to bypass smaller entities
As cost-containment pressure began to grow, providersprimarily hospitals
initially moved into mergers mostly to secure economies of scale and other
operating efficiencies and sometimes for reasons as basic as survival. The growth
and expansion of managed care plans provided further incentive to merge among
hospitals, which seems to have inspired health plan mergers in return. Each time a
significant merger occurs, one side gains more leverage in negotiating contracts. The
larger the managed care plan, the greater the clout in negotiating with hospitals and
physicians and vice versa.
Clarification of Terms
The term merger is used to describe the blending of two or more corporate entities
to create one new organization with one licensure and one provider number for
reimbursement purposes. One central board of trustees or directors is created,
usually with representation from each of the merged facilities. Debts and assets are
combined. For example, suppose a university medical center buys a smaller
community-based hospital. Ownership and control is now shifted to the new
organization. Sometimes the names of the original facilities are retained as part of
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public relations and marketing, as when a community group or religious-affiliated
group has great loyalty and ties to the organization. Alternatively, a combined name
is used, such as Mayfair Hospital of the University Medical System.
The joint venture differs from a merger in that each organization retains its own
standing as a specific legal/corporate entity. A joint venture or affiliation is a formal
agreement between or among member facilities to officially coordinate and share
one or more activities. Ownership and control of each party remains distinct, but
binding agreements, beneficial to all parties, are developed. Shared activities
typically include managed care negotiations, group purchasing discounts, staff
development and education offerings, and shared management services. Each
organization keeps its own name with the addition of some reference to its affiliated
status, as in the title: Port Martin Hospital, an affiliate of Vincent Medical Center.
A collaborative partnership is another interorganizational arrangement. As with
the joint venture, each organization retains its own standing as a specific legal
corporate entity. The purpose of the collaborative partnership is to draw on the
mutually beneficial resources of each party for a specific time period associated with
the completion of agreed-on projects. An example from research illustrates this
point: a universitys neuroscience and psychology departments and a hospital
pediatric service combine research efforts in the area of autism. A formal letter of
agreement or mutual understanding is exchanged, outlining the essential aspects of
the cooperative arrangement.
Such restructuring efforts, especially the formal merger, are preceded by mutual
due diligence reviews in which operational, financial, and legal issues are assessed.
Federal regulations and state licensing requirements must be followed. Details of the
impact of the restructuring on operational levels are considered, with each manager
providing reports; statistics; contractual information, leases (as of equipment); and
staffing arrangements, including independent contractors and outsourced work.
In the instance of a full merger, practical considerations constitute major points
of focus. Examples include redesigning forms, merging the master patient index and
record system into one new system, merging finance and billing processes, and
officially discharging and readmitting patients when the legally binding merger has
taken place.
Present-day mergers and joint ventures can have a pronounced effect on the
health professional entering a management position. Consider the example of a
laboratory manager who must now oversee a geographically divided service because
a two-hospital merger results in this persons having responsibility in two sites that
are miles apart. There is far more to consider in managing a split department than in
managing a single-site operation. The managers job is made all the more difficult.
Overall, however, mergers, joint ventures, and collaborative partnerships are an
opportunity for the professional-as-manager with greatly increased responsibility
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and accountability and a role of increasing complexity.
Range of Service and Levels of Care
One of the most distinguishing features of a specific healthcare organization is the
range of service, along with levels of care. This feature identifies the organization as
a particular kind of organization, explicitly defined in its license to operate (e.g., an
acute care hospital, an adult day care center, a hospice). An organization may offer
many different services, both inpatient and outpatient. The range of service and
levels of care are part of the overall definition of the organization; the specific types
of care are delineated. Groups such as the American Hospital Association (AHA),
The Joint Commission (TJC) and similar associations, and various designated
federal and/or state agencies, define types and levels of care. Thus, a hospital might
develop its range of services at an advanced level, with a variety of specialty
services, to meet the definition of tertiary care. A small, rural hospital might seek to
meet the basic standards for a critical access facility, capitalizing on the flexibility
such designation permits.
Clinics vary in their range of service from the relatively small, walk-in clinic, to
more complex services such as an urgent care clinic or specialty clinic associated
with a hospital. In this latter arrangement, the inpatient service coordinates care with
its companion outpatient clinic. Examples include surgery, cardiac care, and prenatal
and postnatal care.
Another way of noting the variety of care services is to group organizations by
client characteristics and treatment needs: geriatric behavioral care, rapid treatment
for drug-dependent clients, womens health, comprehensive cancer care, sports
medicine, hospice care, and intensive day treatment for at-risk youth. Care of frail,
elderly people has been and is a growth industry because of the simple fact of
demographicsthe increasing numbers of older individuals. The variety of levels of
care include independent living units; personal care assistance, including secured
units for dementia care; skilled nursing care; and comprehensive continuing care
facilities. Adult day care programs augment residential care.
Further details about the range of care can be found by identifying the
organizations place in the overall continuum of care. For the purposes of this
discussion, the acute care, inpatient facility will be placed at the center, with the
continuum of care segmented as subacute and postacute, although it should be noted
that not all care involves inpatient admission. Thus, an organization might tailor its
services to support transitional care, either temporary or permanent care, with a
postacute rehabilitation center, a long-term nursing care center, and assisted living
and secured personal care for frail elderly people. The current emphasis on reducing
readmission rates for inpatient care gives new impetus to the development and/or
expansion of these types of services. A traditional nursing home, specializing in
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balance of life care of frail, elderly people, might restructure its programs to add
posthospitalization care, with the expectation that the length of stay will be weeks or
(a few) monthsnot indeterminate and permanent. Home care programs have
increased in prominence because of their place in the sequence of care. Shortened
inpatient stays, outpatient same-day surgery, transitional care from hospital to
nursing home to the patients personal residence intensify the need for home care by
nurses, along with a variety of other caregivers (e.g., health aides, homemaker
aides).
Hospice care represents a model of service that utilizes several levels of care.
Care of the terminally ill (regardless of age) is rendered in the home, in the hospital
when needed, and in a nursing care facility. A hospice might be owned and
sponsored by an inpatient facility or operate as a stand-alone organization. One way
to describe hospice care is this: the hospice program follows the patient and family
as they move through the various changes in location.
In the continuing search for the best care, with flexibility and affordability, there
has been renewed interest in domiciliary care for the elderly or developmentally
disabled. The underlying idea is a return to home-like, individual care provided by
paid caregivers, often in a patients own homes. Some states have active programs to
increase the number and quality of such arrangements, along with active plans to
decrease the number of nursing home beds.
The group home for adolescents or developmentally disabled people continues to
be an area of change. The movement is away from large, institutional-based care to
very small units (e.g., four to six clients in a family-like group home).
LAWS, REGULATIONS, AND ACCREDITING
STANDARDS
Laws, regulations, and accrediting standards are a major consideration in the
delivery of health care. They affect every aspect of the healthcare system. The sheer
volume of such requirements, some of which are in contradiction to others, has
increased to the point that most organizations have a formally designated
compliance officer. This high-level manager, assigned to the chief executive
division, has the responsibility of assessing compliance with current requirements,
monitoring proposed changes, and helping departments and services prepare for
upcoming changes. Other responsibilities of this officer include the preparation of
required reports and studies, the coordination of site visits, and the preparation of
any follow-up action or plan of correction. In addition, this officer provides liaison
with the Board of Trustees corporate compliance committee. Managers at the
operational level work closely with this office in order to complyindeed excelat
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meeting all requirements.
The operational level managers, while assisted by the compliance office, must
take the initiative on their own to ensure that day-to-day practices and systems are in
order. A systematic review of laws, regulations, and standards facilitates this
practice. A manager can sort through the thicket of requirements by analyzing them
in terms of several features:
Setting. Licensure laws at the state level authorize the owner/sponsors to offer
specific types of care (e.g., acute care hospital, behavioral care facility,
rehabilitation center). The definitions and requirements in this fundamental law
are the starting point, for without meeting this set of binding elements, the
organization would not be permitted to function. Changes in program offerings,
including expansion, termination, or sale, trigger an update in licensure status.
Patient/client group. Certain issues concerning definition of the patient/client
must be considered: when does the relationship begin; who is eligible for
certain programs of care; what aspects of reimbursement for care apply; who
may consent for care; and what, if any, special provisions attach to certain
patient groups (e.g., any patients needing protective care).
Professional practitioners and the support staff. Professional practitioners are
required to have a license to practice. Both the individual and the
organizations officials must be mindful of the necessity of meeting this set of
rules. In addition to this requirement, there are many laws and regulations
governing working conditions, hours and rates of pay, and nondiscrimination.
Systems requirements. Specific aspects of the administrative and support
systems are often laid out in detail, including time frames; requirements for
record development and retention; and review processes relating to patient care,
safety, and privacy. Required documentation of care is delineated in terms of
content and time (e.g., development of plan of care, discharge plan, medication
profile, restraint usage).
The sources of law are both state and federal governments. In addition to these,
local units of government, such as counties and cities, have laws that apply to most
or all formal organizations in their geographic jurisdiction. The usual ones are fire
and safety codes, zoning regulations, environmental requirements, and traffic
controls.
Regulations Stemming from Laws
The usual practice in lawmaking is this: the basic law is developed and passed, with
the lawmakers recognizing that further details will be needed. The specific law
usually indicates which government department or agency is invested with this rule
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making power. Healthcare providers are most familiar with the Department of
Health and Human Services (DHHS) and its Centers for Medicare and Medicaid
Services (CMSformerly the Health Care Financing Administration) division that
has the authority to develop Medicare rules and regulations. Other current
headliner laws and companion regulations include the Health Information
Technology for Economic and Clinical Health Act (HITECH), the Health Insurance
Portability and Accountability Act (HIPAA) of 1996, and the Patient Protection and
Affordable Care Act (PPACA) of 2010.
Accrediting Standards
Although these standards or elements of performance are not required as such, most
healthcare facilities seek to meet them and have official recognition by an
appropriate accrediting agency. Some of the usual nationwide accrediting bodies are
TJC, Continuing Care Accreditation Commission, and the Accrediting Commission
for Health Care.
Within the accrediting process for the overall facility, there are additional criteria
for certain programs, with the resulting assurance of quality care. By way of
example, TJC has a gold seal of approval rating for rehabilitation services. It also
has disease-specific care certification.
Professional Association Standards and Guidelines
Professional associations develop standards of practice and related guidelines in
their area of expertise. These guidelines reflect best practices and provide practical
methods of developing and implementing operational level systems. In addition to
the practical aspect of meeting such optional standards, there is prestige value
associated with gaining recognition by outside groups. Receiving magnet
designation from the American Nurses Credentialing Center illustrates this dual
benefit.
Sources of Information about Requirements
Managers face a challenge in trying to keep up to date regarding the many
requirements. They must take a proactive stand, especially for those aspects relating
to their department or service.
Ones professional association is a reliable source of timely and thorough
information. The umbrella organizations such as the AHA monitor current and
prospective issues and make the information readily available. A useful practice for
managers to adopt is the regular monitoring of the Federal Register for federal
regulations, and the companion publication at state level. These agencies publish
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agenda listings on a periodic basis (e.g., annually, semiannually) to alert the public
about probable new regulations. This is augmented by an official Notice of
Proposed Rulemaking about a specific topic.
Government agencies, public and private think tanks, and other associations
prepare position papers; national, state, or regional health initiatives proposals; and
similar plans. Healthy People 2020 or the DHHSs national health goals or a state
governors long-range plan are examples of readily available documents to alert
managers of trends and issues.
THE IMPACT OF TECHNOLOGY
A survey of any health discipline would readily provide examples of the impact of
technology. New treatment modalities emerge. For example, specialty care is taken
to the patient (e.g., bedside anesthesia, mobile vans with chemotherapy, portable
diagnostic equipment). There is rapid and constant adoption of computerized
devices. Several areas of interest are highlighted here to illustrate the trends and
issues of a high-tech world and its implications for healthcare delivery.
eHealth and Virtual Health
This segment of health care has several names: eHealth, Virtual Health, and Digital
Connectivity. The eVisit, wherein patient and provider communicate by means of
technological interaction instead of face-to-face, in an office, has become
commonplace. Telemedicine or telehealth is a broader and slightly older term,
reflecting the same kind of interaction. Both methods utilize video conferencing,
telephone systems, and computers. The eVisit by the patient with the clinician is a
particularly good method for patients who are in rural areas without easy access to
their primary care provider; it is useful in the same way for the homebound patient
without transportation or whose chronic illness is exacerbated by going outside the
home. Virtual counseling is another example of this kind of care; the sufferer of
posttraumatic stress disorder or depression might find easier access to interventions
and care because it is readily available through technology. Also, the eVisit is a
useful alternative when inclement weather makes travel to on-site care unwise or
impossible. In addition, remote monitoring provides real-time feedback to providers
and patients, allowing them to make more timely interventions when indicated.
Common applications include monitoring heart-related conditions, diabetes, and
pulmonary hypertension.
Teleconferencing provides clinicians with ready access to specialists in another
setting, thus providing the patient and care team with expert advice and avoiding the
transfer of the patient. The telestroke program exemplifies this type of interaction
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where time is of the essence. The popular use of apps for self-monitoring, both for a
clinical condition as well as wellness, provides clients and caregivers with some
baseline information about a clients ongoing condition. The user can set up
reminders about medication use, blood sugar levels, or blood pressure monitoring.
Diet and exercise information can be tracked. Coupled with popular web searches
for health information (e.g., getting a second opinion from a Web site), the
consumer of health care generates his or her own personal health record.
The Personal Health Record
This is not a new concept. Conscientious individuals routinely keep important health
documents, including immunization records, summaries of episodes of care, and
their own tracking notes about a chronic condition. What is new is the increased
computerization of such notes. With the emphasis on developing and maintaining an
electronic health record system, healthcare organizations encourage the
incorporation of client-generated portfolios and the official documentation from
healthcare providers into a comprehensive document. Patients rights to access and
receive a copy of their health records has been well established and is encouraged.
This is a gradual change from the days when there was limited or no routine access.
The personal health record (PHR) does not replace the legal record of the healthcare
providerthe PHR is developed and maintained by the patient/client and the official
record by the provider. There is a related trend: having the patient access the
ongoing, official record through electronic systems. Providers make this possible
through the development of secure portal access to the information and encourage
its use through patient education about the process. Information includes access to
test results, discharge instructions, procedure information, and similar data. The goal
is to increase patients involvement in their own care. The electronic health record is
more fully discussed in the chapter on the challenges of change in the healthcare
system.
Data Warehousing and Data Mining
As the electronic data capture and retention and manipulation increases, so does the
sheer volume of data. These electronic measures incorporate and enhance the more
historical methods of the hard copy record, decentralized indexes and registries, and
special studies. Data warehousing refers to the centralized depository of data
collected from most or all aspects of the organization (e.g., patient demographics,
financial/billing transactions, clinical decision making) gathered into one consistent
computerized format. Easy connectivity to national and international data bases
(e.g., National Library of Medicine, Medicare Providers Analysis and Review) is yet
another feature of this process. Data mining is the analysis and extraction of data to
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find meaningful facts and trends for real-time interventions in clinical decisionmaking support, studies and oversight review of administrative and clinical practice
by designated review groups, budget support, and related data usage. Trend analysis
and predictive indicators (e.g., injury prediction outcomes in pediatric emergencies
or predictions of impending arrhythmia and sudden death, mortality predictions) are
readily available to clinicians. Data mining is also a business; a medical center, with
its fast compilation of core data and specialty data elements, may sell
nonidentifiable patient data to pharmaceutical, medical device, and biotech
industries.
Translational Medicine
With the ready availability of support data, clinicians seek to more effectively and
rapidly complete the cycle of bench to bedside to bench. Translational medicine
emerges as an area of intensified interest, with hospitals coordinating these efforts
through a clinical innovation office headed by a physician with an appropriate
support staff. This strengthens both research capabilities and clinical practice.
The Health Information Exchange
The electronic health record enhances patient care within the organization because
of its real-time, comprehensive features. But what of the situations in which care is
given in more than one setting? The release of information process, using traditional
hard copy or even electronic transmission, usually starts after the patient is admitted.
Why not develop systems of interchange of information, regardless of the point of
care? Such a system would facilitate communication among providers, reduce the
number of unneeded tests, and provide a more comprehensive review of patients
past and ongoing care. Technology supports this concept; the electronic movement
of health-related information is available. The coordinated efforts to make this a
reality have led to the development of regional health information exchange of
patient-consented information.
Privacy and Security Issues
The positive aspects of technology as applied to health care are clear. But along with
these positive benefits, there arise new concerns for privacy and security issues.
Hackers can access and even destroy computerized data bases. Identify theft,
including medical identity, is an increasing problem for individuals and
organizations. Consequently, safeguards are increased to secure the data, yet keep it
easily accessible by legitimate users. There is a growing body of laws and
regulations relating to these issues, foremost of which is HIPAA, mandating a
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variety of controls and practices to ensure patient privacy is protected. A more
detailed discussion of this law and its requirements is in the chapter on the challenge
of change.
Informatics Standards and Common Language
The goals of data sharing in support of patient care are generally well accepted, with
active implementation of systems. To make this effective, there is the continuing
need for interoperability of systems along with informatics standards and common
language. These efforts include the development of standard vocabulary and
classification systems, such as the National Library of Medicines Unified Medical
Language System as well as the standards developed by the Institute of Electrical
and Electronic Engineers and the Health Level-7 standards. HIPAA regulations
requires uniform protocols for electronic transactions for both format and content of
data capture and transmission. The development of a national healthcare information
infrastructure has the support of key advocates who support the development and
implementation of national standards.
The Virtual Enterprise
The concept of the virtual enterprise has emerged as a result of available technology
in both the for-profit and nonprofit sectors. Organizations develop contractual
partnerships with independent companies and individuals who provide goods and
services. Instead of on-site departments, services, or units, or direct employer
employee relationships, organizations outsource many functions. By way of
example, consider the contemporary health information department that has
outsourced several functions: transcription, billing and coding support, release of
information, and document storage and retrieval. Another example, drawn from a
direct patient care program, is reflected in a chronic disease management service
within a home health agency. The home health agency coordinates services from
other health providers who remain independent agents. This trend is so common
that, in job descriptions and want ads, the job location is noted as to on-site or
virtual as the setting.
REIMBURSEMENT AND PATTERNS OF
PAYMENT
Patterns of payment for health care have changed in response to social, political, and
economic pressures. Hospitals and clinics have deep historical roots in charitable,
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not-for-profit models; along with this early approach to care there was also the feefor-service approach as patients made payments directly to practitioners.
Health insurance programs, both nonprofit such as Blue Cross and Blue Shield
and commercial insurance plans, emerged in the 1930s as partners in the payment
for healthcare services. The form of insurance that many of these early plans offered
was frequently referred to as hospitalization insurance; it covered costs when one
was hospitalized, but the majority of early plans did not cover common ancillary
services such as visits to physicians.
The 1960s saw the introduction of federally funded care with the creation of
Medicare coverage for the elderly and Medicaid, essentially a welfare program, to
provide coverage for low-income persons and the indigent. Medicare and Medicaid
were established by the same federal legislation but they differ as sources of
payment. Medicare reimbursement is fully federal, but Medicaid reimbursement is
shared, with 50% coming from the federal government and the remaining 50% split
between state and county. In some instances, the second 50% is split evenly between
state and county and in some the split is different (e.g., 34% state and 16% county).
Concern for healthcare costs has been gathering momentum since the 1960s, as
have efforts to control or reduce these costs. Costs clearly took a leap upward
immediately following the introduction of Medicare and Medicaid; however,
Medicare and Medicaid are not the sole cause of the cost escalation. Rather, costs
have been driven up by a complex combination of forces that include the
aforementioned programs and other government undertakings, private not-for-profit
and commercial insurers, changes in medical practice and advancements in
technology, proliferation of medical specialties, increases in physician fees,
advances in pharmaceuticals, overexpansion of the countrys hospital system,
economic improvements in the lot of healthcare workers, and the desires and
demands of the public. These and other forces have kept healthcare costs rising at a
rate that has outpaced overall inflation two- or threefold in some years.
As concern for healthcare costs has spread, so have attempts to control costs
without adversely affecting quality or hindering access. The final two decades of the
1900s and the beginning of this century have seen some significant dollar-driven
phenomena that are dramatically changing the face of healthcare delivery.
Specifically, these include the following:
The rise of competition among providers in an industry that was long
considered essentially devoid of competition
Changes in the structure of care delivery, such as system shrinkage as hospitals
decertify beds; an increase in hospital closures, mergers, and other affiliations
that catalyzed the growth of healthcare systems; and the proliferation of
independent specialty practices
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The advent and growth and expansion of managed care
In one way or another, most modern societal concerns for health care relate
directly to cost or, in some instances, to issues of access to health care, which in turn
translate directly into concern for cost. Massive change in health care has become a
way of life, and dollars are the principal driver of this change.
THE MANAGED CARE ERA
The Managed Care Solution and the Beginning of
Restricted Access
Aside from technological advances, most of what has occurred in recent years in the
organization of healthcare delivery, and payment has been driven by concern for
costs. Changes have been driven by the desire to stem alarming cost increases and,
in some instances, to reduce costs overall. These efforts have been variously
focused. Government and insurers have acted on the healthcare money supply,
essentially forcing providers to find ways of operating on less money than they think
they require. Provider organizations have taken steps to adjust expenditures to fall
within the financial limitations they face. These steps have included closures,
downsizing, formation of systems to take advantage of economies of scale, and
otherwise seeking ways of delivering care more economically and efficiently. In this
cost-conscious environment, managed care evolved.
Managed care, consisting of a number of practices intended to reduce costs and
improve quality, seemed, at least in concept, to offer workable solutions to the
problem of providing reasonable access to quality care at an affordable cost.
Managed care included economic incentives for physicians and patients, programs
for reviewing the medical necessity of specific services, increased beneficiary costsharing, controls on hospital inpatient admissions and lengths of stay, cost-sharing
incentives for outpatient surgery, selective contracting with providers, and
management of high-cost cases.
The most commonly encountered form of managed care is the health
maintenance organization (HMO). The HMO concept was initially proposed in the
1960s when healthcare costs began to increase all out of proportion to other costs
and so-called normal inflation following the introduction of Medicare and
Medicaid. The HMO was formally promoted as a remedy for rising healthcare costs
by the Health Maintenance Organization Act of 1973. The full title of this
legislation is An Act to amend the Public Health Service Act to provide assistance
and encouragement for the establishment and expansion of health maintenance
organizations, and for other purposes. From todays perspective it is interesting to
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note that in implementing the HMO Act, it was necessary to override laws in place
in a number of states that actually forbade the establishment of such entities.
The HMO Act provided for grants and loans to be used for starting or expanding
HMOs. Preempting state restrictions on the establishment and operation of federally
qualified HMOs, it required employers with 25 or more employees to offer federally
certified HMO options if they already offered traditional health insurance to
employees. (It did not require employers to offer health insurance if they did not
already do so.) To become federally certified, an HMO had to offer a comprehensive
package of specific benefits, be available to a broadly representative population on
an equitable basis, be available at the same or lower cost than traditional insurance
coverage, and provide for increased participation by consumers. Portions of the
HMO Act have been amended several times since its initial passage, most notably
by HIPAA.
Specifically, an HMO is a managed care plan that incorporates financing and
delivery of a defined set of healthcare services to persons who are enrolled in a
service network.
For the first time in the history of American health care, the introduction of
managed care placed significant restrictions on the use of services. The public was
introduced to the concept of the primary care physician as the gatekeeper to
control access to specialists and various other services. Formerly, an insured
individual could go to a specialist at will, and insurance would usually pay for the
service. But with the gatekeeper in place, a subscribers visits to a specialist were
covered only if the patient was properly referred by the primary care physician.
Subscribers who went to specialists without referral suddenly found themselves
billed for the entire cost of the specialists.
By placing restrictions on the services that would be paid for and under what
circumstances they could be accessed, managed care plans exerted control over
some health insurance premium costs for employers and subscribers. In return for
controlled costs, users had to accept limitations on their choice of physicians, having
to choose from among those who agreed to participate in a given plan and accept
that plans payments, accept limitations on what services would be available to
them, and, in most instances, agree to pay specified deductibles and copayments.
Managed care organizations and governmental payers brought pressure to bear
on hospitals as well. Hospitals and physicians were encouraged to reduce the length
of hospital stays, reduce the use of most ancillary services, and meet more medical
needs on an outpatient basis. Review processes were established, and hospitals were
penalized financially if their costs were determined to be too high or their
inpatient stays too long. Eventually, payment became linked to a standard or
target length of stay so that a given diagnosis was compensated at a predetermined
amount regardless of how long the patient was hospitalized.
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As managed care organizations grew larger and stronger, they began to negotiate
with hospitals concerning the use of their services. Various plans negotiated
contracts with hospitals that would provide the best price breaks for the plans
patients, and price competition between and among providers became a reality.
By the end of the 1900s, approximately 160 million Americans were enrolled in
managed care plans, encompassing what many thought to be the majority of people
who were suitable for managed care. In-and-out participation of some groups, such
as the younger aging (people in their 60s or so) and Medicaid patients, was
anticipated. However, the bulk of people on whom managed care plans could best
make their money were supposedly already enrolled. But managed care continued to
grow in a manner essentially consistent with the growth of the population overall.
According to the trade association Americas Health Insurance Plans, approximately
90% of insured Americans were enrolled in plans with some form of managed care
by 2007,
1 and total participation today continues at or near this 90% level.
Much of the movement into managed care was driven by corporate employers
attempting to contain healthcare benefit costs. However, during this same period of
growing managed care enrollment, the number of managed care plans experiencing
financial problems also increased steadily.
It appears that managed care was able to slow the rate of health insurance
premium increases throughout most of the 1990s. However, early in the first decade
of the 2000s, the cost of insurance coverage again began climbing at an alarming
rate. The increase continued; it was reported in 2005 that health insurance premiums
would increase in some areas by more than 12% for 2006, making 2006 the fifth
straight year of double-digit premium increases for many.
2 This grim prediction for
2006 was fulfilled, and the trend has continued, with increases for most years since
then averaging in excess of 10%.
By the end of the 1990s, it appeared that the majority of average middle-class
subscribers had reached a negative consensus about managed care. This caused
some damage to the political viability of for-profit managed care, and it hurt
managed care overall. Indeed, it seemed increasingly likely that managed care might
not be financially affordable in the long run.
The year 2000 was especially grim for the relationship between managed care
plans and Medicare. As a result of decisions made during that year, nearly a million
beneficiaries from 464 counties in 34 states lost their coverage on January 1, 2001,
when 118 HMOs withdrew from Medicare. In addition, many of the plans that
remained in Medicare increased premiums and reduced benefits in response to what
were described as continually rising costs and the effects of cuts in reimbursement
rates. In December 2000, Congress voted to allocate billions of additional dollars to
Medicare HMOs, supposedly to reduce premiums or increase benefits to
subscribers. However, wording of the legislation also allowed HMOs to pay more to
37
their networks of hospitals and healthcare professionals, thus consuming the
majority of the additional funds. As a result, only 4 of the 118 HMOs that had
withdrawn returned to Medicare.
Managed care organizations and elements of government brought additional
pressure to bear on hospitals. Hospitals and physicians were encouraged to reduce
the length of hospital stays, cut back on the use of ancillary services, and meet more
medical needs on an outpatient basis. Review processes were established such that
hospitals were penalized financially if their costs were determined to be too high or
their inpatient stays too long. Eventually payment became linked to a standard, or
target, length of stay so that any given diagnosis was compensated at a specific
amount regardless of how long the patient was hospitalized.
As they grew larger, managed care organizations began to deal directly with
hospitals, negotiating the use of their services. As various plans contracted with
hospitals that would give the best price breaks for the plans patients, price
competition between and among providers became a factor to be considered.
It is reasonable to say that although managed care provided cost-saving benefits
at least for a time, it is evident that managed care plans have not been able to sustain
their promises of delivering efficient and cost-effective care. An aging population,
newer and more expensive technologies, newer and higher priced prescription drugs,
new federal and state mandates, and pressure from healthcare providers for higher
fees have essentially wiped out the savings from managed care for employers and
subscribers alike. It is likely, however, that without managed care, costs and cost
increases would be even more pronounced than at present. Essentially the managed
care model became a permanent and common feature in the coordination of and
payment for care.
The Balanced Budget Act of 1997
The Balanced Budget Act (BBA) of 1997 is worthy of mention in this discussion of
managed care. This act was adopted in part because of: the increased fiscal pressure
caused by the growth of Medicare payments, concern over Medicare overpayments,
the desire for more rational payment methods, and a stated wish to offer
beneficiaries greater choice. By mandating that federal revenues and federal
expenditures be balanced each fiscal year, the BBA fundamentally altered the rules
of fiscal policy making in the United States.
3 (It perhaps need not be said that the
mandate to balance the federal budget has been dramatically overridden in many
years since then.) A balanced budget would of course be sensible, but it was the
manner in which budget balancing was implemented that forced disproportionate
reductions in healthcare reimbursement. In terms of its overall effects, the BBA
became the most significant piece of healthcare legislation since Medicare and
38
Medicaid were established in 1965.
4
The reductions required to balance the budget were not taken uniformly from all
elements of the budget. More than half of the federal budgetspecifically the very
large piece of the budget, including Department of Defense spending, Social
Security, and interest on the federal debtwas insulated from cuts, meaning that the
entire balancing reduction would have to come from the remaining portion (less than
half) of the budget. Medicare had some time earlier become a significantly large
third-party payer for healthcare services, so as a direct result of the BBA, drastic
cuts occurred in Medicare reimbursement, therefore affecting the income of
healthcare providers.
Some degree of relief from the BBA arrived in the form of the Balanced Budget
Refinement Act (BBRA) of 1999, arising perhaps out of recognition that the act
itself went too far in reducing reimbursements. When the BBRA became law, it
suspended the cap that had been placed on outpatient rehabilitation services and
paved the way for the design of a new payment mechanism. Regardless of these
positive steps, however, the BBA brought some irreversible consequences to
healthcare providers.
WHO IS REALLY PAYING THE BILLS?
Payment for health care flows from a number of sources, some major and well
known and some less recognizable and relatively specialized. A number of these
sources can be grouped together under the heading of government, the largest
being, of course, Medicare and Medicaid. Yet in addition to Medicare and Medicaid,
there are other government programs that reimburse for health care at both state and
federal levels. There are, for example, specific programs for providing health
services to the dependents and survivors of military personnel and there is the health
care for former military personnel provided by the hospital system of the Veterans
Administration. Also under government are a number of state programs including,
for example, Workers Ccompensation, which pays for health care for sick or
injured workers as well as compensating for lost income. Many of the states also
have unique programs designed to serve certain specific population segments (e.g.,
Healthy New York programs in New York State).
Next, outside of government programs, various programs can be gathered under
the heading of private insurance. This collection of payers includes not-for-profit
entities such as Blue CrossBlue Shield, commercial (for-profit) insurance
companies, and the many HMOs that comprise a large proportion of payers. These
entities just named interlock to a considerable extent; for example, many managed
care programs are operated by not-for-profits such as Blue Cross and Blue Shield,
39
which also administer insurance programs designed to supplement Medicare
benefits.
Much health care delivered by the HMOs and other insurers subjects users to
deductibles and copays, making patients and families payers to a considerable
extent. (A deductible is a designated amount a patient must pay before certain
coverage kicks in, and a copaycommon to essentially all programs to some
extentis a designated portion of the cost of a specific service that must be borne
by the patient.)
Some larger organizations have essentially entered into the health insurance
business by self-insuring for their employees. Practical (and permissible) for only
sizable organizations with sufficient financial capability, these self-insurers pay their
employees claims directly using, in most instances, an administrative claim service
to handle the transactions. However, most self-insurers also carry additional
coverage against the possibility of catastrophic claims.
However, getting down to absolute basics, it is the population at large that pays
for health care through taxes, through insurance premiums, and out of their own
pockets.
Related Considerations
A number of additional programs or practices in place or under active consideration
affect payment for health care. To enumerate just a few:
Reference pricing is the concept under which a patients plan pays 100% of costs
within ones network and the patient pays 100% of costs incurred outside of the
network. Reference pricing also allows insurers and employers to place a dollar limit
on what the plan pays for expensive procedures, potentially resulting in some large
medical bills for patients. Presently it is believed that CMS may ban reference
pricing.
Regional pricing is another concept that has come under consideration in some
quarters. In its simplest form, this is pricing that has its basis in the economy of a
specified geographic area, suggesting that the same service may cost more in a
wealthier region than in a poorer area.
Although still evolving, the concept of the medical home offers financial
incentives for providers to focus on the quality of patient outcomes rather than the
volume of services provided. The medical home can be a physical or virtual network
of providers; the keys to its success are said to be information technology and
payment reform. The medical home is designed around patient needs and aims to
improve access to care and improve communication in what is promoted as an
innovative approach to delivering comprehensive patient-centered preventive and
primary care. The PPACA contains provisions that support use of the medical home
40
model including new payment policies.
In addition, the financial and practical advantages of membership in the health
network subject to its coordination of the provision of care and payment for care are
addressed to some extent in the PPACA.
Built into the formal reimbursement methods of the principal programs and
organizations that pay for healthcare services are numerous requirements and
conditions the purpose of which is cost containment. For example, there is the
routine review for preventable readmission within 30 days under which some
amount of reimbursement may be denied if a particular readmission within that time
frame is considered not medically necessary. There is also the increased use of
temporary admission to an observation unit rather than to a formal inpatient unit,
reacting to the knowledge that the former, often associated with the emergency
department, is less costly than a regular hospital admission and does not
unnecessarily tie up a bed in an acute care unit.
Another practice that serves both coordination of patient care and cost
containment is the concept of bundling for continuum of care, involving discharge
planning and coordination of posthospital care, recognizing that acute hospital care
is but one step in addressing a patients needs and that complete recovery requires
organized posthospital follow-up to ensure return to health and to minimize the
chances of readmission.
A fairly long-standing practice relating to both quality of care and cost
containment is utilization review. Here hospital discharges are examined in detail to
identify unnecessary treatments, excessive lengths of stay, and quality issues, with
the intent of potentially improving quality of care while containing costs.
In general, virtually all of the reimbursement practices of the payers for health
care have builtin rules, regulations, and requirements that place limits on certain
practices (e.g., limiting length of hospital stays for specific diagnoses) and attendant
penalties in the form of reduced or denied reimbursement.
REIMBURSEMENT SYSTEM WEAKNESSES
It holds generally true that the larger and more complex a system or program, the
greater the chances of error and the more opportunity there is for misuse or
mistreatment of the process itself. The overall healthcare reimbursement structure is
both large and complex. There are many chances for the occurrence of honest errors,
and there are many opportunities for deliberate fraud and abuse. Here are a few
examples:
Upcoding, a process that occurs when someone submits the diagnosis-related
group (DRG) code for a higher reimbursement level than what the actual case
41
should receive (e.g., entering the code for appendectomy with complications
in place of routine appendectomy)
Double billing or false billing by providers, perhaps billing twice for certain
procedures, orrather common among fraud casesbilling for services never
rendered
Billing for more service than was rendered, as in billing for more treatment than
actually was provided and billing payers for appointments that patients had
actually canceled (consider the case of the provider who actually billed as
much as 33 hours for a single date)
Billing for services that are actually not covered under the prevailing
reimbursement mechanism
Double dipping in Medicaid programs by individuals using addresses in two
states and collecting benefits from both for the same care
All manner of medical providers have been involved in fleecing, or attempting to
fleece, the reimbursement system: physicians, dentists, pharmacists, physical
therapists and other individual providers, as well as individuals working in
institutional settings and falsifying records as in upcoding and claiming
reimbursement for services not rendered. Reimbursement structures are generally
large and complex, and there is undoubtedly the feeling among some providers that
what they are doing will never be detected or that their practices will never be
examined in detail (similar to the attitude of the individual who feels that the
Internal Revenue Service will never audit me). Yet numerous providers have lost
their livelihoods when caught committing fraud or otherwise abusing the system.
Fraud and abuse constitute significant problems for present reimbursement
mechanisms, and constant vigilance and regular monitoring are required to keep
them in check. It is likely that any complex, multilayered system can be gamed in
some way, and thanks to Medicare and Medicaid and all else that has risen around
the major payers, healthcare reimbursement is and will likely present opportunities
for fraud and abuse capable of continually siphoning off an eye-opening percentage
of the healthcare dollar.
SOCIAL AND ETHICAL FACTORS
The use of technology, privacy concerns, and continuing issues related to healthcare
availability and financing give rise to new debates about social and ethical factors.
These norms have always been a part of the healthcare ethos, but from time to time,
more urgent considerations are required. As noted above, a technological
breakthrough occasions such renewed interest. At another time, a new legislative
42
mandate, such as the Patient Self-Determination Act, brings about fresh
consideration of enduring concerns. Increased sensitivity to patient or consumer
wishes is yet another source of attentiveness to social and ethical issues. For
example, the increased use by patients of alternative therapies and interventions has
reopened the question about proper integration of nontraditional care with the more
standardized modes. The debate reaches into the questions of reimbursement as
well; healthcare plans are increasingly approving some alternative or
complementary intervention as reimbursable costs. Another ethical issue stemming
from healthcare financing stems from a new practice: the embedded nurse, one who
is an employee of the insurance company but assigned to the direct care team within
a healthcare facility. Whose agent is this employee? What ethical dilemmas does
this worker face? Do patients know that their care is being rendered by one whose
assignment includes cost effectiveness as a direct part of his or her work? Rationing
of health care is yet another area of continuing discussion, including qualityadjusted remaining years indicators and complete lives measures. Finally, the use
of marijuana for medical purposes showcases another example of societal norms
shifting to greater acceptance of such substances.
Ethical considerations such as the these result in the increased use of the ethics
review committee, the institutional review board, and similar clinical and
administrative review groups.
THE ROLE SET OF THE HEALTHCARE
PRACTITIONER AS MANAGER
The dynamic setting of healthcare organizations constitutes the environment of the
manager, specifically the healthcare practitioner as manager. Often unseen by the
patient or the public, the managers of departments and services work behind the
scenes to support direct patient care interactions. In this specialized environment of
a healthcare organization, qualified professional practitioners may assume the role
of unit supervisors, project managers, or department heads. The role may emerge
gradually as the numbers of patients increase, as the number and type of services
expand, and as specialization occurs within a profession. The role of manager begins
to emerge as budget preparations need to be made, job descriptions need to be
updated and refined, and staffing patterns need to be reassessed and expanded.
For example, a physical therapy staff specialist may develop a successful
program for patients with spinal cord injuries. As the practitioner most directly
involved in the work, this individual may be given full administrative responsibility
for that program. Alternatively, an occupational therapist may find that a small
program in home care flourishes and is subsequently made into a specialized
43
division. Again, this credentialed practitioner in a healthcare profession may be
given a managerial role. Practitioners who develop their own independent practices
assume the role of manager for their business enterprises. The role of the
practitioner as manager is reinforced further by various legal, regulatory, and
accrediting agencies, which often require chiefs of service or department heads to be
qualified practitioners in their distinct disciplines.
Classic Management Functions
The healthcare practitionermanager engages in traditional management activities
the circle of actions in which each component (e.g., planning, decision making)
leads to the next. These activities are a mix of routine, repeated activities of an
ongoing nature, along with periodic major activities such as preparation for and
participating in accreditation processes, or major projects such as a complete
systems overhaul. Figure 11 illustrates the interrelationships of management
functions. Table 11 provides examples of daily activities of the professional
practitioner as manager.
FIGURE 11 Interrelationship of Management Functions
Management functions typically include the following:
Planning: the selection of objectives, the establishment of goals, and the factual
determination of the existing situation and the desired future state
44
Decision making: part of the planning process in that a commitment to one of
the several alternatives (decisions) must be made. Others may assist in
planning, but decision making is the privilege and burden of managers.
Decision making includes the development of alternatives, conscious choice,
and commitment.
Organizing: the design of a pattern of roles and relationships that contribute to
the goal. Roles are assigned, authority and responsibility are determined, and
provision is made for coordination. Organization typically involves the
development of the organization chart, job descriptions, and statements of work
flow.
Staffing: the determination of personnel needs and the selection, orientation,
training, and continuing evaluation of the individuals who hold the required
positions identified in the organizing process
Directing or actuating: the provision of guidance and leadership so that the work
performed is goal oriented. It is the exercise of the managers influence as well
asthe process of teaching, coaching, and motivating workers.
Controlling: the determination of what is being accomplished, the assessment of
performance as it relates to the accomplishment of the organizational goals, and
the initiation of corrective actions. In contemporary management practice, the
larger concepts of performance improvement and total quality management
include controlling.
MANAGEMENT AS AN ART AND A SCIENCE
45
Management has been defined as the process of getting things done through and
with people. It is the planning and directing of effort and the organizing and
employing of resources (both human and material) to accomplish some
predetermined objective. Management is both an art and a science. Especially in its
early years of development at the turn of the 20th century, managements scientific
aspects were emphasized. This scientific approach included and continues to include
research and studies about the most efficient methods, leadership styles, and patterns
of organization. However, management science tends to lack the distinct
characteristics of an exact discipline, such as chemistry or mathematics. A more
intuitive and nuanced set of elements reflect management as an art as well as a
science. One speaks of the art of leadership and motivation. One relies on intuition
and experience in situation of conflict or crisis.
Managers seek to combine the best of both approaches, striving to become
effective managers.
Characteristics of an Effective Manager
The classic functions of a manager have been noted in the previous section. The
highlighting of the characteristics of the effective manager augment this role set.
Five major characteristics of effective managers are:
1. They know the internal structure and characteristics of their organization:
Its overall mission
Its client characteristics and needs
Its specific products or services offered to meet these needs
Its specific setting or combination of settings and formal organizational
category (e.g., acute care, freestanding clinic)
Its specific laws, regulations, and accrediting standard applicable to each
type of healthcare unit
2. They know the internal and external dynamics of their organization:
The organizations strengths
The challenges to its survival
The areas requiring adaptation and innovation
Its life cycle
Its network of internal and external relationships
Its survival strategies
3. They lead and motivate the workforce by doing the following:
Developing and maintaining a positive workplace environment
46
Reducing conflict
Increasing worker satisfaction through training and ongoing development
and the provision of proper wage and benefits
Maintaining effective communication
4. They engage in the search for excellence through continuous quality
improvement.
5. They remain aware of and respond to the following:
Trends (e.g., changes in technology, patterns of reimbursement, social
issues)
The challenge of change and the necessity of being a change agent and a
leader
The mangers responsibility to identify and respond to change is the focus of the
following chapter.
EXERCISE: BECOMING A SPLITDEPARTMENT MANAGER
Imagine that you are the manager of a department organized to provide service in
your chosen profession. In other words, if your career is medical laboratory
technology, you are a laboratory manager; if your field is physical therapy, you
manage physical therapy or rehabilitation services; and so on. You are employed by
a 60-bed rural hospital, an institution sufficiently small that you represent the only
level of management within your function (unless your profession is nursing, in
which case there will be perhaps two or three levels of management). This means
that unless you are a first-line manager in nursing (e.g., head nurse), you report
directly to administration.
You have been in your position for about 2 years. Following some stressful early
months, you are beginning to feel that you have your job under control most of the
time.
A possibility that for years had been talked about and argued throughout the local
community, the merger of your hospital with a similar but larger institution (90
beds) about 10 miles away, recently became a reality. One of the initial major
changes undertaken by the new corporate entity was realignment of the management
structure. In addition to placing the new corporate entity under a single chief
executive officer, the realignment included, for most activities, bringing each
function under a single manager. Between the merger date and the present, most
department managers have been involved in the unpleasant process of competing
47
against their counterparts for the single manager position.
You are the successful candidate, the survivor. Effective next Monday, you will
be running a combined department in two locations consisting of more than twice
the number of employees you have been accustomed to supervising.
Instructions
Generate a list of the ways in which you believe your responsibilities and the tasks
you perform are likely to change because of the merger and your resulting new role.
Hint: It may be helpful to make lists of what you imagine to be the circumstances
before and after your appointment. For example, two obvious points of comparison
involve the number of employees (which implies many necessary tasks) and the
travel inherent in the job. See how long a list you are able to generate.
If possible (e.g., within a class or discussion group), after individual lists have
been generated, bring several people together, combine their lists with yours, and
see if a group process can further expand the list.
Also, address the following questions:
1. What does this split-department situation do to your efficiency as a manager,
and how can you compensate for this change?
2. On which specific management skill should the newly appointed splitdepartment manager be concentrating?
NOTES
1. Fast facts. Healthdecisions.org. Americas health insurance plans.
www.healthdecisions.org/learningcenter/facts.aspx.
2. Premiums for Health Insurance Up 12.7%, Rochester (New York) Democrat &
Chronicle, August 31, 2005.
3. K. M. Paget, The Balanced Budget Trap, The American Prospect
(November/December 1996): 12.
4. W. H. Ettinger Jr., The Balanced Budget Act of 1997: Implications for the Practice of
Geriatric Medicine, The Business of Medicine 46 (1998): 530533.
48
CHAPTER 2
The Challenge of Change
CHAPTER OBJECTIVES
Identify the impact of change on organizational life.
Identify the managers role as change agent.
Review examples of successful change.
Examine a major change having ongoing impact.
Describe the organizational change process.
Identify specific strategies for dealing with resistance to change.
THE IMPACT OF CHANGE
Change in the healthcare environment is continuous and challenging; the trends and
issues in the healthcare setting reflect the reality in every stage of the life cycle of
the organization, as well as in its attendant survival strategies. Trends and issues
intensify, becoming mandates for change in patient care, setting, and administrative
support. This affects workers at all levels. Such changes consume financial and
administrative resources; they have the potential of draining emotional and physical
energy away from primary goals. Thus, the managers accept the role of change
agent, seeking to stabilize the organization in the face of change.
THE MANAGER AS CHANGE AGENT
Managers, as the visible leaders of their units, assume the function of change agents.
This change agent role involves moving the trend or issue from challenge to stable
and routine. This is accomplished in several ways:
Mediating imposed change through adjusting patterns of practice, staffing, and
49
administrative routines
Monitoring horizon events through active assessment of trends and issues
Creating a change-ready environment
Taking the lead in accepting change
REVIEW OF SUCCESSFUL CHANGE
Managers foster a change-ready environment by reminding the work group of
successful changes. This raises the comfort level of the group and provides insight
into strategies for achieving desired outcomes. Six examples are provided here to
illustrate the process of successful change:
Year 2000 (Y2K): change as opportunity
Patient Self-Determination Act (PSDA): routinization of change
Health Insurance Portability and Accountability Act (HIPAA): extensive change
via legislation
Electronic health records: proactive change
Economic and market forces: anticipatory readiness through organizational
restructuring
Disruption in personal circumstances: revitalization through career development
Change as Opportunity: Y2K
Recall the transition to the new century: Y2K. The phrase alone reminds us of
successful responses to an inevitable change. It also reminds us of the pre-Y2K
concerns about technology-dependent systems: would they work? Faced with the
possibility of massive systems failure, managers carefully defined the characteristics
of this anticipated change:
1. A definitive event with an exact timetable
2. Well known ahead of time (3- or 4-year run-up)
3. Unknowns or uncertainty mixed with known technical aspects: which systems
might fail, what would the resulting impact be (e.g., failure of power grids,
communication disruption, financial infrastructure chaos)
During the run-up to Y2K, managers assessed the potential impact and planned
accordingly. Furthermore, many managers seized the opportunity to make even
bigger changes. When the cost of upgrading some existing systems was compared
with adopting new systems, managers chose to spend the money and time on a
50
comprehensive overhaul.
Funding such a major project became part of the challenge. Many chose a
combination of borrowing, along with bare bones budgets, with deferred
maintenance and elimination of discretionary projects (e.g., refurbishing) to meet
this need. The end result in many organizations was the adoption of new, wellintegrated computerized systems. This overall plan of upgrading was supplemented
with contingency planning closer to the December 31, 1999, deadline. Managers
took such practical steps as:
Eliminating all backlogs (e.g., coding, billing, transcription)
Preregistering selected patient groups (e.g., prenatal care patients)
Obtaining and warehousing extra supplies
Adjusting staffing patterns for the eve of Y2K and the days immediately
following it, with workers available and trained to carry out manual backup for
critical functions
Managers also took the opportunity to review and update the emergency
preparedness and disaster plans for the healthcare organization. Again, the
anticipated Y2K change was the catalytic agent for renewed efforts in these areas.
Y2K came and ran its course; the change was absorbed with relative ease because of
careful planning.
The Routinization of Change: The Patient SelfDetermination Act of 1990
End-of-life care and related decisions have always been a part of the healthcare
environment. However, technological change (e.g., advances in life support
systems) along with definitive court cases (e.g., Quinlan, Cruzan, Conroy) led to a
renewed interest in these issues. This interest, in turn, resulted in the passage of the
PSDA, which had implications for patient care as well as the administrative support
systems.
The response to this change was orderly and timely because the healthcare
providers and the administrative teams assessed the change in a systematic manner.
This strategy of absorbing change through rapid routinization into existing modes of
practice included the following:
1. Outreach to clients or patients and their families, along with the public at large,
to provide information and guidance about healthcare proxies, advance
directives, and living wills. Information about support services such as social
service, chaplaincy, and hospice care was included as part of the regular
client/patient education programs.
51
2. Review and update of do not resuscitate (DNR) orders and related protocols
for full or selected therapeutic efforts.
3. Review of plan of care protocols for balance of life admissions.
4. Increased emphasis on spiritual and psychological considerations of patients
and families, with documentation through values history or similar
assessments.
5. Renewed involvement of the ethics committee of the medical staff to provide
the healthcare practitioner, patient, and family with guidance. The committee
also adopted review protocols to assess patterns of compliance with advance
directives and end-of-life care.
6. Documentation and related administrative processes augmented to reflect the
details of this sequence of care (e.g., documentation that an advance directive
was made, movement of the document with the patient as he or she changed
location, flagging the chart to indicate the presence of the directive). Existing
policies and procedures were updated to reflect these additional practices.
The changes stemming from the PSDA were easily managed through systematic
review and adjustment of existing, well-established routines. However, there is a
potential downside to routinizing change: the changes might become so well
accepted that they are more or less ignored. For example, the living will becomes
just another piece of paper or data entry, checked off as being available but not truly
part of the care plan.
Because response to legislated change is often required, it is useful to examine
yet another such mandate. A consideration of HIPAA reflects a different dynamic in
the organizational process of responding to new requirements.
Extensive Change via Legislation: Health Insurance
Portability and Accountability Act of 1996
This act, known commonly by the acronym HIPAA, crept inconspicuously on the
scene as Public Law Number 104 of the 191st Congress (PL 104-191). When it was
a newly passed law, its most visible portion was broadly described by the name of
the law, addressing primarily portability of employee health insurance.
The intent of HIPAA was to enable workers to change jobs without fear of losing
healthcare coverage. It enabled workers to move from one employers plan to
anothers without gaps in coverage and without encountering restrictions based on
preexisting conditions. It proclaimed that a worker could move from plan to plan
without disruption of coverage.
In 1996, a great many healthcare managers did not concern themselves with
52
HIPAA. Human resources managers became most aware of the new law because it
concerned their benefits plans, but the burden of notification was borne mostly by
the employers health insurance carriers, so there was little to do other than
answering employees questions. For many managers, the employer had no concerns
about HIPAA beyond ensuring health insurance portability. But HIPAAs major
impact was to come later, and its arrival was a genuine eye-opener for many. This
law consists of five sections: titles I, II, III, IV, and V.
Title II in the Spotlight
Titles I, III, IV, and V of HIPAA deal with employee health insurance, promoting
medical savings accounts, and setting standards for covering long-term care. Title II
is the section driving most HIPAA-related change. This section is called Preventing
Health Care Fraud and Abuse, Administrative Simplification, and Medical Liability
Reform. It is referred to as just Administrative Simplification, a term that is
misleading at best; for many of the organizations that have had to comply with it,
the effects have been anything but simple.
Administrative Simplification includes several requirements designated for
implementation at differing times. Compliance with the Privacy Rule, the most
contentious part of HIPAA, was required by April 14, 2003. Compliance with the
Transactions and Code Sets (TCS) Rule was required by October 16, 2003, and the
Security Rule was set for implementation in April 2005. The Centers for Medicare
and Medicaid Services have issued, and continue to issue, a wide variety of rules
and guidelines, with managers implementing these routinely. HIPAA has become a
fixed feature in healthcare systems.
Nearly all of the controversy over the intent versus the reality of HIPAA involves
the Privacy Rule. In trying to strike a balance between the accessibility of personal
health information by those who truly need it and matters of patient privacy,
portions of HIPAA have created considerable work and expense for healthcare
providers and organizations that do business with them, not to mention creating
inconvenience and frustration for patients and others.
The Continuing Privacy Controversy
Reactions to the Privacy Rule have been numerous. Patients and their advocates
claimed that these new requirements were forcing a choice between access to
medical care and control of their personal medical information. Government,
however, claimed that the rules would successfully balance patient privacy against
the needs of the healthcare industry for information for research promoting public
health objectives and improving the quality of care.
53
When HIPAAs privacy regulations first received widespread exposure,
hospitals, insurers, health maintenance organizations, and others claimed that the
Privacy Rule would impose costly new burdens on the industry. At the same time,
Congress was claiming that HIPAAs protections were immensely popular with
consumers. Consumer advocates hailed the Privacy Rule as a major step toward
comprehensive standards for medical privacy while suggesting that it did not go far
enough.
To comply with the Privacy Rule, affected organizations were required to
Publish policies and procedures addressing the handling of patient medical
information
Train employees in the proper handling of protected health information
Monitor compliance with all requirements for handling protected health
information
Maintain documented proof that all pertinent requirements for information
handling requirements are fulfilled
In many instances, the HIPAA privacy requirements are causing frustration for
patients and others. For example, a spouse who has to help obtain a referral or
follow up on a test result cannot do so without the signed authorization of the patient
(unless the patient is a minor). Anyone other than a minor or a legally incapable or
incapacitated individual must give written permission for anyone else to receive any
of his or her personal medical information.
There are a number of instances in which personal medical information can be
used without patient consent. These instances, along with all patients rights
concerning personal medical information, must be delineated in the Privacy Notice
that every provider organization must provide to every patient.
Effects on an Organization
All healthcare plans and providers must comply with HIPAA. Provider
organizations include physicians and dentists offices; hospitals, nursing homes,
and hospices; home health providers; clinical laboratories; imaging services;
pharmacies, clinics, and freestanding surgical centers and urgent care centers. In
addition, such organizations include any other entities that provide health-related
services to individuals. Also required to comply are other organizations that serve
the direct providers of health care (e.g., billing services and medical equipment
dealers). All affected organizations must
Protect patient information from unauthorized use or distribution and from
malfeasance and misuse
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Implement specific data formats and code sets for consistency of information
processing and preservation
Set up audit mechanisms to safeguard against fraud and abuse
All subcontractors, suppliers, or others coming into contact with protected patient
information are also required to comply with the HIPAA Privacy Rule. In addition,
all arrangements with such entities must define the acceptable uses of patient
information.
Depending on organization size and structure, compliance with the HIPAA
Privacy Rule could involve several departments (as in a mid-size to large hospital), a
few people (as in a small hospital or nursing home), or a single person (as in a small
medical office). Overall, whether compliance is accomplished by separate
departments or just a person or two, compliance can involve a number of activities,
including information technology, health information management, social services,
finance, administration, and ancillary or supporting services.
The necessary changes have been numerous and have added to the workload in
every affected area. Providers routinely obtain written consent from patients or their
legal representatives for the use or disclosure of information in their medical
records, as had been the standard practice. However, renewed attention has been
focused on release of information practices. Also, providers are now legally required
to disclose when patient information has been improperly accessed or disclosed.
The Privacy Rule created a widespread need for healthcare providers to revise
their systems to protect patient information and combat misuse and abuse. Providers
now must protect patient information in all forms, implement specific data formats
and code sets, monitor compliance within their organizations, implement appropriate
policies and procedures, provide training all in HIPAAs privacy requirements, and
require the organizations outside business partners to return or destroy protected
information once it is no longer needed. Also, it is not enough simply to do
everything that is supposed to be done: there are also a number of documentation
requirements as well. Even a provider organizations telecommuting or home-based
program must be HIPAA compliant.
Physical Layout Considerations
The HIPAA Privacy Rule has necessitated changes in physical arrangements to
ensure that no one other than the patient and caregiver or other legitimately involved
person knows the nature of the patients problemor even, for that matter, that the
specific individual is a patient. Medical orders or information about an individuals
condition must be conveyed with a guarantee of privacy. Numerous organizations
had to move desks or workstations, erect privacy partitions, provide soundproofing,
and make other alterations so that no one other than those who are legally entitled to
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hear may overhear what passes between patient or representative and a legitimately
concerned party.
The Privacy Official
Every healthcare provider organization must have a person designated to oversee
HIPAA compliance. In a large organization, this position could be filled by a fulltime HIPAA coordinator. In a small organization, such as a medical office, the task
might be an additional responsibility of the office manager. This person must
monitor all aspects of compliance and ensure that appropriate policies and
procedures are maintained and kept current. Professional associations, including the
American Health Information Management Association (AHIMA), have developed
detailed position descriptions and guidelines for privacy officers.
The Department Manager and HIPAA
Depending on the nature of a departments activity, HIPAAs requirements could
significantly affect the managers role. For example, in addition to most managers
involvement with the Privacy Rule, some person working in health information
management must be concerned with the TCS rule. A manager within information
technology or information systems will be significantly concerned with the Security
Rule because of its relevance for information stored or transmitted electronically.
As with other laws affecting the workplace, there is much more to compliance
with HIPAA than simply putting policies, procedures, and systems in place. Some
HIPAA regulations are complex, and in the most heavily affected areas of an
organization, considerable training can be required. Also, HIPAA necessitates some
training for most staff regardless of department; any person who comes into contact
with protected patient information must receive privacy training. As a consequence,
most managers will be both trainees and trainers, learning HIPAAs privacy
requirements and communicating them to employees.
Not Going Away
Some HIPAA requirements continue to be amplified, and it is clear that the laws
basic privacy requirements are here to stay in one form or another. Privacy rules will
continue to affect every physician, patient, hospital, pharmacy, healthcare provider,
and all other entities having contact with patient medical information in any form.
The American Recovery and Reinvestment Act of 2009 and the related Health
Information Technology for Economic and Clinical Health Act amplify privacy
practices, with particular emphasis on breach notification. The breach notification
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provisions include detailed regulations touching on the following issues:
Notification of individuals if there is significant risk of financial, reputational,
or other harm
Time frames and manner of notification
Tracking and reporting
Internal compliance monitoring systems
HIPAA has brought with it a considerable amount of unwelcome, unwanted, and
frequently burdensome change affecting the jobs of many healthcare managers.
Because the requirements of HIPAA are government mandates, the individual
manager has no option but to comply. The managers challenge, then, is to
conscientiously approach the necessary changes in the role and incorporate them so
that they are addressed as efficiently and effectively as possible.
As an unexpected positive outcome of HIPAA-related actions, the health
information management environment has been primed to undertake major efforts in
expanding electronic health records.
A Study in Proactive Change: Electronic Health Records
Implementation of electronic health records reflects a proactive approach to change.
The application of technology to enhance the creation and use of healthcare
information has been a welcome advance. The migration from hard copy records
and systems to automated ones represents change, both incremental and rapid. Data
gathering and analysis via punched cards in the early 1960s was a precursor of
advances to come. As the country became accustomed to electronic capture,
exchange, and use of information as a result of the new technology (the credit card
easy to use, easy to carry), smart cards with embedded personal health
information were a highlight in the early 1970s. Why not apply the same idea to
ones personal information? Applications of smart cards in the late 1980s included
patients use of interactive behavioral healthcare protocols. Throughout this period,
automated and outsourced administrative processes were adopted readily. The Y2K
events occasioned a thorough review of systems. Advances in technology, plus
related legislation in favor of electronic health records, have resulted in rapid change
and a cascade of changes. Note, by way of example, the adoption of Health Level-7
standards, the creation of a national health information technology coordinator and
the national health information technology plan, and such specific legislation as the
Medical Modernization Act and its mandates concerning electronic prescription
systems.
The electronic health record incentive program provided an additional catalyst
for the adoption of this massive system change. Yes, the technology is continually
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evolving, but the underlying principle is enduring: quality health information for use
in patient care, research, and administrative support. Legislative mandates requiring
universal adoption of electronic health records further reinforce this ongoing
professional mission.
Health information practitioners have taken leadership roles in their workplaces
and through their national association, AHIMA, along with its state component
organizations. A strategy for proactive engagement with these changes was
developed and continues to be applied as the migration from hard copy to electronic
information systems unfolds. The overall strategy has six features:
1. Individual initiative within the workplace
2. Advocacy in the public arena
3. Partnership with key stakeholders
4. Outreach to clients and patients
5. Continual adjustments to information systems
6. Reassessment of health information management job roles and credentialing
Individual Initiative
Within the workplace, individual health information managers have steadily adopted
computer technology to support basic operations. Workflow and processes have
been gradually converted over time, including automated master patient indexes,
coding and reimbursement processes, digital imaging, and speech recognition
dictation. Internal administrative systems have served as building blocks for the
expansion of computerized systems to include electronic health records. Although
individual initiative continues to be an important facet of this transition, fostering
change through advocacy has been primarily an organized group effort through the
national association, AHIMA.
Advocacy in the Public Arena
External forces, particularly law and regulation, are affecting the process of
developing electronic health records. It is essential, then, that professional
practitioners help shape the debate, contributing their knowledge and expertise
through organized efforts. Regular interaction with lawmakers and regulatory
agency officials has been central to this process. Participation in work groups, task
forces, and special initiatives has been steady. Landmark events bear the imprint of
such involvement, including the Centers for Disease Control and Preventions
Public Health Information Network to implement the Consolidated Health
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Informatics standards, the Public Health Data Standards Consortium, the
Department of Health and Human Services (DHHS), the American Health
Information Community and its initiatives toward creating a national health
information network, and the Certification Commission for Healthcare Information
Technology.
Partnerships with Key Stakeholders
The health information profession has long been the authoritative source of practice
standards. With the advent of electronic health records, many of the questions that
have arisen are variations of issues with which health information management
practitioners have successfully dealt. Those experiences have prepared these
practitioners to offer guidance in such areas as documentation content and
standardization, authentication of documentation, informed consent, accuracy of
patient information, access and authorized use of data, and data security.
AHIMA has developed a series of position papers, statements of best practices,
and guidelines for these and related topics. This organization has strengthened its
efforts through partnership with key stakeholders, as the following examples
demonstrate
American Health Information Community (DHHS): standards for electronic
health data
American Medical Informatics Association: data standards
Medical Group Management Association: performance improvements and need
for consistent data standards
National Library of Medicine: data mapping (e.g., Systematized Nomenclature
of Medicine and International Classification of Disease interface)
American Society for Testing and Materials and its committee on health
informatics: core data elements and definitions
Corporate partner industry briefings: cosponsored exchange sessions
Through these and similar outreach efforts, AHIMA makes available valuable
guidance to those involved in adopting electronic health records.
Another major initiative by AHIMA has been the move toward open
membership. In recognition of the important partnership with information
technology specialists, clinicians, and others with a shared interest in health
information, as well as to foster even greater teamwork, the AHIMA members voted
to eliminate associate membership, moving this group into the active membership
category. An open, inclusive membership provides additional strength to the
association in its efforts to support the electronic health record initiative.
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Outreach to Clients and Patients
Consumers are an important partner in the effective use of electronic health records.
AHIMA has developed an initiative to raise public awareness of these personal
health records. As part of this initiative, individual health information practitioners,
using AHIMA-created presentations, interact at local and regional levels with
consumer groups such as local chambers of commerce, health fair coordinators, and
specialty support groups (e.g., cancer support groups). Participation in the Blue
Button initiative (begun by the Department of Veterans Affairs) has provided
another opportunity to educate the public about electronic health records.
Presentations and articles by health information management professionals
concerning the health information exchange or how to explanations about
accessing an electronic health record for ones personal use have fostered patient
engagement in this unfolding endeavor.
An important adjunct to this outreach is advocacy. Clients and patients must
continue to have trust in the process of revealing their personal information fully and
truthfully during healthcare interactions. AHIMA continues to press for specific
protective legislation with a nondiscrimination focus: protect the patient from any
discriminatory action stemming from documented information about patient care
encounters.
Continual Adjustments to Information Systems
In summary, electronic health record initiatives reflect the best in proactive
involvement by managers in facing major change. As the transition from paper to
electronic records continues, AHIMA has provided position papers, best practices
guidelines, and training materials including document imaging to link paper
documents to electronic health records, along with retention guidelines for
postscanning management of data; copy and paste guidelines; making corrections,
amendments, and deletions to ensure record integrity; the definition of the legal
record; and e-discovery rules under federal rules of civil procedures.
Reassessing Health Information Management Job Roles and
Credentialing
The changing landscape of health information management job roles and functions
has produced associations that periodically review this work. Such evaluation has
become a more urgent priority as attention to the need to reassess both traditional
jobs as well as emerging ones. Logical steps have included identifying the new
configuration of jobs and role sets, identifying the associated knowledge and
competencies, and developing and expanding the educational preparatory levels
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(associate, bachelors, and masters degrees, as well as graduate certificate in
healthcare informatics). The credentialing process has also been expanded to include
new categories of specialization (e.g., Certified Documentation Improvement
Practitioner, Certification in Healthcare Privacy and Security).
Economic and Market Forces: Anticipatory Readiness
Through Organizational Restructuring
Sometimes an organization as a whole faces severe circumstances caused by
economic and market forces. Consider the situation of a facility offering two levels
of care for frail, elderly people: personal care and assisted living. This facility
opened 40 years ago and has been in the same physical building since then. It has
had a history of modest but steady success. An analysis of the balance sheet
reflected breakeven points for 11 of the 40 years and 14 years of modest profit. Only
the first few years showed yearly losses, primarily because of startup costs. Then,
most recently, there was a 5-year run of steady loss and increased debt, due to
increased competition in local market and to the need for expensive renovations to
the 40-year old physical facility. Decreasing reimbursement rates from third-party
payers added to this erosion of revenue.
To reverse this trend, the management team undertook the process of preparing
the organization to survive and thrive in a new era. The team restructured the
organization. It also anticipated probable changes in state law, including those
leading to a decrease in skilled care beds through a buy-back provision. Decreased
reimbursement for this level of care gave the organization an additional reason to
convert some units to increase the size of its dementia care service. Assisted living
care was discontinued. The assisted living building was converted to additional
personal care and respite care, plus an adult day care center. Comprehensive home
care services, using a contractual provider, rounded out the reconfigured services.
Through all of these efforts, the organization emerged from its threatened state and
became a leading provider in its geographic region.
Disruption in Personal Circumstances: Revitalization
Through Career Development
The individual is certainly not immune to the pressure of change. Consider the
situation of the health information professional whose family circumstances require
increased income over the next several years. This credentialed practitioner had
been working part-time as a coding specialist in a community hospital. There were
no anticipated resignations in the department management team, and internal
advancement was unlikely. Furthermore, this woman needed to remain in the region
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for family reasons. Recognizing the constraints in her situation, she made and
implemented a plan for advancement. First, she utilized the AHIMA career
development and self-assessment program to identify competencies needing
upgrading. While continuing to work, she undertook masters degree studies in
health informatics and participated in several projects. These projects included
research in correctional facilities, juvenile detention centers, and protective service
agencies. Through this health information professionals involvement in local civic
activity, an opportunity developed for her to work in first local, and then regional,
correctional facilities. She worked first as a part-time consultant and then as the fulltime director of the health information department. Both her personal and
professional goals were met.
Using the foregoing examples as background, let us now consider the theoretical
aspects of organizational change.
CHANGE AND RESISTANCE TO CHANGE
Change is inevitable, but change can also be chaotic and painful. Alfred North
Whitehead once said, The art of progress is to preserve order amid change and to
preserve change amid order. That statement captures the essence of change and its
effects on all of life. Much change is beneficial, even necessary, but change is often
upsetting and unsettling and thus must be controlled. For good or ill, change is
inevitable. So, too, is resistance to change inevitable.
This section addresses the inevitability of change, including how, as individuals,
we tend to deal with change and how, as managers, we can deal with employee
resistance to change. In discussing this topic, it is necessary to look at individual
attitudes toward change, those of both managers and employees alike, because
resistance is a human reaction that can arise in anyone regardless of organizational
position. In other words, the manager who is expected to be a change agent and
supportive of inevitable change may initially experience feelings of resistance
equivalent to those of the employee. It is also necessary to consider how to meet
change when it occurs and how to make change work.
Significant changechange that has the power to confuse, frustrate, and very
nearly overwhelmis a frequent modern concern. Broadscale change has been a
phenomenon affecting only the recent few generations, and for the most part people
remain unable to shake off centuries of programming that causes them to dig in their
heels and resist when change that they neither want nor welcome threatens to pull
them down.
The Collision of Constancy and Change
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Humans have been thoroughly conditioned by many centuries of little or no change
to expect constancy. Up until a few decades ago, an individual could adopt a career
and with few exceptions expect to remain in that career for a lifetime. The effects of
the knowledge explosion and the Industrial Revolution that preceded it, however,
included changes that rendered some occupations obsolete or changed them
dramatically. Occupations that had existed for several generations all but vanished
as machines took over work that had long been done by hand. Entire industries
disappeared. For example, whaling, once an economic mainstay of the northeastern
United States, shriveled and died as petroleum products replaced whale oil. Many
individuals have seen their jobs and careers disappear as a consequence of change
that continues to accelerate to this day.
Those working in the delivery of health care have seen and are seeing new
medical technologies arise to either replace or augment existing technologies, in
some instances making it necessary for workers to learn new skills or seek new
occupations. Some individuals still working in diagnostic imaging were first
employed when imaging was entirely X-ray; these people have seen the addition of
the computerized axial tomography (CAT) scan, magnetic resonance imaging
(MRI), positron emission tomography (PET) scan, and other technologies. One
technologist who had been employed in a hospital laboratory for 30 years observed
that more than 80% of the tests she performed on a routine basis did not exist when
she first entered the field. A professional in another field, comparing the changes in
college course curricula in his field over a period of 30 years, observed that he
would have to take one or two new courses each semester for the rest of his life to
remain completely current with the pace of change in his field.
On a simpler level, for the conduct of routine business functions, whether in
health care or elsewhere, where have all the typewriters (and typewriter makers)
gone? And considering the rapid advances in electronics that are seeing devices
becoming both smaller and more powerful, one might soon be inspired to ask, where
have the personal computers gone?
People have been conditioned by centuries of little change to expect constancy or
near-constancy. That, plus a natural tendency to seek equilibrium with the
surroundings, conditions many people to be automatic resisters of change. They are
continually attempting to preserve equilibrium with the environment, and whenever
it is disturbed they tend to take steps to reestablish that equilibriumto return to a
comfort zone. Certainly not all people behave in the same manner, but it is likely
that most people seek equilibrium with their surroundings and tend to equate
security with constancy. Indeed, security was once likely to be found in adopting an
occupation and doing it well for life or in remaining a loyal employee of one
organization for life. No longer, however, is there security in constancy; rather,
todays security, to the extent that it may exist, lies in flexibility and adaptability.
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The Roots of Resistance
The principal cause of most resistance to change is the disturbance of the previously
mentioned equilibrium. Resistance will, of course, be influenced considerably by
ones knowledge of where a given change is coming from. It is unlikely that a
person will resist a change with which he or she wholeheartedly agrees or one that is
his or her own idea to begin with. The person does not resist such a change because
it is welcome and, therefore, does not threaten ones equilibrium. Thus it is not
change itself that people resist but rather being changedbeing made to change by
forces or circumstances outside of themselves.
A secondary major cause of resistance lies in the inability of people to mentally
conceive of certain possibilities or think beyond the boundaries of what they
presently know or believe. The limitations imposed by what people know and what
they believe can provide significant barriers to creativity and progress. Ideas that are
today deemed revolutionary were not originally welcomed with open minds. Many
people we have come to think of as innovators and visionaries were, in their day,
regarded as dreamers, charlatans, or crackpots. Here are four examples.
1. Barely 2 months before the Wright brothers flew, a noted scientist publicly
explained why a heavier-than-air flying machine could never work. However,
the brothers went ahead and flew anyway; they had an advantage in not
knowing it couldnt be done.
2. A device called a telephone was branded a fraud, with an expert
proclaiming that even if it were possible to transmit human voice over wires,
the device would have no practical value.
3. When television was new, the head of a major Hollywood studio proclaimed
that people would soon get tired of staring at a plywood box every night.
4. Even in the field of medicine, change has often been thought impossible: in
1837, leading British surgeon Sir John Erichson stated that the abdomen, the
chest, and the brain would forever be shut from the intrusion of the wise and
humane surgeon. Note as well that many people alive today once thought that
surgery on a living heart would never be possible.
To a considerable extent, then, the roots of resistance to change are within human
beings themselves.
Primary Causes of Resistance
Concerning change that occurs in the workplace, people tend to be thrown off
balance by changes that are thrust on them and especially by the way in which many
of these changes are introduced. Common sources of change in the work
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organization occur in many areas:
Organizational structure, when departments are altered or interdepartmental
relationships or management reporting relationships are changed, including the
changes that result from merger, affiliation, or system formation
Management, whether in a department, a division, or an entire organization
Product or service lines, as services are added, dropped, or altered significantly
Introduction of new technology, bringing with it new equipment that employees
must learn to use
Job restructuring, altering the duties of particular jobs, such as combining jobs
that were formerly separate
Methods and procedures, requiring workers to learn new ways of doing their
jobs
The organizations policies, especially personnel policies affecting terms and
conditions of employment
Consider how muchor perhaps how littlecontrol the average rank-and-file
employee or the typical department manager can exert over the foregoing changes.
In most instances, the individual is essentially powerless. Managers and some
employees might perhaps have a voice in restructuring jobs and altering methods
and procedures, and perhaps they might be involved in selecting or recommending
new equipment, but chances are they have little or no voice in the decisions
necessitating such changes. It is doubtful that many employees or managers below
the level of executive management have any influence on changes in products or
services. And concerning the remainder of the major sources of change described
significant sources of stress and resistance for managers and employees alikerankand-file employees and their department managers are powerless.
Organizational Changes
Depending on the extent of reorganization, structural changes within a healthcare
organization, such as combining departments or groups or realigning departments
under different executives, can engender ill feelings and generate considerable
resistance. Most department managers and their employees are well aware that
reorganizing under any namereengineering, downsizing, whateveroften means
that some people will lose their jobs, so fear and insecurity and thus resistance
increase while productivity inevitably decreases. Even more likely to upset
employees are the changes accompanying merger or other form of affiliation,
acquisition by a larger organization, or health system formation.
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Management Changes
Changes in management are among the most potentially upsetting changes
employees can experience. The stress of a management change, and thus the
resistance to it, is concentrated within the hierarchy beneath the management
position that is turning over; therefore, a change in department manager will affect
primarily that department, whereas a change in chief executive officer will affect the
entire organization. A change in management almost always involves exchanging a
known quantity for a complete or partial unknown, and it is fear and apprehension
concerning the unknown that causes most initial resistance to management changes.
Policy Changes
Major changes in the policies of the organization, especially personnel policies
affecting terms and conditions of employment, are likely to spark a certain amount
of employee resistance, especially if employees perceive they are losing something.
In these years of fiscal belt-tightening, it is not uncommon to see, for example,
employers in health care and elsewhere shifting an increasing portion of evergrowing health insurance costs to employees, or reducing the corporate contribution
to defined-contribution retirement plans or other investment plans, or reducing the
sick-time benefit and combining the remainder with vacation and personal time in
paid time off plans. Such policy changes have inspired so much resistance for
some employers that they have become major issues in union organizing campaigns
and labor contract negotiations.
Many Causes
Resistance can occur anywhere, resulting from almost any change within an
organization, often arising in situations that no one had thought would prompt any
objections. Times of relative turmoil in health care, with all of the fallout of merger
mania and all of the cost-reducing and cost-saving pressures brought to bear on the
healthcare delivery system, finds the healthcare workerand the healthcare
manager as wellworking in an environment of intensifying change and an eroding
sense of security.
Meeting Change Head-On
The healthcare department manager is in a uniquely difficult position relative to
change that has an impact on the healthcare organization. As an employee, the
manager is just as affected by change as the rank-and-file employees and is just as
likely to feel helpless, demoralized, and resistant. Yet it is up to the manager to try
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to minimize the negative reactions of the work group and attempt to raise employee
morale and ensure continued productivity. If the manager openly projects doom,
gloom, and resistance, the staff will be all the more likely to become more deeply
mired in doom, gloom, and resistance themselves, ensuring that morale and
productivity both suffer. It can be a most difficult role for the manager to function as
cheerleader when there seems to be nothing to cheer about. Yet the manager must
make a conscious effort to rise above all the negative thinking. Succeeding at doing
so is largely a matter of attitude, including the willingness to take a moderate
amount of risk.
Flexibility and Adaptability
As noted, people can no longer find security in constancy, maintaining loyalty to the
same ideas, concepts, and institutions for life. Rather, security, to whatever extent it
exists today, is more likely found in flexibility and adaptability. The manager who
remains rooted in place, with a fixed set of ideas and an unchanging concept of the
job, will not be particularly successful; however, the manager who can move about,
who can flex and adapt as circumstances change, stands a much greater chance of
success. Also, to enhance the departments chances of success in adjusting to
changing circumstances, the manager must be a role model for flexibility and
adaptability.
A department manager may be able to help some employees increase their
flexibility by instituting cross-training wherever possible. For cross-training to be
effective, it is necessary that there be a number of employees distributed across
multiple jobs of approximately the same skill or grade level; thus, it is not possible
in every department. When cross-training is possible, however, there are benefits for
employee, department, and organization alike. With people trained in multiple
activities, coverage for vacations and other absences is more readily accomplished,
employees get the advantages of task variety, and employees may become more
secure during times of readjustment by being capable of moving into certain other
jobs, already trained and competent.
A Matter of Control
The department manager who becomes caught up in a sea of change should
immediately learn the difference between what can be controlled and what cannot be
controlled. Much energy is wasted in trying to control that which is uncontrollable.
For example, a manager may be greatly stressed about an impending merger and
subsequent combination of departments, but there is nothing that the manager can
do about it; it will happen whether he or she wishes it or not.
Stress as a response to change, both real and impending, is an emotional reaction.
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An important early step in gaining a measure of control over ones circumstances is
learning to control ones emotions. A person may have little or no control over the
changes themselves; however, he or she has complete control over how ones
response to the changes.
Fortunately, there are usually a few factors that the individual department
manager can control to some extent. Reorganizing or reengineering frequently
results in the need to combine positions and restructure a number of jobsthat is,
change job descriptions, assignments, crew or team sizes, equipment, or later
services. These actions usually entail changes in methods and procedures, changes
that can be determined in detail within the department by the manager, often with
the participation of the employees.
Addressing Resistance with Employees
A manager responsible for implementing change has three available avenues along
which to approach employees regarding a specific change. The manager can (1)
simply tell them what to do, (2) convince them of the necessity for doing it, or (3)
involve them in planning for the change.
Tell Them
The use of specific orders or commands is one of the hallmarks of the autocratic or
authoritarian leader. The boss is the boss, a giver of orders who either makes a
decision and orders its implementation or relays without expansion or clarification
the mandate from above.
The authoritarian approach is sometimes necessary; occasionally, it is the only
option available under urgent or completely unanticipated circumstances. However,
in most situations the tell-them approach is the approach most likely to generate
resistance, so it should be used in only those rare instances when it is the only means
available.
Convince Them
In most instances, including those in which the change in question is an absolute
mandate from top management, the individual manager has room for explanation
and persuasion. At the very least, there is the opportunity to try making each
employee aware of the reasons for the change and the necessity for its
implementation. It may be necessary for the manager to champion the cause of
something clearly distasteful to all concerned (except, most likely, to those
mandating compliance) because it may be good for the institution overall or good
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for patients, or even perhaps because it is mandated by new government regulations.
The employees may not like what they are called on to do, but they are more likely
to respond as needed if they know and understand why the change must be
implemented.
The employees deserve all the information available, and this information often
serves the manager well because it can remove the shadow of the unknown from the
employees and thus lessen their resistance. Few, if any, changes cannot be
approached by this means. The authoritarian tell-them approach should be
reserved as a last resort to be used on those occasions when employees clearly
cannot be sold on the change.
Involve Them
Whenever possible, and especially if it affects the way they do their assigned jobs,
employees should become involved in shaping the details of any particular change.
It has been repeatedly demonstrated that employees are far more likely to
understand and comply when they have a voice in determining the form and
substance of the change. For example, if new equipment is under consideration and
there is sufficient lead time, it is helpful to obtain the input of the people who will
have to work with the equipment once it is in place. This sort of involvement not
only enhances employee cooperation but often leads to a better decision because of
the perspective of the people doing the hands-on work. When expansion or
remodeling will change the characteristics of the department, employee input in the
planning stages will bring the workers perspective into determining optimal layout
and work flow. Through involvement, change can become a positive force.
Employees will be more likely to comply because they own part of the change; in
effect, a piece of it is their idea.
There is another potential benefit to involvement as well: employee knowledge of
the details of the work in ways the manager may never have. The manager
supervises a number of tasks, some of which he or she may have once done
personally. However, the employees regularly perform in hands-on fashion the tasks
the manager only oversees. Thus, the employees usually know the details of the
work far better than the manager and are in a better position to provide the basis for
positive change in task performance.
The numerous sources of management advice that promote the value of employee
involvement are correct. The participative and consultative approaches to
management are the best ways of getting things done through employees. The most
effective ways of reducing or removing the fear of the unknown make full use of
communication and involvement.
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Guidelines for Effective Management of Change
To secure employee cooperation and participation and successfully manage change
in the workplace, it is necessary for the manager to take the following steps:
Plan thoroughly. Fully evaluate the potential change and examine all
implications of its potential impact on the department and the total
organization.
Communicate fully. Completely communicate the change, starting early,
ensuring that the employees are not taken by surprise. This should ideally be
two-way communication, preparing the way for employees involvement by
soliciting their comments or suggestions.
Convince employees. As necessary, take steps to sell employees on the value
and benefits of the proposed change. When possible, appeal to employees selfinterest, letting them know how they stand to benefit from the change and how
it might make their work easier.
Involve employees when possible. It is not possible to completely involve
employees in all matters, but involvement is nevertheless possible on many
occasions. Be especially aware of the value of employees as a source of job
knowledge, and tap this source not only for the acceptance of change but also
for the development of improvements.
Monitor implementation. As with the implementation of any decision, monitor
the implementation of any change until the new way is established as part of
the accepted work pattern. A new work method, dependent for its success on
willing adoption by individual employees, can be introduced in a burst of
enthusiasm. Do not let it die of its own weight as the novelty wears off and old
habits return. New habits are not easily formed, and the employees need all the
help the manager can furnish through conscientious follow-up.
True Resistance
Resistance to change will never be completely eliminated. People possess differing
degrees of flexibility and exhibit varying degrees of acceptance of ideas that are not
purely their own. However, involvement helps, and the manager will eventually
discover, if not already having done so, that most employees are willing to
cooperate and genuinely want to contribute. Beyond involvement, however,
continuing communication is the key. Full knowledge and understanding of what is
happening and why it is happening are the strongest forces the manager can bring to
bear on the problems of resistance to change. Ultimately, one will discover that it is
not change that people resist so much as they resist being changed.
In addition to applying the foregoing strategies, managers facilitate their response
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to change by
1. Recommitting to the full spectrum of their role through a review of the
enduring functions of the manager
2. Remaining attentive to
Developments in the history of management and the ways in which
managers adjusted their focus from time to time
Shifts in organizational life from informal to formal, stable organizational
patterns
Opportunities for building a strong network of internal and external
relationships
ONE MORE CHALLENGE: THE PATIENT
PROTECTION AND AFFORDABLE CARE ACT
OF 2010
The major legislation known as the Patient Protection and Affordable Care Act of
2010, more commonly referred to as the Affordable Care Act, affects the healthcare
system at all levels. Middle managers need to use all of the strategies described in
this chapter to deal with the massive changes associated with this legislation
focusing on the provision of affordable care and healthcare reform. They need to
take into account the political aspects of the legislations passage, which are likely
to lead to further amendments, deletions, and changes in its implementation time
frame. The federal mandates, in turn, will generate companion state-level
legislation. More than 100 regulatory agencies, boards, and councils are empowered
to issue guidelines and mandatory regulations. The designated time frame for the
implementation of the federal law is from 2010 to 2018. Thus, many people face an
almost decade-long period of sustained change.
The manager who has a positive attitude will more easily respond to these
challenges than one who is resistant. Flexibility, creativity, and attentiveness to the
unfolding mandatesthese traits will serve the manager well. A commitment to
factual analysis will lead the manager to develop a system for monitoring the details
of this law. For guidance, the manager should turn to trusted sources, such as
professional associationsespecially these organizations legislative divisions,
which monitor primary documents such as federal and state regulation publications.
The manager might partner with several peers in the work setting to study the
unfolding mandates and share insight about their impact.
Following is a suggested template for use in tracking these changes. A few
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examples are included under the headings as a starter.
Impact on the organizational setting
Increase in community health centers
Development of independence-at-home programs
Creation of community-based transition programs for Medicare patients at
high risk for readmission to acute care
Phasing out of physician-owned specialty hospitals
Increase in use of observation units as a bridge between emergency care and
admission/readmission to inpatient care
Patterns of care
Increase in use of outcome measurement for clinical effectiveness research
Implementation of wellness programs and preventive care (e.g., smoking
cessation counseling)
Wellness care incentives
Increased emphasis on coordination of care for all stages of care, with
particular attention to discharge planning and reduction of preventable
readmission within 30 days
Creation of medical homes or health homes programs (i.e., a decentralized
coordinator of care) for chronic illness care. (Note: The term homes is not
used to denote a place to live; in this context, it means the primary caregiver
who coordinates various aspects of care including referrals to specialists.)
Practitioners
Increased funding for training
Increased utilization of physician assistants and nurse practitioners
Increased roles for pharmacists in direct counseling of patients concerning
medication management
Clients
Increased numbers as individuals come under new health insurance coverage
Surge in demand for specific services as coverage for these services unfolds
(e.g., free annual physical examination)
Increased need for client education about the details of coverage and the
time frames associated with various benefits (e.g., preexisting conditions
coverage starts in 2010 for children but does not begin for adults until 2014)
Increased need to capture eligibility data (e.g., income levels, prescription
medication expenses for the benefit period, Medicare or Medicaid coverage)
Increased sensitivity to patients concerns about their coverage and their
continued access to care. This involves the development of trusted adviser
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contacts who assist clients with their understanding of their eligibility for,
and coverage options, with regard to healthcare insurance plans
Employees
Need for timely information about changes in health insurance coverage,
copayments, and deductibles
Need for annual information (on W-2 forms) about the dollar value of the
health insurance fringe benefit
Concern for job security when the organizational setting changes
Questions about job rotation (e.g., if mergers occur or if community-based
programs are developed, will the employee be obliged to rotate among
various geographic locations?)
Need for more frequent continuing education (e.g., intake processing and
health insurance questions)
Specific systems impact
Budget adjustments to include resources for more frequent continuing
education
Increase in fraud detection processes
Increase in patient-centered outcomes standards research and studies
Increase in monitoring of discharge planning, coordination of care,
readmission rates, and supportive rationale
The manager constantly attends to change, meets it through managing the
organization through its life cycle, uses strategies for organizational adaptation and
survival, and strengthens the organizations relationships with key constituents and
stakeholders. These concepts are discussed in subsequent chapters.
CASE: IN NEED OF IMPROVEMENT?
You are an administrative staff specialist newly employed by the hospital to act as a
management engineer and address a number of issues relating to operating
efficiency. Your first assignment is to analyze work methods and staffing in the
central sterile supply division of materials management. The department was singled
out for study for the following reasons:
The managera registered nurse who has held the job for more than 25 years
has requested two more processing aides, although her staff is already one
person larger than that of another area hospital of equivalent size.
There has been a recent, seemingly unexplainable, upturn in the consumption of
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disposables.
A number of storage shelves appear to be stocked to overflowing with
infrequently used items.
The department issues frequent rush orders to obtain needed items that have
completely disappeared.
Observed conditions in the department include an overcrowded storage area, a
seemingly inadequate decontamination area, and a grossly oversized processing
area referred to by most employees as the ballroom.
On your initial visit to the department, the first thing the manager says to you is,
So youre the one whos going to tell us what were doing wrong? Her tone is
none too friendly.
Instructions
Develop a proposed approach to a complete study of the department, including the
sales pitch you would use to try to win the managers cooperation and support.
Specify what should be done, why it should be done, and how you propose to
address the inevitable resistance of both manager and staff.
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CHAPTER 3
Organizational Adaptation and
Survival
CHAPTER OBJECTIVES
Present the concept of the organization as a total system.
Describe the evolution of the total system approach to management.
Describe the development and characteristics of the formal organization.
Identify the approaches to the classification of organizations and apply these
to the healthcare organization.
Introduce the concept of the clientele network and describe the application
of these components to the healthcare organization.
Identify the need for organizational survival as a fundamental goal of
organizational effort.
Describe selected management strategies used to enhance organizational
survival.
Analyze the phases of the organizational life cycle that reflect major changes
in the organization and relate these to the functions of the manager.
THE ORGANIZATION AS A TOTAL SYSTEM
The managers environment is the formal organization, with its multiple aspects and
ever changing dynamics. The effective manager knows the internal and external
dynamics of the organization: its strengths and vulnerabilities, challenges to its
survival, areas requiring adaptation and innovation, its life cycle, its network of
internal and external relationships, and its survival strategies.
There is a subtlety to the interaction of these dimensions of organizational life.
Although much is written down in the organizations major documents (e.g., its
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formal history, mission statement, policies, procedures, organizational charts), there
are other layers of interaction about which the manager has both an interest and a
concern. There is a kind of tribal knowledge within an organization; there are
early warning cues about conflict, change, and opportunity. A manager does not
want to miss these important signals or be blind-sided. Thus, the astute manager
drills down into the fabric of the organization, using the tools mentioned above. The
manager observes both the broad characteristics of the organization along with
noting the fine details. In addition, the manager views the organization as a total
system: the work per se, the workers, the clients, the internal and external mandates
and requirements, and the interaction of the public-at-large with the organization.
An organization does not exist in a static world; rather, it is in a continual state of
transaction with its environment. As an open system, the organization receives
inputs from its environment, acts on them and is acted on by them, and produces
outputs such as goods and services (and even organizational survival, which can be
considered an essential output.) Consequently, the organizational environment
consists of both internal and external components. The specific functions of the
manager are modified by the organizational environment (i.e., the specific attributes
of the given work setting).
Classical organizational theory provides the manager with concepts to assess the
organizational environment, including the following:
Examination of its characteristics and components through a typology of
organizations
Analysis of its clientele network
Review of its life cycle
Managers are enabled, through continual monitoring of the environment, to
anticipate change and prepare for it rather than dealing with it through reactive
responses. A short review of the history of management is a starting place for
identifying past practice and current trends.
THE HISTORY OF MANAGEMENT
Knowledge of the history of management provides a framework within which
contemporary managerial challenges may be reviewed. Modern managers benefit
from the experiences of their predecessors. They may assess current problems and
plan solutions by using theories that have been developed and tested over time.
Contemporary executives may take from past approaches the elements that have
been proved successful and seek to integrate them into a unified system of modern
management practice.
1
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In an examination of the phases in management history, it must be remembered
that history is not completely linear. Any period in history involves the interplay of
components that cannot be separated into distinct elements, and each period is part
of a continuum of events. The specific features of management history phases given
here are intended to exemplify the predominant emphasis within each period and are
only highlights.
Another cautionary note is warranted in regard to assigning dates to various
periods. The dates given here are intended as guides. There is no precise day and
year when one school of thought or predominant approach began or ended. As in
any study of history, the dates suggest approximate periods when particular
practices were developed and applied with sufficient regularity as to constitute a
school of management thought or a predominant approach. The classic concepts
presented here provide a base for ongoing research and study about formal
organizations.
Scientific Management
The work of Frederick Taylor (18651915) forms the commonly accepted basis of
scientific management. Taylor started as a day laborer in a steel mill, advanced to
foreman, and experienced the struggles of middle management as workers resisted
top executives efforts to achieve more productivity. He faced the basic question:
what is a fair days work? With Carl G. L. Barth (18601939) and Henry L. Gantt
(18611919), Taylor made a scientific study of workers, machines, and the
workplace. These pioneers originated modern industrial practices of standardization
of parts, uniformity of work methods, and the assembly line. In addition, Frank
Gilbreth (18681924) and Lillian Gilbreth (18781972) developed a classification
system for fundamental motions to facilitate the study of work methods. (Lillian
Gilbreth may be of particular interest to occupational therapists because much of her
later work concerned the efficiency of physically handicapped women in the
management of their homes.) The concept of scientific management continues to be
the basis for continuous quality improvement, productivity studies, and cost
containment.
The Behavioralists and the Human Relations Approach
Although the major figures in the development of scientific management
emphasized the work rather than the worker, concern for the latter was apparent.
Lillian Gilbreth, a psychologist, tended to stress the needs of the employee. Frank
Gilbreth developed a model promotion plan that emphasized regular meetings
between employee and the individual responsible for evaluating the employees
work. The behavioralists increased the focus on the worker, applying the behavioral
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sciences to worker productivity and interaction. There remains to this day the
shorthand reference to this era: the Hawthorne effect, in which positive change in
productivity, reduction of conflict and the like are attributed to the increase in
human interaction as much as they are to streamlining the work and introducing
efficiency measure. The term stems from the work of Elton Mayo and F. J.
Roethlisberger at Western Electrics Hawthorne works. Through these studies, the
importance of the informal group and the social and motivational needs of workers
were recognized. The behavioral science and human relations approaches may be
linked because both emphasize the workers social and psychological needs and
stress group dynamics, psychology, and sociology. The emphasis on quality circles
and total quality management, as well as the contemporary use of appreciative
inquiry methods of assessing the strengths of an organization, are examples of this
approach.
Structuralism
Because work is done within specific organizational patterns and because the
worker-superior roles imply authority relationships, the structure or framework
within which these patterns occur has been studied. Structuralism is based on Max
Webers theory of bureaucracy or formal organization. Major theorists in the
structuralist school of thought (e.g., Robert K. Merton, Philip Selznik, Peter Blau)
have given particular attention to line and staff relationships, authority structure, the
decision-making process, and the effect of organizational life on the individual
worker. These issues continue to this day. Note, for example, the renewed
discussions of best organizational pattern: specialized units or the silo pattern
versus a flatter organizational pattern, with teams of workers and fewer authority
layers.
The Management Process School
This approach focuses on the managerial functions: the work of the chief executive
and those in leadershipauthority roles. Henri Fayol (18411925) is credited with
having developed the concept of the functions of the manager. The basic processes
and functions of management, including the universality of these elements, was the
focus of study in the late 1930s and early 1940s. The manager as leader and
leadership styles, and the role of middle managers, continue to be the focus of
research.
The Quantitative or Operations Research Approach
Problem solving and decision making with the aid of mathematical models and the
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use of probability and statistical inference characterize the quantitative or operations
research approach to management. Also called the management science school, this
approach includes various quantitative approaches to executive processes and is
characterized by an interdisciplinary systems approach. The urgency of the problems
in World War II and in the space program hastened the development of
mathematical models and computer technology for problem solving. The current
adoption of the Six Sigma approach to continuous quality improvement relies on
statistical analysis as one of its main elements of assessing organizational
performance. The current emphasis on data-driven, evidenced-based patterns of
patient care reflect the overall concept of quantitative analysis.
THE SYSTEMS APPROACH
Each school of management thought tends to emphasize one major feature of an
organization:
1. Scientific management focuses on the work.
2. Human relations and behavioralism stress the worker and workermanager
relationship.
3. Structuralism emphasizes organizational design.
4. Management process theory focuses on the functions of the manager.
5. Management science theory adds computer technology to the scientific
approach.
The search for a management method that takes into account each of these
essential features led to the systems approach. This focuses on the organization as a
whole, its internal and external components, the people in the organization, the work
processes, and the organizational environment. The total environment of the
organization, and the interrelationship of all of its parts, is seen as a continuous
cycle of absorbing inputs from the organizational environment, processing these as
throughputs, resulting in productive output. This cycle (inputthroughputoutput)
may be applied to the organization as a whole or to any of its divisions. The changes
in the organizational environment can be assessed continually in a structured manner
to determine the impact of change and to make necessary adjustments.
Management theorists turned to biology and related sciences (e.g., L. von
Bertalanffy, Kenneth E. Boulding) to develop this ecological approach to the study
of organizations.
2 A change in any one aspect of the environment has an impact on
other components. The specifics are analyzedalways in terms of the whole. The
organization or formal institution is considered an entity that lives in a specific
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environment and has essential parts that are interdependent.
Basic Systems Concepts and Definitions
A system may be defined as an assemblage or combination of things or parts
forming a complex or unitary wholea set of interaction units. The essential focus
of the systems approach is the relationship and interdependence of the parts. The
systems approach moves beyond structure or function (e.g., organization charts,
departmentation) to emphasize the flow of information, the work, the inputs and the
outputs. Systems add horizontal relationships to the vertical ones contained in
traditional organizational theory. The systems model is made up of four basic
components: inputs, throughputs or processes, outputs, and feedback. These
components are considered within the overall environment.
The Nature of Inputs
Inputs are the elements the system must accept because they are imposed by outside
forces. The many constraints on organizational processes, such as government
regulation and economic factors, are typical inputs imposed by outside groups.
Certain inputs are needed to achieve organizational goals; for example, the inputs
often are the raw materials that are processed to produce some object or service. The
concepts of inputs may be expanded to include the demands made on the system,
such as deadlines, priorities, or conflicting pressures. Goodwill toward the
organization and general support (of the lack of these) also may be included as
inputs.
A systematic review of inputs for a healthcare organization or one of its
departments could include the following elements:
Characteristics of the clients: average length of stay, diagnostic categories,
payment status
Legal and accrediting agency requirements: federal Medicare provisions,
institutional licensure, certification of healthcare practitioners
Federal and state laws concerning employment: collective bargaining
legislation, the Occupational Safety and Health Act, workers compensation
legislation, Civil Rights Act
Multiple goals: patient care, teaching, research
For more examples of inputs, recall the earlier discussion of the overall setting of
healthcare organizations.
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The Nature of Outputs
Outputs are the goods and services that the organization (or subdivision or unit)
must produce. These outputs may be routine, frequently predictable, and somewhat
easy to identify. The stated purpose of the organization contains information on its
basic, obvious outputs. For example, a fire department provides fire protection, a
hospital offers patient care, a department store sells goods, a factory produces items,
and an airline supplies transportation. Managers control routine outputs through the
planning process.
Other necessary outputs are infrequent but predictable. By careful analysis of
organizational data over a relatively long period, a manager can usually identify
these infrequent outputs. For example, hospitals and programs are reaccredited
periodically, and plans can be made for this predictable event. An organization that
is tied directly to political sponsorship could take the cycle of presidential or
congressional elections into account. Again, proper planning through identification
and anticipation of such special periodic demands on the systems leads to greater
control and, consequently, stability.
Most managers must deal with a third category of outputs: the nonpredictable
ones for which they can and must plan. Certain demands on the system are made
with sufficient regularity that although the exact numbers and times cannot be
calculated, estimates can be made. This is an essential aspect of planning and
controlling. In an outpatient clinic, for example, the number of walk-in and
emergency patients is not completely predictable. To plan for these relatively
random demands on the system, the manager can study patterns: times of arrival,
purpose of the visit, or new or continuing client status. Some patient education
would probably be done to help clients take advantage of orderly scheduling.
Staffing patterns would be adjusted to meet the anticipated needs. The planning is
designed to shift the nonpredictable to predictable. Other examples of
nonpredictable outputs for which plans can be developed include employee turnover
rates, seasonal demand for care (e.g., physical examinations for the upcoming
school year). Even natural disasters associated with weather patterns (e.g., hurricane
season, winter snowstorms) can be anticipated. Disaster planning, for example, is a
required part of institutional planning. The renewed emphasis on disaster planning
in light of bioterrorism, new strains of diseases (e.g., Ebola, flu strains), or periodic
socialpolitical disruption (riots) has added urgency to such planning.
Some outputs of a healthcare institution are as follows:
Maintenance of licensure and accreditation status
Compliance with special federal programs concerning quality assurance
Provisions of acute care services for medical, surgical, obstetrics, and pediatric
patients
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Provision of comprehensive wellness and preventive health services for clients
in a specific geographic area
Outputs may be refined further by adding specific time or quality factors, or other
statements of expected performance:
One hundred percent follow-up on all patients who fail to keep appointments
Processing of specified laboratory tests within (n) hours of receipt of specimen
Retrieval of hard copy record from remote storage within (n) minutes of receipt
of request
It may be useful to group outputs with related inputs by formulating an input
output analysis. It should be noted, however, that not every input generates a direct
output; there is no one-to-one relationship in some instances. For example, the goal
(output) of retrieving a hard copy record requires considerations (inputs) of accuracy
of identification of the record, its location, and the delivery system procedures.
Throughputs
Throughputs are the structures or processes by which inputs are converted to
outputs. Physical plant, workflow, methods and procedures, and staffing patterns are
throughputs. Inputs originate in the environment. Throughputs, as the term implies,
are contained within the organization. Throughputs are analyzed by work sampling,
simplification and methods improvement, lean management studies, reviews of
staffing patterns, and physical layout.
Managers may be severely limited in their ability to control inputs, but the
processes, structures, organizational patterns, and procedures that constitute
throughputs are normally areas of management prerogative. In a specialized service,
the control of throughputs is directly related to the managers professional
knowledge. For example, the procedures for processing patient flow within a clinic
are developed by the head of the specific service because of that persons knowledge
of patient care procedures, priorities, and the interrelationships among components
of the treatment plan. The policies and procedures for the release of information
from patients health records are aspects of highly technical processes that are the
domain of the professional health information specialist.
In some cases, elements that usually belong to the throughput category are
considered inputs. These elements are imposed by the internal environment of the
organization. Middle managers may not be able to exert direct control over some
aspects of the work (e.g., physical space allocations, budget cuts, personnel
vacancies). These elements are, essentially, inputs that must be accepted.
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Feedback
Changes in the inputoutput mix must be anticipated. To respond to these changes,
managers need feedback on the acceptability and adequacy of the outputs. It is
through the feedback process that inputs and throughputs are adjusted to produce
better outputs. The communication network and control processes are the usual
sources of organized feedback. Routine, orderly feedback is provided by such
activities as market research and forecasting, client surveys, periodic accrediting
agency reviews, and periodic employee evaluations in the work group.
The management by objectives process, short interval scheduling, program
evaluationreview techniques, and various audits (e.g., safety, financial, infection
control) constitute specific management tools of planning and controlling that
include structured, factual feedback. If there is an absence of planned feedback, if
the communication process is not sufficiently developed to permit safe and
acceptable avenues for feedback, or if the feedback actually received is ignored, a
certain amount of feedback will occur spontaneously. In this case, the feedback
tends to take a negative form, such as a client outburst of anger; a precipitous
lawsuit; a slew of anonymous, negative letters to local news media complaining
about the organization; a wildcat strike; a consumer boycott; or an epidemic.
Spontaneous feedback could take a positive form, of course, such as the acclamation
of a hero or leader after a crisis, or an unsolicited letter of satisfaction from a client.
Some feedback is tacit, and the manager may assume that because there is no
overt evidence to the contrary, all outputs are fine. The danger in such an
assumption is that problems and difficulties may not come to light until a crisis
occurs. The planning process is undermined because there are no reliable data that
can be used to assess the impact of change and to implement the necessary
adjustments. The overall system constantly seeks a balanced state. The management
functions of decision making, leadership, and particularly correction of deviation
from organizational goals are necessary for the detection, identification, and proper
response to changes in the organizational environment. Through the systems
approach, the manager focuses on the organization as a whole, attending to each
particular unit in relation to the whole. Every organization can be studied through a
review of its organizational environment, its degree of formal organizational and
bureaucratic characteristics and its placement in traditional classification of
organizations.
For more information about these concepts, see Table 31.
FORMAL VERSUS INFORMAL
ORGANIZATIONS
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An organization is a basic social unit that has been established for the purpose of
achieving a goal. A formal organization is characterized by several distinct features:
A common goal; an accepted pattern of purpose
A set of shared values or common beliefs that give individuals a sense of
identification and belonging
Continuity of goal-oriented interaction
A division of labor deliberately planned to achieve the goal
A system of authority or a chain of command to achieve conscious integration
of the group and conscious coordination of efforts to reach the goal
Table 31 Relationship of Classic Management Functions and Systems
Concepts
Systems Concept Predominant Management Function
Input analysis
Identification of constraints
Assessment of client characteristics Planning
Assessment of physical space
Budget allocation analysis
Throughput determination
Development of policies, procedures,
methods
Planning and controlling
Development of detailed departmental
layout
Specification of staffing pattern Staffing
Methods of worker productivity
enhancement
Controlling, leadership, and motivation
Output analysis
Goal formulation Planning
Statement of objectives
Development of management by
objectives plan
Planning and controlling
Feedback mechanisms Controlling, communicating, and
resolving conflict
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Development of feedback processes Renewing planning cycle
Adjustment of inputs and outputs in
light of feedback
Adjustment of internal throughputs
An informal organization may be characterized by some of the features of formal
organizations, but it necessarily lacks one or more of these features. Individuals who
share a common value may meet regularly to foster some goal, and this group may
become a recognizable formal organization. Some informal groups never develop
the consistent characteristics of a formal organization, however, and simply remain
informal.
Formal organizations almost inevitably give rise to informal organizations. Such
informal groups may be viewed as spontaneous organizations that emerge because
individuals are brought together in a common workplace to pursue a common goal,
which makes social interaction inescapable. Informal organizations arise as a means
of easing the restrictions of formal structures, as in the cooperative communication
and coordination that may occur outside of the officially mandated channels of
authority. Through an informal organizations communication network, individuals
may gain valuable information that supplements or clarifies formal communications.
Also, informal groups help to integrate individuals into the organization and
socialize them to accept their specific organizational roles. A manager must remain
aware of the existence and composition of informal groups in the organization so
that their functioning affects the formal structure in positive rather than negative
ways.
CLASSIFICATION OF ORGANIZATIONS
When an organizations managers understand and accept its nature, organizational
conflict can be reduced and organizational viability increased, because the managers
function in a manner consistent with the type of organization shaping the
interactions. Personal conflict can be reduced. Should an individual be unwilling or
unable to accept certain aspects of a particular organizational type, that individual
may decide to move to a different organizational climate. For example, if an
individual practitioner prefers not to function in a highly structured, bureaucratic
setting, it is better to recognize this before accepting employment in a governmentsponsored healthcare institution. An individual who believes that health care should
not be for profit would do well to seek employment in healthcare settings that are
not predicated on the business model. An individual may gain an insight into the
climate of a particular organization through the use of organizational classifications
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based on prime beneficiary, authority structure, and genotypic characteristics.
Prime Beneficiary
Peter Blau and W. R. Scott presented a classification of organizations based on the
prime beneficiary.
3 Their suggested model for the analysis of organizations focuses
on the question: who benefits from the existence of the organization? Four types of
organizations result from the application of this criterion:
1. Mutual benefit associations, where the members are the prime beneficiaries
(e.g., professional association, credit union, collective bargaining unit)
2. Business concerns, where the owners are the prime beneficiaries
3. Service organizations, where the clients are the prime beneficiaries
4. Commonweal organizations, where the public at large is the prime beneficiary
(e.g., police department, fire department)
Managers may formulate goals, establish priorities, and monitor activities to
determine the effectiveness of the organization in meeting the needs of the prime
beneficiary. Actions that do not foster such goals are eliminated, and proper
priorities are formulated. Because the clients are the prime beneficiaries of a service
organization, decisions about hours of service, the scope of services offered, and
similar matters are made with the needs of clients in mind. In health care, the
growing development of home care, flexible hours in outpatient clinics, and
alternatives to full hospitalization are attempts at meeting the needs of the prime
beneficiariesthe patients and their families. At the same time, healthcare worker
units involved in collective bargaining can be considered mutual benefit
associations. Managers in healthcare settings must balance the demands made by
both types of organizational forms within one organization.
Authority Structure
The organizational environment can also be classified according to the modes of
authority that are operative in the institution. Managers must adopt leadership styles,
develop procedures and methods for worker interaction, and determine client
interactions in a manner that is consistent with the predominant authority structure.
Healthcare organizations tend to embody more than one pattern of authority
structure; for example, there are few limits on the activities of professional staff and
more limits on the activities of semiskilled and unskilled workers. The work of
Amatai Etzioni provides a typology of organizations based on the authority structure
predominant in the institution.
4 The classification that results from this approach
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may be summarized as follows:
1. Predominantly coercive authority: prisons, concentration camps, custodial
mental institutions, or coercive unions
2. Predominantly utilitarian, rationallegal authority: use of economic rewards;
businesses, industry, unions, and the military in peacetime
3. Predominantly normative authority: use of membership, status, intrinsic
values; religious organizations, universities, professional associations, mutual
benefit associations, fraternal and philanthropic associations
4. Mixed structures: normativecoercive (e.g., combat units); utilitarian
normative (e.g., most labor unions); utilitariancoercive (e.g., some early
industries, some farms, company towns, ships)
Genotypic Characteristics
Like the prime beneficiary concept, the classification of organizations by genotype
is based on an analysis of their fundamental roots and purposes. Daniel Katz and
Robert Kahn viewed organizations as subsystems of the larger society that carry out
basic functions of that larger society. These basic functions are the focal point in this
system of classification. The typology of organizations developed by Katz and Kahn
is based on genotypes, or first-order characteristics. What is the most basic function
that the organization carries out in terms of society?5 The mission of the
organization stems from this fundamental concept. These first-order, basic functions
are as follows:
1. Productive or economic functions: the creation of wealth or goods as occurs in
businesses
2. Maintenance of society: the socialization and general care of people as occurs
in education, training, indoctrination, and health care
3. Adaptive functions: the creation of knowledge as occurs in universities and as
a result of research and artistic endeavors
4. Managerial/political functions: the adjudication and coordination functions and
control of resources and people as occur in court systems, police departments,
political parties, interest groups, and government agencies
The charter, articles of incorporation, and statement of purpose are official
documents of the organization that can be used to classify the organization
according to this typology.
Goal statements are derived and priorities set in terms of primary function.
Managers can monitor organizational change when the actual function performed
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differs from the stated function. When a social service agency spends a great deal of
effort determining eligibility of patients for service under a variety of government
programs, it is assuming some of the characteristics of a managerial/political
organization. Sometimes this adjudication interferes with the delivery of the
healthcare service; managers must make decisions in the light of this conflict. If
priority is given to research and education over direct patient care, the healthcare
practitioner must again come to terms with the true nature of the organization.
CLASSIFICATION OF HEALTHCARE
ORGANIZATIONS
When a healthcare organization is classified according to these typologies, the
complexity of the setting becomes apparent. Classification by prime beneficiary
offers several possibilities. In terms of direct patient care, for example, the
healthcare organization can be classified as a typical service organization.
Conversely, if it is a for-profit institution, classification as a business organization is
more appropriate. If the healthcare organization has mixed goals, as does a teaching
hospital associated with a medical school, it can be defined as a service organization
with respect to its clientsboth the physicians to be educated and the patients to be
treated. The potentially conflicting priorities of teaching and direct patient care
underlie the selection of patients for treatment, however; preference may be given to
those patients who are interesting cases for teaching purposes. Even when a
healthcare institution is not directly associated with a medical school, a variety of
clinical affiliation arrangements may be developed to meet the needs of such
practitioners as occupational and physical therapists, medical technologists, social
workers, health information administrators, dietitians, and other groups that require
clinical practice as part of their educational sequence. In developing goal statements
for a department, the chief of service must keep this secondary goal in mind.
A healthcare organization also is a commonweal organization insofar as it
protects the public interest in matters of general community health, such as the
benefits of the facilitys research efforts for the public at large. In addition,
healthcare institutions offer a variety of free health monitoring programs as a means
of fostering health maintenance in the community.
Etzioni included the hospital as an example of a normative authority structure.
This point could be argued, however, depending on the focus of organizational
analysis. Professional staff members tend to function in the normative mode; their
codes of ethics, their professional training, and the general level of behavior
expected of them modify their individual participation in the organization as much
as, if not more than, the formal bylaws and contractual arrangements. In this sense,
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the normative authority structure predominates. When the healthcare organization is
viewed from another perspective, it seems to function more as a mixed normative
utilitarian structure. Given the business orientation and the increasing unionization
of workers in the healthcare field, the utilitarian model seems to be a more
appropriate category.
A coercive element is sometimes introduced into the healthcare setting, as when
individuals are assigned to healthcare jobs in wartime as an alternative to military
service or when hospital volunteer work is given as part of a court sentence. In such
cases, a mix of normativeutilitariancoercive authority is required, and the
manager must adopt a variety of leadership and motivational styles in working with
the different groups in the organization. Worker or member motivation and the
source of the managers authority differ for these different groups.
In the Katz and Kahn genotypic classification, the healthcare organization fits
two categories, again indicating the mixed mandates of such entities. As an
organization concerned with restoration, the healthcare establishment functions to
maintain society. It also performs adaptive functions when higher education and
research are major goals.
CLASSIC BUREAUCRACY
Bureaucracy is such a common aspect of organizational life that it is often treated as
synonymous with formal organization. The study of bureaucracy in its pure form
was the work of the structuralists in management history: Max Weber, Peter Blau
and W. Richard Scott, and Robert K. Merton. Webers work is pivotal, as it
presented the chief characteristics of bureaucracy in its pure form. Weber regarded
the bureaucratic form as an ideal type and described the theoretically perfect
organization.
6 In effect, he codified the major characteristics of formal organizations
in which rational decision making and administrative efficiency are maximized. He
did not include the dysfunctional aspects or the aberrations that occur when any
characteristics are exaggerated, as in the popular equating of bureaucracy with red
tape. From the works of Weber and others, a composite set of characteristics or
descriptive statements may be derived concerning the formal organization or
bureaucracy.
1. Size
a. Large scale of operations, large number of clients, high volume of work, and
wide geographical dispersion
b. Communication beyond face-to-face, personal interaction
2. Division of labor
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a. Systematic division of labor
b. Clear limits and boundaries of work units
3. Specialization
a. A result of division of labor
b. Each units pursuit of its goal without conflict because of clear boundaries
c. Areas of specialization and division of labor that correspond with official
jurisdictional areas
d. Specific sphere of competence for each incumbent
e. Promotion of staff expertise
f. Technical qualifications for officeholders
4. Official jurisdictional areas
a. Fixed by rules, laws, or administrative regulation
b. Specific official duties for each office
5. Rationallegal authority
a. Formal authority attached to the official position or office
b. Authority delegated in a stable way
c. Clear rules delineating the use of authority
d. Depersonalization of office: emphasis on the position, not the person
6. Principle of hierarchy
a. Firmly ordered system of supervision and subordination
b. Each lower office or position under the control and supervision of a higher
one
c. Systematic checking and reinforcing of compliance
7. Rules
a. Providing continuity of operations
b. Promoting stability, regardless of changing personnel
c. Routinizing the work
d. Generating red tape
8. Impersonality
a. Impersonal orientation by officials
b. Emphasis on the rules and regulations
c. Disregard of personal considerations in clients and employees
d. Rational judgments free of personal feeling
e. Social distance among successive levels of the hierarchy
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f. Social distance from clients
9. The bureaucrat
a. Career with system of promotion to reward loyalty and service
b. Special training required because of specialization, division of labor, or
technical rules
c. Separation of manager from owner
d. Compensation by salary, not direct payment by clients
10. The bureau (or office or administrative unit)
a. Formulation and recording of all administrative acts, decisions, and rules
b. Enhancement of systematic interpretation of norms and enforcement of rules
c. Written documents, equipment, and support staff employed to maintain
records
d. Office management based on expert, specialized training
e. Physical property, equipment, and supplies clearly separate from personal
belongings and domicile of the officeholder
These characteristics are interwoven, each flowing from the others. For example, the
growing size necessitates a division of labor, which in turn fosters specialization.
One of the dreams of many direct patient care practitioners is a healthcare
delivery system that does not become bogged down in formalities. The private
practice model seems to offer the solution. If the private practice or small group
practice flourishes, however, the characteristics of formal organizations inevitably
begin to emergefor example, specialization and division of labor, procedures for
uniformity, some form of authority structure, and a variety of rules. The wisest
approach seems to involve taking the best features of formal bureaucracy and
making particular efforts to avoid the negative elements, such as impersonality.
Family-centered approaches to health care or the team approach are models that tend
to offset the impersonalization associated with large health care organizations.
CONSEQUENCES OF ORGANIZATIONAL
FORM
Managers work in specific organizational environments, and their specific functions
are shaped and modified by the organizational form, structure, and authority climate.
Some specific consequences concern the following organizational characteristics:
Size. The more layers in the hierarchy, the greater (potentially) the limits on
managers freedom in decision making. Their decisions may be subject to
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review at several levels, and more decisions may be imposed from these higher
levels.
Organizational climate. The degree to which clients, workers, and other
managers participate in planning and decision-making processes is determined
in part by the authority climate. Managers may have to modify their
management or leadership style if it is inconsistent with the organizations
authority structure. The basis of motivation may vary. In the highly normative
setting, for example, members willingly participate; in the coercive
organization, the basis of motivation tends to rest on the avoidance of
punishment.
Degree of bureaucracy. A highly bureaucratic organization may be associated
with great predictability in routine practices but less innovation and more
resistance to change. Efforts to offset distortion caused by layering in
communication may constitute a large portion of the activities of a manager in
a highly bureaucratic organization.
Phase in the life cycle. The openness to innovation and the vigorous, aggressive
undertakings through goal expansion and multiplication that characterize some
stages of the life cycle may permit the manager to undertake a variety of
activities that are precluded by concerns for organizational survival in other
phases of the life cycle.
For these reasons, managers must assess the organizational setting and their own
roles. The major concepts of the clientele network, organizational life cycle, and
analysis of organizational goals are tools for such assessments. Their active use
fosters in the manager an awareness of the overall organizational dynamics that
shape managerial practice, worker interaction, and client services.
THE CLIENTELE NETWORK
Managers must devote constant attention to the web of relationships reflecting the
needs and interests of individuals and groups both internal and external to the
organization. Common terms used to describe these relationships include critical
partners, stakeholders, champions, superusers, and communities of interest.
A major charge given implicitly to any manager is the building of external
relationships and developing a framework for partnership. This framework connects
the people of the organization with one another and with the larger communities of
interest. To do this, the manager must identify critical relationships, develop
satisfactory working relationships with the several key individuals and groups
involved, and, finally, work at maintaining these relationships. With the
conservation of organizational resources, time, money, and personnel as a mandate,
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the manager seeks to capitalize on available external sources of power, influence,
advice, and support as well as to identify those areas of potential difficulty, such as
competition and rivalry, erosion of client goodwill, and shifting client demand and
loyalty. In an era of increasing regulation of health care, the contemporary manager
in the healthcare setting must identify and comply with multiple sets of changing
regulations and guidelines issued by federal and state government agencies as well
as by the various accrediting agencies, such as The Joint Commission or the
Continuing Care Accreditation Commission.
Like a living organism, an organization exists in a dynamic environment to which
it must continually adapt. The manager identifies these units and constructs a
network of the pattern of interrelationships. Bertram Gross has developed the
concept of the clientele network, noting that any organization is usually surrounded
by a complex array of people, units, and other organizations that interrelate with it
on the basis of various roles. He has provided a framework for analyzing these key
relationships, using the categories of client, suppliers, advisers, controllers, and
adversaries.
7 The following discussion applies Grosss concepts to the healthcare
organization.
Wherever the concept of organization is used, a department manager could well
substitute individual service or department. Although such a department or service is
obviously a part of the organization, the development of the clientele network for a
unit within the organization yields information about the critical relationships,
clients, adversaries, and supporters of that department. Department-level managers
must be aware of the unique environment of their departments or services as well as
the overall environment of their organization.
CLIENTS
The most obvious and immediate individuals and groups who make significant
demands on the organization are the clients. Gross used the term clients in a broad
sensethat is, to refer to those for whom goods and services are provided by the
organization. Immediate, visible clients in health care, both for the organization and
for any department directly involved in patient care services, are the patients.
The providers of direct healthcare services are immediate, visible clients for
certain units within the organizations. The billing and accounts receivable office, the
legal staff, and the health information service offer support services to assist
physicians, nurses, and social workers in the provision of patient care. Given the
traditional and historical development of the modern hospital, it could be said that
the physicians are a special class of clients in that the organization of the hospital or
clinic gives them the necessary support personnel and services for patient care.
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Physicians in different specialties are clients of each other, because they depend on
each other for consultative services and referrals.
Certain services may be placed into the client category vis–vis each other. Some
service units, such as physical therapy, are income producing; because the resources
obtained are used on behalf of the whole organization, other units may be
considered clients of the income-producing units. The billing and accounts
receivable office relies on the health information service to supply certain
documentation to satisfy financial claims, and the safety committee relies on the
several patient care and administrative departments to supply the information
necessary to perform its function.
The use of the broadest possible definition of client alerts the manager to the
subtle facets of organizational relationships. The manager who recognizes the
number of distinct client groups can more effectively monitor their several and
sometimes conflicting demands for services.
Although one step removed from the immediate services or goods offered by the
organization, less visible clients are nonetheless legitimate users of the services or
goods. By identifying these secondary clients, the manager has a key to the primary
and secondary goals of the organization or unit. In the many educational programs
offered within healthcare organizations, for example, the sponsoring institutions
(e.g., a college or university), the health professionals, and the technical students are
secondary, less visible clients. Hospitals traditionally have direct patient care as a
primary goal, with teaching and research as secondary goals. The ordering of
priorities should stem from recognition of the multilevel client demands.
The same physicians who are immediate clients in terms of their need for support
services for their direct patient care activities are less visible clients in terms of their
need for opportunities for education and research. The employees of the
organizations are, in a sense, less visible clients, given that one of the organizational
outputs is the provision of jobs. Occasionally, in health care the provision of jobs is
an explicit goal. For example, the neighborhood health centers sponsored by the
federal government were intended not only to provide healthcare services but also to
afford job opportunities to area residents. Employees also depend on the employer
for important resources (e.g., wellness programs, health insurance, retirement plans,
continuing education) to advance in their careers. There is also the less tangible
need: the need for recognitionbeing valued, celebrated, motivated.
Clients twice removed from the immediate goal of the organization may be
termed remote clients. Many of these individuals and groups do not even know they
are being served. In addition to patient care, teaching, and research, a third goal of
healthcare organizations is generally given as the protection of the public at large
that is, remote clients. Remote clients of the healthcare organization benefit from the
research done by the physicians and related research teams. For example, remote
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client benefits can be seen in immunization outreach programs. The maintenance of
herd immunity is taken for granted by the public; healthcare providers are proactive
in ensuring this protection through intensive efforts regarding immunization.
Outreach efforts are carried out regarding many other topics (e.g., Lyme disease
prevention, stroke, cancer, and wellness initiatives). Public lectures, free screening,
educational materialsall are common means of reaching remote clients.
Managers, in assessing the stated and implied goals, may readily identify them by
analyzing the needs of primary, visible clients as well as those of the less visible and
remote clients. If the client demand is relatively stable, planning, organizing, and
staffing needs may be assessed in a stable manner. The net effect is efficiency in the
allocation of resources of money, space, and personnel.
There is within the client group a potential capacity to control the organization.
On the one hand, when a business has only one major purchaser of its goods or an
agency has only one group to serve, the clients could easily take charge of the
organization, limiting its independence. On the other hand, the organization with
multiple clients must set priorities, balance conflicting demands, and maneuver so as
to satisfy several groups.
The manager maintains continuous awareness of potential new clients and their
needs; for example, the ever-growing leisure culture and amateur sports creates an
increased need for physical therapy services. The aging of the baby boomer
population and increased longevity will lead to an increase in the need for such
services as subacute care, caregiver support groups, and adult respite care. Managers
reach out to such potential clients in a variety of ways such as participating in
community-sponsored events (e.g., blood drives, weight loss seminars, preventive
health initiatives). Managers also get involved with the many support groups (e.g.,
for kidney disease, breast cancer, arthritis, and autism), offering space for their
meetings and presenting educational lectures.
SUPPLIERS
Three categories of suppliers are identified by Gross: resource suppliers, associates,
and supporters.
Resource Suppliers
Because no organization is totally self-sufficient, it must take in the necessary
resources, raw material, money, and goodwill that it needs to survive and function.
In this sense, the organization is the client of other organizations.
Within the given organization, one department or service is the supplier of
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another. In assessing workflow patterns, this concept is useful in identifying which
aspects of the work are within the units immediate control and which originate in
one or several other departments. For example, the health information service is the
client of several other units in this sense. The proper gathering of patient
identification information is the work of the several admissions and intake units; a
health information department is dependent on these units for that part of the
workflow. A centralized, computerized information technology system is dependent
in the same way. The laboratory, radiology department, physical therapy
department, and occupational therapy department all depend on the nursing service
(or other unit that has the task of coordinating patient transportation in-house) to
bring, send, or prepare patients so that the service/unit can proceed with its own
work in a predictable manner. Essential information for the formulation of job
descriptions concerning interdepartmental relationships or for the development of
cross-training programs within the organization is obtained from an awareness of
those organizational components that act as resource suppliers to each other.
In the same sense, the chief executive officer can be seen as a resource supplier,
making the final adjudication in the allocation of space, money, and personnel to the
units. The manager of the department or service should know the needs of other
departments and should develop strategic alliances in the competition for scarce
resources.
Resource suppliers are often external to the organization. Companies making
specialty products or offering specialty services have a unique relationship to the
healthcare organization. Such suppliers may be limited in number; in fact, there may
be only one such supplier in a geographic area. The viability of such an organization
is of interest and concern for the manager who relies on these products or services.
Furthermore, with the implementation of such federal regulations as the Health
Insurance Portability and Accountability Act and with issues relating to risk
management, the healthcare organization that contracts with one or another such
resource supplier needs to work with that resource supplier to ensure that it, too,
follows the specific regulations. These considerations include policies, procedures,
and safeguards relating to patient privacy and confidentiality. Chain-of-trust
agreements are required for organizations dealing directly with patient care
information (such as an outsourced transcription service or a medical billing
service). The healthcare manager will attend to the quality of products and services
from external sources because these become part of the services offered by the
healthcare organization.
In addition, there are points of vulnerability in the relationships between the
organization and its resource suppliers. If a supplier goes out of business, with or
without notice, the organization must find a new, reliable provider and look into
reclamation of the organizations resources (e.g., documents stored or processed offsite). If there is a long-term, locked-in contract with a supplier, the organization may
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not be able to take advantage of another supplier who can provide needed goods on
more favorable terms. If there is little or no competition among many suppliers, the
few suppliers hold the power in negotiations. Finally, if a department manager finds
that a supplier will not continue to provide the goods or services until a bill is paid,
an awkward, indeed, difficult situation may develop; the payment process within an
organization might be slow, or even fraught with problems, all of which are beyond
the middle managers ability to solve.
Managers take opportunities to partner with resource suppliers in special project
development. For example, health information educators work with vendors to
create virtual laboratory modules for use in educational institutions as well as for inservice training in healthcare settings. Another example is found in the partnerships
of university-based departments of physical and rehabilitation medicine and a
research and training program in life skills adjustment.
Associates
Individuals or groups outside the organization who work cooperatively with the
organization in a joint effort are associates of the organization. Associates have a
common interest and common work that unites them with the organization. The
manager who recognizes the efforts of associates will actively obtain their
cooperation. Through informal sharing of ideas among themselves, the various
healthcare practitioners frequently act as associates to one another. The health
information practitioners from several area hospitals may collaborate informally on
release of information concerns and work to publicize the regional health
information exchange. The communities of practice and related sharing of best
practices sponsored by the American Health Information Management Association
(AHIMA) is yet another example of associate activity. The Joint Position Statement
on Health Information Confidentiality, developed by the American Medical
Informatics Association and AHIMA, is yet another example of associate
interaction. The discussion about electronic health records in Chapter 2 contains a
listing of groups who partner in this major joint effort.
Associate interaction is a useful as an ongoing activity, especially when a new
demand on the system arises (e.g., the adoption of a new coding/classification
system). When an organization is challenged by the requirements of meeting
accrediting standards, the accrediting agency (usually categorized as a controller)
provides associate-style interaction with the healthcare partner (e.g., the
Commission on Accreditation of Rehabilitation Facilities), provides a staff coach to
the organization when it applies for accreditation. It coordinates peer review groups
to give even further assistance.
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Supporters
Various politically, socially, and economically powerful individuals and groups in
the society may be supporters of the organization. They mobilize friendly power
for the organization, giving it encouragement and developing a climate of goodwill
toward the organization. Such supporters can coordinate major activities, such as
fund-raising, public relations, and intermediate services for the organization. This
type of support helps the organization conserve its own resources for direct
application to immediate goals, such as providing direct patient care. Individual
organizations may quite simply lack the power to mobilize certain political or
economic resources on their own behalf and may depend on a friend in the castle
to help in these matters. The traditional pattern of appointing the political, social,
and economic elite to the board of trustees in healthcare organizations is often an
effort to mobilize such power on behalf of these organizations. Professional
associations foster this relationship through regularly scheduled interaction with
both state and federal lawmakers. For example, Capitol Hill Day, usually
coordinated at the national level by the professional associations, is one such
endeavor. Members of the association use this opportunity for face-to-face
interaction with their elected officials, calling attention to issues of interest and
concern. Testimony at hearings or availability for expert review on relevant topics
are other examples of this type of interaction.
Occasionally, a nationally prominent figure demonstrates a particular interest in
health care because of some personal experience with a particular health problem. In
a sense, poliomyelitis, heart disease, and breast cancer received more attention
because they affected a president or a member of his family. Leading political
figures may work toward the passage of legislation on behalf of some specific health
care need. A number of well-known entertainers and sports figures have supported
fund-raising activities for certain healthcare issues. Such individuals command
resources unavailable to a single institution.
The Lions Club programs to support eye care, the Easter Seals program in fundraising and coordination of volunteers to work with developmentally challenged
persons, and the Shriners traditional support of health care for children with
disabilities illustrate the typical activity of supporters. The traditional hospital
auxiliary is yet another example of a support group. Its fund-raising activities may
facilitate the development of special programs such as wound care surgery
equipment, cataract surgery at no cost for those unable to pay, or the No One Dies
Alone project. Supporters may help coordinate activities to the mutual benefit of all
participants, offsetting the destructive aspect of competition and facilitating
compliance with standards set by controllers by making resources available for use
by the organization.
Although an organization may not actively declare itself a supporter, the net
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effect of its activities may provide support. Advocacy groups for privacy in general,
for example, have helped raise the social consciousness of the public toward all
issues concerning privacy, thus helping healthcare institutions to develop guidelines
for the restrictive release of information. In such situations, collaboration in the
development of and lobbying for pertinent state legislation becomes possible.
Sometimes a client group takes on the dual roles of both supporter and resource
supplier, as in the case of hospice care. Medicare requirements for hospice programs
include the mandate that a minimum 5% of all hospice care be given by volunteers.
Clients become volunteers, thereby helping the organization meet this mandate.
ADVISERS
Although they are like supporters in some ways, advisers have more specific
activities that tend to set trends for the industry. Advisers provide a particular form
of resource or support through their advice. Gross stressed an important difference
between supporters and advisers; the assistance and support of advisers help the
organization use its resources and the support it receives from other sources.
Advisers stand apart from the organization and often have a more impersonal
relationship with the organization than do supporters.
The advice may be in the form of overall guidelines, position papers, data
analysis, sample procedures and methods, best practices and benchmarking, or
model legislation. The various professional organizations provide abundant
resources for use. Sometimes an external organization has legal and accrediting
authority over the organization; this is discussed in the next section on controllers.
These same controllers occasionally take on the additional role of adviser because
they want the licensed/accredited group to succeed. Thus, the controlling
organization becomes an adviser through the provision of interpretive guidelines,
sample policies and practices, educational material, and training sessions. If the
accrediting process is too unwieldy, punitive, or costly, an organization may forgo
it. Although it must meet licensure standards, accreditation is voluntary. The
accrediting agencies stand to lose if they do not encourage and assist their
constituency.
CONTROLLERS
Those individuals or groups who have power over the organization are controllers.
Healthcare organizations must comply with the regulations of several federal and
state government agencies as well as with the mandates of the various accrediting
agencies. A multispecialty healthcare organization is required to meet detailed
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regulations from different state agencies as a condition for licensure. For example,
social service agencies must meet a variety of regulations from the following
government agencies:
Adoption and foster care: Office of Children, Youth, and Families
Residential school and outpatient psychiatric clinic: Mental Health and
Substance Abuse Services
Personal care home: Office of Social Programs
Skilled nursing facility: Department of Health
Several organizations and agencies have such control power. The level of detail
varies greatly, ranging from the optimal standards stated by The Joint Commission
to the highly detailed regulations (e.g., required room size) in a state law. Chapter 1
contains a discussion of settings, laws, regulations, and standards.
Certain controllers are internal to the organization and yet constitute a kind of
separate organization. Workers as individuals are a part of the organization, but the
unions that represent them stand outside the organization, exerting specific pressure
on it through collective bargaining. The governing board is an integral part of the
hierarchical structure, but in some ways the board of trustees is separate from the
line managers, who are controlled by the decisions made by the top-level
management group. The assessment of the net effect of such controllers input gives
the manager a sense of clear boundaries for planning and decision making. However
innovative an idea might be, for example, the manager must still keep management
practices in line with these constraints.
Controllers may also impose conflicting regulations on the institution, such as the
mandate of the federal government to maintain almost absolute confidentiality of
alcohol and drug abuse records and the mandate of third-party payers to provide
satisfactory evidence of treatment for reimbursement. Managers may be forced to
change their managerial style as a result of certain constraints imposed by a
controller (e.g., the details of a union contract may limit severely the use of the
laissez-faire style of management). By means of survey questionnaires and site
visits, the manager may assess the net effect of these multiple regulations on
workflow, services offered, staffing patterns mandated, and job descriptions
restricted and refined.
ADVERSARIES
Health care traditionally carries overtones of great compassion and deep charitable
roots. However, healthcare organizations, like many other organizations, have
opponents and enemies as well as competitors and rivals. The rising cost of
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healthcare tends to be a source of conflict for healthcare professionals and the
organizations in which they work.
Indeed, clients themselves at times take an adversarial stance because of small,
cumulative changes in the organization. These are listed below:
As the organization grows and assumes more and more impersonal
characteristics, clients may become disaffected. Instead of speaking to a person,
one may reach an answering machine, or instead of going to a familiar location,
one must go to an off-site clinic or even to a newly acquired facility in another
town.
Patients may sense that they are second-class citizens because they do not
participate in the health systems managed care insurance plan. Being reminded
that a certain aspect of care would be paid for more readily if one has a gold
level membership is disconcerting and erodes trust.
The use of the electronic health system leads to inadvertent impersonalization.
Here a clinician must look at the computer screen more than at the patient, or
instead of a short but personable set of interactions at registration, a patient
checks in using a personal computer.
A patient may bring a full-scale, formal malpractice lawsuit.
The healthcare organizations interaction with third-party payers may lead to an
adversarial relationship. Denial of claims is the arena for this dynamic. The
effect of denials spills over into the organizations relationship with its primary
clients, the patients, with an attendant loss of goodwill. When final billing is
received by the patient many months after the care event, or the billing is
broken down into the care and the unreimbursed support services (facilities,
supplies), patients become alienated.
Also, current and former employees sometimes take an adversarial role as
whistle-blowers; this behavior may flow from good intentions or result from some
negative experience. Employees who face reduction in staffing or many changes
resulting from lean management initiatives may feel threatened by job loss or the
disturbance of familiar relationships and routines.
All of this leads to shifting loyalty. Identifying and reducing, even eliminating,
adversarial relationships remains an important managerial duty. Managers seek to
offset disaffection by clients through processes such as risk management,
customer/patient satisfaction surveys, development of ombudsman programs, and
the use of expert advisers to assist with insurance claim issues.
Outright opponents or enemies are those individuals or groups who seek actively
and aggressively to limit the organization in its activity. These opponents or enemies
may have the power to bring an activity to a halt or to prohibit an activity from
being started. For example, clients do not wish to have certain facilities, such as
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drug treatment centers or group homes for the developmentally challenged, too close
to their homes. Furthermore, they may want ample parking and easy access to their
hospital, but they do not want to disturb local housing units or business areas.
Zoning codes may be enforced to prevent the development of alternative treatment
facilities or the expansion of existing facilities. Clients may withdraw financial
support as evidence of displeasure. In this high-tech age, organizations must deal
with hackers, identity theft operatives, and systems hijackers. This threat to the
organization requires diligent attention regarding detection and prevention, as well
as processes to deal with the aftermath when a disruptive event occurs.
The concept of competition is well understood and accepted in the economic
arena. Within reasonable boundaries, competition is favorable for clients because it
forces providers to make products or services better or more accessible. The sharp
edge of competition is also evident in healthcare delivery, possibly because certain
factors in contemporary culture are producing shifts in client loyalty. These factors
include erosion of strong ethnic and religious ties to one hospital or health center
along with urban and suburban migration patterns.
Given a dropping inpatient census, a hospital may compete actively with a
freestanding medical clinic by offering its own outpatient clinic services. To attract
patients, one obstetrics unit may offer the latest in fetal monitoring, whereas another
may stress family-centered childbirth. An urban medical school or medical center
may offer the benefits of highly specialized techniques to offset a census drop
because certain clients seek to avoid the city. A hospital seeking financial bond
approval for an expanded facility or for some special activity may engage in active
outreach to increase its patient population.
Rivals, according to Gross, are those who produce different products but compete
for resources, assistance, and support. In the healthcare setting, specialty hospitals
could be considered the rivals of general hospitals (e.g., a childrens hospital versus
a pediatric unit in a general hospital, a lying-in hospital versus an obstetrics unit).
When the emphasis in definition is placed on competition for the same resources,
there is evidence of rivalry among healthcare institutions for scarce personnel (e.g.,
registered nurses for the 3:00 to 11:00 P.M. shift, trained coding specialists,
physicians for the emergency department).
Within an organization, one department may be cast as rival to another for
needed space, additional personnel, and special funds. Managers may find that the
same departments that are clients may also be supporters and rivals.
COALITIONS FOR BUILDING COMMUNITY
AND CLIENT INVOLVEMENT
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The analysis of an organization through the application of the clientele network
illustrates the intertwining of the organization with its local community. Healthcare
organizations generally command respect; communities rely on them not only for
health care but also for employment. The organizations management team is
viewed as a major part of community leadership. In turn, the concerns of the
community have an impact on the healthcare organizationjob losses or gains,
crime, and infrastructure development, to name a few salient issues.
Helping the community build alliances is an aspect of leadership. How is this
best accomplished? There are some tried-and-true steps in community building.
First, the management/leadership team clarifies, internally, the level of its
involvement in community affairs. The prudent course in one situation might be
simply starting the conversationthat is, helping raise the issue in a general way. In
another situation, the organization might commit to a highly visible leadership role,
or the provision of physical space for meetings and the loan of staff. Identification of
the specific issue of focus (e.g., need for area-wide transportation, need for more
elder care programs, economic development) is part of this process.
With this focus clarified, the team then starts its outreach efforts to the
communities of interest and stakeholders. Team members devote efforts to
developing and supporting community-based leadership, with the continuing offer
of support. The leadership team, now expanded to include community members,
sharpens its focus again, determining which specific problem to solve, which
alternatives are available, how to select the best alternative, and how to develop a
program of action. In many situations, the program of action involves local, state, or
federal government entities. A healthcare organization, through its board of trustees,
usually has one or more individuals who are power holders in their own right and
whose influence can be used to advance the cause. Sometimes special funding is
available through private or public grants; the healthcare organization, through its
research and development division, might be the most effective agent to apply for
and receive such funding.
As with any program, during its implementation and again at its conclusion, a
variety of processes are used to provide feedback during this process. Community
building and the development of ongoing alliances are mutually supportive
endeavors. These skills are part of the managers portfolio.
EXAMPLE OF CLIENTELE NETWORK FOR A
PHYSICAL THERAPY UNIT
A tabulation method can be used to analyze a departmental clientele network. The
development of such a reference tool for the internal environment of the
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organization provides the manager with much information concerning relationships
to be developed, aspects of the workflow to be considered, and regulations and
guidelines that must be satisfied. The following is the clientele network of a spinal
cord treatment service in a physical therapy department:
I. Clients
A. Immediate clients
1. Patients of the spinal cord injury service
2. Hospital personnel assigned to the spinal cord injury service
B. Secondary clients
1. Family members
2. Hospital medical staff for in-service education and clarification of
policies and procedures
3. Physical therapy students on clinical affiliation
4. Local hospitals requesting information on special programs dealing
with treatment of the spinal cordinjured patient
C. Remote clients
1. Local hospitals
2. Home health agencies
3. School systems (sports injury care)
II. Suppliers
A. Resources
1. Physicians within the hospital who refer patients to the spinal cord
injury unit
2. Medical supply companies that supply equipment for both the patients
and the department
3. Bureau of Vocational Rehabilitation, which covers the cost of
treatment and equipment
4. Hospital transport system
B. Associates
1. National spinal cord treatment centers
2. Other direct patient services (e.g., nursing, occupational therapy,
speech, psychology, social services)
3. Home health agencies
4. Professional association educational materials
C. Supporters
1. Hospital physicians and residents
2. Community service organizations
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3. Auxiliary organizations serving the spinal cord service
4. Medical supply companies
5. County wheelchair sports association
6. Public relations department of the hospital
III. Advisers
A. American Physical Therapy Association
B. Hospital administrators
C. Other direct patient care services within the hospital
D. Insurance companies
IV. Controllers
A. Accreditation agencies
1. The Joint Commission
2. Commission on Accreditation of Rehabilitation Facilities
B. Federal government
1. Medicare reimbursement regulations
2. Equal employment opportunity
3. Working conditions
C. State government
1. Licensing regulations for physical therapists
2. Medicaid reimbursement regulations
D. County hospital association
E. Professional association codes of ethics
F. Unions
G. Hospital policies
H. Third-party payers
V. Adversaries
A. Opponents and enemies
1. Consumer groups
2. Hospital personnel resistant to change
B. Rivals and competitors
1. Other local rehabilitation centers sharing the same clientele network
2. Independent group practices specializing in rehabilitation
INTRODUCING ORGANIZATIONAL SURVIVAL
STRATEGIES
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Organizational survival and growth are implicit goals requiring the investment of
energy and resources. Normally, only higher levels of management need give
attention to organizational survival; it may be taken for granted by most employees
or members, some of whom may even take actions that threaten the organizations
survival (e.g., a prolonged strike). There may be an unwillingness to admit the
legitimacy of survival as a goal because it seems self-serving. However, managers
disregard the concept of organizational survivalwhether the whole corporation or
just a department or unitat their own peril.
So fundamental is the goal of organizational survival that it underpins all other
goals. Fostering this goal contributes to the satisfaction of the more explicit goals of
the group or organization. Survival is articulated as a goal in certain phases of
organizational developmentfor example, when competition threatens. The
clientele network includes competitors, rivals, enemies, and opponents that must be
faced. Certain threats to organizational survival may be identified:
Lack of strong, formal leadership after the early charismatic leadership of the
founders
Too-rapid change either within or outside the organization
Shifting client demand, either with the loss of clients or with the increased
exercise of control by clients
Competition from stronger organizations
High turnover rate in either the rank and file or the leadership
Failure to recognize and accept organizational survival as a legitimate, although
not the sole, organizational purpose
These factors drain from the organization the energy that should be goal-directed.
An organization ensures its survival through certain strategies and processes,
such as bureaucratic imperialism, co-optation, patterns of adaptation, goal
multiplication and expansion, use of organizational roles, conflict limitation, and
integration of the individual into the organization. Astute managers recognize such
patterns of organizational behavior and assess them realistically. A weak
organization or unit cannot pull together the money, resources, and power to serve
its clients effectively.
BUREAUCRATIC IMPERIALISM
An organization develops to pursue a particular goal, serve a specific client group,
or promote the good of a certain group. In effect, an organization stakes out its
territory. Thus, a professional association seeks to represent the interests of members
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who have something in common, such as specific academic training and
professional practice. A hospital or home health agency seeks to serve a particular
area. A union focuses on the needs of one or several categories of workers. A
political party attempts to bring in members who hold a particular political
philosophy. A government agency seeks to serve a specific constituency.
The classic definition of bureaucratic imperialism reflects the idea that a
bureaucratic organization exerts a kind of pressure to develop a particular client
group and then to expand it. It becomes imperialistic in the underlying power
struggle and competition that ensues when any other group seeks to deal with the
same clients, members, or area of jurisdiction. Matthew Holden, Jr., coined the term
bureaucratic imperialism and defined it in the context of federal government
agencies that must consider such factors as clients to be served, political aspects to
be assessed, and benefits to be shared among administrative officials and key
political clients. According to Holdens definition of the concept, bureaucratic
imperialism is a matter of interagency conflict in which two or more agencies try to
assert permanent control over the same jurisdiction, or in which one agency actually
seeks to take over another agency as well as the jurisdiction of that agency.
8 The
idea of agency can be expanded to include any organization, the various components
of the clientele network can be substituted for the constituency, and the role of
manager can replace that of the administrative politician in those organizations that
are not in the formal political setting.
Managers in many organizations can recognize the elements of this competitive
mode of interaction among organizations. There may even be such competition
among departments and units within an organization. In the healthcare field,
competition may be seen in the areas of professional licensure and practice,
accreditation processes for the organizations as a whole, the delineation of clients to
be served, and similar areas.
Professional licensure has the effect of annexing specific territory as the proper
domain of a given professional group, but other groups may seek to carry out the
same, or at least similar, activities. For example, there is the question of the role of
chiropractors in traditional healthcare settings. Is the use of radiological techniques
the exclusive jurisdiction of physicians and trained radiological technicians or
should the law be changed to permit chiropractors greater use of these techniques?
Psychiatrists question the expanding role of others who have entered the field of
behavioral health. As each healthcare profession develops, the question of
jurisdiction emerges.
The accreditation process in health care reflects similar struggles for jurisdiction.
Which shall be the definitive accreditation process for behavioral care facilities
that approved by the American Psychiatric Association or that approved by The
Joint Commission? Should all of these processes be set aside, leaving only state
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governments to exercise such control through the licensure of institutions? Longestablished professional associations (e.g., AHIMA) have developed sound
examination and credentialing processes, only to see the rise of for-profit
organizations that develop their own categories and provide certification.
Other examples may be drawn from the healthcare setting. There has been a
jurisdictional dispute over blood banking between the American Red Cross and the
American Association of Blood Banks, as well as competition among health
maintenance organizations, or HMOs, with the more traditional Blue CrossBlue
Shield-type plans and commercial medical insurance companies.
Certain trends have occasioned the development of new organizational positions
(e.g., chief privacy officer, chief compliance officer, chief information officer,
health informatician). Are these new professions or do they fall under the education
and credentialing of existing professional organizations? To state this question
another waywhose organizational territory encompasses information technology?
Within an organization, which department or service will be the designated leader
for information technology application? No doubt the tasks will remain shared
among several departments, with each continuing to exert its own prerogatives.
Another example may be drawn for the development and implementation of
electronic health recordswhich agency or organization will be the final arbiter of
core data elements, formats, standards, and technological aspects of the system? The
Health Level-7 International has relatively universal acceptance. The Joint
Commission has its elements of practice, AHIMA has its information governance
principles, and ECRI (formerly the Emergency Care Research Institute) has clinical
standards for core content as well as support technology (as does the American
Society for Testing and Measurement). The Institute of Medicine promulgates core
functions for electronic health records. Managers must attend to these competing
groups, which in turn must cooperate with one another.
Although the charitable nature of health care has been emphasized traditionally,
the elements of competition and underlying conflict must be recognized. With shifts
in patient populations and changes in each healthcare profession, healthcare
managers must assess the effects of bureaucratic imperialism in a realistic manner.
The competition engendered by bureaucratic imperialism and the resultant total or
partial colonization of an organizational unit or client group may be functional.
Holden noted that conflict not only forces organizational regrouping by clarifying
client loyalty and wishes but also sharpens support for the agency or unit that
wins. Furthermore, it disrupts the bureaucratic form from time to time, causing a
healthy review of client need, organizational purpose, and structural pattern.
CO-OPTATION
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Another method that organizations use to help ensure their survival is co-optation,
an organizational strategy for adapting and responding to change. Philip Selznick
described and labeled this strategy, which is viewed as both cooperative and
adaptive. He defined co-optation as an adaptive response on the part of the
organization in response to the social forces in its environment; by this means, the
organization averts threats to its stability by absorbing new elements into the
leadership of the organization.
9 The organization, in effect, shares organizational
power by absorbing these new elements. Selznick called it a realistic adjustment to
the centers of institutional strength.
Formal Versus Informal Co-optation
In formal co-optation, the symbols of authority and administrative burdens are
shared, but no substantial power is transferred. The organization does not permit the
co-opted group to interfere with organizational unity of command. Normal
bureaucratic processes tend to provide sufficient checks and balances on any coopted group, just as they tend to restrict the actions of managers. Through formal cooptation, however, the organization seeks to demonstrate its accessibility to its
various publics.
In health care, the co-optation process is suggested by the practice of appointing
ordinary citizens to the board of trustees. Community behavioral care health
centers and some neighborhood health centers tend to emphasize consumer or
community representation. Health planning agencies include both providers and
consumers in planning for health care on a regional or statewide basis. The
formalization of nursing home ombudsmen or patient/resident councils is still
another example of this process.
Professional associations in those disciplines that have technical-level
practitioners have sought to open their governing processes in response to the
growing strength of the technical-level group. Increases in numbers, greater degree
of training, further specialization, and a general emphasis on the democratic process
and provision of rights for all members have fostered changes in these associations.
Open membership, such as that adopted by AHIMA, is an example of positive
cooptation; the rapid developments in the wider field of information technology
gave impetus to including the information technology specialists in the existing
health information arena. Without cooperative adaptation to such internal changes,
there is a risk that additional associations will be formed, possibly weakening the
parent organization.
When an organization seeks to deal less overtly with shifting centers of power
and to maintain the legitimacy of its own power, co-optation may be informal in
nature. For example, managers may meet unofficially with informally delegated
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representatives of clients, employees, or outside groups. Organizational leaders may
deal regularly with some groups, but there are no visible changes in the official
leadership structures. No new positions are created; committee membership remains
intact. Informal co-optation may be more important than formal co-optation because
of its emphasis on true power, although each form serves its unique purpose. An
organization can blend formal and informal co-optation processes, as they are not
mutually exclusive.
Control of Co-opted Groups
Although the co-opted group could gain strength and attempt to consolidate power,
this does not happen frequently for several reasons. First, the organization has the
means of controlling participation. For example, only limited support may be given
to the group; there may be no physical space, money, or staff available to give to the
co-opted group, or management could simply withhold support. Another possible
course is to assign so much activity to the co-opted group that it cannot succeed
easily. With this approach, key leaders of the co-opted group generally retain their
regular work assignments but now have additional projects and tasks relating to their
special causes. Co-opted leaders also become the buffer individuals in the
organization, because the group has placed its trust in them and looks for results
faster than they can be produced. Such leaders may find their base of action eroded
and their activity turning into a thankless task.
In a more Machiavellian approach, organizational authorities could schedule
meetings at inconvenient hours or control their agendas in such a way that issues of
significance to the co-opted group are too far down on the list of discussion items to
be dealt with under the time constraints. Absolute insistence on parliamentary
procedure may also be used as a weapon of control; a novice in the use of Roberts
Rules of Order is at a distinct disadvantage when compared with a seasoned expert.
The subtle psychological process that occurs in the co-opted individual who is
taken into the formal organization as a distinct outsider acts as another controlling
measure. The person suddenly becomes, for this moment, one of the power holders
and derives new status. Certain perquisites also are granted. A consumer
representative, for example, may find his or her way paid, quite legitimately, for a
special conference or fact-finding trip to study a problem. The individual, in
becoming privy to more data and sometimes to confidential data, may start to see
things from the organizations point of view. Also, certain subtle social barriers
may make the co-opted individual uncomfortable, even though they may not be
raised intentionally and may be part of the normal course of action for the group.
Individuals representing pressure groups find that their own time and energies are
limited, even if they desire power. Other activities continue to demand their
energies. In addition, certain issues lose popularity, and pressure groups may find
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their power base has eroded. Finally, the agenda items that were causes of conflict
may become the recurring business of the organization. The conflict may become a
routine, and the structure to deal with it may become a part of the formal
organization. In the collective bargaining process, for example, the union is a part of
the organization, and its leaders have built-in protection from factors that erode
effective participation. Labor union officials commonly have certain reductions in
workload so that they may attend to union business, space may be provided for their
offices or meetings, and they may seek meetings with management as often as
executives seek sessions with them. Co-optation has occurred in such a case, but
without a loss of identity of the co-opted group. In healthcare organizations,
consumer participation has become part of the organizations continuing activity
through the development of a more stable process for consumer input, such as the
community governing board models.
HIBERNATION AND ADAPTATION
To maintain its equilibrium, an organization must adapt to changing inputs. This
adjustment may take the passive form of hibernation, in which the institution enters
a phase of retrenchment. Cutting losses may be the sensible option. If efforts to
maintain an acceptable census in certain hospital units, such as obstetrics or
pediatrics, are unsuccessful, there may be an administrative decision to close those
units and concentrate on providing quality patient care in the remaining services. An
organization may adjust or adapt to changing inputs more actively by anticipating
them. Staff specialists may be brought in, equipment and physical facilities updated,
and goals restated. Finally, the overall corporate form may be restructured as a
permanent reorganization that formalizes the cumulative effects of changes. A
hospital may move from private sponsorship to a state-related affiliated status, or a
healthcare center may become the base service unit for behavioral care programs in
the area. An assisted living facility may regroup as a personal care facility. Recall
the example from an earlier discussion under adaptation to change.
The relationships among the concepts of hibernation, adaptation, and permanent
change can be seen in the following case history of a state behavioral care hospital.
After the state legislature cut the budget of all such state hospitals, the institution
director began to set priorities for services so that the institution could survive. The
least productive departments were asked to decrease their staff. The rehabilitation
department lost two aide positions. The institution director had to force the
organization into a state of hibernation to accomplish some essential conservation of
resources. The director of rehabilitation services revised the department goals to
improve the chances of departmental survival. After closing ancillary services, the
director concentrated staff on visible areas of the hospital and asked them to make
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their work particularly praiseworthy. At the same time, the director emphasized the
need to document services so that patients progress in therapy programs could be
demonstrated. The director adapted to the change in the organization.
The program changes proved successful. The director of the rehabilitation
department consolidated the changes and modified the departments goals. Instead
of offering periodic programs to adolescent, neurological, geriatric, and acute care
patients, the staff would concentrate on acutely ill geriatric patients. The staff
applied for funds that were available to treat this population. At the same time, the
staff determined that the adolescent unit could benefit from their services. Although
funds were shrinking, the staff serviced this unit because needs in that area were
unmet. The director and the staff decided to apply for private funds to service
neurological and acute care cases so that these programs could also continue. By
adopting a combined strategy of hibernation and adaptation, with alternate plans for
expansion, the department director was able to foster not only departmental survival
but, ultimately, departmental growth.
Another example of hibernation as a survival strategy is illustrated by the
response of a continuing care or retirement community to several challenges.
Planning assumptions, budget projections, short- and long-term investments, and fee
structures were based on expectations of a modest to robust profit. Unfortunately, a
prolonged economic downturn reduced the rate of return on investments with no
concomitant decrease in costs. Credit lines became more difficult to obtain and came
with much higher interest rates. An increase in regulatory requirements for the
assisted living component of the facility would have required major renovations that
were cost prohibitive. As a response to these factors, the assisted living component
was eliminated and other expansion plans were put on hold. Plans to seek additional,
voluntary accreditation were also postponed until the organization had evidence that
such accreditation would enhance its attractiveness as a care facility, with a resulting
increase in admissions.
GOAL SUCCESSION, MULTIPLICATION, AND
EXPANSION
Because an organization that effectively serves multiple client groups can attract
money, materials, and personnel more readily than an organization with a more
limited constituency, leaders may actively seek to expand the original goals of the
organization. In addition to the pressures in the organizational environment that may
force the organization to modify its goals as an adaptive response, success in
reaching organizational goals may enable managers to focus on expanded or even
new goals. The terms goal succession, goal expansion, and goal multiplication are
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used to describe the process in which goals are modified, usually in a positive
manner.
Amatai Etzioni described this tendency of organizations to find new goals when
old ones have been realized or cannot be attained.
10 In goal succession, one goal is
reached and is succeeded by a new one. One example is the March of Dimes, which
began as a formal organization with the goal of eradicating polio; this objective was
achieved. The organization had strong support and a well-developed formal
structure. Rather than disband, the organization celebrated its achievement and
undertook a new goal: the prevention of birth defects. Another example of this
pattern involves the actions of a group of local merchants. They formed a
cooperative group to coordinate clean-up efforts after catastrophic floodinga goal
that was met. However, a strong cooperative group had been formed and solid
administrative structures had been developed; community and regional support was
strong. Rather than disband after meeting its original goal, the group took on new
goals of fostering economic development and promoting tourism. In addition,
sometimes an organization takes on additional goals because the original goals are
relatively unattainable. For example, a church may add a variety of social services to
attract members when the worship services and doctrinal substance per se do not
increase the churchs membership. A missionary group may offer a variety of
healthcare or educational services when its direct evangelical methods cannot be
used. The original goal is not abandoned, but it is sought indirectly; more tangible
goals of service and outreach succeed this primary goal.
Goal expansion is the process in which the original goal is retained and enlarged
with variations. Many examples can be described:
A college or university includes continuing education as well as traditional
classes.
An acute care facility may open a rehabilitation or convalescent care hospital as
an adjunct to its short-stay services.
A medical center opens a specialty division just for the comprehensive care of
senior citizens.
A special day program for people with fetal alcohol spectrum disorder (FASD)
adds an emergency overnight or short-stay unit. This same program partners
with the National Association of Counsel for Children, which focuses on
judicial proceedings affecting the client group (adolescents with FASD)
common to both organizations.
The Joint Commission continues to focus primarily on inpatient acute care
hospital accreditation but has expanded its standards and accreditation process
to include home care, outpatient, and emergency care units.
A collective bargaining unit negotiates specific benefits for its workers and
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takes on the administrative processing of certain elements, such as the pension
fund. The basic goal of improving the circumstances of the workers is retained
and expanded beyond immediate economic benefits.
A long-term care (skilled care) facility expands its goals to provide a new
service: a memory care or Alzheimers disease unit.
The Easter Seals Association reflects a history of goal expansion, beginning
with services for children with disabilities and currently offering additional
services to families affected by autism. In response to the growing number of
military service members who are returning from active duty with disabilities,
the organization has broadened its client group to serve them.
A community pharmacy implements comprehensive medication review for its
customers.
The Red Cross, which was originally organized to provide disaster relief in
World War I, subsequently assists in coordinating relief from all disasters,
regardless of cause. In recent years, this same agency has expanded its child
care safety training to include grandparents who have become increasingly
common caretakers of the young. Another example can be found in the
personal care setting, where some of these facilities offer respite care in a
secure unit, thus providing family members the opportunity to take a break.
Note that in all of these examples, the basic goals are retained, and the new ones are
derived from them. The new goals are closely related and are essentially extensions
of the original goals.
Goal multiplication is also a process in which an original goal is retained and
new ones added. In this case, however, the new goals reflect the organizations
effort to diversify. Goal multiplication is often the natural outgrowth of success. A
hospital may offer patient care as its traditional, primary goal. To this it may add the
goal of education of physicians, nurses, and other healthcare professionals. Because
excellence in education is frequently related to the adequacy of the institutions
research programs, research may subsequently become a goal. The hospital may
take on a goal of participating in social reform, seeking to undertake affirmative
action hiring plans and to foster employment within its neighborhood. It may offer
special training programs for those who are unemployed in its area or for those who
are physically or developmentally impaired. It may coordinate extensive social
services in an effort to assist patients and their families with both immediate
healthcare problems and the larger social and economic problems they face. Large
medical centers may take on activities such as real estate ventures, because (1) they
need housing for visiting fellows, associates, and students in training, and (2) they
view such pursuits as income-producing ventures.
Similar examples can be found in the business sector. A large hotelmotel
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corporation, with its resources for dealing with temporary living quarters, may go
into the nursing home industry or the drug and alcohol treatment facility business by
offering food, laundry, and housekeeping services; it may even operate a chain of
convalescent or alcohol and drug rehabilitation centers. Several real estate firms
might consolidate their efforts in direct sale of homes and then offer mortgage
services as an additional program. Organizations may take on a variety of goals as a
means of diversification; resources are directed toward satisfaction of all the goals.
Such multiplication of goals is seen as a positive state of organizational growth.
ORGANIZATIONAL LIFE CYCLE
Organizational change can be monitored through the analysis of an organizations
life cycle. This concept is drawn from the pattern seen in living organisms. In
management and administrative literature, the development of this model stems
from the work of Marver Bernstein, who analyzed the stages of evolution and
growth of independent federal regulatory commissions.
11 This model of the life
cycle can be applied to advantage by any manager who wishes to analyze a
particular management setting. The following material presents an application of
this model to the healthcare setting.
The organization is assessed not in chronological years but in phases of growth
and development. No absolute number of years can be assigned to each phase, and
any attempt to do so to predict characteristics would force and possibly distort the
model. The value of organizational analysis by means of the life cycle lies in its
emphasis on characteristics of the stages rather than the years. For example, the
neighborhood health centers established in the 1960s under Office of Economic
Opportunity sponsorship had a relatively short life span in comparison with the life
span of some large urban hospitals that are approaching a century or more of
service. Both types of organizations have experienced the phases of the life cycle,
with the former having completed the entire phase through decline andin its
original formextinction.
The phases of the organizational life cycle usually meld into one another, just as
they do in the biological model. Human beings do not suddenly become adolescents,
adults, or senior citizens. So, too, organizations normally move from one phase to
another at an imperceptible rate with some blurring of boundaries. Finally, not every
organization reflects in detail every characteristic of each phase. The emphasis is on
the cluster of characteristics that are predominant at a specific time.
Gestation
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In this early formative stage, there is a gradual recognition and articulation of need
or shared purpose. This stage often predates the formal organization; indeed, a major
characteristic of this period is the movement from informal to formal organization.
The impetus for organizing is strong, as it is necessary to bring together in an
organized way the prime movers of the fledgling organization, its members
(workers), and its clients.
Leadership tends to be strong and committed, and members are willing to work
hard. Members identification with organizational goals is strong because the
members are in the unique situation of actualizing their internalized goals; in
contrast, those who become part of the institution later must subsequently internalize
the institutions objectives. Members of the management team find innovation the
order of the day. Creative ideas meet with ready acceptance, because there is no
precedent to act as a barrier to innovation. If there is a precedent in a parent
organization, it may be cast off easily as part of the rejection of the old organization.
A self-selection process also occurs, with individuals leaving if they do not agree
with the form the organizational entity is taking. This is largely a flexible process,
free of the formal resignation and separation procedures that come later.
Youth
The early enthusiasm of the gestational phase carries over into the development of a
formal organization. Idealism and high hopes continue to dominate the
psychological atmosphere. The creativity of the gestational period is channeled
toward developing an organization that will be free of the problems of similar
institutions. There is a strong camaraderie among the original group of leaders and
members. Organizational patterns exhibit a certain inevitability, however. If a
creative new organization is successful, it is likely to experience an increase in
clients that will force it to formalize policies and procedures rapidly so as to handle
the greater demand for service.
Some crisis may occur that precipitates expansion earlier than planned. A health
center may have a plan for gradual neighborhood outreach, for example, but a
sudden epidemic of flu may bring an influx of clients before it is staffed
adequately. Management must make rapid adjustments in clinic hours and staffing
patterns to meet the demand for specific services and, at the same time, to continue
its plan for comprehensive health screening. A center for the developmentally
challenged may schedule one opening date, but a court order to vacate a large,
decaying facility may require the new center to accept the immediate transfer of
many patients. Routine, recurring situations are met by increasingly complex
procedures and rules. Additional staff is needed, recruited, and brought into the
organization, perhaps even in a crash program rather than through the gradual
integration of new members.
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At this point, a new generation of worker enters the organization. These workers
are one phase removed from the era of idealism and deeply shared commitment to
the organizations goals. The organizational structure (e.g., workflow, job
descriptions, line and staff relationships, and roles and authority) is tested. For the
newcomer brought in at the management level, formal position or hierarchical office
is the primary base of authority. Other members of the management team, as the
pioneers, know one anothers strengths and weaknesses intimately, but these
managers may need to test the newcomers personal attributes and technical
competence. Sometimes, because the new organization attempts to deal with some
problem in an innovative manner, an individual healthcare practitioner is hired in a
nontraditional role; not only the professional and technical competence but also the
managerial competence of that individual are tested.
Communication networks are essential in any organization. During an
organizations youth, it is necessary to rely on formal communication because the
informal patterns are not yet well developed, except within the core group. This lack
of an easy, anonymous, informal communication network forces individuals to
communicate mainly along formal lines of authority. The core group may become
more and more closed, more and more in, relying on well-developed, secure
relationships that stem from a shared history in the developing organization, while
the newcomers form a distinct out group.
The jockeying for power and position may be intense. If managers hold an
innovative office, those who oppose such creative organizational patterns may exert
significant pressure to acquire jurisdiction or to force a return to traditional ways.
Because there may have been much innovation in the overall organizational pattern
during the gestationyouth transition stage, managers have little or no precedent
against which they can measure their actions.
Certain problems center on the implementation of the original plans. The
planners may start to experience frustration with managers who enter the
organization during this period of formalization. Perhaps the original plans need
modification; perhaps the innovative, ideal approach of the original group is not
working, largely because of the change in the size of the organization. The line
managers find themselves in the difficult situation of seeming to fail at the task on
the one hand and being unable to make the original planners change their view on
the other hand. The promise of innovation becomes empty, however, if the original
planners guard innovation as their prerogative and refuse to accept other ideas.
In the youth phase of an organization, more time must be devoted to orientation
and similar formal processes of integrating new individuals into the organization.
Certain difficulties may be encountered in recruiting additional supervisors and
professional practitioners. For example, there may be no secure retirement funds,
only minimal group medical and life insurance, and a lack of benefits that are
predicated on long-term investments and large membership. Salary ranges may be
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modest in comparison with those of more established organizations simply because
insufficient time has passed for the development of adequate resources. The strong
normative sense of idealism may have a negative effect on potential workers as well
as a positive one; a certain dedication to the organizations cause may be expected,
and it may also be assumed that personnel should be willing to work hard without
being rewarded monetarily.
During these early years, a subtle cueing system emergeswhat is valued, what
is rewarded. There is a need to develop the customary external markers associated
with motivation: awards and recognition events. Although it is important to develop
these, managers must avoid trivializing this process by overrewarding
accomplishment (e.g., a 1-year pin). Managers should focus instead on markers such
as safety records, number of client encounters (e.g., 1,000), or certain goals the (e.g.,
training 100% of employees in a specific topic). These elements foster a sense of
organizational stability and decrease worker concerns about job security.
The dynamics of bureaucratic imperialism are evident at this early stage. The
youthful organization is exerting its claim in the marketplace of health care, trying
to operate from a place of strength. Meanwhile, an existing organization may
compete intensively for clients and resources. The new organization, with its limited
resources, may become less innovative because it is not sure of its strength. It may
choose to fight only those battles in which victory is certain. In a healthcare
organization, the new unit may be treated as a stepchild of related healthcare
institutions. A new community behavioral health center or a home care organization,
for example, may have to choose between competing with older, traditional units
within the parent organization and being completely independent, still competing for
resources but with less legitimacy of claim. A struggle not unlike the classic parent
adolescent conflict may emerge. Thus, organizational energy may go into an internal
struggle for survival rather than into serving clients and expanding goals.
If the client groups are well defined and no other group or institution is offering
the same service, a youthful organization may flourish. A burn unit in a hospital
may have an excellent chance of survival as an organization because of the
specificity of its clients as compared, for example, with the chance of a general
medical clinics survival. A similar positive climate may foster the development of
units for treatment of spinal cord injury or for rehabilitation of the hand as
specialized services. In effect, a highly specialized client group may afford a unit or
an organization a virtual monopoly, which will tend to place the unit or organization
in a position of strength.
A particularly challenging aspect of the transition from gestation to youth is the
necessary development of articles of incorporation and related bylaws. The closely
knit group of founders must make plans to anticipate difficulties, conflicts, and the
possibility of failure. Provision for removal of board members or officers, auditing
of business records, succession plans to replace themselves, and the disposition of
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assets if the venture fails are concepts seemingly at odds with the idealism of this
stage.
Middle Age
The multiple constraints on the organization at middle age are compounded by
several factors. In addition to the external influences that shape the work of the
organization, internal factors must be dealt with, such as the organizational pattern,
the growing bureaucratic form, the weight of decision by precedent, and an
increasing number of traditions.
However, the organization also reaps many benefits from middle age. Many
activities are routine and predictable; roles are clear; and communication, both
formal and informal, is relatively reliable. These years are potentially stable and
productive. There is a reasonable receptivity to new ideas, but middle age is not
usually a time of constant massive or rapid change and disruption, even the positive
disruption resulting from major innovation. The manager in an organization in its
middle age performs the basic traditional management processes in a relatively
predictable manner. Assessing change and adapting to it has become well
established.
Periods of rejuvenation are precipitated by a variety of events. A new leader may
act as a catalytic agent, bringing new vision to the organization; for example, the
president of a corporation may push for goal expansion by introducing a new line of
products, or an aggressive hospital administrator may push for the development of
an alternative health care service model. Mergers and affiliations with new and
developing types of healthcare institutions, such as community health centers and
home care programs, may be the catalyst. Although primarily negative events, the
fiscal chaos associated with bankruptcy or the loss of accreditation as a hospital may
cause the organization to reassess its goals and restructure its form, thereby giving
itself a new lease on life. Sheer competition, coupled with a strong belief in its
mission of comprehensive care, might cause a community hospital to add services in
specialties such as sports medicine and rehabilitation, cardiac treatment, behavioral
health for older adults, and on-site comprehensive imaging and laboratory services.
Some external crisis or change of articulated values in the larger society may
make the organization vital once again. The recent emergence of alternative modes
of communal living reflects individuals search for a mode of living that combats the
alienation of urban society; organizations that provide alternative modes of living
can be revitalized because of this new interest in shared living arrangements. The
renewed interest in domiciliary care of the elderly reflects this trend. The effect of
war on the vitality of the military is an obvious example of crisis as a catalytic agent
that causes a spurt of new growth for an organization. The growth of consumer and
environmental agencies is another organizational response to change or crisis in the
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larger society.
In health care, family practice has developed as a specialty in response to
patients wishes for a more comprehensive, more personal type of medical care. The
hospice concept for the terminally ill became an alternative to the highly specialized
setting of the acute care hospital.
An organization may experience a significant surge of vitality because of some
internal activity, such as unionization of workers. During the covert as well as the
overt stage of unionization, management may take steps to get the house in order,
including greater emphasis on workermanagement cooperation in reaching the
fundamental goals of the organization. Client groups may become more active, both
to focus attention on the institutions primary purpose and to mobilize client
goodwill in the face of the potential adversary (i.e., the union).
Yet another catalytic agent for revitalization of an organization is change in its
sponsorship. Although such change (decreased presence of members of the
sponsoring group, such as religious sisters) may alienate sectors of the original
client group (those with strong ties to the founding sponsors), survival strategies
already noted may be used to offset this potential loss of goodwill. Thus, celebration
of the organizations milestones, its history, its long-term clients, along with formal
and informal co-optation, helps restrengthen these ties. A strategy that can be used
to advantage at such times of transition involves the temporary use of an outside
management group. This management team, focusing on transition and/or
turnaround efforts, has the advantage of objectivity. It can become also the target of
the unhappiness of clients about changes, thus absorbing the negative energy of the
passing phase. The middle managers are shielded from the negativity and thus they
are able to focus on motivating and leading the workers and clients through the
changing era.
In addition, legislation of massive scope, particularly at the federal level, may
have a rejuvenating effect. The infusion of money into the healthcare system via
Medicare and Medicaid is partly responsible for the growth of the long-term care
industry, although population trends and sociological patterns for care of the aged
outside of the family setting are contributing factors. The passage of governmentsponsored healthcare planning and resource development initiatives rejuvenated
some of the existing health planning agencies; their gradual phasing out of such
initiatives, of course, has had the opposite effect in some instances by forcing a
decline in certain planning groups. Changes in state professional licensure laws may
bring certain professional groups into a season of new vigor because their scope of
practice has been enlarged.
The bureaucratic hierarchy protects managers who derive authority from a
position that traditionally is well defined by the organizations middle age. Planning
and decision making are shared responsibilities, subject to several hierarchical levels
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of review. The same events that may spur rejuvenation also may hurl the
organization into a state of decline, the major characteristic of the final stage: old
age.
Old Age
Staid routines, resistance to change, a long history of how we do things, little or
no innovation, and concern with survival are the obvious characteristics of an
organization in decline. There may be feeble attempts to maintain the status quo or
to serve clients in a minimal fashion, but the greater organizational energy is
directed toward efforts to survive. If the end is inevitable, resources are guarded so
that the institution can fulfill its obligations to its contractual suppliers and to its past
and present employees (e.g., through vested pension funds, severance pay, related
termination benefits). There may even be a well-organized, overt process of seeking
job placement for employees. Time and resources may be made available to such
individuals. This stage is a delicate one: members are competing for the same jobs in
the same, or closely related, organizations and/or in the same geographic region.
Employees become competitors with one another. Workers who keep applying for
jobs, only to be rejected, become demoralized and anxious.
Because of an organizations dwindling resources, it may no longer serve clients
well, and all but the most loyal clients will look for other organizations. The
organization in decline cannot attract new clients; the cycle is broken. Without
clients, the organization cannot mobilize financial and political resources to
maintain its physical facilities, expand services, respond to technological change, or
remain in compliance with new licensure or regulatory mandates. The end, which
may come swiftly, may be brought about by a decision to close and a specific plan
to do so in an orderly way. For example, a department store might announce a
liquidation sale that ends with the closing date. Only the internal details of closing
need attention; as far as clients are concerned, the organization has died.
A final closing date may be imposed on an organization. In a bankruptcy, for
example, the date may be determined in the course of legal proceedings. Legislation
that initially establishes certain programs may include a termination date, although
the date is more commonly set when legislation to continue funding the program
fails. The changes in medical care evaluation under professional standards review
organizations and the Office of Economic Opportunity neighborhood health centers
are examples in the healthcare field of programs that moved into a state of decline or
closure when funding was no longer available through federal, state, or county
legislation.
The closing decision may be a more passive one; there may be a gradual
diminution of services and selective plant shutdowns and layoffs, as may occur in
manufacturing corporations that rely primarily on military or space contracts.
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Bankruptcy is costly in economic and political terms in some cases, so the decision
is implemented slowly. Indeed, it sometimes seems that no one actually makes a
decision in some institutions that decline. Because of its unpopularity, the decision
to close certain services, such as healthcare services, may be made in a somewhat
passive way; however, the seemingly gradual slipping away of clients and the
deterioration or outright closing of urban hospitals may be accompanied by the
emergence of competitive forms of health care, such as home care units,
neighborhood health centers, and mobile clinics.
Although some organizations cease to exist entirely, others may change form or
exist under new sponsorship. For example, some of the neighborhood health centers
under specialty grant sponsorship have been absorbed into other federal government
systems of health clinics. Some hospitals that had been owned and controlled by
religious orders have become community-based, nonprofit institutions. Some
organizations seem only to change title and official sponsorship. The various types
of agencies for healthcare planning have included regional medical programs and
regional comprehensive health planning programs, and statewide declining
organization may find themselves in a caretaker role that health planning agencies;
the organizational structure, not the total mandate, of these agencies has changed or
been eliminated.
Managers overseeing the closing stages of an organization face both challenges
and opportunities. To end well becomes an unspoken goal and a goal that must be
made explicit. Managers must come to terms with the realities associated with
phasing out an organization. It will be a stressful time for all, and managers need to
attend to personal well-being. Yes, there is a personal goal of being a class act
right to the end. This starts with a decisionto stay to the end or to leave earlier. If
a manager does not have a contractual obligation to stay, he or she might leave as
soon as possible and plan accordingly. Ambivalence, lack of enthusiasm, and
anxiety surface and contribute to poor leadership at this critical stage. Proceeding
with forthrightness and directness is usually the best choice. But if a manager
chooses to stay to the end, his or her attitude should flow from this unspoken
mandate, ending well. There is much work to accomplish in the closure of an
organization. Here are some of the main features of management concerns and
activities:
Adopt and communicate a positive attitude about the unfolding events.
Develop robust communication processes to offset rumors and uncertainties and
to maintain the trust of workers and clients.
Attend to the needs of the clients/patients by providing:
a. Notice of closing and related information
b. Continuity of care plans and referrals
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c. Detailed information about alternate points of care
d. Detailed information about accessing/obtaining health records and
information about final billing and claims
Give timely notice to secondary clients (e.g., clinical affiliation agreements with
colleges and university educational programs, on-the-job training programs
with community-based groups).
Attend to the needs of the workers:
a. Give clear, timely information about the phases of the closure.
b. State policy and procedures for using sick leave, vacation time, or
compensation time, and any related options if available (e.g., additional pay
instead of taking time off).
c. State the policy and procedure for requesting time off for job interviews.
d. Develop opportunities for lateral transfer to obtain additional job
experience.
e. Make sure awards and recognition deadlines are met.
f. Work with human relations department to ensure workers understand their
benefits and the associated requirements (e.g., health insurance coverage).
Attend to the relationships with resource suppliers and supporter:
a. Give timely notice and accurate information about the upcoming closure.
b. Renegotiate contracts to phase out the arrangement, or, in some cases, to
extend it (e.g., outsourced billing and coding, off-site storage, leased
equipment).
Managers must develop plans to phase out essential activity and also prepare for
the associated costs:
1. Payment of pensions, retirement funds, severance pay, escrow accounts (e.g.,
as in the case of continuing care facilities)
2. Continuance of health insurance, worker compensation, and unemployment
insurance plans for the period mandated by law
3. Retention of, and access to, business and healthcare records
4. Renegotiation contracts for outsourced functions or leased equipment
5. Development a plan for maintaining essential functions (on site or outsourced)
such as final billing and claims processing, storage of records
6. Arrangement of coverage by hiring temporary workers to offset the increased
worker unavailability time due to increased use of vacation time, etc.
7. Participation in the final due diligence review, usually carried out by external
consultants and auditors
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One final activity flows from the need for psychological and symbolic closure.
The many constituents of the organization, both internal and external, observe how
well or how poorly this is accomplished. Thus, managers explicitly arrange for the
retirement of organizational symbols such as logo, motto, and colors; items of
historical meaning are honored and disposed of with care; and traditional fundraising events are passed on to the new organization. The final closing event is more
than a formality. It is public relations at its best. An old saying provides some
guiding wisdom here: if it is done right, it is right forever.
Paradoxically, this may be a time of great opportunity for managers. Middle
managers may have an opportunity to participate in activities outside their normal
scope as the executive team grows thin. This may be the ideal time for middle
managers to try their hand at related jobs, because failure may be ascribed to the
situation rather than to inexperience or even incompetence. The same holds true for
employees; managers can use this opportunity to motivate the remaining workers by
giving them new opportunities to gain experience and to enhance their rsums.
Valuable experience may be gained because this may also be a time of great
creativity as the gestational phase begins for a new organization with its unique
opportunities, challenges, and frustrations. Throughout the life cycle of the
organization, strong leadership is needed. The next section contains a discussion of
the manager as leader.
NOTES
1. For additional reading about the early development of the history of management, see:
a. Luther Gulick and Lyndall F. Urwick, eds., Papers of the Science of Administration
(New York: Institute of Public Administration, 1929).
b. Henri Fayol, General and Industrial Administration (Geneva, Switzerland:
International Management Institute, 1929).
c. Chester Bernard, The Functions of the Executive (Cambridge, MA: Harvard
University Press, 1968).
d. James Mooney and A. C. Reiley, The Principles of Organizations (New York:
Harper, 1939).
2. Ludwig von Bertalanffy, General Systems Theory: A Critical Review, General
System 7 (1962): 120; and Kenneth F. Boulding, General Systems Theory: The
Skeleton of Science, Management Science 2 (1956): 197208.
3. Peter Blau and W. R. Scott, Formal Organization (San Francisco: Chandler, 1962), 42.
4. Amatai Etzioni, A Comparative Analysis of Complex Organizations (Glencoe, IL: Free
Press, 1961).
5. Daniel Katz and Robert L. Kahn, The Social Psychology of Organizations (New York:
John Wiley and Sons, 1967), 11.
124
6. Max Weber, The Theory of Social and Economic Organization, trans. A. M. Henderson
and Talcott Parsons; ed. Talcott Parsons (Glencoe, IL: Free Press, 1947), 324386.
7. Bertram Gross, Organizations and Their Managing (New York: Free Press, 1968), 114
132 passim.
8. Matthew Holden, Jr., Imperialism in Bureaucracy, American Political Science Review
(December 1966): 943.
9. Philip Selznick, TVA and the Grass Roots (New York: Harper Torchbooks, 1966), 13,
260261.
10. Amatai Etzioni, Modern Organizations (Englewood Cliffs, NJ: Prentice-Hall, 1964),
1314.
11. Marver Bernstein, Regulating Business by Independent Commission (Princeton, NJ:
Princeton University Press, 1955).
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CHAPTER 4
Leadership and the Manager
CHAPTER OBJECTIVES
Address the role of the manager as a principal agent of change.
Differentiate among the terms power, influence, and authority.
Recognize the importance of authority for organizational stability.
Identify the sources of power, influence, and authority.
Relate the sources of power, influence, and authority to the organizational
position of the line manager.
Recognize the limits placed on the use of power and authority in
organizational settings.
Recognize the importance of delegation of authority.
Explore the nature of leadership and the reasons why individuals seek
leadership positions.
Identify the styles of leadership, their characteristics, and the circumstances
under which they are applied.
CHANGE AND THE MANAGER
The healthcare setting of today is a highly dynamic environment in which the
individual manager must embrace the reality of constant change and accept and
fulfill the role of change agent within the organization. It is only through addressing
essential change and truly leading employees in its acceptance and implementation
that the manager can be successful in the long term. Denying or resisting change
does not merely mean standing still but losing ground and actually going backward
relative to technology and society as they race ahead.
The department manager must be able to deal with employee resistance to
change, including the most frequently encountered causes of resistance and how best
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to approach resistance to change with employees. However, this implies that the
manager is already completely on board with the necessity for a particular change. It
is now appropriate to acknowledge that the manager may well be fully as susceptible
to resistance as the employees. Who is the manger but simply another employee? He
or she can be just as affected by misgivings and uncertainty about impending change
as the rank-and-file staff. A discussion of how managers may deal with change
appears in Chapter 2.
Thus, the manager may have a difficult task up front in the implementation of
change, especially change mandated from on high or forced by external
circumstances, because the manager has nearly the same potential for resistance as
the employees. Even the knowledge that a certain change is inevitable regardless of
what it entails does not necessarily guarantee that the manager will be a willing
advocate for the change.
Of course the manager, and just about everyone else for that matter, is likely to
champion a change that was his or her own idea. But when ideas or directives or
other requirements come from elsewhere, the manager, who may experience some
feeling of resistance, must deliberately strive to overcome that feeling and become
champion of the change. It is often extremely difficult for the manager who feels
some personal misgivings to go forward as the driver of change.
We are told repeatedly that the manager can address change with the employees
in three ways: tell them what to do, convince them of what must be done, or involve
them in determining what must be done. This third approach, involving them, is all
well and goodbut often it cannot be used. The first approach, the tell-them-whatto-do route, is avoided if possible because it does little to temper resistance. This
leaves the second approach, the need for the manager to convince the employees of
what must be done. Clearly, many employees are more likely to get on board with a
particular change if they know why it must be done. And an honest why is not
simply telling the employees that it is orders from administration or blaming it on
the ever-present yet never identifiable they as in they are making me do it.
The central point of this brief discussion is that if the manager is to be a true
agent of change and an honest and effective catalyst for change, the first person to
be accepting and supportive of change is the manager. So if you, the manager,
experience doubts or misgivings about some change that lies ahead, work these out
within yourself and with your superiors as necessary. Your employees should be
able to see you as a true agent of change who is there to support their efforts in
implementing change and helping them through it such that everyone, yourself
included, achieves a new comfort zone as essential change becomes part of the
norm.
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WHY FOLLOW THE MANAGER?
The manager issues an order or directive, and the result is compliance. But why do
employees obey? Is it even appropriate to use the term obey to describe this
compliance? Which bases of authority are operative in superiorsubordinate
transactions? What are the limits of a managers authority? What if a particular
supervisor is seen as a weak manager? Are there remedies available for addressing
problems related to weak or ineffective management leadership? Of what value to
the organization is the authority structure? What are the consequences for life within
the organization if there is not general, unchallenged compliance most of the time?
When actions of compliance are described, which term provides the proper point of
referencepower, authority, or influence? Are these terms mutually exclusive or
are they synonymous when used in the context of organizational relationships?
These questions arise when discussion of authority in organizations is undertaken.
Organizational behavior is controlled behavior, behavior that is directed toward
goal attainment. The authority structure is created to ensure adherence to
organizational norms, to suppress spontaneous or random behavior, and to induce
purposeful behavior consistent with the aims of the organization. No matter how the
work within the organization is divided, no matter the extent to which specialization,
departmentation, centralization, or decentralization is formalized, there must be
some measure of legitimate authority if the organization is to be effective. The
concept of formal authority is supported by the two related concepts of power and
influence. These concepts may be separated for analytical purposes; in actual
practice, however, the concepts of authority, power, and influence are intertwined.
THE CONCEPT OF POWER
Power is the ability to obtain compliance by means of some form of coercion,
whether blatant or subtle; ones own will prevail even in the face of resistance.
Power is force or naked strength; it is a mental hold over another. Like authority and
influence, power is aimed at encouraging compliance, but it does not seek consensus
or agreement as a condition of that compliance.
Power is always relational. An individual who has power over another person can
narrow that persons range of choices and obtain compliance. The power holder
does not necessarily force compliance by physical acts but rather may operate in
more subtle ways, such as an implied threat to apply sanctions. Latent power is
frequently as effective as an overt show of power. Power attaches to people, not to
official positions. The formal authority holder (i.e., the person who has the official
title, organizational position, and grant of authority) may or may not have power in
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addition to this formal grant of authority.
An imbalance in superiorsubordinate relationships can occur when a
nonofficeholder has more power than the official officeholder. This can even be
seen in family life. For example, when a 2-year-old boy shows signs of an incipient
temper tantrum in the middle of the annual family gathering, the power balance
clearly is in favor of the child if the tantrum pattern has developed. The child does
not have to carry out the explosive behavior; the mere threat of the possibility brings
about some desired behavior from the parent caught in the situation.
Workers often have some degree of power over line supervisors and managers. A
worker with specific technical knowledge can withhold key information from a
manager or can develop a relationship that is personally favorable. Information may
not actually be withheld; the mere possibility that the manager cannot rely on an
individual is enough to shift the balance, at least temporarily, in favor of the worker.
Groups of workers can control a manager when it is known that the manager is
responsible for meeting a deadline or filling a quota; the managers ability to do so
is dependent on the cooperation of the workers. Normal, steady output may be
produced routinely, but the ability to make that extra push needed to surpass the
quota or reach a special level of output rests more with the workers than with the
manager. Strikes by workers are classic examples of mobilized power, but the power
shifts back in favor of management if striking workers are terminated during a
strike.
When an individual can supply something that a person values and cannot obtain
elsewhere in an accepted manner, or when the individual can deprive one of
something valued, then there is a power relationship. This implicit or explicit power
relationship may or may not be perceived by one or both parties.
THE CONCEPT OF INFLUENCE
Like power, influence is the capacity to produce effects on others or obtain
compliance from others, but it differs from power in the manner in which
compliance is evoked. Power is coercive, but influence is accepted voluntarily.
Influence is the capacity to obtain compliance without relying on formal actions,
rules, or force. In relationships governed by influence, not only compliance but also
consensus and agreement are sought; persuasion rather than latent or overt force is
the major factor in influence. Influence supplements power, and it is sometimes
difficult to distinguish latent power from influence in a given situation. Does the
individual comply because of a relationship of influence or because of the latent
power factor? Together, power and influence supplement formal authority.
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THE CONCEPT OF FORMAL AUTHORITY
Authority may be described as legitimate power. It is the right to issue orders, to
direct action, and to command or exact compliance. It is the right given to a manager
to employ resources, make commitments, and exercise control. By a grant of formal
authority, the manager is entitled, empowered, and authorized to act; thus, the
manager incurs a responsibility to act. Authority may be expressed by direct
command or instruction or, more commonly, by request or suggestion. Through the
delegation of authority, coordination is established in the organization.
The authority mandate is delineated, communicated, and reinforced in several
ways, including organizational charts, job descriptions, procedure manuals, and
work rules. Although the exercise of authority in many situations tends to be similar
to transactions of influence, authority differs from influence in that authority is
clearly vested in the formal chain of command. Individuals are given specific grants
of authority as a result of organizational position. Power and influence may be
exercised by an individual authority holder, but they may also be exercised by
individuals who do not have specific grants of authority.
Authority is both complemented and supplemented by power on the one hand
and influence on the other hand. It is within the realm of formal authority to exact
compliance by the threat of firing a person for failure to comply; however, this may
be such a rare occurrence in an organization that such a threat is really an
application of power more than an exercise of authority. However, formal aspects of
authority may be so well developed that the major transactions remain at the level of
influence, with the influence based largely on the holding of formal office. The
infrequent use of formal authoritative directives to evoke compliance may indicate
organizational health; that is, people know what to do and perform willingly.
THE IMPORTANCE OF AUTHORITY
When a subordinate refuses to accept the orders of a superior, the superior has
several choices, each of which carries potentially negative consequences for the
attainment of organizational goals. The superior can accept the insubordination,
withdraw the order, and call on others to carry out the directive. This action would
probably further weaken authority, however, because the superior would most likely
be perceived as lacking the subtle blend of power and authority needed to exact
compliance on a predictable basis. A chain reaction of insubordination could occur.
If other workers are asked to carry out a directive that had been refused by one
worker, resentment could build up and produce negative consequences. If the order
is withdrawn completely, of course, the work will not be accomplished.
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The manager who decides to enforce compliance may suspend or fire the
insubordinate worker, but the superior still must find a worker to carry out the
directive. If there is a chain reaction of insubordination, it may become impractical
to suspend or fire the entire work force. In such circumstances, the situation moves
from one of authority to one of power. Therefore, managers must identify and widen
their bases of authority to help ensure a stable work climate.
SOURCES OF POWER, INFLUENCE, AND
AUTHORITY
The managers organizational relationships flow along the continuum of power,
influence, and authority, varying in emphasis at different times and in different
situations. To more fully understand the dynamics of the powerinfluenceauthority
triad, it is useful to examine the sources or bases of authority in formal
organizations. The wider the base of authority, the stronger the managers position;
with a broad base of authority, the manager can work in the realm of influence and
need not rely only on the formal grant of authority that attaches to organizational
position.
The sources of formal authority have been studied by several theorists in the
disciplines of social psychology, management, and political science. A review of the
literature suggests several sources or bases of authority: (1) acceptance or consent,
(2) patterns of formal organization, (3) cultural expectations, (4) technical
competence and expertise, and (5) characteristics of authority holders. The limits or
weaknesses of each theory are offset by the approach taken in another.
The Consent Theory of Authority
The belief that authority involves a subordinates acceptance of a superiors decision
is the basis for the acceptance or consent theory of formal authority. A superior has
authority only insofar as the subordinate accepts it. This theory implies that
members of the organization have a choice concerning compliance, even when often
they do not. It remains important to recognize the concepts of acceptance and
consent to identify the centers of more subtle and diffuse resistance to authority,
even when there is no overt and massive insubordination.
The zone of indifference and the zone of acceptance are two similar concepts in
the acceptance or consent theory of authority. Chester Barnard used the term zone of
indifference to describe that area in which an individual accepts an order without
conscious questioning.
1 Barnard noted that the manager establishes an overall
setting by means of preliminary education, prior persuasive efforts, and known
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inducements for compliance. The order then lies within the range that is more or less
anticipated by the subordinate, who accepts it without conscious questioning or
resistance because it is consistent with the overall organizational framework.
Herbert Simon used the term zone of acceptance to reflect the same authority
relationship. The zone of acceptance, according to Simon, is an area established by
subordinates within which they are willing to accept the decisions made for them by
their superior.
2 Simon noted that this zone is modified by positive and negative
sanctions in the authority relationship, as well as by such factors as community of
purpose, habit, and leadership.
Coupled with the foregoing factors is the concept of the rule of anticipated
reactions, which Simon included in his discussion of the zone of acceptance.
3
According to this rule, subordinates seek to act in a manner that is acceptable to
their superior, even when there has been no explicit command. The authority
system, including anticipated review of actions, is so well developed that the
superior needs only to review actions rather than issue commands. The past
organizational history in which positive and negative sanctions were enforced is
recalled; the expectation of the review of actions is fostered so that the subordinates
zone of acceptance is expanded.
Another approach to the concept of authority as a relationship between
organizational leaders and their followers is described by Robert Presthus, who
posited a transactional view of authority in which there is reciprocity among
individuals at different levels in the hierarchy.
4 Compliance with authority is in
some way rewarding to the individual, and the individual, therefore, plays an active
role in defining and accepting authority. Everyone has formal authority, in that each
person has a formal role in the organization. There is, Presthus stated, an implicit
bargaining and exchange of authority, with each individual deferring to the other.
The notion of reciprocal expectations in authority relationships is further
supported in Edgar Scheins discussion of the psychological contract.
5 As in
Barnards concept of the zone of indifference and in Simons rule of anticipated
reactions, the premise of member acceptance of organizational authority and its
attendant control system is basic to the psychological contract. The workers
acceptance of authority constitutes a realm of upward influence; in turn, the workers
expect the authority holders to honor the implicit restrictions on their grant of
authority. The workers expect the authority holders to refrain from ordering actions
that are inconsistent with the general climate of the given organization and from
taking advantage of the workers acceptance of authority. The workers also expect
as part of this psychological contract the rewards of compliance (i.e., positive
sanctions readily given and negative sanctions kept at a minimum).
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The Theory of Formal Organizational Authority
In his classic study of bureaucracies, Max Weber discussed three forms of authority:
charismatic, traditional, and rationallegal. Charisma, as defined by Weber, is a
certain quality of an individual personality by virtue of which he is set apart from
ordinary men and treated as endowed with supernatural, superhuman, or at least
specifically exceptional qualities.6 The social, religious, and political groups that
form around charismatic leaders tend to lack formal role structure. The routines of
bureaucratic structure are not developed and may even be disdained by the group.
Charismatic authority figures function as revolutionary forces against established
systems of leadership and authority. Such authority is not bound by explicit rules but
rather remains invested in the key charismatic individual. Personal devotion to the
leader or what might be termed an almost irrational faith in the leader bind the
members of the group to one another and to the leader.
Because charismatic authority is linked to the individual leader, the
organizations survival is similarly linked. If the organization is to endure, it must
take on some of the characteristics of formal organizations, including a formalized
authority pattern. In this area, two developments are possible. Charismatic
leadership may evolve into a traditional system of authority, or it may develop into
the rationallegal system of formal authority. In traditionalism, a pattern of
succession is developed. A successor may be designated by the leader or
hereditary/kinship succession may be established; then a system of transferring the
leadership to the legitimately designated individual or heir must be developed. This,
in turn, leads to a system of roles and formal authority. Weber uses the term
routinization of charisma to describe this transformation of charismatic authority
into, first, traditional authority, and then rationallegal authority.
Rationallegal authority is the authority predicated in formal organizations. It is
generally assumed that formal organizations come into being and derive legitimacy
from an overall social and legal system. Individuals accept authority within the
formal organizational structure because the rights and duties of members of the
organization are consistent with the more abstract rules that individuals in the larger
society accept as legitimate and rational.
Within the formal organization, a system of roles and authority relationships is
carefully constructed to enable the organization to survive and move toward its
formal goal on a continuing, stable basis. Authority has its basis in the
organizational position, not in any individual. Weber described in detail the major
characteristics of bureaucratic structures; the following characteristics relate to the
rational-legal authority structure:
7
1. The principle of fixed and official jurisdictional areas means that areas are
generally ordered by rulesthat is, by laws or administrative regulations.
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a. The regular activities required for the purposes of the bureaucratically
governed structure are distributed in a fixed way as official duties.
b. The authority to give the commands required for the discharge of these
duties is distributed in a stable way and is strictly delimited in a fixed way as
official duties.
c. Methodical provision is made for the regular and continuous fulfillment of
these duties and for the execution of the corresponding rights; only persons
who have generally regulated qualifications to serve are employed.
2. The principles of office hierarchy and of levels of graded authority mean that
there is a firmly ordered system of superiority and subordination in which
supervision of the lower offices is carried out by the higher ones.
The theory of formal organizational authority rests on this rationallegal system
of formal office, impersonality of the officeholder, and a system of rules and
regulations to constrain the grant of authority. Delegation of formal authority from
top management to each successive level of management is the basis of formal
organizational authority. Authority is derived from official position and is
circumscribed by the limits imposed by the hierarchical order.
Cultural Expectations
Both the consent theory of authority and the theory of formal organizational
authority include an implicit assumption that individuals in a society are culturally
induced to accept authority. Furthermore, the acceptable use of authority in
organizations is defined in part by the larger societal mores as well as by union
contract, corporate law, and state and federal law and regulation.
Acceptance of the status system in a society is learned as part of the general
socialization process. General deference to authority is ingrained early in
psychosocial development, and social roles with their sanctions are accepted and
reinforced throughout life. The role of employee carries with it both formal and
informal sanctions; insubordination is not generally condoned. Even as a group
cheers the occasional rebel, there is attendant discomfort because something is out
of order in the relationship. When the insubordination of an individual begins to
threaten the economic security of the group, there is counterpressure on that
individual to bring about reacceptance of authority. Fear of authority may bring
about a similar response of renewed acceptance of authority and counterpressure on
any dissidents.
The expected zone of acceptance or zone of indifference varies with different
social roles. These variables are rarely spelled out in great detail; they are learned as
much through the pervasive cultural formation process as through the formal
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orientation process in any one organization. There is a kind of group mind that
includes the general realization that a particular behavior pattern is part of a given
role, and the entire role set reinforces this general acceptance of authority.
Technical Competence and Expertise
Three terms reflect the organizational authority that is derived from or based on the
technical competence and expertise of the individual, regardless of which office or
position the individual holds in the organization. These terms are functional
authority, law of the situation, and authority of facts.
Functional authority is the limited right that line or staff members (or
departments) may exercise over specified activities for which they are responsible.
Functional authority is given to the line or staff member as an exception to the
principle of unity of command. For purposes of this discussion on the sources of
authority, it is useful to emphasize the special character of functional authority,
which is given to a line or staff member primarily because that individual has
specialized knowledge and technical competence. For example, the human resources
manager normally assists all other department heads in matters of employee
relations, although this manager has no authority to intervene directly in manager
employee relations. The situation changes when there is a legally binding collective
bargaining agreement: the human resources manager, with special training in labor
relations, may be given functional authority over all matters stemming from the
union contract because of specialized knowledge. Another example is that of
information technology support staff who, because of technical competence, are
given authority to make final decisions over certain aspects of data collection. The
authority is granted because of the technical competence of the staff members.
Mary Parker Follett, a pioneer in management thought, introduced the terms law
of the situation and authority of facts.
8 Follett described the ideal authority
relationship as that stemming from the situation as a whole. Each participant in the
organization who is assumed to have the necessary qualifications for the position
held has authority associated with that position. Orders become depersonalized in
that each participant in the process studies and accepts the factors in the situation as
a whole. Follett stated that one person should not give orders to another person but
rather both should agree to take their orders from the situation.
9 She developed this
concept further: both the employer and the employee should study the situation and
should apply their specialized knowledge and technical competence through the
principles of scientific management. The emphasis shifts, in Folletts approach, from
authority derived from ones official position or office to authority derived from the
situation. The individual who has the most knowledge and competence to make the
decision and issue the order in a particular situation has the authority to do so. The
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staff assistant or a key employee potentially has as much authority in a particular
situation as does the holder of a hierarchical office. The incident command system
used in hospital disaster management is an example of law of the situation, with
command passing from unit manager, clinical specialist, or safety officer as the
circumstance requires.
Closely tied to the concept of law of the situation is that of authority of facts.
Follett stressed that, in modern organizations, individuals exercise authority and
leadership because of their expert knowledge.
10 Again, leadership and authority
shift from the hierarchical position to the situation. The person with the knowledge
demanded by the situation tends to exercise effective authority.
Both of these concepts place emphasis on the depersonalization of orders. At the
same time, the source of the authority is highly personal, in that knowledge and
competence for the exercise of authority belong to an individual. Underlying the
concepts of functional authority, law of the situation, and authority of facts is the
theme that authority is derived from the technical competence and knowledge of
individuals in the organization who do not necessarily hold formal office in the line
hierarchy.
Characteristics of Authority Holders
Authority rests in individuals. The talents and traits of the individual may become
the source of authority, as in the case of the charismatic leader. A person holding
power may use this as a base for gaining legitimate authority, or a group may invest
the person of power with legitimate authority as a protective measure and seek to
impose the limits and customs of authority. They may also accept the power holder
as formal officeholder as a means of accepting the situation without further conflict.
Technical competence and knowledge are also personal characteristics that become
the basis of authority in certain situations.
Authority by Default
A weak form of authority stems from situations in which the group members, either
by conscious decision or by lack of attention to authorityleadership succession, do
not develop strong, clear, authority patterns. A professional organization, for
example, might decide to rotate authorityleadership roles through a nomination
process that limits the choice of candidates from specific geographic regions. In
another organization, the committee chair role might be simply rotated through all
the members in turn, either because members do not wish to have any one
department as dominant or simply because the task is seen as a chore. In another
organization, provision for succession might be weakened because the same few
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members hold officer positions for years, so no new leadership is developed.
Of course, the time invariably comes when a long-term authority holder is no
longer able to continue. A vacuum then arises, and a newer member is prevailed on
to assume the office. When such occurs, authority by default is the rule. The
officeholder must attend to building up the office or accept the realities of the
situation, as he or she has only a limited authority mandate.
The Managers Use of Sources of Authority
In practice, managers should recognize all the potential sources of authority and
weigh the contribution of each theory to obtain as complete a picture of the authority
nexus as possible. They should assess their own grants of authority and try to
determine which elements tend to strengthen their authority and which tend to erode
it.
The base of authority shifts from time to time. As an example, suppose an
individual is offered the position of department head of a health information service
because of that individuals competence in the administration of health information
systems; this specialized knowledge and technical competence is the first pillar of
authority. When the individual accepts the position, the formal authority mandate of
that official position is added. This authority, in turn, is shaped by the prevailing
organizational climate, which includes either a wide or narrow zone of acceptance
on the part of employees. The personal traits of the authority holder complete the
authority base for that office.
The individual with a participative management style may emphasize those
aspects of authority that widen the zone of acceptance. The setting itself may dictate
the predominant authority base, as in the law of the situation; in a highly technical
setting, those persons with the most technical knowledge use this knowledge as the
base of authority. Although there is a tendency to downplay internal politics in
organizations such as healthcare institutions, some individual managers may use
power as a major source of authority. Astute managers regularly assess the several
bases of authority available to them to enhance the authority relationships and
thereby contribute more effectively to the achievement of organizational goals.
RESTRICTIONS ON THE USE OF AUTHORITY
Several factors restrict the use of authority. Some constraints stem from internal
factors, such as the limits placed on authority at each organizational level; others
stem from external factors, such as laws, regulations, and ethical considerations. The
following is a systematic summary of these factors:
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1. Organizational position. Each holder of authority receives a limited delegation
of authority consistent with the position held in the organization. An individual
has no legitimate formal authority beyond that accorded to the organizational
position.
2. Legal and contractual mandates. Authority is limited by federal, state, and
municipal laws and regulations relating to safety, work hours, licensure, and
scope of practice; by internal corporate charter and bylaws; and by union
contract.
3. Social limitations. The social codes, mores, and values of society at large
include both implicit and explicit limits on the behavior of individuals.
Authority holders are expected to act in a manner consistent with the
predominant value system of the society. These social limitations are major
factors in shaping the zone of acceptance and the general cultural deference of
individuals who are members of organizations.
4. Physical limits. An authority holder can neither force a person to do something
that is simply beyond that persons physical capabilities nor escape the natural
limits of the physical environment, such as climate or physical laws.
5. Technological constraints. The advances and the limitations of the state of the
art must be considered in the exercise of authority; no amount of power or
authority can bring about a result that is beyond the technical ability of the
individuals.
6. Economic constraints. The scarcity of needed resources limits the behavior of
formal authority holders.
7. Zone of acceptance of organization members. Both authority and power have
their limits in that the net cost of using either must be calculated. When a weak
manager is faced with a strong employee group, perhaps as encountered in a
strong union setting, the cost of using even legitimate authority may be too
high; the authority grant is actually diminished.
Although many employees do not have complete freedom to choose what they
will or will not do, they may resist authority in subtle ways, such as adherence to job
duties exactly as stated in the job description, passive resistance, and failure to take
initiative in any area not specifically designated by the supervisor. The manager
must move into a distinct leadership position to develop a wide zone of acceptance,
as leadership becomes an essential adjunct to the exercise of authority.
IMPORTANCE OF DELEGATION
Although the manager retains overall responsibility and authority for the work of the
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department or service, he or she must necessarily delegate authority to specific
workers under his or her jurisdiction. Simply put, it is not possible for the manager
to carry out every task. Therefore, each worker receives delegated authority from the
manager to proceed on a day-to-day basis. Empowerment of the workers is essential.
Managers set up the parameters for action through several means: the
development of policies and procedures, the promulgation of work rules and codes
of behavior, the development of job descriptions with job duties and expectations
well delineated, and the presentations of formal orientation and training programs
associated with job duties. The manager consciously selects an appropriate style of
leadership and communication to further enhance an atmosphere in which workers
accept responsibility for their part in meeting the organizational goals.
A manager who is new to the role may experience some uneasiness with
delegating. First, there is simply that natural tendency to think, I can do this better
or faster myself. Second, a manager may harbor some fears. For instance, if the
worker fails at the task, the responsibility still rests with the manager; it is the
manager who will take the heat, so to speak. There is also a certain loss of
satisfaction and recognition; managers are often removed from day-to-day
interaction with patients and their families and their own professional peers who
remain in the arena of active, hands-on practice. Recognition of these inner barriers
to delegation is the first step to overcoming resistance to this necessary aspect of
authority.
Dos and Donts of Delegation
Know when to delegate. In most day-to-day circumstances, delegation of authority is
the norm. Routine tasks such as employee scheduling, for example, are easily
accomplished by the supervisor closest to the unit. Certain highly specialized tasks
such as revenue-cycle/compliance reviews are best delegated to a member of the
department team who specializes in the area. Such a person would have the most upto-date knowledge related to the topic. Workflow coordination and routine problem
solving between or among working units are best accomplished by the immediate
unit supervisors who are in continual interaction. Delegation is also a part of team
development; the manager builds capability and confidence in the assistant
managers, unit supervisors, and specialists. Delegation is part of the intentional
training and mentoring goals of the manager.
Know when not to delegate. Certain activities remain the primary responsibility
of the manager and normally are not delegated, such as hiring, disciplinary action,
and termination. Generally, any task that falls under the heading of personnel
management cannot be delegated; no nonmanagement employee must ever be
empowered to make personnel decisions that affect other nonmanagement
employees. Throughout each process, there will be input from unit managers and
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supervisors, but the final action is that of the manager. Complex or volatile
employee or client situations sometimes arise; these, too, are the managers
responsibility. Overall systems and workflow, along with equipment and layout, are
the managers concerns, although there is input from unit managers and supervisors.
Avoid common pitfalls associated with delegation. Two common pitfalls can
occur inadvertently; the prudent manager takes care to avoid these. First, a manager
might undermine a unit supervisor by countermanding, even informally, a decision
made by the first-line supervisor. For example, a unit supervisor might deny a
request for a schedule change by an employee because of workflow or staffing
considerations. The employee might informally ask the manager to approve the
desired schedule change. Managers who allow themselves to override a subordinate
managers decisions undercut the authority and responsibility grant of this manager.
(This is not the same thing as the normal grievance or appeal process during which
an employee may meet with a higher-level manager at designated steps in the course
of the seeking resolution.) Second, a manager, with the best of intentions, solicits
information on a regular basis, perhaps daily, from unit managers. The casual but
purposeful question, How are things going in your unit today? may lead to on-thespot reports of one or another workflow or staffing problem. The concerned
manager might readily respond, Ill look into that and get back to you, instead of
involving the subordinate supervisor in solving the problem.
Interact with workers regularly. It is necessary to set up a balanced system of
availability and support. The manager remains available to unit supervisors through
a mix of formal and informal interactions, such as the following:
Formal, periodic meetings with individual supervisors for in-depth feedback
about a specific activity. These meetings focus on workflow and related
problem solving.
Formal development meetings with individual supervisors or the team of
supervisors. The focus is development of supervisory skills, mentoring, and
career path development.
Informal day-to-day prn interaction.
A combination of formal and informal daily briefing, sometimes referred to as
the huddle.
The final practice involves a brief daily meeting, about 15 minutes in length, held
sometime between the early morning and midday. By this time, any immediate
concerns will have surfaced, yet there is sufficient time remaining in the day to solve
most problems that arise. The team usually remains standing while each supervisor
summarizes the particular concerns in his or her functional unit, allowing each
member of the team to become aware of workflow impact, employee issues, and
news of the day. Team members are able to make immediate plans to deal with
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intradepartmental concerns without the managers having to mediate such
coordination. An administrative assistant also attends, bringing materials for
distribution on the spot, which eliminates the accumulation of materials in the inbox
for each team member. The manager comments on such materials if follow-up is
required. The assistants presence also facilitates actions that keep things moving
without further instructionfor example, he or she will follow up on a purchase
order or check on a question relating to a payroll matter.
The manager typically rotates the location of the huddle among the different
units of the department unless confidential information is involved. In the latter
case, the unit supervisor of that department leads a roundtable briefing. This action
provides visibility of the authorityresponsibility mandate entrusted to that
supervisor. The employees of the unit see their unit supervisor as a member of the
team. Furthermore, this experience of leading a roundtable briefing provides
additional training in leadership for each team member. The huddle takes place
daily, even when the manager is unable to attend, thereby reinforcing the role set of
the supervisors as designated agents of the manager. This practice empowers the
unit supervisors by enabling them to take the lead.
Effects of Good Delegation
Recognition of the benefits of proper delegation and, conversely, awareness of the
consequences of poor delegation further enhance a managers ability to delegate.
Just as proper delegation increases the zone of acceptance on the part of employees,
so failure to delegate demoralizes workers, thereby shrinking their field of
cooperation. Morale suffers, turnover rates increase, and loss of productivity results.
When workers in regular contact with clients cannot easily take immediate and
effective action, client groups become alienated and unhappy and seek services
elsewhere. The organization develops a reputation for being wrapped in bureaucratic
red tape.
Finally, without proper delegation, a manager must remain constantly present to
authorize action; this is time consuming and wasteful of managerial resources. It is
also unrealistic because a managers duties frequently require being out of the
department or office and even away from the premises. With a managers
commitment to delegation in place, and with, the day-to-day activities flow toward
accomplishing the overall mission of the organization.
LEADERSHIP
Frequently, when professionals describe a leader as a powerful person who has
made it to the top of his or her field, they use the expression industry leader or
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other similar label. The successful health professional does not seem to share
familiar and common habits with the average practitioner. People imagine the
person as a romantic figure who is not human. Drucker describes leadership in
reality as mundane, unromantic and boring. Its essence is performance.11 Yet
leadership is vital for the future growth and development of health professions. This
section is designed to address the leadership qualities that everyone has buried
within. Rather than define leadership as distant and unusual, this section describes it
as a set of characteristics that emerge from individuals who are able to get things
done within an organization.
Natural leaders do exist, but it is likely that they are few and far between. For
the most part leaders are not born; they develop. In fact, leaders are not
extraordinary in any way except that they can match organizational goals to the
abilities and interests of their work groups. This talent is mercurial; some leaders are
effective in one set of circumstances but not in others. Leadership is not based on
impossible characteristics possessed by few; rather, it is a collection of abilities that
successful managers have carefully cultivated.
Definition of Leadership
A leader is a person who can organize tasks and make things happen through the
efforts of a group of people. Using the unique interests and needs of every member
of the work group, the effective leader inspires goal-directed behavior that is
consistent and efficient. The leader cajoles, rewards, punishes, organizes, stimulates,
strengthens, communicates, and motivates. There is no set standard for leadership
behavior, as individuals must match their own characteristics to the needs of the
organization.
The personal characteristics common to many leaders are a strong self-image, a
vision of the future, a firm belief in the goals of the organization, the ability to
influence the behavior of subordinates, and the ability to relate to and influence
individuals in parallel or superior positions of authority.
Leadership exists both informally and formally. Informal leadership is exerted in
many settings, including formal organizations. Within any formal organization,
there are subunits and even para-organizations, such as collective bargaining units,
that are led by individuals who do not hold formal hierarchical office. Leadership is
implied, even explicitly included, in the role of the manager whose function is to
achieve organizational objectives by coordinating, motivating, and directing the
work group. For the remainder of this discussion on formal leadership, it is
presumed that the manager is a leader in addition to being a holder of formal
authority.
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Where Do Leaders Come From?
The word leaders in this subheading stands in quotes because not all persons in
leadership positions are truly leaders.
In organizational life, leaders are acquired in two ways: they are promoted
from the ranks of employees, and they are recruited from outside of the
organization. Both means have their advantages and disadvantages. The leader
promoted from within ordinarily knows the organization and its structure and
workings, understands the policies and practices of the organization, knows about
the processes he or she will oversee, and is familiar with the staff. But the leader
promoted from within usually has drawbacks to overcome in the form of
interpersonal relationships that can hamper the transition into a leadership role,
especially, as frequently occurs, when one is promoted to managing a department in
which he or she was one of the employees.
The leader recruited from outside usually comes in with no knowledge of the
personalities already in place. Depending on conditions existing before the new
leaders arrival, this person may be cautiously welcomed by the staff as one who can
improve certain conditions or may be regarded with apprehension as a potential
new broom who will make changes. So whether a new leaderwhether firstline manager, middle manager, or whateverrises from within or comes from
outside, there are pluses and minuses associated with the appointment.
Anyone who has been part of a work organization for any length of time has
learned that the best rank-and-file employees, those who are most knowledgeable
and successful, do not necessarily make the best leaders. Yet there is a certain
amount of logic in the promotion of the technically best employees into
management. After all, promoting weak or even mediocre workers into management
is surely not a consideration. But many leadership positions are filled by individuals
who have had little or no education in the management of people. This is a large
area of concern in many organizations, and it is often addressed through
management development programs.
But rather than further consideration of where leaders come from, it is important
to consider a related question that says a great deal about many individuals who
enter leadership. Why do many individuals seek leadership positions?
What Drives People to Become Leaders?
There is an informal exercise that is worth conducting with a group of employees,
especially with people in a supervisory development program who wish to become
supervisors or have already been promoted to supervision. Lead them in a
brainstorming exercise using this instruction; list any or all reasons a given
individual might have for seeking a leadership position. Do not let the participants
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note just a few of the supposedly standard reasons, and do not be concerned with
similarities and overlaps among reasons. Without too much prodding, a group of 10
or more people can come up with literally dozens of reasons why individuals seek
leadership positions. Then have the group sort these reasons into two broad
categories: (1) those addressing the true needs of leadership and (2) those addressing
primarily an individuals needs or desires.
It does not take too long to discover that the reasons addressing an individuals
needs or desires far outweigh the reasons that address the needs of the organization
or entity that requires leadership. On the up side will be to make a difference, to
serve the customer, to implement my ideas, to improve the organization, to motivate
and encourage employees, to solve some long-standing problems, and a number of
other similarly noble statements. On the down side, always the much longer list
coming from this exercise, will be to make more money, to obtain better benefits, to
acquire standing as a manager, to acquire power, to exert influence, to position
myself to grow further, and other essentially selfish reasons. If asked, of course, one
who is seeking a leadership position will never articulate any of the selfish reasons
but will surely state a couple of the organization-positive reasons.
Consider the public arena in which we obtain leaders by voting for them.
Candidates will tell us what they stand for and what they propose to do if elected
(or, in these times of rampant negative campaigning, will regale us with reasons why
their opponents are unfit to hold office). A candidate for public office will always
articulate some variation on I only want to serve. But consider this question: would
this individual still want to serve if doing so did not entail acquiring money,
benefits, position, power, prestige, influence, acclaim, and such?
Thus, people seek leadership positions for both positive and negative reasons,
and many of these reasons are driven by selfishness. It is possible that many of the
best potential leaders are buried in the general population; these are people who
have or could develop the requisite skills but experience none of the selfish urges or
who simply do not want the responsibility of what they may see as a thankless job.
Once in a while, in the face of an emergent situation when others have failed or
become incapacitated, one of these potential leaders will step into the breach and
take charge, but this does not often happen. However, seldom do these best potential
leaders step forward and seek leadership positions.
Leadership Qualities
To influence and induce others to strive toward a goal, the leader must possess not
only a strong vision of that goal but also the ability to render the goal meaningful to
the group. The knowledge, insight, and skill of the leader are greater than those of
other members of the group. At an obvious level, the leader leads but does not drag,
coerce, or push the group. Group members are steadily induced to move toward the
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goal; they are influenced in a pervasive way so that the overall goal becomes their
own goal. The leader does not achieve the work alone but instead successfully
coordinates the work of the group. The leader inspires confidence through both
emotional and knowledge ties with the followers. Indeed, a major factor that
characterizes a truly successful leader is the willing acceptance of that leadership by
the followers.
It is possible to generate a fairly lengthy list of qualities and characteristics that
some would say define a leader. However, there are a couple of problems related
to the creation of such a list. One difficulty, surely minor in the long run, is that no
one persons list is ever complete in the eyes of another person, and it approaches
the impossible to get even a few people to agree on which qualities and
characteristics are more important than the others. But the greater difficulty with any
list of essential qualities and characteristics of a leader is that no matter what
quality or characteristic is cited as essential, we can nevertheless point to some
supposedly very successful leaders who are lacking in such. Many successful
leaders are lacking, for example, in honesty, compassion, analytical ability, and
numerous other qualities. So any attempt to define a leader by listing qualities and
characteristics simply takes us back to the single characteristic that always holds
true: the acceptance of the followers. One who is not accorded the acceptance of the
followers does not truly lead but rather pushes.
Leadership Functions
In formal organizations, the leader has certain functions that are tied to the
organizational need for leadership. The leader is expected to influence, persuade,
and in general control the group. As an individual with vision, the leader is expected
to take calculated risks and to act as a catalyst in the change process.
The leader carries out important functions on behalf of group members through
the role of representative. For example, employees look to their unit or department
head to speak for them and to seek or to obtain advantages for them. The leader may
be cast in several roles by followers, especially at the symbolic level, and may even
be seen as the father or mother figure who shields the individual from difficulties.
The leader may also be the scapegoat. As the management representative closest to
the rank-and-file worker, the first-line leadermanager bears the brunt of anger
when the organizational situation is less than optimal.
The leader is presumed to embody the values of the group. As such, the leader
becomes the focal point in the motivational process. He or she fosters the
development of the climate and conditions that favor individual involvement in
group effort. Leadership is a process more than a structure; the leader fosters the
climate for change so that the organization will possess the adaptability required for
long-term survival.
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From Theory to Practice: A Leaders Plan of Action
The manager must make a conscious commitment to the exercise of leadership
through specific actions. Leadership activity clusters in natural groupings and to a
considerable extent are intertwined. Here are some examples of leadership action
relating to health information management:
1. The leader starts and sustains the conversation. By being out in front of the
trends, the leader studies the big challenges, digests them, talks them up,
and translates them into action plans within the organization. Examples include
encouraging employee development through the attainment of additional
specialty credentials and promoting participation in regional health
information exchange and e-health initiatives.
2. The leader uses professional and technical competence to promote the health
information professionals as the authoritative sources for clinical
documentation systems and practices. Activities would typically include
monitoring the federal initiatives concerning the electronic health record
(EHR) initiative, the dissemination of information about the current changes in
electronic discovery civil rule and the related topic of the definition of the
electronic legal record, and serving as EHR project manager or team member.
3. The leader partners with key players in the organization. The leader identifies
individuals whose support is critical to successful implementation of major
systemsfor example, the EHR, speech recognition technology, or
computerized provider order entry. The leader takes the initiative in
interdepartmental collaborative action such as:
Policy and procedure affecting joint action
Clinical pertinence review protocols
In-service training needs
Compliance reviews and billing audits
Risk management reviews
Interorganization peer review
4. The leader is actively engaged in the life of the organization. The leader
recognizes and accepts that necessary work extends beyond the routine 9-to-5
day and beyond the borders of the department. The leaders attitude is one of
loyalty to and enthusiasm for the work of the organization. This visible support
of the mission might take on a variety of forms:
Participation in organizational events to honor employees or volunteersfor
example, employee recognition ceremonies and receptions
Participation in outreach activities such as career days, health fairs, and
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fund-raising events
Attendance at events sponsored by other departmentsfor example, the
open house celebrating a designated professional week (such as Physical
Therapy Week or National Nurses Week)
Participation in the organizations speakers bureau
Hosting regional meetings of ones profession to bring attention to the
organizations areas of excellence
5. The leader passes on the praise and the pride. Employees are not taken for
granted; rather, their accomplishments are noted within the department and the
organization. The leader takes care to nominate employees for appropriate
awards such as Employee of the Month. Departmental activities are included
in the internal newsletter, with its customary spotlight on column. The leader
submits entries for trade and professional association newsletters featuring the
department. The leader finds opportunities for employees to participate in
extradepartmental events, such as annual disaster or emergency preparedness
drills, thereby raising the visibility and involvement of the group.
Styles of Leadership
The manner in which a manager interacts with subordinates reflects a collection of
characteristics that constitute a style of leadership. Although any manager may use
several styles of leadershipchoosing the style most appropriate for a given
situationone style generally emerges as that managers predominant mode of
interaction.
Autocratic Leadership
Also referred to as authoritarian, boss-centered, or dictatorial leadership, autocratic
leadership is characterized by close supervision. The manager who uses this style
gives direct, clear, and precise directions to employees, telling them what is to be
done and how it will be done; there is no room for employee initiative. Employees
do not participate in the decision-making process. There is a high degree of
centralization and a narrow span of management. The chain of command is clearly
and fully understood by all. Autocratic managers use their authority as the principal,
or only, method of getting work done because they believe that employees could not
properly or efficiently carry out work assignments without detailed instruction.
There are two general types of autocratic leadership, exploitative and benevolent.
In the exploitative type, the followers are literally exploited for the benefit of the
leader. In the benevolent type, the father-knows-best approach to leadership is
used; the leader treats followers kindly while sincerely believing he or she must
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make all the decisions and call all the shots. Both the exploitative autocrat,
fortunately a seldom-encountered sort of leader, and the benevolent autocrat, a much
more common sort than the other, are dictators; they lay down the law and the
followers have no choice other than to comply or leave.
Although autocratic leadership appears to get results much of the time, it can be
fatal in the long run. Employees can lose interest in their assignments and stop
thinking for themselves, because there is no room for independent thought. Under
certain conditions and with specific employees, however, a degree of close
supervision may be necessary. Some employees prefer to receive clear and precise
orders, because close supervision reassures them they are doing a good job. Even so,
it can generally be assumed that an autocratic, close leadership style is the least
effective and least desirable method for motivating employees to perform. This
remains so whether the leader is the harsh exploitative autocrat or the kindly
benevolent autocrat; in either case, the leader dictates and the followers are expected
to comply.
Bureaucratic Leadership
Like the autocratic leader, the bureaucratic leader tells employees what to do and
how to do it. The basis for this leadership style is almost exclusively the
organizations rules and regulations. For the bureaucrat, the rules are the law. The
bureaucratic manager is often afraid to take chances and manages by the book.
Rules are strictly enforced, and no departures or exceptions are permitted. The
bureaucrat, like the autocrat, allows employees little or no freedom. Some
bureaucrats become so entrenched in their reliance on rules and regulations that they
are essentially paralyzed when encountering a situation for which there is no
applicable rule or regulation.
Participative Leadership
In participative leadership, the contribution of the group to the organizational effort
is emphasized. This style is the opposite of autocratic, close supervision. The
manager who uses the participative method involves the employees in the decisionmaking process and in the maintenance of cohesive group interaction. The manager
involves employees in determining goals, objectives, and work assignments, and
similarly he or she involves them in defining the nature and extent of a problem
before making a final decision and issuing directives or orders. This approach
endeavors to make full use of the talents and abilities of the group members. If
approached honestly and with fair consideration of employees input, the employees
who have participated in the process are likely to experience a sense of ownership in
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the resulting decision.
Participative management does not weaken a managers formal authority,
because the manager remains responsible for the final decision whether it is made
independently or by the group. The obvious advantage of the participative style of
leadership revolves around the meaningful involvement of the employees, which
greatly enhances the implementation of the decisions that have been made.
Consultative Leadership
Some managers use a pseudo-participative method of leadership to give employees
the feeling that they have participated in decision making. The consultative leader
routinely solicits employee input, then just as routinely ignores that input and
independently makes the decision. This sort of leader is often self-deluded into
believing that he or she is being openly participative by soliciting employee input.
However, when the employee input is ignored, employees quickly sense that the
manager is manipulating people and that their participation in the decision-making
process is not real.
Laissez-Faire Leadership
Laissez-faire or free rein or essentially hands-off leadership is based on the
assumption that individuals are self-motivated and generally self-directed. In this
approach, employees receive little or no supervision. Employees, as individuals or
as a group, determine their own goals and make their own decisions. The manager,
whose contribution is minimal, acts primarily as a consultant and does so only when
asked. The manager does not lead but allows the employees to lead themselves.
Some managers consider this approach to be true democratic leadership, but the
usual end result is disorganization and chaos. The lack of leadership permits
different employees to proceed in different directions.
Paternalistic Leadership
This is quite similar to benevolent autocracy, the father-knows-best approach to
leadership. The paternalistic manager treats employees like children, telling them in
a kindly manner what to do and how to do it. It is the paternalistic managers belief
that employees do not really know what is good for them or how to make decisions
for themselves. In this approach, everyone is watched over by the benevolent
managerthe benign dictatorand the employees eventually become extremely
dependent on their paternalistic boss. The paternalistic leader genuinely believes
that the followers are incapable and must therefore be told every move to make. In
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contrast, the benevolent autocrat does not care whether the followers are capable or
not, but firmly believes that he or she must think and decide for the entire group.
Continuum of Leadership Styles
Another way to view leadership behavior is on a continuum ranging from highly
boss-centered to highly group-centered. The relationship between the manager and
the employee in the continuum ranges from completely autocratic, in which there is
no employee participation in the decision-making process, to completely
democratic, in which the employee participates in all phases of the decision-making
process. The following briefly describes the gradations along the continuum:
1. The manager makes the decision and announces it. The manager identifies a
problem, considers alternative solutions, selects a course of action, and tells
employees what to do. Employees do not participate in the decision-making
process; they do not provide input in any form.
2. The manager sells the decision. The manager again makes the decision
without consulting the employees. Instead of simply dictating the decision,
however, the manager attempts to persuade the employees to accept it largely
through explaining how the decision serves both the goals of the department
and the interests of group members.
3. The manager presents ideas and invites questions. The manager has already
made the decision but asks the employees to express their ideas. Thus, the
manager allows for the possibility that the initial decision may be modified.
4. The manager presents a tentative decision subject to change. The manager
allows the employees the opportunity to exert some influence before the
decision is finalized. The manager meets with the employees and presents the
problem and a tentative decision. Before the decision is finalized, the manager
obtains the reactions of employees who will be affected by it.
5. The manager presents the problem, obtains suggestions, and makes the
decision. Up to this point on the continuum, the manager has always come
before the employees with at least a tentative solution to the problem. At this
point, however, the employees get the first opportunity to suggest solutions.
Consultation with the employees increases the number of possible solutions to
the problem. The manager then selects the solution that he or she regards as
most appropriate in solving the problem.
6. The manager defines limits and asks the group to make the decision. For the
first time, the employees make the decision. The manager now becomes a
member of the group. Before doing so, however, the manager defines the
problem and the limits and boundaries within which the decision must be
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made.
7. The manager permits subordinates to function within the limits defined by the
superior. For the maximum degree of employee participation, the manager
defines the problem and lists the guidelines and boundaries within which a
solution must be achieved. The limitations imposed on the employees come
directly from the manager, who participates as a group member in the
decision-making process and is committed in advance to implementing
whatever decision the employees make.
In summary, the managers relationship with the employees influences morale,
job satisfaction, and work output. Employee satisfaction is positively associated
with the degree to which employees are permitted to participate in the decisionmaking process. In contrast, poor supervision causes employee dissatisfaction, high
turnover rates, and low morale.
Factors That Influence Leadership Style
No one style of leadership fits all situations. A successful manager is one who has
learned how to apply the most appropriate method for a given situation. Before
selecting a style of leadership or deciding to blend several styles, the manager must
consider a number of factors:
1. Work assignment. If the work assignment is repetitious, properly trained
employees do not need constant or close supervision. If the assignment is new
or complex, however, close supervision may be required.
2. Personality and ability of employees. Employees who are not self-starters
function best under close supervision. Others, by reason of personality and
work background, can take on new and important responsibilities on their own;
these individuals react best to participative leadership. The occupational
makeup of a department may also influence the leadership style used by the
manager. For professional practitioners (e.g., physical therapists, occupational
therapists, health information personnel) or other highly skilled employees, the
employee-centered participative leadership style is often most effective. When
employees are unskilled or unable to act independently, the boss-centered or
autocratic style of leadership may produce better results.
3. Attitude of employees toward the manager. The manager cannot begin to lead
or influence behavior unless he or she is accepted by the group. Employees
fully accept the managers authority only when they believe that the goals and
objectives of the manager are consistent with their own personal and
professional interests.
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4. Personality and ability of the manager. The managers personality has a
definite effect on the behavior and performance of employees. The manager
must treat employees opinions and suggestions with respect and must
sincerely encourage employee participation.
When faced with different work group encounters and situational factors, the
effective manager shifts from one style of leadership to another, often without
conscious recognition of a shift in style. Table 41 shows examples of the
adjustments in leadership style that a manager makes to stimulate maximum effort
from employees.
Communicating Your Own Managerial Style
A manager may deliberately go out of his or her way to communicate to employees
the style of leadership or management he or she practices. It is not particularly
uncommon for a manager who is relatively new to an organization or department to
make statements such as these: I believe in employee participation, and I always
welcome your input; I practice management by wandering around, so youll see
me a lot in the departments; or, one of the most oft-heard, my door is always
open.
There are some significant hazards in introducing yourself as a manager in such a
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manner. In the words of a wise, anonymous observer of management practices, Its
Management 101using the buzzwords, saying what you think you should be
saying, telling people that youre what the management experts say you should
be. The hazards inherent in such pronouncements are found in the risk of being
trapped by employee perception.
It takes only a few perceived contradictions of your self-described style to create
dissonance. As soon as you are seen unilaterally making decisions without soliciting
participation or input, you have created a perceived conflict between your words and
your actions. And when a few employees have found you unavailable, although you
have said My door is always open, more such conflicts are created and employee
perceptions begin to turn unfavorably against you, whether deservedly or not. Any
given perception may not be entirely accurate, but to the perceiver perception is
reality.
It is best to say as little as necessary about your own style of leadership and allow
your actions to convey your true style. In other words, instead of telling employees
what kind of leader you are, let your actions show them. You may not come across
as the sort of leader idealized in Management 101, but, even more importantly,
you are more likely to come across as honest.
Situational Leadership and Adjustment
What is here referred to as situational leadership is hardly worth of a label in its
own right. For the well-experienced conscientious manager and insightful leader of
people, it should be automatic. Situational leadership consists of adapting ones
style to the particular situation at hand or to the unique needs of the moment.
Not every problem submits to the same logical process of analysis and solution.
Not every need that arises in the workday can be addressed in an identical manner.
And, most important to the manager, not every employee is able to respond as
desired to the same management approach. Within the same group you may have
Theory X individuals, who must be led and who indeed often prefer to be led and
have others do their thinking for them, along with Theory Y people who are selfmotivated and capable of significant self-direction. This is especially likely in
department employing both professionals and nonprofessionals. Although the same
overall rulesthat is, the same personnel policiesapply uniformly to all
employees, the manager will have to deal differently with individuals in other ways.
Some you may consult and invite their participation or input; others you will simply
direct.
Avoid making assumptions about people; never assume that what works with one
will work with all others. Know your employees and try to understand each one as
both a producer and a person. By working with people over a period of time, and
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especially by working at the business of getting to know them, you can learn a great
deal about individual likes and dislikes and capabilities. Learn about your people as
individuals and when necessary lead accordingly. If you are convinced that a certain
employee genuinely prefers orders and instructions and this attitude is not
inconsistent with job requirements, then use orders and instructions. Although many
employees of healthcare organizations seem to prefer participative leadership, not
everyone will desire this same consideration. Maintain sufficient flexibility to
accommodate the employee who wants or requires authoritarian supervision. It is
fully as unfair to expect people to become what they do not want to be as it is to
allow a rigid structure to stifle those other employees who feel they have something
more to contribute.
There is no single style of leadership that is appropriate to all people and
situations at all times. Let the situation and the needs of those involved dictate your
managerial style.
SOME FINAL THOUGHTS ABOUT AUTHENTIC
PERSONAL LEADERSHIP
In the preceding discussion, the manager has been identified as an agent of change.
The functions of the manager have been noted, and leadership traits and foundations
have been explored. All of this leads up to some final thoughts about the manager
leader as a person.
One who would aspire to leadership and become successful in its pursuit must
perform some serious self-examination by asking: why should anyone be led by me?
This can be a startling question. A persons initial reaction might be one of
defensiveness or even irritation: Shouldnt it be obvious? I am up-to-date in my
field; I come in every year at or under budget; no accreditation citations arise from
my department; there are few, if any, grievances from my staff; and my employee
turnover is minimal. What more do they want?
Now ask the latter question another way: What more do you want? What kind of
person are you striving to be? Some people view the idea of self-development as
trendy: dress for success, or six steps to persuading and negotiating, or similar topics
suggesting artificial methods for getting ahead in the organization. Such practices
even become the fodder for sit-coms and cartoons, not to be taken seriously. But for
others, this focus on self is embarrassing and perhaps discouraging. Who can be the
perfect person?
Such reactions could cause us to neglect this important aspect of leadership.
Notice the emphasis that major business and management schools place on the
cultural, spiritual, and psychological development of the managerleader. They
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devote significant curriculum time and resources to these topics. Major business and
management journals include regular features on these aspects of leadership. When
we observe successful peers, higher-level managers, and leaders both within the
organization and external to it, we notice some common traits. Specifically, they
possess a set of value-added characteristics.
Value-Added Characteristics
The value-added characteristics flow from a deep respect for the dignity of the
human person. This genuinely high regard for oneself and for others is reflected in
the presentation of self in everyday life. It is manifested through an attitude of
engaged, conscious living; gracious interpersonal relationships; and calm, orderly
work habits. It is embodied in the values of integrity, trustworthiness, and respect.
Engaged, Conscious Living
Individuals who display the characteristic of engaged, conscious living have an
awareness of and an enthusiasm for life. They bring positive energy to the work
setting that is rooted in a balanced lifethey like their life! Their approach to life
keeps them from overreacting. They are not the caricature characters who are always
having a bad day and give off the negative vibration: dont even ask; you dont
want to know; wait until I have had my coffee. No, these are the people who are
steady; they are pleasant to associate with; they easily and routinely show
graciousness.
Gracious Interpersonal Relationships
In an age of depersonalization, coupled with overly casual ways of relating, a person
can inadvertently fail at fundamental politeness. The antidote is gracious
interpersonal relationships. The gracious person truly sees you and acknowledges
you; a simple good morning is extended to coworkers, and a cordial hello is
given to the attendees at a meeting. This person knows how to make an introduction,
both informal and formal, and can offer an appropriate blessing, a toast, or a
congratulatory message at a celebratory occasion. He or she sends the timely
handwritten note and does not fall into the casual practice of cute, humorous, or
even sarcastic commercial cards. He or she can make conversation with ease and
does not rely on the latest sports headline as the only topic.
Calm, Orderly Work Habits
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The workplace is accepted for what it isa place of business. The attentive
managerleader maintains an orderly work space, free of distracting items (e.g.,
mementos, knickknacks, highly personal possessions). The office is not the persons
second home. The work at hand is laid out for attention and then returned to its
proper holding place. A member of the organization who comes to this persons
office can literally sit down without having to step over or move files and piles. If
a high-level manager brings a visitor to the office space, it should not result in
embarrassment on anyones part. There is an attitude of dignity and respect toward
ones physical environment; this person is a good steward of the material goods
entrusted to him or her.
Embodiment of Values
Others can easily make positive remarks about these managerleaders. They have
integrity; they promote ethical behavior that is reflected in routine practice. There is
no bootleg software in use. Their expense reports are truthful and straightforward.
When given the opportunity to attend conferences and training sessions, they
actively participate, take the opportunity to obtain information from vendors, and
make useful contacts through networking. They are trustworthy; such a person can
keep a confidence, and he or she is a thoughtful sounding board and a safe haven for
letting off steam. The person confiding in this managerleader knows that the
conversation will be safeguarded.
Finally, these managerleaders are respectful of others. People know that they are
psychologically safe in such a persons presence. People know they will not be
recorded, photographed, or uploaded onto the various social media. The respectful
managerleader truly listens to the individual in one-on-one situations and at
meetings; he or she is not doodling, knitting, clock watching, surreptitiously
checking for messages, or multitasking. Attentiveness, being fully present, is the
hallmark behavior of such a person.
Recall the probing question: Why should anyone be led by you? The answer
becomes easy and obvious when one attends to purposeful self-development.
CASE: AUTHORITY AND LEADERSHIP:
RISING FROM THE RANKS
Background
After working 8 years as a staff nurse on a general medicalsurgical unit, Julie
Davis was appointed nurse manager of that unit. Following a staff meeting at which
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her promotion was announced, Julie found herself surrounded by three longtime
coworkers offering their congratulations and making other observations and
comments.
Im really happy for you, said Sarah Johnson. This sounds like a terrific career
step. But I suppose this means our carpool is affected, since your hours are bound to
be a lot less predictable from now on.
Elaine Rowe said, And I guess that shoots the lunch bunch, too. Management
commitments, you know. The emphasis on management was subtle though
undeniable, and Julie was not at all sure that she was pleased with what she was
hearing.
Jane Davidson offered, Well, maybe now we can get some action on a few ageold problems. Remember, Julie, you used to gripe about these things as much as the
rest of us.
Weve all complained a lot, Sarah agreed. Thats been sort of a way of life
around here. The tone of her voice shaded toward a suggestion of coolness and her
customary smile was absent when she added, Now Julies going to be in a position
where she can do something, so lets hope she doesnt forget who her friends are.
Elaine and Jane looked quickly from Sarah to Julie. For an awkward 10 seconds
or so, no one spoke. At last, someone passing by said something to Julie, and as
Julie turned to respond, Elaine, Jane, and Sarah went their separate ways.
Instructions
1. Identify the potential advantages Julie might enjoy in becoming manager of a
group of which she has long been a member, and contrast these with the
possible disadvantages that might present themselves because she has long
been a member of this group.
2. Describe how you believe Julie will have to proceed in establishing herself as
the legitimate possessor of supervisory authority on the unit, and describe the
sources and forms of Julies authority.
CASE: DISCIPLINE AND DOCUMENTATION
HERE SHE GOES AGAIN
Background
Ive come to the end of my patience with Roberta Weston, said accounting
manager Sam Best. The position shes in is so important to us that we simply cant
afford any more of her omissions or mistakes. For the sake of the hospital and the
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department, I believe shes got to go.
Whats the problem? asked Charlene Harrison, the human resources director.
Problems, plural, Best answered. Shes so late in posting receipts on rentals in
the medical arts center that we wind up double-billing a number of physicians every
month. Actually, its the same with just about all miscellaneous incomesince
shes responsible for all receipts except third-party reimbursement. Were losing
control of income, and I get three or four complaints a week from people who claim
theyve been billed again for charges theyve already paid.
Best shook his head and added, Ive really tried to give her every chance to turn
around, but nothing seems to work. At least not for very long.
Harrison said, Ive reviewed Robertas file. The only evidence of a problem I
found was your rather detailed performance improvement review of 2 months ago.
In that process, youre supposed to give the employee detailed direction aimed at
correcting the problem. You did that, and you also provided a warning that task
performance would be monitored closely for 30 days and that she could be let go by
the end of that period if her work didnt come up to satisfactory levels. You did the
review well, but I didnt see anything about any follow-up.
Best said, Thats because she had shaped up by the end of the 30 days.
But now she isnt working up to the requirements of the job?
No. Her work was just marginally okay at the end of the 30 days, but within 2
weeks the bottom dropped out again and the mistakes started rolling in.
Harrison asked, What do you mean by again?
This is the third time Ive been through this with her. I go over the areas in
which shes not working up to standard, she puts on a burst of effort and does better,
and a month or so later she falls back into her old ways. Best frowned and added,
I cant put up with it any longer. Three strikesshes out.
Harrison said, According to her file, its just one strike. The only documentation
is your single performance improvement review. What about the other two times?
Strictly verbal.
You didnt write up anything? Youre supposed to cover such discussions with a
counseling form or at least a memo for the record.
Best said, If I wrote up one of those every time I had to talk to an employee, Id
never get done writing. Its a lot of work.
I know it is, responded Harrison, but youve got to have your documentation.
As it stands right now, if we terminate her she could probably give us a real hard
time with a couple of outside agencies.
So what should I do? Best asked.
Instructions
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1. Describe the ways in which the employee might be able to give the
organization a real hard time if she is terminated now.
2. Develop a plan of action that you would recommend Sam Best to follow in
dealing with employee Roberta Weston.
NOTES
1. Chester Barnard, The Functions of the Executive (Cambridge, MA: Harvard University
Press, 1968), 167169.
2. Herbert Simon, Administrative Behavior (New York, NY: Macmillan, 1965), 12.
3. Ibid., 129.
4. Robert Presthus, Authority in Organizations, in Concepts and Issues in Administrative
Behavior, edited by Sidney Mailick and Edward H. Van Ness (Englewood Cliffs, NJ:
Prentice-Hall, 1962), 122.
5. Edgar H. Schein, Organizational Psychology (Englewood Cliffs, NJ: Prentice-Hall,
1965), 11.
6. H. H. Gerth and C. Wright Mills, From Max Weber: Essays in Sociology (New York,
NY: Oxford University Press, 1946), 196204.
7. Ibid.
8. H. C. Metcalf and L. Urwick, eds., Dynamic Administration: The Collected Papers of
Mary Parker Follett (New York, NY: Harper, 1942).
9. Ibid.
10. Ibid.
11. P. F. Drucker, Leadership: More Doing Than Task, Wall Street Journal (January 6,
1988).
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CHAPTER 5
Planning and Decision Making
CHAPTER OBJECTIVES
Define the management functions of planning and decision making.
Identify the characteristics of plans and specifically address those
characteristics or features that make plans effective.
Identify participants and their responsibilities in the planning process.
Delineate the constraints placed on planning and identify the boundaries to
be observed in the planning process.
Define and differentiate among the terms philosophy, goal, objective,
functional objective, policy, procedure, method, and rule.
Delineate aspects of project management and 500-day plans.
Determine how to evaluate a decisions importance.
Describe some of the tools and techniques available to aid decision making.
Planning is the process of deciding in the present what to do to bring about a desired
outcome in the future. We might further qualify this description by referring to
planning as the process of tentatively deciding what to do because we have no
assurance of exactly what the future will bring.
Planning involves determining appropriate goals and deciding on the means to
achieve them, making assumptions, developing premises, and reviewing alternative
courses of action. It is the what, who, when, and how of alternative courses of action
and of possible future actions. In planning, the manager contemplates the state of
affairs desired for the future in light of what is known or can be inferred about the
future. Any time people are looking ahead considering what to do in the future
whether that future is years or only minutes awaythey are planning.
In the planning process, the step involving the choice among alternatives is the
decision-making phase.
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CHARACTERISTICS OF PLANNING
Planning is the most fundamental management function and logically precedes all
other functions. Unplanned action cannot be properly controlled because there is no
basis on which to measure progress, and organizing becomes meaningless and
ineffective because there is no specific goal around which to mobilize resources.
Decisions may be made without planning, but they will lack effectiveness unless
they are related to specific goals.
Planning goes beyond mere judgments, because judgments involve the
assessment of a situation but do not stipulate actions to be taken. Planning concerns
actions to be taken with reference to specific goals.
In planning, the ideal state is first identified. The initial approach to achieving
that ideal is then modified, refined, and brought to a practical level through a variety
of derived elements, such as intermediate target statements, functional objectives,
and operational goals. Planning includes the decision-making process, particularly
in the commitment phase. Logical planning includes commitment in terms of time
and actions to be taken. There is a hierarchy in the process that includes the
relationship of derived plans to the master course, the linkage of short-range and
long-range plans, and the coordination of division and department or unit plans with
those of the organization as a whole. Finally, planning is characterized by a cyclic
process in which some or many goals and specific objectives are recycled.
In a sense, some plans are never achieved completely; they are continuous. For
example, the goal of healthcare institutions to provide quality patient care is a
continuing one that invests the many derived plans with a fundamental purpose.
This goal is recycled during each planning period.
PARTICIPANTS IN PLANNING
Top management sets the basic tone for planning, determines overall goals for the
organization, and provides direction on the content of policies and similar planning
documents. This is not done in isolation but is based on information provided
through the feedback cycle, through reports and special studies, and through the
direct participation of personnel in each department or division. The manager
consults the major superusers, both in the direct patient care divisions and the
administrative units.
Department heads are normally responsible for the planning process in their areas
of jurisdiction. They identify overall goals and policies for their departments, and
they develop immediate objectives, taking into account their departments particular
work constraints. In some organizations, a special planning department is created,
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such as a program and development division or a research and development unit.
Occasionally, clients participate in the planning process; such participation is
required in some externally funded programs. In healthcare planning, for example,
members of the provider, consumer, and business community are included at each
level of the review process. Professional associations frequently involve their
members in the planning process at local, regional, state, and national levels.
Employee involvement is yet another aspect of participation. Organizations whose
members belong to collective bargaining units involve employee representatives in
formulating certain aspects of planning, such as plans to downsize or to change
major patterns of staffing. Because the final responsibility for planning, with the
attendant legal considerations, rests with management, the input of employees and
the public is advisory in nature. Their roles should be well delineated at the outset,
and their input is encouraged.
THE PLANNING PROCESS
Because planning is intended to focus attention on objectives and to reduce
uncertainty, there must be a clear statement of goals. Once the goals to be attained
have been established, premising must be developedthat is, the assumptions must
be identified, stated, and used consistently. Premising includes an analysis of
planning constraints and a statement of the anticipated environment within which
the plans will unfold. In a healthcare organization, the premises reflect the level of
care, the specific setting (e.g., outpatient clinic, inpatient unit, or home care), the
specific number of beds per service, the anticipated number and kinds of specialty
services or clinics, morbidity and mortality data for the outreach territory, and the
availability of related services.
The department head states the premises on which departmental plans are based
for example, the number of inpatient beds, the readmission rate, the projected
length of stay, and the interrelationship of the workflow. The following is an
example of specific planning premises or assumptions based on the operation of a
physical therapy service:
1. Anticipated hours of operation
a. 6 days per week
b. 8-hour day; evening coverage for selected patients and clinics
2. Anticipated caseload
a. Inpatients100 per day
b. Outpatients120 per day
3. Diagnostic categories
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a. Hemiplegics
b. Arthritics
c. Amputees
d. Fractures
e. Sports injuries
4. Patient characteristics
a. Adults: general adult population; workers compensation/industrial health
referrals; frail, elderly people; juveniles, especially those with sports-related
injuries
b. Children
5. Level of care
a. Acute
b. Subacute
c. Convalescent
d. Chronic
Alternative approaches to reaching the desired state are developed, and the
choices to be made are stated. Commitment to one of these choices constitutes the
decision-making phase. Derivative plans then are formulated, and details of
sequence and timing are identified. Planning includes periodic checking and review,
which leads to the control process. Review and necessary revisions of plans, based
on feedback, are the final steps in the cycle of planning.
PLANNING CONSTRAINTS OR BOUNDARIES
To constrain means to limit, to bind, to delineate freedom of action. Constraints in
planning are factors that managers must take into account to make their plans
feasible and realistic. Constraints, which are both internal and external, take a
variety of forms. Analysis of the organizational environment by means of the
clientele network, specifically the category of controller, leads to ready
identification of planning constraints. The use of the inputoutput model also yields
practical information about the constraints specific to an organization. The cost of
data gathering and analysis is another constraint; if committees or special review
groups are involved, the cost of their time must be considered.
General resistance to change impedes the planning process so that standing plans
take on the force of habit. Without a program for regular review of plans, they
become static and rooted in tradition. Precedent becomes the rule, and the
bureaucratic processes become entrenched. The phase in the life cycle of the
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organization also affects planning, as the degree of innovation that is appropriate
varies with each phase.
The nature of the organization also shapes the planning process. The extent to
which the organizations members participate in planning correlates with the
predominant mode of authority. Highly normative organizations tend to include
more member participation in their planning than do coercive ones. Ethics and
values of the larger society, of the individual members, and, in health care, of the
many professional organizations help shape the goal formulation and subsequent
policies and practices. When health care is seen as a right and not as a privilege,
there may be a greater openness to innovation and a demand for outreach programs
and flexible patterns of delivery of service.
Within the organization, interdepartmental relationships may be constraints. In
highly specialized organizations with many services or departments, each unit
manager must consider how other departments needs and processes are interwoven
with those of the managers own department. Effective planning includes an
assessment of such factors. The manager sometimes must accept as inputs or
constraints the procedures and policies of another department.
Capital investments must also be considered. When a major commitment that
involves the physical layout of the facility or some major equipment purchase has
been made, the degree of flexibility in changing the process is necessarily limited.
External factors to be considered in planning include the political climate, which
varies in its openness to extensive programs in health care. The general state of labor
relations and the degree to which unionization is allowed or perhaps even mandated
in an industry may be imposed on the organization. The many regulations, laws, and
directives constitute another set of constraints.
In healthcare organizations, the many legal and accrediting requirements are
specific, pervasive constraints that affect every aspect of planning. Such
requirements can be developed into a reference grid for the use of the manager, as
compliance with these mandates is a binding element in the overall constraint on
departmental functioning.
An alternative approach to the identification of constraints in any healthcare
planning situation is the systematic recognition of the following major factors. (Also
recall the earlier discussions on the settings and trends, and on response to change,
for additional examples.)
1. General setting. The level and particular emphasis of care must be determined.
For example, the goal of one institution may be acute care in specialized
diagnostic categories; the goal of another may be long-term care of frail,
elderly people. The critical organizational relationships that stem from the
general setting should be identified (e.g., the institutions degree of
independence versus its adherence to corporate and affiliation agreements and
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contractual arrangements). Physical location may also be a constraining factor,
although an earlier decision to develop the facility in a specific location may
be part of the ideal plan. For example, the decision to develop a pattern of
decentralized care so as to enhance the outreach program of a community
behavioral health center will serve as a constraint on many derived plans, such
as workflow and staffing patterns. Information about the general setting is
readily available in long-range planning documents, licensure and
accreditation surveys, annual reports, and public relations materials.
2. Legal and accrediting agency mandates. Each healthcare institution is
regulated by a federal or state agency that imposes specific requirements for
the level of care and nature of services offered. For example, a hospital is
licensed by the state only after it meets certain requirements; it is approved for
participation in the Medicare and Medicaid programs only after it fulfills
certain conditions. In addition, a hospital must comply with special regulations
for medical care evaluation. It also must comply, at a minimum, with
malpractice insurance regulations and related risk management programs as
well as fire, safety, and zoning codes.
3. Characteristics of the clients. The general patterns of mortality and morbidity
for a given population must be considered, as well as related factors such as
length of inpatient stay, frequency of outpatient services, emergency unit
usage, and readmission rate. Patient sources of payment relate to the stability
and predictability of cash flow. Specific eligibility for treatment may be
another factor, as in certain services for veterans or programs for other specific
groups. Demographic profiles for the area served and the organizations
internal database are the usual sources of such information.
4. Practitioners and employees. The licensure laws for healthcare practitioners
and physicians, as well as the many federal and state laws pertaining to most
classes of employees, govern the utilization of staff. These include the Labor
Management Relations Act (Taft-Hartley Act), the Civil Rights Act, the Age
Discrimination in Employment Act, the Unemployment Compensation and
Workers Compensation Acts, the Occupational Safety and Health Act, and the
Americans with Disabilities Act. The personnel practices mandated in the
accrediting agency standards and guidelines of health agencies and
professional associations also must be followed. Any contractual agreement
resulting from the collective bargaining process must be taken into account.
The specific bylaws and related rules and regulations for medical staff and
allied healthcare practitioners are yet another constraint on plans involving
employees and professional practitioners in any role.
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Strategic or Limiting Factors as Constraints
Chester Barnard, in his classic work on the functions of managers, stressed the
importance of identifying those limiting factors that constrain the development of
plans.
1 Legal and accreditation requirements and contractual agreements are major
examples of binding constraints. The planning team identifies these factors to
prevent a waste of time and energy in the planning process; they concentrate on
developing plans that are feasible. Alternative solutions are narrowed to include
only those that fit the organizational goals and the availability of resources, and that
satisfy the binding requirements. In exceptional situations, managers might seek
exemptions from the existing regulations so as to undertake a pilot program or
demonstration project focusing on innovative practices, but this is rare.
CHARACTERISTICS OF EFFECTIVE PLANS
Effective plans are flexible. Plans should have a built-in capacity to change; they
should be adaptable. A plan could include a timetable sequence, for example, that
allows extra time for unexpected events before the plan goes off-schedule.
The manager seeks to balance plans so that they are neither too idealistic nor too
practical or limited. On the one hand, plans that are too idealistic tend to produce
frustration because they cannot be attained; they may become mere mottoes. On the
other hand, plans that are too modest lack motivational value, and it may be difficult
to muster support for them. Clarity and vagueness must also be balanced in
formulating plans. These factors help make the goals realistic. A precise goal may
be a motivational tool because it provides immediate satisfaction, but there is also
merit in a degree of vagueness because with some plans, especially long-range ones,
it may not be possible or desirable to state goals in precise terms. Vagueness can
contribute to motivation by permitting the development of detailed plans by those
more directly involved in the work. Finally, vagueness can provide the necessary
latitude to compromise when this is required or is a general strategy in the
development of plans throughout the organization.
Anticipating Changes and Updates in Existing Plans
The effective manager monitors the planning process as an ongoing activity so that
existing plans may be modified and new plans developed to meet changes in one or
several planning constraints. The manager is not caught unaware but instead has an
active plan to monitor potential change. Federal and state agencies as well as
accrediting agencies issue their intended changes well in advance of their required
implementation. Some agencies issue annual or semiannual agendas of changes
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under consideration. The various inspectors general regularly make known the
targeted review focus for the upcoming year.
Plans needing modification are similarly assessed. As a manager identifies a
trend or issue, he or she checks existing objectives, policies, and procedures to
adjust them accordingly. An equipment recycling program may have worked well in
the past, but now more particular attention is required when computers are recycled
or destroyed; privacy considerations as well as environmental protection
requirements need to be added as factors in such a recycling or disposal process.
Planning for the Unknown
In addition to planning based on well-known planning premises (e.g., expected
number of patients per year, usual length of stay), planning for unknown events
must be accomplished. The management team typically assesses the relative
unknowns and seeks to make them progressively tangible. Although complete
certainty is not possible, plans for rare but probable events are not only prudent but
often mandated by external agencies. The strike plan is one such example. As the
contract period for a given labor union agreement concludes, it is possible that a new
contract may not have been agreed to yet. The workers may strike, thereby causing
work disruption. Because patient care is of primary importance, management must
have a contingency plan in place well before the strike deadline. Weather-related
disruptions are another instance of possible-to-probable events. Managers in
hurricane-prone locations or in regions with winter storms of a crippling variety
have plans in place to cover those circumstances. Although managers do not know
precisely how many or when such disruptions will occur, they have anticipated them
well in advance and only need to fine-tune the plan when the emergency conditions
escalate.
Disaster preparedness is a prime example of planning for the unknown. The types
of possible disasters (e.g., epidemic, mass casualty, bioterrorism) are identified and
the plans rehearsed in great detail precisely because their incidences are so
unpredictable. Continuity of operations and plans for succession are essential
aspects of disaster planning. These plans include such topics as alternative care sites,
triage, changes in staffing patterns, and remote work site/telecommuting
arrangements.
Each critical function of patient care and administrative support (e.g., food,
electricity, water, medications, supplies) is assessed to determine the quantities of
inputs needed and the vendors and suppliers available to meet those needs. An
authorityresponsibility pattern is developed for each critical function so that a clear
chain of command is established, including succession plans indicating who will
take over the tasks should the usual job holder become unable to function. The job
descriptions and the training programs for the succession team members reflects
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these succession considerations. Plans should also include family well-being
considerations (e.g., child care, elder care) so that workers with disrupted schedules
may work without distraction and concern.
Types of Plans
The planning process involves a variety of plans that develop logically from the
highly abstract, as in a statement of philosophy or ideal goals, to the progressively
concrete, as in operational goals and procedures. Management literature on planning
consistently includes the concepts of goals and objectives as central to the planning
process. The terms goal and objective are frequently used interchangeably, except in
discussions of management by objectives (MBO). The MBO concept refers to
specific, measurable, attainable plans for the unit, department, or organization. For
the purposes of this discussion of plans, the concept of goals will be discussed in
terms of overall purpose. The concept of objectives will be discussed in terms of
more measurable attainable plans, including unit or departmental objectives and
functional objectives. Exhibit 51 lists the sequence of planning documents from
planning state through controlling by means of operational goals.
EXHIBIT 51 Relationship of Types of Plans
I. Underlying Purpose/Overall Mission/Philosophy/Goal
II. Objectives
III. Functional Objectives
IV. Policies
V. Procedures
V.1 Methods
V.2 Rules
VI. Work Standards
VII. Performance Standards
VIII. Training Objectives
IX. Management by Objectives
X. Operational Goals
CORE VALUES, PHILOSOPHY, HERITAGE
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STATEMENT, AND MISSION
Individuals who share a common vision and set of values come together to create a
formal organization for purposes that are consistent with and derived from their
common values. The statement of core values, philosophy, or mission provides an
overall frame of reference for organizational practice; it is the basis of the overall
goals, objectives, policies, and derived plans. (See Exhibit 52 for a sample of a
mission, vision, and values statement of a nonprofit, community-based healthcare
center.) Actual practice, as delineated in policies and procedures, should not violate
the organizations underlying philosophy. As new members and clients are attracted
to the organization and as the organization grows from the gestational to the
youthful stage of the life cycle, the statement of principles may be made more
explicit. A statement of core values may take one of several forms, such as a creed, a
pledge, or a statement of principle. A heritage statement sometimes forms a sort of
preamble to the core values statement, providing a context for the values and
principles. This provides a context for the values to the historical development and
long traditions of the founding/sponsoring organization. Here is an example of
wording in a heritage statement:
EXHIBIT 52 Mission, Vision, and Values of
Community Hospital
Community Hospital and Health Center exists to serve the community by
providing expert, affordable, and readily available evaluation and treatment of
the health needs of the residents. Educational and research activities to meet
community needs and improve the quality of life of the communities we serve
are part of our commitment.
Vision
Our vision is to offer health services ranging from primary to specialty care,
with coordination among all units, thus encouraging patient care across the
continuum of care. We seek to offer cost-efficient, customized care at our
facility and to coordinate care with facilities in adjacent geographic areas. We
seek partnership with the business, educational, and research communities for
the mutual benefit of all.
Values
Our organizations govern our actions by the following values:
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Service: excellence and compassion in all aspects of care
Unity: team approach among the direct care providers and support staff
Innovation: continuous learning and searching for best practices
Adaptability: proactive toward change and supportive of others who
initiate change
Communication: openness to receive information and feedback in a
nonjudgmental atmosphere
Project Caring exists because the citizens of this county recognize their responsibility
to care for those in need. From 1914 to 1965, services were largely organized around
the institutionalized care of the aged, orphaned, and destitute. Since 1965, the project
has expanded its programs to include social and community-based services. It relies
primarily on charitable funding and depends on volunteers to help the professional
staff.
In addition to reflecting the values of the immediate, specific group that formed
the organization, a statement of philosophy may reflect, implicitly or explicitly, the
values of the larger society. To one degree or another, for example, society as a
whole now accepts the burden of providing for those who need medical care. The
concept of health care as a right, regardless of ability to pay, gradually emerged as
an explicit value in the 1960s. Emphasis on the rights of consumers and patients
emerged in a similar evolutionary pattern in the 1970s. Because free enterprise is a
benchmark of the democratic way of life, a trend toward marketing and competition
in health care became a feature of the 1980s and 1990s. The early 21st century is
characterized by a combination of all of these considerations.
Department managers in a healthcare organization are guided by several
philosophical premises. These may differ from, and even be in opposition to, the
managers personal values. However, as members of the executive team, the
managers are expected to accept these premises. One of the goals of providing
orientation and motivation is to foster acceptance of the underlying purpose of the
organization. Typical philosophical premises in health care include the following:
The basic philosophy of the group that sponsors or controls the healthcare
institution (e.g., federal or state government agency, religious or fraternal
organization, business concern)
The guidelines promulgated by national associations regarding patient rights,
safety and privacy, and similar issues
Guidelines of accrediting agencies, such as The Joint Commission, that
emphasize continuity of care, patient rights, and other topics
Guidelines, codes of ethics, and position statements of professional associations
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(e.g., American Physical Therapy Association, American Health Information
Management Association [AHIMA], American Occupational Therapy
Association)
Values of society in general, such as concern for privacy, equal access,
employee safety, and consumer/client participation in decision making
Contemporary trends in the delivery of health care, such as the shift from
inpatient acute care to outpatient care and community-based outreach centers;
the establishment of independent practices by health professionals (e.g.,
physical therapists) who formerly provided care only under the direct
supervision of physicians; and the emergence of technical levels in several
health professions and the acceptance of the care given by technicians
Mission statements usually remain stable over the life of the organization because
the fundamental purpose of the organization remains unchanged. Note that there is
another concept of mission, usually associated with military or emergency
operations: the mission is specific and limited, and when completed, a new mission
is undertaken. The concept of mission in this discussion refers to the relatively
unchanging, underlying mission of the healthcare facility.
Medical centers devoted to acute care as well as teaching carry out an ongoing
mission consisting of three elements:
Educating superior physicians
Enhancing research and knowledge
Improving health care in the community and region
A specialty assisted living facility defines itself through its mission statement: to
provide an assisted living residence for individuals in the early to middle stages of
Alzheimers disease and other related memory impairments, in an environment of
warmth, caring, safety, with the comforts and routines of home.
The following are excerpts from statements of philosophy. One health
information department has its philosophy stated in a preamble:
Given the basic right of patients to comprehensive, quality health care, health
information management, as a service department, provides support and assistance
within its jurisdiction to the staff and programs of this institution. A major function
of this department is to facilitate continuity of patient care through the development
and maintenance of the appropriate health information systems, which shall reflect
all episodes of care given by the professional and technical staff in any of the
components of this institution.
An educational institution adheres to the following statement of philosophy:
One of the critical elements in an effective approach to health care is the
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establishment of the spirit and practice of cooperative endeavor among practitioners.
Recognizing this need, the Consortium for Interdisciplinary Health Studies seeks to
foster the team approach to the delivery of health care.
The following is from the statement of philosophy of a physical therapy department:
The physical therapy department as a component of the healthcare system is
committed to providing quality patient care and community services in the most
responsive and cost-effective manner possible. In addition, the department will
participate in research and investigative studies and provide educational programs for
hospital personnel and affiliating students from the various medical and health
professions.
The philosophy of an occupational therapy private practice group is stated in these
terms:
The Occupational Therapy Consultants, Inc. believe that humans are open systems
that both influence and are influenced by the environment. Therefore, individuals are
motivated to pursue goal-directed activities that reflect their values, roles, and
interest. We use activities and environmental adaptations to provide positive
reinforcement and a sense of mastery to our clients. We make doing possible.
The mission of this private practice group is as follows:
Occupational Therapy Consultants, Inc. will seek referrals from medical and
nonmedical sources and offer high-quality, cost-effective services to clients and their
caregivers whose roles, habits, and interests are limited by pathological, congenital,
or traumatic incidents. Services, direct and consultative, will be offered in schools,
homes, industrial settings, and outpatient facilities.
The values of the organization are stated explicitly in mission and vision
statements. They are embodied in subsequent management practices and documents.
Policies and practices for risk management, infection control, and in-service training
are additional examples of vision and values informing day-to-day practice. For
example in a sample labor union contract, the shared values of fostering patient care
and providing good working conditions are amplified.
OVERALL GOALS
The goals of the organization originate in the common vision and sense of mission
embodied in the statement of purpose or the underlying philosophy. They reflect the
general purpose of the organization and provide the basis for subsequent
management action. As statements of long-range organizational intent and purpose,
goals are the ends toward which activity is directed. In a sense, a goal is never
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completely achieved but rather continues to exist as an ideal state to be attained.
Goals serve as a basis for grouping organizationsfor example, educational
organizations, healthcare institutions, and philanthropic or fraternal associations.
Goals, like statements of philosophy, may be found in an organizations charter,
articles of incorporation, statement of mission, or introduction to the official bylaws.
Again, like the statement of philosophy, the overall goals may not bear a specific
label and may be identified only through common understanding. The planning
process is facilitated when the philosophy and the goals are formally stated.
Derivative plans may then be developed in a consistent manner and with less risk of
implementing policies and procedures that violate fundamental values.
This overall goal statement for a publicly sponsored rural health agency is an
example of the language and style used in stating these plans. This agency has three
primary goals:
To provide services that will enable older adults to maintain a relatively
independent lifestyle in both home and community, rather than becoming
dependent on institutional care
To advocate for older adults in the three-county rural area
To give priority services to those older persons with the greatest social and
economic needs
OBJECTIVES
In the planning process, the manager makes the plans progressively more explicit.
The move from ideal, relatively intangible statements of mission and purpose or
overall goal to the real plans is accomplished through the development of specific
objectives that bring the goals to a practical, working level. Objectives are relatively
tangible, concrete plans and are usually stated in terms of results to be achieved. The
manager reviews the underlying purpose and basically answers the question: what is
my unit or department to accomplish specifically in light of these overall goals?
Achieving specific objectives tends to be a continuous process; the work of the
department must satisfy these objectives over and over again. An overall goal such
as to promote the health and well-being of the community can be accomplished
only through a series of specific objectives that are met on a continuing basis.
Objectives add the dimensions of quality, time, accuracy, and priorities to goals. The
objectives are specific to each unit or department, whereas the overall goals for an
organization remain the same for all units.
Objectives may be stated in a variety of ways, and different levels of detail may
be used. For example, objectives may be expressed as follows:
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Quantitatively: to maintain the profit margin of 6% during each fiscal year by
an increase in sales volume sufficient to offset increased cost
Qualitatively: to make effective use of community involvement by the
establishment of an advisory committee with a majority of members drawn
from the active clients who live in the immediate geographical community
As services to be offered: to provide comprehensive personal patient care
services with full consideration for the elements of good medical care (e.g.,
accessibility, quality, continuity, efficiency)
As values to be supported: to ensure privacy and confidentiality in all phases of
patient care interaction and documentation
Objectives for the department as a whole may include elements essential for
proper delineation of all other objectives. These may be stated as objectives for the
organization and need not, therefore, be repeated in the subsequent departmental
statement of objectives:
Compliance with legal, regulatory, and accrediting standards and with
institutional bylaws
Risk management factors, including accuracy
Privacy and confidentiality in patient care transactions and documentation
Reference to inpatient as well as outpatient/ambulatory care and other programs
sponsored by the organization, such as home care or satellite clinics
Because they are intended to give specificity to overall goals, objectives are the
key to management planning. Therefore, objectives must be measurable whenever
possible. They must provide for formal accountability in terms of achieving the
results. Furthermore, they must be flexible so that they can be adapted to changing
circumstances over time.
Two additional planning concepts must be used with the statements of objectives
to make them meaningful: the statement of functional objectives and the
development of policies. These related plans are both important in fleshing out
departmental objectives.
FUNCTIONAL OBJECTIVES
A functional objective is a statement that refines a general objective in terms of:
The specific service to be provided
The type of output
The quantity and/or specificity of output
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The frequency and/or specificity of output
Accuracy
Priorities
Some elements, such as accuracy indicators, may be defined for the department or
unit as a whole. A general objectives priority may be implied by its delineation in a
related functional objective.
Planning data for organizing and staffing functions may be obtained by inference
from statements of objectives. For example, the functional objective statement may
include the stipulation that all documentation of patient encounters (e.g., discharge
summaries) shall be entered into the electronic health record system. The workload
(number of discharge summaries) may be calculated based on the number of
discharges per year. A priority system for processing such summaries or a
designated turnaround time for such processing provides the necessary parameters
for calculating the number of workers needed to meet the objective on a continuing
basis. The staffing patterns for day, evening, and night shifts may be developed,
again, in a way to satisfy the priority designation and turnaround time contained in
the functional objective.
The relationship of the general objective and the functional objectives that
support it is clearly seen in the following example, which is drawn from the plans
for a transcription/word processing unit of a health information management service.
General Objective: Health information management will provide a system for
dictation of selected medical reports by specified healthcare practitioners and for the
timely and accurate transcription of these reports on a regular basis.
Functional Objectives: More specifically, this system will provide for:
1. Dictation services for attending medical staff, house officers, and associated
professional staff as defined by the medical staff bylaws
2. Transcription/editing of reports will be done within the following time frame:
a. Discharge summaries within 8 hours of receipt of dictation
b. Operative reports within 4 hours of receipt of dictation
c. Consultation reports within 4 hours of receipt of dictation
d. Emergency and priority requests on a stat basis
3. Coordination of in-service training for using the system:
a. New employeesat hiring and semiannually thereafter
b. Healthcare practitionersat hiring and as requested thereafter
4. Maintain quality controls through monthly reviews focusing on accuracy and
timeliness of report processing
This example specifies the quantity of output and the time frame and implies the
priority of the objective through the designation of the time frame. A statement of
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accuracy is not included, because it is included in the objectives for the department
as a whole. This accuracy statement, which may fall under the overall objective of
risk management and quality control, may be expressed as follows:
Health information management strives to carry out its responsibilities and activities
with 100% accuracy; therefore, we strive for this level of accuracy.
The following is an example of a general objective and functional objectives
from a direct patient care service:
General Objective: The physical therapy department will provide evaluation and
assessment procedures appropriate to the patients condition as requested by the
referring physician.
Functional Objectives: More specifically, this system will provide for:
1. Evaluations within one working day following receipt of the referral.
2. A verbal summary of findings submitted to the physician following the completion
of the evaluation.
3. A formal summary of the evaluation entered in the patients health record within 8
hours following the verbal report.
POLICIES
Policies are the guides to thought and action by which managers seek to delineate
the areas within which decisions will be made and subsequent actions taken.
Policies spell out the required, prohibited, or suggested courses of action. The
limitations on actions are stated, defined, or, at least, clearly implied. Policies
predecide issues and limit actions so that situations that occur repeatedly are
handled in the same way. Because policies are intended to be overall guides, their
language is customarily broad.
A balance must be achieved when policies are formulated. These comprehensive
guides should be sufficiently specific to provide the user with information about the
actions to take, the actions to be avoided, and when and how to respond. At the
same time, they should be flexible enough to accommodate changing conditions.
They should reinforce and be consistent with the overall goals and objectives. In
addition, they should conform to legal and accrediting mandates as well as to any
other requirement imposed by internal or external authorities. Policies and related
procedures have importance in legal proceedings; they constitute the practices
identified as those carried out in the normal course of business. For example, in a
challenge to the legal chain of custody of evidence, the usual or customary practices,
spelled out in policy and procedure, would involve a review of these documents.
Policies are relatively permanent plans, a kind of cornerstone of other, more
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detailed plans. Yet they must be sufficiently flexible in intent to permit change in the
derived plans without necessitating a change in the policy. For example, a
commitment to a centralized dictationtranscription/editing system might be made
through a policy statement on health information functions. However, no
specification is made as to brand of equipment, exclusive use in in-house staffing, or
external agency contract. All remain options as long as the equipment selected and
the staffing pattern determined meet the policy considerations of an adequate
dictationword processing function. In the dictationword processing policy, the
essential features of the word processing system are delineated. It is easy to derive
from this a decision-making matrix for the comparison and selection of one or
another commercial transcriptionword processing service. In this sense, a policy
statement serves to preform or shape detailed decision making because the overall
parameters are stated within the policy or are easily derived from it.
Sources of Policy
Department or unit managers develop the policies specific to their assigned areas,
but these policies must be consistent with those originated by top management.
Policies are sometimes implied, as in a tacit agreement to permit an afternoon coffee
break. An implied policy may make it difficult to enforce some other course of
action, however, if the implied policy has become standardin spite of its lack of
official approval. Policies are shaped in some instances by the effect of exceptions
granted; a series of exceptions may become the basis of a new policy, or at least a
revision of an existing one. Certain policies may be imposed by outside groups, such
as an accrediting agency or a labor union, through a negotiated contract.
A rich trove of policy and related guidelines is available through national
associations of the various health professionals. These associations publish practice
briefs and best practice guidelines. These sources reflect state-of-the-art practices,
and the wording of these documents is carefully crafted to provide clear guidance.
These suggested practices and guidelines are supported by research and field testing.
Another source of wording for policy content is the official publication of a law,
regulation, or standard. When these are added to a policy, appropriate citation is
made and the excerpt is incorporated with the exact wording of the published law,
regulation, or standard.
Wording of Policies
Policies permit and require interpretation. Language indicators, such as whenever
possible or as circumstances permit, are expressions typically used to give
policies the flexibility needed. Policy statements in a healthcare institution may
concern such items as definitions of categories of patients and designations of
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responsibility. In a health information service, policy statements may specify, for
example, a standardized patient record core content, the use of abbreviations, and
the processing of urgent requests.
To decrease the sheer volume of policy statements, a glossary may be developed
that includes the institutional definition of patient as well as definitions of terms
and acronyms referring to members of the medical and professional staff and legal
and accrediting bodies. Occasionally, a statement of rationale is included in a policy
statement, but the manager should avoid excessive explanations; in general, the
manager needs to couch policy directives in wording that predecides issues and
permits actions. Another useful adjunct to the complete policy statement is the
Policy in Briefa short summary of major points for quick reference.
Policies are somewhat futuristic in that they are meant to remain in force, with
little change, for extended periods. In an age of rapid social and technical change, it
is helpful to think in broad terms, anticipating change. It also helps to set aside the
normal biases that stem from describing the way things are now: increasing use of
technology (e.g., telemedicine); expanding scope of practice by physician assistants,
nurse practitioners, and technical assistants; and changing levels of care.
Departmental policies typically include these topics:
Scope of service: list the major functions (e.g., coordination of release of
information; maintaining a statistical database)
Hours of operation and provision for access when department is closed
Staffing: include a statement that there is a mix of full-time and part-time
employees, supplemented by contractual services
Continuity of operations and succession planning
Confidentiality, privacy, and data security provisions
Provision of in-service training
Participation in education and research
Risk management and continuous quality improvement
Interdepartmental coordination
The wording in the following examples, drawn from a variety of settings, tends to
be broad and elastic yet gives sufficient information to guide the user. The first
example is a policy for the waiver of tuition for senior citizens:
In recognition of their efforts over the years in support of education, the college will
waive tuition for academic and continuing education courses for senior citizens who
reside in the tricounty area. All residents who are at least 62 years of age and who are
not engaged in full-time gainful employment are eligible under this tuition waiver
policy. This policy will be subject to annual budgeted funds.
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This example provides a general sense of why the college is granting this waiver: in
recognition of senior citizen support over the years. The outer limits of its
applicability are noted; both academic and continuing education programs are
included. A definition of senior citizen is included, and the additional eligibility
factors are stated. A final parameter is included to provide flexibility should
circumstances changenamely, the limitation determined by the availability of
budgeted funds. With this short policy, the necessary procedures can be developed
for determining eligibility, and a relatively untrained worker can make the necessary
determination.
The following are typical policies for healthcare institutions.
For employee promotion:
It is the policy of this hospital to promote from within the organization whenever
qualified employees are available for vacancies. The following factors shall be
considered in the selection of individual employees for promotion: length of service
with the organization, above-average performance in present position, and special
preparation for promotion. Employees on their present job for a reasonable length of
time, excluding probationary period, may request promotion during the customary
period in which a job is open and posted as being available.
For admission of patients to a research unit:
Because the primary purpose of this unit is research in specialized areas of medicine,
the primary consideration in selecting elective patients for admission to the research
unit accommodations is given to the teaching and research value of the clinical
findings. The research unit offers two types of service: inpatient and outpatient. The
research unit reserves the right to assign patients to either service category,
depending on the characteristics of the case and facilities available at the time.
For a physical therapy department:
The Physical Therapy Department shall be open from 8:30 A.M. to 4:30 P.M. Monday
through Friday and on weekends and holidays as required to meet patient care needs.
The following is an example of a policy regarding professional credentials:
All occupational therapy personnel will be licensed and registered.
Each applicant will submit the names of two references, and the human resources
officer will contact these individuals and check on the applicants ability to problem
solve and communicate with others and his or her work habits and commitment to
patient service delivery.
The director of the occupational therapy department will check to see if the
applicant has passed the national certification examination and has a current state
license.
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Recent graduates or therapists from foreign countries may treat patients but they
must be supervised by a licensed and certified occupational therapist who reviews
their patient care plans and progress notes.
Occupational therapists may not work more than 6 months under these
conditions. If not registered and licensed within 6 months after hire, employment
must be terminated.
PROCEDURES
A procedure is a guide to action. It is a series of related tasks, listed in chronological
order, that constitute the prescribed manner of performing the work. Essential
information in any procedure includes the specific tasks that must be done, at what
time or under what circumstances they must be done, and who (job title, not name of
employee) is to do them. Procedures are developed for repetitive work to ensure
uniformity of practice, to facilitate personnel training, and to permit the
development of controls and checks in the workflow. Unlike policies, which are
more general, procedures are highly specific and need little, if any, interpretation.
Procedures for a specific organizational unit are developed by the manager of
that unit. As with other plans, departmental procedures must be coordinated with
those of related departments as well as with those developed by higher management
levels for all departments. For example, the procedures for patient transport to
various specialized service units, such as nuclear medicine, physical therapy, or
occupational therapy, are developed jointly by the nursing service and these related
departments or services. In contrast, procedures relating to employee matters may
well be dictated by top-level management for the organization as a whole with little,
if any, procedural development done at the departmental or unit level.
Procedure Manual Format
There are two common format types used in procedure manuals: narrative and
abbreviated narrative. The narrative format contains a series of statements in
paragraph form, with special notes or explanations in subparagraphs or in footnotes.
This format has the disadvantage of being difficult to refer to quickly and easily.
The abbreviated narrative format illustrates procedures through the use of key steps
and key points (Exhibits 53, 54, and 55). When a procedure involves several
workers or departments, it is useful to identify each participant by job title. The step
is given a sequence number, key action words are stated, and action sentences are
developed for the step (see Exhibit 55).
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EXHIBIT 53 Abbreviated Narrative Procedure
Format: Procedure for Terminal Digit
Filing
The last two digits (terminals) are color coded. The colors for each digit always
remain the same, and once they are learned they can be used in many
combinations of numbers. They help a person file more accurately and quickly.
Look here second within the 18 section 52
EXHIBIT 54 Abbreviated Narrative Procedure
Format: Procedure for
Interdepartmental Coordination
Key Step Key Points
1. Determine patient
care need.
1. Review medical care record.
2. Perform appropriate evaluation procedures.
3. Complete related medical documentation, including
information needed for consultation.
Key Step Key Points
2. Contact
appropriate
department.
1. Make verbal contact via telephone.
2. Confirm through interdepartmental request form for
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joint conference.
The physical format of the procedure manual is important. A procedure manual
should be convenient in size, easy to read, and arranged logically. If the manual is
too large or too heavy for everyday use or is difficult to read because of too many
unbroken pages of type, workers tend to develop their own procedures rather than
referring to the manual for the prescribed steps. The choice of a format that makes it
easy to update the manual (e.g., loose-leaf binder) removes a major disadvantage or
limitation regarding the manuals usepages of obsolete procedures. The use of
electronic media is, of course, a convenient option.
Development of the Procedure Manual
The manager who is developing a procedure manual must first determine its purpose
and audience (e.g., to train new employees or to bring about uniformity of practice
among current employees). The level of detail and the number and kinds of
examples depend on the purpose and the audience. Clarity, brevity, and the use of
simple commands or direct language improve comprehension. Action verbs that
specify actions the worker must take help to clarify the instructions. Keeping the
focus of the procedure specific and its scope limited permits the manager to develop
a highly detailed description of the steps to be followed. The steps are listed in
logical sequence, with definitions, examples, and illustrations.
Methods improvement is a prerequisite for efficient, effective procedure
development. Flow charts and flow process charts are useful adjuncts to the
procedure manual because they require logical sequencing and make it possible to
reduce the backtracking and bottlenecks in the workflow.
EXHIBIT 55 Examples of Key Steps and Detailed
Steps
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183
METHODS
The way in which each step of a procedure is to be performed is a method. Methods
focus on such elements as the arrangement of the work area, the use of certain
forms, or the operation of specific equipment. A method describes the preferred way
of performing a task. The manager may develop methods detail as part of the
training package for employee development, leaving the procedure manual free of
such detail.
RULES
One of the simplest and most direct types of plan is a rule. A continuing or repeatuse plan, a rule delineates a required or prohibited course of action. The purpose of
rules is to predecide issues and specify the required course of action authoritatively
and officially.
Like policies, rules guide thinking and channel behavior. Rules, however, are
more precise and specific than policies and, technically, allow no discretion in their
application. As a result, management must direct careful attention to the number of
rules and their intent. If the management intent is to guide and direct behavior rather
than require or prohibit certain actions, the rule in effect becomes a policy and
should be issued as such.
Like procedures, rules guide action; unlike procedures, however, rules have no
time sequence or chronology. Some rules are contained in procedures (e.g.,
Extinguish all smoking material before entering this facility). Other rules are
independent of any procedure and stand alone (e.g., No smoking). The wording of
rules is direct and specific, such as:
Food removed from the cafeteria must be in covered containers.
Books returned to the library after 4:00 P.M. will be considered as returned the
following day, and a late fine will be charged.
Children younger than the age of 12 must be accompanied at all times by an
adult who is responsible for their conduct.
PROJECT PLANNING
In addition to developing the operational plans for day-to-day functioning, managers
sometimes undertake intensive project planning for major initiatives. Examples
include:
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Implement an organization-wide electronic health record over a 4-year period.
Form a regional health information exchange over a 2-year period.
Enhance the revenue cycle processes to maximize reimbursement by collecting
all the revenues to which the organization is entitled. To accomplish this in a
timely manner, systems and workflow changes are to be implemented during
the first 3 months of the new fiscal year.
Develop a leadership succession plan for the next 3 years in anticipation of
planned retirement of (n) executive-level managers.
Extensive projects, such as planning and opening a new service, developing an
educational division, or expanding an existing program to include satellite facilities,
generally fall under the rubric of major project planning.
A major project reflects the elements of general planning (e.g., assumptions,
constraints, goals and objectives, timeline). Project planning is sometimes expressed
primarily in terms of time frame, as in a 500-day plan to gain momentum and to
demonstrate major achievements. In the 500-day plan, a rolling cycle of designated
periods is delineated (e.g., 90 days, 100 days, 13 weeks), with adjustments to the
plan made at the conclusion of each phase. The designated periods are not
necessarily the same for each activity. As one phase is completed, an additional
phase is added until the rollout of the project has occurred. Planning for the next
phase is fine-tuned in light of the outcomes in the preceding period. The goals for
such initiatives reflect actions that have the potential to yield the most results. For
example, a fetal alcohol syndrome disorders clinic might focus on early intervention
through emphasis on prenatal care. Other aspects of the program simultaneously
unfold, but the major focus is this aspect of care.
The Project Manager
The project manager is the designated coordinator of the planning and execution of
the project. For large, organization-wide projects, this manager may hold an
executive level position. For projects within a division or department, the middle
manager might take on that role, or he or she might delegate it to an assistant who
has authority and responsibility over the system that is the focus of the project.
Sometimes an outside consultant is hired as the project manager as in the case of
new products, systems, and equipment. This individual would have knowledge of
the new system, along with expertise in implementation. Colleges and universities,
along with private organizations, offer training and certification in project
management. Professional organizations offer similar programs, tailored to the
interests and needs of the particular profession.
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ELEMENTS AND EXAMPLES OF MAJOR
PROJECTS
At the outset of developing a major project, the project manager and team decide on
the desired level of detail of the plan. In general, a major project includes the
customary elements, described here, with some examples of wording. Exhibit 56
provides a more detailed example of the project elements, timelines, and wording of
a major project plan with a 500-day timetable.
Name of Project
This should be precise but informative, as in Developing and Implementing a
Neighborhood Health Center in the Northeast Catchment Area of the City of
Clarion.
Focus and Scope of the Project
This section provides an overview of the project. Specify whether the project is a
new one or an extension of an existing project. Provide brief background
information. Has funding been obtained? Have feasibility studies completed?
Sample wording of focus and scope might be:
This new project has as its focus the development and implementation of a
comprehensive neighborhood health center in catchment area 25 of Clarion Citys
master health plan. The projected time line is augmented by a detailed timeline and
milestone event listing included in the body of this proposal. The overall timeline is:
January 1, year one: Development phase
July 1, year one: Phase Onelimited opening of clinic for maternal and infant
care as well as school-age youth care
October 1, year one: Phase Twoopening of all the remaining clinics;
programs fully operational
July 1, year two: Transition from grant funding to freestanding, communitysponsored clinic, with 6-month transition funding (JulyDecember)
January 1, year three: Transition funding ends; clinic is self-supporting
Scope of Service
The clinic is a primary care facility, with as-needed referrals to a tertiary care
hospital and specialty clinics. It deals with ambulatory carescheduled, walk-in, or
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urgent.
The target population include mothers and infants, preschool and school-age
children and youth, and adults. There is a special emphasis on homeless youths and
adults. (The target population figures/planned numbers would be given here.)
Project Manager and Project Team
Key personnel are identified, with a listing of name, title, and organizational
authority/responsibility. For example:
The Project Manager is Dr. Leslie H. Deal, Associate Vice President for Community
Outreach, Clarion Health Systems. Project Manager Associates are the designated
representatives from the direct patient care and support services staff. (A list of
names and titles would be given here.) These associates report directly to the project
manager, who, in turn, reports to the Vice President for Community Outreach,
Clarion Health Systems.
Time Frame and Milestone Events
The time frame provided in the opening section on the focus and scope of the
project is repeated and amplified in this section. Managers develop a level of detail
best suited to the project and their management style. If time is critical, with little or
no leeway, and/or if there are multiple contingent activities, the timeline is detailed
and precise. For example, time specifications could include three estimated time
calculations: the probable, most likely (realistic considerations noted); the
pessimistic (if everything or many things go wrong); and the optimistic (everything
goes as scheduled, no equipment breakdowns, no staff turnover, no delay in
obtaining material). The beginning and ending time frame for each activity is
specified.
Milestone events are listed. These are the markers for major accomplishments,
such as completion of equipment selection, completion of site renovations, and
accomplishment of an immunization and physical examination program for
preschool children.
Activities are carried out to lead to the completion of a milestone or landmark
event. For example, developing a job analysis, job descriptions, and a wage and
salary scale for clerical and technical support staff leads to the milestone of
completion of foundational analysis and description of clerical and technical support
staff documents. Note: Activities and events are not solely sequential; some
activities, and therefore the accomplishment of events, may occur simultaneously.
Cost Factors
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Project managers develop a related tracking process for budgeting; the monitoring
timeline is associated closely with the step-by-step implementation. This financial
monitoring and auditing can be built into the evaluation process.
The Evaluation Process
Both public and private organizations require sound evaluation processes. The
federal governments Program Evaluation for Effectiveness Review is one example
of detailed evaluation requirements. Program evaluation focuses on the systematic
collecting, evaluating, and using information to answer the basic question. Did the
program accomplish what it set out to do? Did the program meet its proposed goals?
There are two categories of evaluation: process and outcome. Process evaluation
focuses on the start-up activities that need to be in place before direct services can
be offered (e.g., site location secured, physical renovations completed, license to
operate obtained). In addition to a major process review at the end of the
development phase of the project, ongoing process review occurs throughout the life
of the project to ensure smooth operations. For example, in a project with limited
service offerings, followed by full-scale service offerings, particular attention would
be given to the functionality of the systems when the program is expanded.
Evaluation methods could include sampling of workflow, equipment, error rates,
turnaround times, flow of intake, and registration process.
Outcome evaluation focuses on the results in terms of effect on target population.
Did the project reach the intended numbers and categories of patients? Factual data
are presented. For example, data for a social service project might show:
A short narrative explanation of reasons for overprojection or underprojection
would be included.
If the project focus includes behavior changes in patients, these would be
reported (e.g., successful smoking cessation rates, wellness behaviors). Client
satisfaction with services is another indicator of program success. (Interviews and
surveys are the source of this information.)
The sources of information about patient care outcomes include studies drawn
from documented care, patient satisfaction surveys, aggregate data about infection
rates, patterns of no-show appointments or noncompliance, and number of return
visits. If there are unexpected results, these are explained in detail. For example, the
need for coordination of transportation from clinic to tertiary hospitals clinics might
188
surface. Or the planned focus on school-age at-risk youth might have changed to a
wider focus to include at-risk youth who no longer attend school.
The evaluation process properly includes both internal and external review, along
with appropriate intervals of review. One final review is insufficient to make course
adjustment. The internal review and its time frames are developed to correspond
with milestone events (e.g., frequent reviews during development phase to ensure
on-time opening of a clinic). These reviews are internal for the most part. An outside
peer review, perhaps from the affiliated health system, would usually be invited
because the systems of the two organizations need coordination. External review
teams include the peer review, as noted, along with coaching reviews by accrediting
agencies, external financial audit, or community boards.
Exhibit 56 provides excerpts from a major project, coupled with the 500-day
planning approach. See also Chapter 12 of this text on strategic planning and related
examples.
THE PLAN AND THE PROCESS
Referring back to the beginning of the chapter, it is perhaps pertinent to offer a
reminder that planning always involves tentatively deciding what might be done in a
time period that is not yet herethat is, at some point anywhere from the very near
to the far distant future. People plan because they do not know for certain what
changes will occur in the environment; they plan because every decision carries with
it some elements of risk and uncertainty.
Of course, the environment will change between the time people make their
tentative decisions and the time the future becomes the present, and of course they
enter the overall process with less-than-perfect information about not only what the
future will bring but often also what the present contains. Because change is
continual and only partially predictable, people know at the outset that rarely will
their plans be fulfilled exactly as planned. This does not, however, mean that
planning is a futile activity. On the contrary, it means all the more than might be
suspected that planning is essential.
In and of themselves, plansthose collections of stated targets with dates and
desired results attachedare not especially valuable. What is of inestimable value is
the planning process, that cycle of activities in which people gather information,
tentatively decide what is to be done and do it, monitor progress, alter methods as
the environment changes and the unforeseen occurs, modify targets as necessary,
and go through it all over again but differently. Even if the stated target remains
fixed and valid but not attained, the simple presence of the target provides
information people would not have had without itthey know by how much they
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missed, and thus they know how much they must correct their approach for the next
attempt.
EXHIBIT 56 Project Plan for Neighborhood Health
Center with 500-Day Timeline
(Note: This exhibit shows excerpts from the project plan to illustrate the usual
content and wording. There would be several supplementary attachments, such
as budget and audit protocols.)
Name of Project
Development and Implementation of a Neighborhood Health Center in the
Northeast Catchment Area of the City of Clarion
Focus and Scope of the Project
This new project has as its focus the development and implantation of a
neighborhood health center (NHC) in catchment area 25 of Clarion Citys
master health plan. The health centers services will be coordinated with the
city health department clinic and the outpatient clinics of the University
Hospitals tertiary care center. A combination of a federal grant and private
funding has been secured by the University Hospital for the first 2 years of
operation. A plan for transition to freestanding status has been developed. The
grant application, including feasibility study and related background
information, is attached.
A full range of services will be offered. There will be primary care, with asneeded referrals to the University Hospital tertiary care hospital and its clinics.
Ambulatory care will include both scheduled and walk-in routine and urgent
care services. The target populations is a mix of adult and children. Initial
emphasis will be given to maternal and infant care and young child care
(preschool children and children in primary grades). Then the scope of service
will be expanded to older children and adults. Special emphasis will be given to
homeless youth and adult populations.
Overall Time Frame
January 1,
201June 30,
201
Preliminary development phase
July 1, 201
September 30,
Phase One of clinic service: maternal and infant care, young
child care (preschool children and children in primary
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201 grades)
October 1,
201
November 30,
201
Phase Two of clinic service: general population (youths and
adults); clinic fully operational
December 1,
201
December 31,
201
Phase Three: outreach program begun for homeless (both
youth and adult)
July 1, 202
December 31,
202
Transition phase from University Hospital sponsorship to
freestanding neighborhood center, under sponsorship and
control of community agency
January 2, 203 Independent, freestanding neighborhood center fully
operational, with 2-month transitional funding from grant
obtained by community agency
March 1, 203 Fully self-sustaining clinic
(A detailed timeline, with key events, is attached.) The 500-day pattern of
planning cycles reflects 100-day cycles, with the rolling addition of 100-day
cycles as each planned cycle is completed.
Project Manager and Project Team
The Project Manager is Dr. Leslie H. Deal, Associate Vice President for
Community Outreach, University Hospital. Project Manager Associates are the
designated representatives from the direct patient care staff and administrative
support services of the hospital. (A complete list of names, titles, and
responsibilities is attached.) The associate project managers report directly to
the project manager who, in turn, reports to the Vice President for Community
Outreach, University Hospital.
Cost Factors and Tracking
The generally accepted financial practices will be followed. This includes a
monthly internal audit by the finance department of University Hospital;
special oversight review and audit by the Vice President for Community
Outreach to conform to grant funding requirements. A quarterly audit by an
independent auditing firm augment the internal audits. (Sample audit protocols
are attached.)
Evaluation
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Both internal and external evaluation processes have been developed.
Evaluations will be done throughout each phase of the project. Their frequency
varies from 1 month to 6 weeks to quarterly, depending on the focus of the
review. Process evaluation methods will be used for administrative activities.
Outcome evaluation methods will be used to reflect patient care and client and
community-at-large satisfaction with clinic services. (A detailed listing of the
timeline and evaluation methods is attached.)
Evaluators include internal review committees and teams and external,
independent reviews, including peer teams from the sponsoring hospital and its
related university, as well as peer professionals from clinics in the region. An
independent review will be carried out by a designated accrediting agency that
provides preliminary coaching reviews for outpatient services.
Detailed Timeline of Activities: 500-day plan (excerpts)
Cycle One: 100 days (January 1, 201April 10, 201)
January
Incorporation filed; state agency approval to operate received
Physical site secured; renovations begun
Administrative processes developed
Mission; goals and objectives; policies; procedures
Staffing patterns developed
Monthly budget review and reconciliation completed by NHC staff
(This review will be done every month and would be listed as an activity and
related event for each month using this same wording.)
February
Neighborhood community board configured and members selected and
oriented
Collaborative arrangements completed for mutual referrals (University
Hospital, city health department clinics, local schoolsprekindergarten
and primary grades)
Monthly budget review of previous month completed
Process evaluation completed by peer review team from University
Hospital and NHC staff
Process evaluation completed regarding legal, regulatory, corporate
compliance (carried out by Vice President for Corporate Compliance and
Chief Development Officer of University Hospital)
Patient care practitioners and administrative support staff recruited for
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Phase One: program opening (for July 1)
March
Equipment selected, received, and debugged
Quarterly external financial audit and budget review completed
Pilot run completed (intake and registration; flow of patient care through
care site)
Peer group review of administrative and patient care processes completed
by NHC staff and University Hospital clinic counterparts
April
Direct patient care staff and administrative support staff recruited for Phase
Two of clinic operations (scheduled for late October)
Quarterly financial audit completed by external auditors
Process evaluation of administrative functions completed by NHC staff
Cycle Two: 100 days (April 11, 201July 19, 201)
April
Outreach to community completed (detailed outreach plan is attached)
May
All hiring and orientation completed
All requirements met regarding billing Medicare, Medicaid, and city health
agency
June
Pilot run completed: sampling of patient population recruited and treated
(200 maternal and infant care patients, 50 prekindergarten children)
Final review of administrative and patient care processes completed
July 1
NHC officially opened
Cycle Three: 100 days (July 20, 201October 28, 201)
July
Evaluation of outreach program completed by NHC staff
August
Outreach program completed (youth and adults for Phase Two)
Outreach program evaluation completed (NHC staff, community board,
representatives from local schools)
September
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Outcome evaluations completed for maternal and infant care and
prekindergarten care
Additional staff for Phase Three hired and oriented (social worker and
nurse practitioner)
Outreach program for Phase Two completed (general population)
Process review of intake and care flow completed (maternal and infant
care and prekindergarten care)
Patient satisfaction information captured and compiled (maternal and
infant care)
October
Phase Two programs opened (general population)
Agreements with nonprofit Host Home Program for at-risk youths
completed
Agreements with local homeless shelters (referrals) completed
Quarterly external financial audit completed
Cycle Four: 100 days (October 29, 201February 5, 202)
November
Transportation needs survey completed and analyzed
Community Board input and review of transportation needs completed
Action plan developed:
Donation of van obtained
Schedule of transportation to and from University Hospital specialty
clinics developed
Van driver hired ($10.00/hour for 8-hour day Monday through Friday)
Budget allocations reassigned to cover drivers wages and fringe
benefits; money taken from training budget and from refurbishing funds
for 202; arrangements made for free training by University faculty as
an in-kind donation
December
Homeless and at-risk youths outreach extended to youths not attending
school (street outreach, soup kitchen, emergency winter shelters in
catchment area [four overnight shelters, two day shelters])
Coordination of shelter services with partnering agencies completed (focus
on homeless adults)
Coordination of services, and referral processes completed (community
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mental health agencies for adults; clean and sober programs for adults)
Process survey completed (focus on patient/client satisfaction with
transportation and with intake-care flow)
Peer review completed
Focus on administrative processes: regional peers
Focus on direct care provision: regional peers
January
Quarterly external financial audit completed
Internal review completed: billing compliance (review team coordinated
by Vice President for Compliance and Chief Financial Officer of
University Hospital)
Patient care outcomes review completed (focus on wellness and
immunizations; medication compliance; patterns of care: chronic
conditions of diabetes, obesity, and blood pressure)
February
Process evaluation: review of transportation services completed
Cycle Five: 100 days (February 6May 17, 202)
February
Repeat patient care outcomes evaluations completed; comparison study
completed
March
External regional peer review completed (focus on administrative
processes and outcomes, with emphasis on data from comparison studies)
April
Quarterly external financial audit completed
Community agency, nonprofit corporation formed
Preliminary plans for transition in 203 begun
Outcomes review completed: community-at-large survey
May
Transitional funding request for 203 completed and submitted to citys
Community Development Fund
May 17, 202 END OF FIRST 500-DAY CYCLE
Cycle Six: 100 days (May 18, 202August 26, 202)
(activities and events reflecting ongoing operations)
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Cycle Seven: 100 days (August 27, 202December 5, 202)
August (activities and events reflecting ongoing operations)
September
External funding for transition received
October
Quarterly external financial audit completed
Billing compliance internal review completed
Additional administrative processes implemented regarding incomplete
and late billing
Preliminary close out for line items in budget completed
Revenue projections for 203 completed
November
Transition plan completed
December 5
Transition plan implemented
Cycle Eight: 100 days (December 6, 202March 16, 203)
December
Process review of all administrative systems completed
Outcomes review of patient care (all categories) completed
Due Diligence Review completed
December 31, 202:
Official end of University Hospital sponsorship
End of 2-year funding grant
January 1
New funding cycle (transitional funds) begun
February
Detailed plan for self-sufficiency funding developed and implemented
Final audit of 2-year University Hospital funding completed (reflecting
late charges and final billing as well as closeout of budget line items)
March 16
Transitional funding completed; clinic is fully self-sustaining
Giving special attention to the decision-making phase may be a useful adjunct to
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this phase of planning.
DECISION MAKING
Evaluating a Decisions Importance
By its nature, decision making means commitment. The importance of a decision
may be measured in terms of both the resources and the time being committed.
Some decisions affect only small segments of the organization, whereas others
involve the entire organization. Some decisions are irrevocable because they create
new situations. The degree of flexibility that remains after the commitment has been
made may also be used when evaluating the significance of a decision. Are the
resulting conditions tightly circumscribed, with little flexibility permitted, or are
several options still available in developing subsequent plans? Decisions regarding
capital expenditures, major procedural systems, and the cost of the equipment that
must be prorated over the projected life of the equipment are examples.
The degree of uncertaintyand therefore the degree of riskassociated with a
decision is another dimension that must be evaluated in weighing its impact. The
greater the impact in terms of time, resources, and degree of risk, the more time,
money, and effort that must be directed toward making such decisions. Uncertainty
is caused, in part, by a lack of necessary information or the impossibility obtaining
comprehensive, reliable data. The consequence of some events may not be known
until an action or a project has been undertaken and sufficient information is
generated to make additional plans.
The management team must proceed in some instances without full certainty.
There are costs associated with inaction and indecision. For example, the
opportunity to expand a program, to increase client base, or to obtain special
funding may be lost if timely action is not taken. Other aspects of inability to make
decisions, which have associated costs and impacts, include:
Failure or delay in making necessary capital improvements, resulting in (1)
increased safety hazards for clients and workers and (2) greater costs due to
deterioration of physical plant
Loss of licensure or accreditation because of failure to meet standards
Decrease in client perception of the organizations quality, causing clients to
seek service elsewhere
Therefore, the management team attends to decision making, even in the face of
uncertainty. The team uses such strategies as incremental implementation, taking
advantage of the unfolding dynamic in which unknowns become knowns; thus,
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uncertainties become clearer, and plans can be revised.
Finally, in any organization, effects of a decision on humans are a major factor.
The environmental impact and social costs must be assessed. Decisions have a
cascading impactsometimes positive, sometimes negative. In the planning
decision phase, managers anticipate second- and third-order effects: the desired
outcome is the first causeeffect dyad. This, in turn, causes a second-order effect,
which leads to a third-order effect. By way of example: consider the decision by a
healthcare team to open an outreach, walk-in clinic in a busy, congested
neighborhood. This is done with the positive result of easier access by clients to the
care they desire. As the client usage rises, so does the traffic and related parking
congestion; this second-order effect is a negative one, with both merchants and
residents becoming disaffected with the clinic. They, in turn, begin to boycott the
clinic and call for increasing inspection and regulation of the facility; this is a thirdorder event.
Managers try to anticipate second- and third-order effects in order to prevent or
mitigate them. Managers seek to avoid unanticipated consequences, as for example,
the efficient regrouping of transportation for frail, elderly people in a continuing
care facility. In one instance, instead of picking up one person at a time, designated
pick-up stations were set up. This resulted in more falls and accidents in inclement
weather, causing obvious harm to the clients, and an increase in lawsuits for
negligence. Originally, the cost-savings idea had seemed like a good one, but the
reality reflected a different result. Both positive and negative factors influence the
process by which alternatives are evaluated.
Evaluation of Alternatives
To evaluate alternatives, a manager must adopt an underlying philosophical stance
and make a preliminary decision about the approach to decision making that will be
taken. Depending on this philosophical stance, certain alternatives will be
considered acceptable, and others will be excluded automatically. Root and branch
decision making, satisficing, maximizing, and the use of Paretian optimality are
among the fundamental types of (or approaches to) decision making that partially
determine the decisions that are actually reached.
Root and Branch Decision Making
Certain decisions are so basic to the organizations nature that their effects are
pervasive and far-reaching in terms of organizational values, philosophy, goals, and
overall policies. Such decisionstermed root decisionsinvest the organization
with its fundamental nature at its inception and carry it through periodic,
comprehensive reviews of its fundamental purpose, often resulting in massive
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innovation. Thus, in the life cycle of an organization, root decisions may be
associated with gestation, when the fundamental form and purpose of the
organization are crystallized. They may also occur in middle age, when new goals
are developed and new organizational patterns are adopted. Finally, during old age
and decline, a fundamental decision to dissolve the organization may be made.
The pervasive effect of root decisions may be seen in the decision of a board of
trustees to change a 2-year college into a baccalaureate degreegranting institution
or to convert a hospital into a multicomponent healthcare center. Consider the
decision made by a health information administrator who chooses to use off-site
commercial storage for hard copy records. When this change is implemented, the
existing space for hard copy records will be eliminated and will not easily be
recovered. Policies and procedures, budget considerations, and changes in staffing
patterns also result. Such a decision has long-lasting implications. For these reasons,
it ranks as a root decision.
Other examples of root decisions can be found in the major changes made by
some professional associations, such as the AHIMAs decision to open active
membership to all who are interested in the primary work of this organization.
Another example of such change is the American Physical Therapy Associations
decision to emphasize doctoral-level preparation as the norm for its practitioners.
Charles Lindblom described root decisions and their opposite, branch or
incremental decisions.
2 According to Lindblom, these incremental, limited,
successive decisions do not involve a reevaluation of goals, policies, or underlying
philosophy. Rather, objectives and goals are recycled and policies are accepted
without massive review and revision. Change occurs by degree, and only a small
segment of the organization is affected.
Branch decision making is more conservative in its approach than is root decision
making, with innovation being inhibited during the former. The stability of
organizational life is enhanced, in many cases, when decision making is of the
successive, incremental type, because the manager does not have the option of
completely reviewing the organizational structure, functions, staffing patterns,
equipment selection, and similar capital expenditures. Incrementalism also
simplifies decision making because it tends to limit conflicts that might occur if the
patterns of compromise, consensus, organizational territory, and subtle internal
politics are disturbed. Moreover, incrementalism may be the simple outcome of
previous root decisions. However, the manager may overlook some excellent
alternatives because they are not readily apparent in the chain of successive
decisions. Incrementalism lacks the built-in safeguard of explicit, programmed
review of values and philosophy.
Satisficing and Maximizing
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It might easily happen that what is second best is best, actually, because that which
is actually best may be out of the question. This quotation, attributed to the
philosophereducator Cardinal Newman, expresses the idea contained in the
concepts of satisficing and maximizing. In decision making, the one best solution
may be determined by developing a set of criteria against which all alternatives are
compared until one solution emerges as clearly preeminent. In the form of decision
making known as maximizing, this one best solution is the only acceptable one.
In the form of decision making known as satisficing (a term used by Simon3), a
set of minimal criteria is developed, and any alternative that fulfills those criteria is
considered acceptable. A course of action that is good enough is selected, with the
conscious recognition that better solutions may exist. When the manager seeks
several options, satisficing may be employed. Like incrementalism, satisficing
obstructs absolute, rational, optimal decision making, yet it simplifies the process. In
satisficing, the manager accepts the fact that not every decision need be made with
the same degree of intensity.
The Pareto Principle (Paretian Optimality)
Vilfredo Pareto (18481923) was an Italian economist and sociologist who
postulated a criterion for decision making that is referred to as the Pareto principle
or Paretian optimality.
4 He suggested that each persons needs be met as much as
possible without any loss to another person. In this mode of decision making, certain
alternatives are rejected because they would produce a decrease in benefits for one
or several groups. Decisions that result in a major gain for one individual with a
concomitant major loss for another are avoided. This approach involves compromise
and consensus, with each manager accepting the needs of other units of the
organization as legitimate and the needs of the organization as a whole as
paramount. The concessions and trade-offs in the budget process or in the labor
negotiation process illustrate the balance required to satisfy the needs of many
departments or groups without penalizing any one of them (or by penalizing all
departments or groups in equal measure if penalties are unavoidable).
Continuing Assessment of Decisions
The decision-making process includes continuous analysis of decisions. Through the
feedback process, a new agenda is generated and new alternatives are revealed. The
steps in the control process provide a link back to the planning and decision-making
functions. This feedback process necessarily pervades organizational life. Planned,
formal review is built into operational plans and decisions such as budget
preparation, accrediting self-study processes, and labor union contract review. In
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addition, there is need for continuous real-time assessment of decisions that require
rapid response to changing situations. An example of such a condition is an outbreak
of an epidemic; disruption of service because of a protracted and polarizing labor
strike is another such circumstance.
In this type of situation, the classic OODA loop, or Boyd cycle, provides a
method of rapid assessment and real-time adjustments to the pressing situation. This
strategy was developed by Colonel John Boyd of the U.S. Air Force (retired) and
has been widely used in military operations.
5 Businesses have adopted the general
schematics of the OODA loop in responding to rapid change in their own and their
competitors environment. OODA is the acronym for:
Observe: the fact-gathering stage, which emphasizes the immediate situation
and its changed reality
Orient: an assessment of ones own position in relation to the changed situation
Decide: a rapid decision to commit to a new course of action in light of the
changed circumstances
Action: implementation of the new course of action immediately, without delay
The use of the OODA loop is predicated on managerial flexibility and a high degree
of delegation of authority. This decision-making process is intended for use in the
field by highly skilled professionals who need to act without continual reference
back to some other authority. Rapid adjustment to the plans is a key characteristic.
The after-action report (AAR) or hotwash review is a method used in
emergency responsedisaster management. As soon as possible after the crisis has
been dealt with, but before the response team leaves, a rapid review is completed
what worked, what did not, and what situations need further review. For example,
on the plus side, there may have been rapid and coordinated response of two or
more local service units and available supplies and personnel when surge capacity
needed increasing. On the minus side, there also may have been portable lighting
on scene that was insufficient, traffic diversion that needed to be accomplished
earlier, and radio frequencies that required recalibration. Using AARs, a lessonslearned session may be held at a later date to consolidate the findings and make
recommendations.
DECISION-MAKING TOOLS AND
TECHNIQUES
Managers have available a variety of historical records, information about past
performance, and summaries of their own and other managers experience. In
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addition, managers may test alternatives through the use of decision-making tools
and techniques.
Considered Opinion and Devils Advocate
A manager may obtain the considered opinion of experts and use the technique of
the devils advocate to sharpen the arguments for and against an alternative. In the
first instance, the manager asks staff experts or other members of the management
team to assess the several alternatives and develop arguments for and against each.
The resulting comparative assessment helps the decision maker to select a course of
action.
When the devils advocate technique is used, the decision maker assigns an
individual or group the duty of developing statements of all the negative aspects or
weaknesses of each alternative. Each alternative is then tested through frank
discussion of weaknesses and errors before the final decision is made. The
underlying theory is that it is better to subject alternatives to strict, internal,
organized criticism than to run the risk of having a hidden weakness or error
exposed after a decision has been implemented. The devils advocate does not make
the decision but simply develops arguments to ensure that all aspects are considered.
The Factor Analysis Matrix
For the decision maker who must overcome personal preference to make an
impartial decision, the matrix of comparative factors is an effective tool of analysis.
As a first step, the decision maker develops the criteria under two major categories:
essential elements (musts) and desired elements (wants). The manager begins this
process by listing key factors relating to the topic. For example, in weighing
alternatives to select an outsourcing service for dictationtranscription functions, the
manager would consider the following points:
Health Insurance Portability and Accountability Act (HIPAA)-compliant
encryption
Accepts dictation from landline phone systems and personal digital assistant
devices
Document distribution system by secure e-mail and remote print
Electronic edit and authentication
One-screen tracking of documentation from beginning of recording through the
finished document received at the client site
Temporary or total outsourcing services for seasonal peak loads
Customized formatting
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STAT capability
24-hour/365-day support center
Turnaround time of 12 hours for routine reports
Conformity with standardized billing method principles
Zero capital investment on site: use of standard Internet connections
The choices available are compared by developing a table or matrix. The factors
can be assigned relative weights, as in a point scale, with the alternative with the
highest point value becoming the best option. Even without the weighting factors,
the matrix remains useful as a technique of factual comparison. Table 51 illustrates
the use of the must and want categories to compare equipment for departmental
use. A similar process could be used to evaluate applicants for a job; personal bias
can be set aside more easily and candidates compared on the basis of their
qualifications for the position (Table 52).
The Decision Tree
A managerial tool used to depict the possible directions that actions might take from
various decision points, the decision tree forces the manager to ask the what then
questions (i.e., to anticipate outcomes). Possible events are included, with a notation
about the probabilities associated with each. The basic decisions are stated, with all
the unfolding, probable events branching out from them. Decision trees enable
managers to undertake disciplined speculation about the consequences, including the
unpleasant or negative ones, of actions. Through the use of decision trees, managers
are forced to delineate their reasoning, and the constraints imposed by probable
future events on subsequent decisions become evident. Each decision tree reveals
the probable new situation that results from a decision.
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It is possible to use a decision tree without including mathematical calculations
of probability, although computers are commonly used to calculate the probability
of events when such detailed information is available. Managers in business
corporations with sufficient market data about profit, loss, patterns of consumer
response, and national economic fluctuations include these data in the construction
of a decision tree for the marketing of a new product, for example.
Managers who lack detailed information of this type can still use decision trees to
advantage. In developing decision trees, these managers use symbols to designate
points of certainty and uncertainty. For example, events of certainty may be placed
in rectangles; events of uncertainty in ovals. This technique emphasizes the relative
risk in each decision track. The goal to be reached is the continual reference point.
The sequence of decisions that leads to the goal with the least uncertainty emerges
as a distinct track, thereby facilitating the managers decision. For decisions in
which the manager has intense personal involvement, this approach is a valuable aid
in overcoming emotional barriers to objective choice.
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When managers devote time and effort to sound decision making, the planning
process is enhanced, leading to consistent achievement of organizational goals.
EXERCISE: FROM INTENT TO ACTION: THE
PLANNING PATH
Select a specific healthcare organization that you know something about. If you are
or have been employed in health care, use your employing organization. (Whether
the example consists of your organization or another, there is no need to specifically
identify it.) You may use a hospital, nursing home, health center, rehabilitation
service, surgicenter, urgent care center, or any of a number of other health settings.
Assume you are a department manager within your chosen setting.
For your chosen organization:
1. Write a mission statement for the organizationa concise yet appropriately
descriptive of why the organization exists.
2. Consistent with the organizations mission as expressed in this mission
statement, develop a statement of philosophy for your department.
3. Write one major policy that supports this philosophy.
4. Write two or three specific procedures that express aspects of the policy from
Question 3 as instructions for action (keeping in mind that a policy is
ordinarily a statement of what is to be done, and a procedure consists of how it
should be done).
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EXERCISE: PLANS ARE WHAT?
Consider the following statement: plans in and of themselves are not especially
useful; however, the planning process is invaluable.
In essay form, thoroughly explain what you believe is meant by this statement. It
will be necessary to examine the statement from both directions. That is, explain the
truth (or lack thereof) in the comment about plans not being especially useful, and
then proceed to explain the supposedly greater value of the planning process.
EXERCISE: GOALS, OBJECTIVES, AND
PROCEDURES
For any department of your choosing (except for physical therapy and health
information management, which are used in this chapters examples), create a
general objective that identifies the departments overall mission, and provide a set
of three to five functional objectives describing how the general objective will be
pursued. Then select one of the functional objectives and in outline form create at
least one procedure that could be applied in pursuing that objective.
CASE: PAID TO MAKE DECISIONS?
Background
Carrie Wilson, a registered nurse with more than 10 years of active supervisory
experience, was hired from outside as nursing manager for the emergency
department of County Hospital. It was Carries style to develop insight into how to
manage a given operation by putting herself where the action was and becoming
totally immersed in the work. She quickly discovered, however, that her tendency to
become deeply involved in hands-on work drew reactions from staff members
ranging from surprise to resentment. She also discovered that her predecessor, who
had been in the position for several years, had been referred to as the Invisible
Nurse. As someone said about the former manager, I think she was a very pleasant
person, but thats hard to say because we almost never saw her.
In spite of the legacy of the Invisible Nurse, Carrie provided a constant
management presence and seemed determined to remain deeply involved in the
work of the department. She was also determined to vastly improve the level of
professionalism in the department, a quality that had struck her from the first as
decidedly lacking.
206
In a short time, Carrie had moved to reinstate and enforce a long-ignored dress
code for the department, eliminate personal telephone calls during working hours
except for urgent situations, curb chronic tardiness on the part of some staff
members, bar food and drink and reading materials from work areas (also a
reemphasis of long-ignored rules), and curb the practice of changing scheduled days
of work after the time limit allowed by policy.
Carrie found her efforts frustrated at every turn. As she said to her immediate
superior, I cant understand the reaction. All Ive done is insist that a few hospital
rules be followedmostly rules that have been there all along but were being
ignoredand added a few twists unique to the emergency department. Just that, and
yet the bitterness and lack of support and even resentment are so strong I could slice
them. Im getting all-out resistance from a few people whom I would still have to
describe as good, professional nurses at heart.
Carries boss, the vice president for nursing service, said, Do you suppose you
may have been pushing too hard, hitting them with one surprise after another
without knowing how they felt and without asking for their cooperation?
Thats possible, answered Carrie, but now Im committed on several fronts
and I cant back down on any of them without looking bad to the department.
Dont think of this as a contest of wills or a game, said the vice president. It
may be necessary for you to back down temporarily in some areas or at least hold a
few of your improvements up in the air for a while. It may not hurt to fall back and
involve a few of your staff in looking at the apparent needs of the department.
With a touch of impatience in her voice, Carrie said, Oh, Ive heard all this stuff
about participative management and staff involvement in making decisions. That
may be the way for some, but thats never been my style. Im paid to make decisions
so I make themI dont try to avoid responsibility by encouraging employees to
make my decisions.
Questions
1. What are the weaknesses, if any, in Carries final statement about decisionmaking responsibility?
2. What has essentially been wrong with Carries approach to raising the level of
professionalism in the department?
3. How has Carries behavior altered or otherwise affected the environment
within which she expects her decisions to be implemented?
4. Ideally, how should Carrie have initially approached her plan to improve the
emergency department?
5. Given the state of affairs Carrie is facing as of her conversation with the vice
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president, how should she go about attempting to salvage some of her ideas
and proceed with the improvement of the department? Keep in mind that at
this stage her actions have probably had serious effects on her chances of
implementing her plans, and some of the decisions she may have already made
may need to be revisited in a different fashion.
NOTES
1. Chester Barnard. The Functions of the Executive (Cambridge, MA: Harvard University
Press, 1968), 202.
2. Charles Lindblom, The Science of Muddling Through, Public Administration Review
(Spring 1959): 7988.
3. Herbert Simon, Models of Man (New York: John Wiley & Sons, 1957), 207.
4. Vilfredo Pareto, Mind and Society (New York: Harcourt, Brace, 1935).
5. Grant Hammond. The Mind of War: John Boyd and American Security (Washington,
DC: Smithsonian Institution Press, 2001).
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CHAPTER 6
Organizing and Staffing
CHAPTER OBJECTIVES
Define the basic management function of organizing and identify the steps in
the organizing process.
Define the key concepts of hierarchy, chain of command, splintered
authority, and concurring authority.
Identify the factors that shape the span of management.
Differentiate between line and staff relationships, and identify basic line and
staff relationships.
Describe the dual pyramid organization arrangement found in healthcare
authority patterns.
Identify the basic patterns of departmentation.
Introduce the concept of the matrix organization and define the applicability
of this apparently contradictory concept.
Identify patterns of organizational flexibility: temporary agency, contractual
outsourcing, and the use of independent contractors and consultants.
Identify the principles involved in developing an organizational chart.
Describe the elements of a job analysis.
Introduce job descriptions, including their uses and the elements necessary
in their development.
Describe the job rating and classification system.
Identify the content and uses of the management inventory.
Describe the role and activities of the professional practitioner as consultant.
Organizing is the process of grouping necessary responsibilities and activities into
workable units, determining the lines of authority and communication, and
developing patterns of coordination. It is the conscious development of the role
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structures of superior and subordinate, line and staff. The organizing process stems
from several underlying premises:
There is a common goal toward which work effort is directed.
The goal is articulated in detailed plans.
There is a need for clear authorityresponsibility relationships.
Power and authority elements must be reconciled so that individual interactions
within the organization are productive and goal directed.
Conflict is inevitable but may be reduced through clarity of organizational
relationships.
Individual needs must be reconciled with and subordinated to organizational
needs.
Unity of command must prevail.
Authority must be delegated.
THE PROCESS OF ORGANIZING
The immediately identifiable aspects of the organizing process include clear
delineation of the goal in terms of scope, function, and priorities. For example, will
a healthcare institution focus on acute care for inpatients or comprehensive care,
including outpatient care and home care? Will the organization expand its services
through decentralized locations and active outreach programs?
The development of a specific organizational structure must be considered. What
degree of specialization will be sought? Specialization is a major feature of
healthcare organizations; it is dictated and shaped in part by the specific licensure
mandates for each health profession. The manager must assess the question of line
and staff officers and units. A major organizational question concerns the division of
work. What will be the pattern of departmentation? The development of the
organizational chart, the job descriptions, and the statements of interdepartmental
and intradepartmental workflow systems must be assessed and implemented as part
of the management function of organizing. Finally, the changes in the internal and
external organizational environment must be monitored so that the organizational
structure can be adjusted accordingly.
In summary, the basic steps of organizing are these:
1. Goal recognition and statement
2. Review of organizational environment
3. Determination of structure needed to reach the goal (e.g., degree of
centralization, basis of departmentation, committee use, line and staff
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relationships)
4. Determination of authority relationships and development of the organizational
chart, job descriptions, and related support documents
FUNDAMENTAL CONCEPTS AND PRINCIPLES
Relationships in formal organizations are highly structured in terms of authority and
responsibility. The resulting hierarchythat is, the arrangement of individuals into a
graded series of superiors and subordinates, authority holders, and rank-and-file
membersconstitutes one of the most obvious characteristics of formal
organizations. A pyramid-shaped organization tends to result from the development
of a hierarchy (Figure 61).
The authority and responsibility that can be observed in the hierarchy constitutes
a distinct chain of command, also referred to as the scalar principle: the chain of
direct authority from superior to subordinate. It was long maintained that strict unity
of commandthe uninterrupted line of authority from superior to subordinate so
that each individual reports to one and only one superiorwas fundamental to
hierarchical relationships in organizations. It was seen as essential to have a clear
chain of command showing who reports to whom, who is responsible for each
individuals actions, and who has authority over each worker. In situations of
mandatory reporting, critical events, and similar matters, it is important that this set
of relationships (i.e., who has the responsibility to reportand to whom) be well
established and stated with clarity.
Although unity of command is the usual practice, an alternative is reflected in
split-reporting relationships in which a single subordinate reports to two or more
superiors. Split-reporting relationships are proliferating as healthcare organizations
merge into larger organizations or join together in health systems. It is not at all
uncommon to find, for example, a single manager over the same functions at two
sites who is therefore answerable to two different site administrators. Such
combinations have occurred out of economic necessity, and many of them make
sense in terms of operating efficiency and optimal utilization of management
capability. This efficiency can be put at risk, however, as the absence of unity of
command can create a new set of problems.
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FIGURE 61 Pyramidal Hierarchy
The individual who reports to two superiors is put in the position of having to
balance the two reporting relationships. If either superior is inflexible or overly
demanding, the stage is set for subordinate burnout as the individual attempts to
reconcile conflicting demands. Much of the determination of whether a splitreporting relationship works lies beyond the reach of the individual. Even the most
highly capable subordinate can be rendered frustrated and ineffective by two
superiors who have not coordinated their demands and expectations or who have
tried to have their way with the subordinate at the expense of the other superior.
Also, a split-reporting relationship more than doubles the communication
demands on the subordinate manager. Not only does the manager have to
communicate regularly with two superiors, but he or she must do so in a manner that
attempts to provide coordination between the needs of the two superiors.
Split reporting may generate potential conflict when managers differ in their
interpretation or application of policy. For example, one manager may readily give
liberal leave in bad weather or allow early closing before a holiday, whereas another
manager may have a stricter interpretation of such practices. The employee in this
situation is caught in the middle of an ambiguous situation.
Split-reporting relationships may be necessary under certain circumstances, but
they should always be entered into with full awareness and consideration of the
problems that may be encountered. The concept of unity of command should not be
abandoned without good reason and without planning to meet the increased
communication needs of the alternative arrangement.
The authority delegated to any individual must be equal to the responsibility
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assigned. This principle of paritythat responsibility cannot be greater than the
authority givenensures that individuals can carry out their assigned duties without
provoking conflict over their right to do so. In developing policies and documents
that support the organizational chart, managers must avoid contradicting this
principle. At the same time, managers cannot so completely delegate authority that
they become free of responsibility. This is reflected in the principle of the
absoluteness of responsibility; authority may (and must) be delegated, but ultimate
responsibility is retained by the manager. This, in turn, is the basis of the managers
right to exercise the necessary controls and require accountability.
Normally, managers have adequate authority to carry out the required activities
of their divisions or units without recourse to the authority possessed by other
managers. Two situations occur, however, in which the authority of a single
manager is not sufficient for unilateral decision making or action. Occasionally,
because the work must be coordinated and because there are necessary limits on
each managers authority, a problem cannot be solved or a decision made without
pooling the authority of two or more managers. These problems of splintered
authority are overcome in three ways: (1) the managers may simply pool their
authority and make the decision or solve the problem, (2) the problem may be
referred to a higher level of authority until it reaches a single manager with
sufficient authority, or (3) reorganization may be done so that recurring situations of
splintered authority are eliminated. Such recurring situations sometimes require
adjustment in the delegation of authority.
Concurring authority is sometimes given to related departments to ensure
uniformity of practice. For example, the packaging department of a manufacturing
company may not change specifications without the agreement of the production
division. A computer systems manager in a healthcare setting may be given
concurring authority on any data element changes, although this is the primary
responsibility of the health information practitioner, to foster compatibility
throughout the information processing function. Concurring authority, as a control
and coordinating measure, can be a normal part of the routine checks-and-balances
system. Splintered authority and concurring authority are the natural consequences
of the division of labor and specialization that make it necessary to coordinate the
authority delegated to different managers.
Maintaining unity of command in disasters and emergency situations has
received particular attention over the past several years. In 2003, the National
Incident Management System was implemented as part of a nationwide Homeland
Security initiative. One feature of this system is the concept of unified command, a
mechanism wherein a command team, which consists of representatives from
various response agencies, develops a collective set of strategies. This process takes
into account that different responding groups (e.g., police, fire companies,
emergency medical response personnel) have differing jurisdictions and
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responsibilities. Within the structure of unified command, incident commanders
from each agency coordinate their efforts. A lead agency or team will have primary
authority and responsibility, with the other groups deferring to them. The lead
agency or team could change as the situation changes and a different skill set or
jurisdictional authority becomes the preferred one (e.g., a fire company hands off a
situation to police; an emergency first responder team hands off the care of injured
patients to an advanced field triage team). Healthcare organizations are adopting
similar organizational patterns in their disaster planning, both internal and external.
THE SPAN OF MANAGEMENT
If authority is to be delegated appropriately, consideration must be given to the
number of subordinates a manager may supervise effectively. Four terms are used to
refer to this concept: span of management, span of control, span of supervision, and
span of authority. Stated another way, the span of management is the number of
immediate subordinates who report to any one manager. It is essential to recognize
that the number of individuals whose activities can be properly coordinated and
controlled by one manager is limited.
There is no ideal span of management. A span of 4 or 5 subordinates at higher
levels and a span of 8 to 12 at the lower levels have sometimes been suggested.
Many modifying factors shape the appropriate span of management for any
authority holder, however. These factors include the following:
Type of work. Routine, repetitive, and homogeneous work allows a larger span
of management.
Degree of training of the worker. Those workers who are well trained and well
motivated do not need as much supervision as a trainee group; the more highly
trained the group, the larger the span of management may be.
Organizational stability. When the organization as a whole, as well as the
specific department, is stable, the span of control can be broader; when there
are rapid changes, high turnover, and general organizational instability, a
narrower span of control may be needed.
Geographical location. When the work units are dispersed over a scattered
physical layout, sometimes even involving separate geographical locations,
closer supervision is necessary to control and coordinate the work.
Flow of work. If much coordination of workflow is needed, there is a
corresponding need for greater supervision and a narrow span of control.
Supervisors qualifications. As the amount of training and experience of the
supervisor increases, the span of control for that supervisor may increase as
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well.
Availability of staff specialists. When staff specialists and selected support
services, such as a training, human resources, or development department, are
available, a supervisors span of management may be increased.
Value system of the organization. In highly coercive organizations, a supervisor
may have a large span of management, because there is a pervasive system to
help ensure conformity, even to the extent of severe punishment for deviation
from the rules. In contrast, in a highly normative organization, there may be an
emphasis on participation in planning and decision making and a resultant
complexity in the communication process; thus a smaller span of management
may be appropriate. In healthcare organizations (traditionally normative
settings with respect to the professional worker), the span of management may
be large because the healthcare professional is a specialist within an area and
does not always require close supervision.
As an example, the span of management in a laboratory department is shown in
the partial organizational chart in Figure 62. In this figure, one can trace the chain
of command from each supervisor in the department back up to the chief executive
officer. Figure 63, depicting the relationships in a physical therapy department,
illustrates other ways of depicting organizational relationships.
LINE AND STAFF RELATIONSHIPS
The terms line and staff are key words in any discussion of organizing. In common
usage, staff refers to the groups of employees who perform the work of a given
department or unit. The director of nursing speaks of the nursing staff, the chief
dietitian discusses the dietary/food service staff, and the physicians who practice in a
hospital are referred to as the medical staff.
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FIGURE 62 Partial Organization Chart Illustrating Span of Management
(following from President/CEO through Vice President/Ancillary Services and
Director, Laboratories)
FIGURE 63 Physical Therapy Department Organizational Chart
In management literature, a differentiation is made between line and staff
departments or officers. Line refers to those workers who have direct responsibility
for accomplishing the objectives of the organization, and staff refers to those
employees who help the line units achieve the objectives. In a healthcare
organization, direct patient care units are considered to perform line functions, and
all other units are listed as staff services. The problem with this distinction becomes
apparent when it must be applied to such units as the dietary, supply chain division,
or housekeeping and environmental services. Are these functions any less essential
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to the operation of a healthcare organization than a direct patient care unit? Some
authors prefer to list such units as service departments, reserving the term staff for
a specific authority relationship.
The concept of line and staff was inherited by management theorists from the
military of the 1700s and 1800s. An examination of a typical military encounter
during this era makes it easier to conceptualize the notions of line and staff. The
soldiers literally formed a line; the immediate commanding officers were those who
commanded the linethat is, line officers. The actual fighting of the battle was the
duty of these troops and officers. In turn, these troops and officers were assisted by
staff officers and other units that provided logistical support, supplies, and
information. The idea carried over as formal bureaucratic organizational theory
developed in the 1800s.
The Relationship of Line and Staff Authority
The term staff also connotes a certain kind of authority relationship. Again, the
original usage of the term was derived from the military, in which the staff assistant
pattern was developed as a means of relieving commanders of details that could be
handled by others. The staff officer was an assistant to the commander, and this
assistants authority was an extension of line authority.
Line authority is based on a direct chain of command from the top level of
authority through each successive level of the organization. A manager with line
authority has direct authority and responsibility for the work of a unit; the line
manager alone has the right to command others to act. A staff assistant provides
advice, counsel, or technical support that may be accepted, altered, or rejected by the
line officer.
Functional authority is the right of individuals to exercise a limited form of
authority over the specialized functions for which they are responsible, regardless of
who exercises line authority over the employees performing the activities. For
example, the information services staff is responsible for developing and
implementing a specific computerized data collection system. The unit manager has
functional authority over processing input documents, although these documents
may be originated and completed by workers in other units, such as the admission
office, business office, nursing service, or health information management. A human
resources officer may be charged with monitoring organizational compliance with
affirmative action programs or labor union contracts; the advice of such an officer
cannot be rejected or altered arbitrarily by a line officer.
A manager may hold a staff position. Such an individual may be the designated
officer in charge of a support department, such as the legal or human resources
department. Yet this manager may also have charge of one or several workers within
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the unit and would exercise line authority within that unit. Organization charts, job
descriptions, and similar documents should contain clear statements as to the nature
of each position: whether it is a line or staff position, what kind of authority it
possesses, and what its area of responsibility includes.
Line and Staff Interaction
Various types of staff arrangements may be developed to channel line and staff
interaction. As noted earlier, one basic mode of interaction is to designate a staff
member as the personal assistant to an individual holding office in the upper levels
of the organization. This position should not be confused with that of an assistant
department head or assistant manager, who generally shares in direct line authority.
Managers in the upper levels of the organization may have several assistants, each
carrying out highly specialized tasks. When there is only one position of assistant,
this individuals work may be general, varied, and determined by the needs of the
superior officer. The style of interaction may be highly personal, as when the staff
assistant is seen as an alter ego of the line officer. When such a staff member
indicates a point of view, a desired action, or a preferred decision, other members of
the organization recognize that this individual is reflecting the opinion and wishes of
the line officer.
A full department that gives specialized assistance and support frequently has a
general staff. The relationship between staff and line personnel is less intimate than
the assistant relationship. The work tends to be technical and highly specialized
(e.g., the work of logistical staff in the military).
A third aspect of line and staff relationship is the organizational arrangement of
the specialized staff. Specialized staff members (or departments in a large
institution) give highly specialized counsel, such as that provided by engineers,
architects, accountants, lawyers, and auditors. Finally, as noted, departments can be
arranged in terms of direct line entities, assisted by support or service units.
The Contractual Management Team
There is a growing practice of using a contractual management team in place of the
direct-hire chief executive and/or chief operating officer and some key department
manager positions (e.g., director of nursing). The board of trustees hires, on
contract, an outside individual or team to take over, for some period, the executive
functions in the organization. The board has directly given this individual or team
authority to make necessary changes and maintain regular operations. The reasons
for using an outside group include necessary restructuring due to downsizing or
mergers, need for turnaround measures, and preparation for a merger or for
disinvesting by the original sponsoring organization. These expert outsiders identify
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and implement necessary changes, absorb any hostility from workers and clients,
and deal with overcoming the resulting demoralization. They may be in residence
for several months or years, depending on the reasons for using them. More than
consultants who merely make recommendations, these individuals are empowered to
implement.
THE DUAL PYRAMID FORM OF
ORGANIZATION IN HEALTH CARE
Healthcare institutions are characterized by a dual pyramid form of organization
because of the traditional relationship of the medical staff to the administrative staff.
The ultimate authority and responsibility for the management of the institution is
vested in the governing board. In accordance with the stipulations of licensure and
accrediting agencies, the board appoints a chief executive officer and a chief of
medical staff, resulting in two lines of authority. The chief executive officer is
responsible for effectively managing the administrative components of the
institution and delegates authority to each department head in the administrative
component. Within the administrative units, there is a typical pyramidal
organization with a unified chain of command.
Physicians and dentists are organized under a specific set of bylaws for the
governance of the medical and dental staff. With governing board approval, the
chief of the medical staff appoints the chief of each clinical service. Physicians and
dentists apply for clinical privileges through the medical staff credentials process
and receive appointment from the governing board. A second pyramid results from
this organization of the medical staff into clinical services, with each having a chief
of service who reports to the chief of the medical staff.
In an effort to consolidate authority and clarify responsibility, the top
administrative levels of a healthcare organization may be expanded to include a
central officer to whom both the administrator and the chief of the medical staff
report. In some institutions, however, there may be no permanent medical staff
position that corresponds to the position of chief executive officer on the
organizational chart. The elected president of the medical staff may fill this role
when there is no organizational slot for a medical director per se.
It is important to determine the precise meaning of titles as they are used in a
specific healthcare setting. The following titles are commonly used:
Chief of staff. This is the officer of the medical staff to whom the chiefs of
medical and clinical services report. The chief of staff is appointed by the
governing board.
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Chief of service. Each chief of service is the physiciandirector of a specific
clinical service (e.g., chief of surgery) and is the line officer for physicians who
are appointed to that specific service.
Department chairperson. The chairperson of a department is the director of a
specific clinical service in an academic institution, such as a teaching hospital.
(This title may be used as an alternative to chief of service in this type of
setting.)
Medical director. This is a position in a line authority structure. It is sometimes
seen as the counterpart of the chief executive officer for the medical staff.
President of the medical staff. The president is the presiding officer for the
medical staff and is usually elected for a year. In the absence of a full-time
medical director, this individual serves as coordinating officer for the medical
staff.
Although all authority flows from the governing board, there are two distinct
chains of commandone in the administrative structure and one in the medical
sector. Furthermore, in matters of direct patient care, the attending physician
exercises professional authority; thus, a single employee not only may be subject to
more than one line of authority but also may have professional authority. Line
officers in the administrative unit may find that their authority is limited in some
areas because of the specific jurisdiction of medical staff committees, such as the
pharmacy and therapeutics committees. The director of the physical therapy
department, for example, may report to a committee of physicians of the active
medical staff, which limits the authority mandate of this line manager. Because of
the dual pyramid structure, much coordination is needed.
BASIC DEPARTMENTATION
The development of departments is a natural adjunct to the specialization and
division of labor that are characteristic of formal organizations. Departmentation
overcomes the limitation imposed by the span of management. The organization,
through its departments and similar subdivisions, can expand almost indefinitely in
size. Departmentation facilitates the coordination process, as there is a logical
grouping of closely related activities.
Basic departmentation may be developed according to any one of several
patterns:
1. By function. Because it is logical, efficient, and natural, the most widely used
form of departmentation groups all related activities or jobs together. This
permits managers to take advantage of specialization and to concern
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themselves with only one major focus of activity. Hospital departments are
usually developed according to function (e.g., the finance office and the health
information management, human resources, environmental services,
maintenance, and dietary departments).
2. By product. All activities needed in the development, production, and
marketing of a product may be grouped for purposes of coordination and
control. This pattern of departmentation is used in business and industry where
one or a few closely related products are grouped. It facilitates the use of
research funds, the use of specialized skills and knowledge, and the
development of cost control data for each product line. Functional
departmentation may be an adjunct of product departmentation.
3. By territory. In business, the marketing process may be developed according to
geographical boundaries. In service organizations, a decentralized pattern
based on customer or client groupings may be appropriate. In some healthcare
organizations, territorial departmentation is used because funding stipulations
designate specific catchment areas or require coverage of certain population
centers. Local needs, such as participation of clients and prompt settlement of
difficulties, may be accommodated more easily through departmentation by
territory. Grouping by geographical territory is a common element in outreach
programs and home care services, because it fosters efficient movement of
personnel to client locations.
4. By customer. Departmentation may be based on client needs. Specialty clinics
in health care tend to follow this pattern. Government programs frequently
focus on a specific client need, partly in response to the lobbying of interest
groups. Specific examples of customer departmentation include special
maternal and infant care programs, the Veterans Administration, and programs
for migrant workers. A university may have components such as day, evening,
and weekend divisions, as well as continuing education programs, to
accommodate the needs and interests of differing student populations.
5. By time. Activities may be grouped according to the time of day they are
performed. This pattern, which is usually based on the use of shifts, is common
in manufacturing and similar organizations in which the activities of a
relatively large group of semiskilled or technical workers are repetitive and
continue around the clock. Organizations that provide essential services
throughout the day and night use this pattern, usually in conjunction with
functional departmentation.
6. By process. Technological considerations and specialized equipment usage
may lead to departmentation by process. This is similar to functional
departmentation in that all the activities involving one major process or some
set of specialized equipment are grouped. In healthcare organizations, the
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formation of radiology and clinical laboratory departments is an example of
departmentation by process as well as by function.
7. By number. Departmentation may be accomplished by assigning certain duties
to undifferentiated workers under specific supervision. This form of
departmentation is used when many workers are needed to carry out an
activity. Its use is relatively limited in modern organizations, but it was
traditional in early societies, such as tribes, clans, and armies. Organizing by
sheer number may be used in such activities as house-to-house soliciting
campaigns and membership drives. Unskilled labor crews may be organized in
this pattern.
Orphan Activities
Certain activities may not merit grouping into separate departments, and there may
be no compelling reason to place them in any specific location in the organization.
Yet these orphan activities must be coordinated and interlocked with all others. The
most use criterion is followed to resolve the question of organizational placement.
The major department that most often uses or needs the service absorbs it. Other
units that need the service obtain it from the major department to which it has been
assigned.
Patient transportation in a hospital involves such a set of activities. These
services are used by the physical therapy, occupational therapy, and radiology
departments, among others, but overall coordination is assigned to the inpatient
nursing units because one central placement is needed for these groups of workers.
As another example, in small nursing homes one worker often performs several
activities on a limited basis, such as general maintenance activities, running errands,
and transporting patients to appointments with private physicians. The individual
with these responsibilities may report to a central manager, such as the director of
nursing, because the director or a delegate is present on all shifts. This arrangement
provides coordination and control of the activities.
Deadly Parallel Arrangements
In an alternative organizational pattern, the higher levels of management establish
dual organizational units for the purposes of control or competition. As a control
device, the parallel arrangement permits comparison of costs, productivity, and
similar parameters. Competition may be enhanced, if this is desired as a means of
motivation, because productivity and performance can be compared.
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SPECIFIC SCHEDULING
The determination of specific coverage of key functions through specific scheduling,
usually by shift, is an essential aspect of organizing. Exhibit 61 provides an
example of the development of coverage based on workflow. A mix of full-time and
part-time workers and overlapping shifts at times of high volume demand in the
workflow are essential considerations in developing this particular plan, which
reflects the needs of a large group practice with a hard copy record system in use
while it gradually implements an electronic health record system.
EXHIBIT 61 Specific Scheduling by Shift: Health
Information Services
Planning Premises
1. Clinic days and hours
Monday through Friday 8:00 A.M. to 7:00 P.M.
Scheduled appointments and walk-ins
Saturday and Sunday 8:00 A.M. to 4:00 P.M.
Primarily walk-ins; occasional scheduled appointments
2. Tasks and deadlines (based on operational goals for department)
Pull and deliver charts for appointments for chart availability 1 hour
before clinic opening.
Pull and deliver charts for walk-ins within 15 minutes of call for chart.
Refile charts within 2 hours of return by clinic (pick up and return of
charts scheduled every 2 hours).
File late and continuing care reports within 2 hours of receipt.
3. Special task
Search for charts unavailable or not found on first attempt. Perform this
task at 8:00 A.M., 12:00 P.M., and 2:00 P.M. weekdays.
4. Full-time equivalents (FTEs) needed
Eight (to be full-time employees)
5. Number of floaters needed to provide vacation, holiday, and sick-time
coverage Two FTEs, to consist of four part-time positions assigned as
needed based on vacation, holiday, and sick-time experience.
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Monday Through Friday
7:00 A.M. to 3:00 P.M. Shift: Two FTEs
Search for charts missing or not found on initial attempt.
Pull and deliver charts for walk-ins throughout shift.
Pick up and return charts to file, 2-hour rotation.
Pull charts for next days clinic appointments.
9:00 A.M. to 5:00 P.M. Shift: Two FTEs
Pick up and return charts to file, 2-hour rotation.
Pull charts for next days clinic appointments.
Process late and continuing care reports.
Search for charts missing or not found on initial attempt (for late afternoon
and early evening clinic appointments).
Pull and deliver charts for walk-ins 3:00 P.M. to 5:00 P.M.
3:00 P.M. to 11:00 P.M. Shift: Two FTEs
Pull and deliver charts for evening clinic walk-ins.
Pick up and return charts to file, 2-hour rotation.
Process late and continuing care reports.
Carry out quality control audit of files.
Saturday and Sunday
8:00 A.M. to 4:00 P.M. Shift: One FTE per day
Pull and deliver charts for walk-ins.
Pick up and return charts to file, 2-hour rotation.
Process late and continuing care reports.
Carry out quality control audit of files.
FLEXIBILITY IN ORGANIZATIONAL
STRUCTURE
Managers, in their role as change agents, continually seek ways to respond to
change in the external and internal organizational environment. It may be necessary
to adjust traditional organizational patterns because of advances in modern
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technology, increases in workers technical and professional training, the need to
offset employee alienation, and the need to overcome the problems inherent in
decentralized, widely dispersed units. In addition, managers must take into account
certain characteristics of todays workforce: the two-wage earner family, the single
parent, and the worker who is also caretaker of an elderly family member. These
workers need a modicum of flexibility such as that provided in flexible hours,
telecommuting, and similar alternatives to on-site work.
In general, functional departmentation has been predominant, and there has been
a strong emphasis on unity of command. When technical advice or assistance was
needed, staff roles were developed to assist the line managers. When
intraorganizational communication and cooperation among several units were
needed, the committee structure was used. Three alternative temporary or permanent
organizational patterns allow managers to retain the benefits of these traditional
practices and to reduce some of their disadvantages: (1) the matrix approach, (2)
temporary departmentation, and (3) the task force. These approaches may
supplement the traditional organizational structure or, in the case of the matrix
approach, supplant it.
Matrix Organization
Matrix organization, a design that involves both functional and product
departmentation, is used predominantly to provide a flexible and adaptable
organizational structure for specific projects in, for example, research, engineering,
or product development. This pattern is also called grid or latticework organization
and project or product management. The matrix of organizational relationships
involves a chief for the technical aspects, an administrative officer for the
managerial aspects, and a project coordinator as the final authority. This dual
authority structure is a predominant characteristic of the matrix organization and
stands in distinct contrast to the unity of command in the traditional organizational
pattern.
Workers are essentially borrowed from functional units and temporarily assigned
to the project unit. Rather than designating line and staff interactions, the developers
of the matrix pattern seek to create a web of relationships among technical and
managerial workers. Multiple reporting systems are developed and communication
lines are interwoven throughout the matrix.
Participants in the matrix organizational pattern tend to be highly trained, selfmotivated individuals with a relatively independent mode of working. These
functional personnel are grouped together according to the needs dictated by the
phase of the project that has been undertaken. In the matrix arrangement, workers
receive direction from the technical or the administrative chief as appropriate, but it
is assumed that they have the ability to develop the necessary communication and
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work patterns without specific direction in every aspect. The project coordinator has
the traditional responsibilities of guiding the technical and administrative groups and
of developing the basic channels of communication and lines of coordination;
however, there may be none of the detailed stipulations that are commonly
associated with the highly bureaucratic traditional organizational pattern. In the
healthcare organization, a matrix organization frees nurses, physical therapists,
occupational therapists, and other direct patient care professionals from some of the
relatively rigid elements of formal organization.
Temporary Departmentation
The temporary department or unit reflects a management decision to create an
organizational division with a predetermined lifetime to meet some temporary need.
This lifetime may be imposed by an inherent, self-limiting element, such as funding
through a defense contract or private research grant. Although the predominant
organizational structure may be modified periodically, there is an implicit
assumption that the basic unit will remain substantially unchanged for the life of the
organization. The use of the term temporary may be somewhat misleading;
temporary departmentation usually reflects an organizational pattern that will exist
for more than a few months, as an activity limited to only a few months duration
would be placed under the category of special project or task force rather than
temporary departmentation. The temporary department may exist for several years
(i.e., for the life of a research grant), although there is no set rule.
The development of a new product (i.e., the calculation of comparative cost data,
product development, and marketing) may be placed under a temporary department
assigned to carry out the necessary research development and marketing within a
specific period. A team of workers with the necessary specialized knowledge may
be assembled under the jurisdiction of the temporary department, deadlines set,
necessary accounting processes developed, and related functions delineated.
In businesses and institutions with defense contracts or research grants,
temporary departmentation provides the necessary organizational structure without
interfering with the establishments normal efforts. Equipment is purchased and
workers hired with special funds designated for that purpose. These workers are not
necessarily subject to the same pay scale, fringe benefits, union contracts, and
similar regulations as are regular employees. The manager must make it clear to
these workers that their jobs are temporary, limited to the life of the contract or
grant. There should also be a clear understanding about worker movement into the
main organizational unit: is this employee eligible for such movement with or
without having accrued seniority and similar benefits? Patients who receive full or
partial subsidy for their care in a healthcare institution under a special research grant
or project should be informed about the limited scope of the project, and their
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options for continuity of care about the life of the project should be explained.
Temporary Agency Services
Staffing flexibility may also be achieved or enhanced through the use of temporary
help from agencies that specialize in supplying trained personnel to cover short-term
needs. Short-term in this sense is ordinarily construed as a period not exceeding 6
months. The employees engaged under an arrangement with a temporary help
agency are employees of the agency, not the utilizing organization.
There are several advantages to the use of agency temps. The organization is
spared the effort and expense of recruiting, hiring, training, and separating
employees who will be in the workforce for perhaps only a few weeks. Also, in
many instances, these temporary employees come trained in the basics of the job
and require only specific departmental orientation. Although the organization pays
something of a premium in that the rate for a temp includes the persons pay and
benefits and the agencys profit, the temp alternative is often more economical than
paying overtime premium to regular staff to cover the need. There are in health care,
however, some marked exceptions to this claim of economy in health care.
Professional staff such as registered nurses, physical therapists, and a number of
others are always more costly as temporaries than regular staff. Presently the reasons
for engaging professional temps have little or nothing to do with short-term needs;
the key reasons for todays use of professional temps are the shortage of adequate
staff and the attendant difficulties experienced in recruiting critically needed
personnel.
It should be stressed that temporary help arrangements need to be limited to a
period of less than 6 months. Federal law requires that anyone working for an
organization for a period exceeding 6 months must be considered an employee for
purposes of earning credit toward retirement. Some nonhealthcare organizations
past practicesoften involving laying off employees and hiring them back as
temporaries at lower rates of pay and with fewer benefits and the inability to
accrue retirement creditwere seen as a deliberate strategy to avoid certain costs.
In any event, a temporary engagement that has extended beyond the 6-month
guideline should be examined closely for alternative ways of meeting the need. The
key criterion for the appropriate use of temporary staff is the short-term nature of the
need. In the healthcare setting especially, the prolonged use of temps to meet a
continuing need is never as economical as engaging permanent staff.
Outsourcing
Outsourcing is the process of having certain services that could be provided
internally performed by agencies or individuals external to the organization.
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Outsourcing has been an actively used alternative in manufacturing industries for
many years. It is common in manufacturing for a company to rely on external
suppliers to provide it with various components made to the companys
specifications. In fact, what we now know as outsourcing probably began in
manufacturing in the manner just described, although the label outsourcing is
considerably newer than the activity itself.
Many of the decisions favoring outsourcing are made for economic reasons.
Quite simply, if a service can be obtained externally for less than the cost of
providing it internally, outsourcing may be considered a preferred alternative
(providing, of course, that the external source meets all of the organizations quality
requirements).
Often the economic decision favoring outsourcing is driven by volume
considerations. Should there not be enough of a particular activity required to justify
hiring and staffing to perform it (e.g., some specialized task requiring just a few
hours each week), outsourcing may be the logical alternative.
Outsourcing decisions may also hinge on the presence or absence of particular
skills or capabilities. For example, a large healthcare organization may have its own
in-house legal counsel, whereas a smaller organization will outsource all of its legal
work to an external law firm. Or perhaps a group practice that is having difficulty
keeping up with medical transcription because of position vacancies or abnormally
high volume of dictation will farm out some of its transcription work to an external
service.
In recent years, outsourcing has become a hot-button issue with many
Americans. More and more activities have been farmed out not just to suppliers
external to an organization but to suppliers outside the country. Some businesses
have taken this approach in an effort to reduce their operating costs or improve their
competitive positions; in tough economic times, some have seen outsourcing as
enhancing their chances of survival. Regardless of why outsourcing is undertaken,
however, it frequently leads to the loss of jobs. Foreign outsourcing invariably
means lower costs for various products and services and fewer jobs in the domestic
economy.
Nevertheless, for the modern healthcare organization, outsourcing has its
legitimate uses. Outsourcing is often essential for acquiring services that cannot be
provided on an in-house basis, and it is sometimes the most economical means of
addressing a temporary need.
Contracted Services
The general heading of outsourcing includes the use of contract management
services and the use of independent contractors. Under contract management, the
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entirety of a particular service associated with the organization is managed by or
perhaps provided in full by an external organization that specializes in that service.
Probably the two most common hospital and nursing home services provided under
contract management are food service and housekeeping, although in one setting or
another essentially every conceivable service has been contracted out by some
healthcare organizations. Contract management may involve management alone or
the complete provision of the service. At one particular hospital, for example, an
external firm supplies the management of food service while the rank-and-file food
service workers remain hospital employees; at the same hospital, housekeeping is
provided by an external firm using its own staff with no involvement of hospital
employees.
The use of so-called independent contractors has received considerable
government attention over the past couple of decades. Generally, to qualify under
Internal Revenue Service (IRS) guidelines as an independent contractor and thus be
paid as a supplier rather than as an employee, a worker is required to demonstrate a
level of independence not commonly found in an employeremployee relationship,
as evidenced by the following principal factors:
The worker personally invests in facilities and equipment that are used in
performing the services.
The worker can expect to either make a profit or experience a loss from the
activity (other than because of simple nonpayment for services provided).
The worker provides services for two or more unrelated clients or customers
within the same period of time.
The worker makes services available to any or all potential clients or customers
on a regular and consistent basis.
It is the presence of the foregoing conditions that the IRS will look for in
assessing the nature of the relationship in which an external service is provided.
Using an independent medical transcriptionist as an example, if Ms. Jones acquired
her own equipment and offers transcription services to a number of organizations
including Hospital A, chances are she will be considered an independent contractor.
If, however, Ms. Jones is performing transcription for Hospital A only and working
in her home using equipment largely or completely provided by Hospital A, she will
be considered an employee of Hospital A. And as an employee Ms. Jones must be
on the payroll of Hospital A with all that such a status implies (various personnel
expenses for the hospital, and withholding taxes and such for Ms. Jones).
The use of independent contractors may generate cost savings because of the
elimination of personnel expenses associated with training, physical space
requirements, unemployment compensation, and other aspects of direct
employment. However, the healthcare organization department that makes use of
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independent contractors must have consistently applied guidelines governing such
working relationships. Exhibit 62 provides a set of sample guidelines for contract
specifications for independent contractors using, for illustrative purposes, guidelines
applied in arrangements with an outsourced dictationtranscription service.
Telecommuting
If our hypothetical Ms. Jones of the foregoing example does all or most of her work
at home, serving only Hospital A and using some Hospital As hardware and
software, she may be considered a telecommuting employee.
EXHIBIT 62 Guidelines for the Use of Contractual
Services
Contracts with incorporated contractual services should be approved by the
Human Resources Division and should include the following elements as a
minimum:
HIPAA-compliant confidentiality and security measures
Accept dictation from land-line phone systems, PC microphones, handheld
digital recorders
Document distribution by secure line fax, secure e-mail, remote print
Electronic editing and signature
Tracking system for each document, from beginning of recording through
document received
Customized format
Ninety-nine percent error-free guarantee
STAT capability
Access to listen or view transcriptions 24/7 (365 days/year)
24/7 support center (365 days/year)
Turnaround time of (n) hours
Conform with nationally accepted billing method principles
Telecommuting is an employment arrangement in which a person who is on the
organizations payroll works an agreed-on or perhaps regularly scheduled amount of
time each week at home or some other external location with the support of the
appropriate equipment and services. As a flexible workstyle option, telecommuting
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is a significant step beyond what is often called flextime. A telecommuter works
in a setting other than the traditional office or shop and is supervised by means other
than management provided by an immediately present supervisor.
Whether they work full-time or part-time, telecommuters are regular employees
on the payroll of the organization. They are decidedly not independent contractors or
freelancers who are paid per piece or per job and excluded from employee benefits,
and they do not conform to the criteria by which the IRS defines independent
contractors.
Telecommuting is never appropriate for employees whose primary duties involve
direct interaction with clients or customers, and it is inappropriate for people who
work on team undertakings that require regular employee interaction. And even if a
particular jobs duties would seem to lend themselves to telecommuting, such an
arrangement should never be considered for employees who have yet to prove
themselves as reliable self-starters.
Telecommuting cannot be a hit-or-miss proposition. It requires a consistent
policy delineating the rules for its use, specifying:
Where the telecommuter can work: whether just at home or at other sites as well
Work status: whether full-time or part-time
When one can work: whether the employee sets the hours, the organization sets
the hours, or the employee is allowed to flex around required core hours
Technology required: whether what is needed is determined by the
telecommuter or designated by the business
Work space: compliant with the Health Insurance Portability and Accountability
Act (HIPAA), with security of confidential data
In developing a telecommuting policy, it is best to secure the input of not only
affected managers but also some of the likely telecommuters. The telecommuting
policy should require that any such arrangement be described by specific objectives,
detailed results expected, and methods for measuring accomplishments.
For certain kinds of activities, telecommuting has been practiced for years. For
example, traditional telecommuting arrangements have included data entry,
customer billing, and medical transcription. However, possibilities for
telecommuting include most jobs that are performed independent of other people
and those that do not require high-cost specialized equipment. Many jobs can lend
themselves to telecommuting as long as the arrangement can satisfactorily serve the
needs of all concerned.
The individual in a telecommuting situation stands to benefit from reduced travel
time and fewer transportation concerns, comfort of work environment and dress,
freedom from interruptions, possibly flexible hours, and in some instances relief
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from child care concerns. Some professional and technical employees find that on
telecommuting days they are more available for telephone consultation than when
they are in a busy office environment. The organization frequently gains productive
efficiency and is often able to reduce expenses and save energy and in general
reduce the strain on facilities and services. In fact, some organizations have adopted
telecommuting as a means of avoiding the addition of more space. Telecommuting
can also aid in recruiting and retaining employees.
Telecommuting is not likely to succeed with the occasional employee who is
unable to cope well with isolation from coworkers and the absence of traditional
supervision. And the manager who is constantlyor, at the other extreme, never
checking up on the unseen employee will not do well with telecommuting
employees. Managers inexperienced with telecommuting often fear they will not be
able to monitor employee activities sufficiently, perhaps feeling they cannot
effectively manage people who are not under their full-time direct supervision. Thus
the manager of telecommuters must necessarily manage by results, using goals,
objectives, and quotas.
Before going forward with any telecommuting arrangement:
Check with counterparts at other organizations of comparable size and
complexity about their experiences with telecommuting.
Be certain the desired arrangement is consistent with the organizations
personnel and business systems (e.g., time reporting, payroll).
If unionized employees are potentially involved, sound out the union concerning
its stand on telecommuting and bring union officials into the process early.
Needless to say, a great many employees would likely jump at the opportunity to
work at home. However, telecommuting should never be adopted simply because
some employees want to do it. Telecommuting should be seriously considered only
if doing so would seem to make good business sense.
THE ORGANIZATIONAL CHART
The management tool used for depicting organizational relationships is the
organizational chart. It is a diagrammatic form, a visual arrangement that depicts the
following aspects of an institution:
1. Major functions, usually by department
2. Relationships of functions or departments
3. Channels of supervision
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4. Lines of authority and of communication
5. Positions (by job title) within departments or units
There are numerous reasons for using organizational charts:
An organizational chart maps major lines of decision making and authority, so
managers can review it to identify any inconsistencies and complexities in the
organizational structure. The diagrammatic representation makes it easier to
determine and correct these inconsistencies and complexities.
An organizational chart may be used to orient employees, because it shows
where each job fits in relation to supervisors and to other jobs in the
department. It shows the relationship of the department to the organization as a
whole.
The chart is a useful tool in managerial audits. Managers can review such
factors as the span of management, mixed lines of authority, and splintered
authority; they can also check that individual job titles are on the chart so it is
clear to whom each employee reports. In addition, managers can compare
current practice with the original plan of job assignments to determine if any
discrepancies exist.
Certain limitations are inherent in the rather static structure presented by
organizational charts, and these limitations can offset some of the advantages of
using the charts:
Only formal lines of authority and communication are shown; important lines of
informal communication and significant informal relationships cannot be
shown.
The chart may become obsolete if not updated at least once a year (or whenever
there is a major change in the organizational pattern).
Individuals without proper training in interpretation may confuse authority
relationship with status. Managers whose positions are placed physically higher
in the graphic representation may be perceived as having authority over those
whose positions are lower on the chart. The emphasis must be placed on the
direct authority relationships and the chain of command.
The chart cannot be properly interpreted without reference to support
information, such as that usually contained in the organizational manual and
related job descriptions.
Types of Charts
There are two major kinds of organizational charts: master and supplementary. The
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master chart depicts the entire organization, although not in great detail, and
normally shows all departments and major positions of authority. A detailed listing
of formal positions or job titles is not given in the master chart, however. Each
supplementary chart depicts a section, department, or unit, including the specific
details of its organizational pattern. An organization has as many supplementary
charts as it has departments or unit
The supplementary chart of a department usually reflects the master chart and
shows the direct chain of command from highest authority to that derived by the
department head. The master chart usually shows the major functions, whereas the
supplementary chart depicts each individual job title and the number of positions in
each section, as well as full-time or part-time status. Additional information, such as
cost centers, major codes, or similar identifying information, sometimes appears on
the charts.
General Arrangements and Conventions
The conventional organizational chart is a line or scalar chart showing each layer of
the organization in sequence (Figure 64). In another arrangement, the flow of
authority may be depicted from left to right, starting with major officials on the
extreme left and with each successive division to the right of the preceding unit. The
advantage of this form stems from its similarity to normal reading patterns. A
circular arrangement, in which the authority flows from the center outward, is
sometimes used; its advantage is that it shows the authority flow reaching out and
permeating all levels, not just flowing from top to bottom.
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FIGURE 64 Organizational Chart of a Hospital
FIGURE 65 Special Relationships: Consultant in Advisory Role
Certain general conventions are followed when an organizational chart is drawn.
Ordinarily, line authority and line relationships are indicated by solid lines, and staff
positions are indicated by broken or dotted lines. In Figure 6-5, the position of
health information consultant has a staff relationship to the administrator, which is,
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accordingly, shown by a broken line. Sometimes the staff relationship is indicated
by a small s with a slash mark setting it off from the job title.
Occasionally, a special relationship is indicated by surrounding an entire unit or
even another organization with broken lines and leaving it unconnected to any line
or staff unit. Such a unit is included in the organizational chart to call attention to the
existence of a related, auxiliary, or affiliated organization. This technique is used in
Figure 64 to indicate the relationship of the teaching institutions affiliated with the
hospital
Preparing the Organizational Chart
If the chart is prepared during a planning or reorganization stage, the first step is to
list all the major functions and the jobs associated with them. The major groupings
by function then are brought together as specific unitsfor example, all jobs
dealing with health information services or with patient identification systems, all
jobs dealing with physical medicine and rehabilitation, or all jobs dealing with
information processing and computer activities. If there is a question about the
proper placement of one or several functions, managers can derive significant
information by asking the following questions:
If there is a problem, who must be involved to effect a solution?
Do the supervisors at each level have the necessary authority to carry out their
functions?
If a change in systems and procedures is needed, who must agree to the
changes?
If critical information must be channeled through the organization, who is
responsible for its transmission throughout each unit of the organization?
As an aid in developing the organizational chart, it is useful to prepare a simple
tabulation showing the following information:
1. Job title
2. Reporting line: supervised by whom (title)
3. Full-time or part-time
4. Day, evening, or night shift
5. Line or staff position
The inclusion of the incumbents name is optional for this worksheet preparation,
although names may be useful in a subsequent managerial audit of the department in
which the manager is comparing present practice with the original plan. The use of
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names as the basic means of developing the chart could be misleading, however, as
it may block managers thinking, causing them to describe organizational
relationships as they are rather than as they should be. It may be best to show names
only on a staffing chart that is prepared after the organizational chart has been
developed.
After obtaining the necessary information about work relationships, shifts,
supervisory needs, and span of management factors, managers develop the final
chart, using the general conventions for depicting organizational relationships. A
support narrative or a section of the organizations manual can be developed to give
additional information.
THE JOB DESCRIPTION
The duties associated with each job should be determined by the needs of the
department. Frequently, jobs evolve as duties are assigned to an employee. These
jobs are accumulations of tasks rather than products of prior planning. Some form of
control is necessary to keep assignments within intended limits. To provide this
control of the various work assignments, the duties and responsibilities of each job
should be set forth in written form. This helps ensure that employees concepts of
their duties will be consistent with those of the manager and with the needs of the
department.
In every formal organization, there are job descriptions/position profiles to cover
all jobs. To fill the various positions with the appropriate employees, it is necessary
to match the jobs available in the department with the individuals. This can be done
only with the help of job descriptions, which are written objective statements
defining duties and functions. Each job description includes responsibilities,
experience, organizational relationships, working conditions, and other essential
factors of the position.
If a specific position is part of the continuity of operations plan, or if team
participation is an essential component of the position, these expectations should be
clearly stated.
Job Analysis
Preceding the development of a job description, there should be a thorough job
analysis that serves as a single source for the various uses to be made of information
concerning a specific job. In addition to providing all of the information necessary
for the development of the job description, the job analysis serves a variety of other
uses, including performing a job evaluation (establishing an appropriate pay grade
for the job), developing recruiting specifications, conducting employee orientation
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and education, and planning for staffing requirements. Reminder: not every element
will apply to every job; the job analysis pattern is, however, applied to every job so
that comparison and classification of jobs is possible. Typical content includes the
following:
Job responsibilities: details of work, frequency of action (e.g., routine, periodic,
emergency), any other distinguishing features (e.g., on-call duties) (note
percentage of time spent on each duty)
Level of supervision: working under direct supervision or independently, with
only periodic review of work by second-level supervisor or department
manager
Supervisory responsibilities: providing direct supervision (indicate job titles and
numbers of employees supervised); providing direct training and supervision of
students on affiliation rotation (indicate if duties include employee evaluation,
discipline, and/or hire-or-fire decisions as well as if duties include orienting,
training, coaching, scheduling, developing, counseling, and measuring
performance of [n] employees)
Consequences of errors:
Are errors easily detected and remedied?
Are errors difficult to detect, with long-range consequences?
Is the work performed independently?
Could a serious error occur in direct patient care?
Confidential data: having limited access or full access to patient records,
financial information, or review committee proceedings (e.g., infection control
reports, safety reviews, audits, credentialing reviews, employee evaluations,
labor contract background information)
Mental and physical demands and effort: having various physical abilities, such
as (1) lifting and supporting patients (n pounds) and (2) lifting and pushing
equipment (n pounds; indicate type of equipment); ability to walk and stand
throughout the work day, to tolerate prolonged sitting throughout the work day,
to maintain calm demeanor when faced with agitated or demanding clients, and
to drive an automobile; having visual and aural acuity
Environment/working conditions: routine office environment; indoors; no major
exposure to noise, infections, or hazards (identify these [e.g., exposure to
infections, high noise levels, outdoor work in extreme weather conditions]);
telecommuting option; travel requirements; shift work (permanent or rotating);
site rotation (regular or occasional)
Preparation and training: entry level requirements only (e.g., high school
diploma or equivalent), advanced training (e.g., masters degree in a specific
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field of study), certification as specialist in a specific area, graduation from an
approved/accredited training or educational program, computer skills, language
and degree of fluency in specific language
A specific advantage of the use of a job analysis is that a single job analysis can
sometimes serve as a template for a family of jobs. Consider, for example, a job
analysis of perhaps six pages in length for registered nurse (RN). This thorough
job analysis would be written to be descriptive of all RN positions in the
organization, with all duties or groupings of duties described in general terms.
Related to this master job analysis, there may be any number of one- or two-page
job descriptions addressing the specific variations of RN, such as RN, Emergency
Department; RN, Medical/Surgical; RN, Operating Room; and so on.
At one time or another, all of the information gathered via a thorough job
analysis will be relevant to some important application information it contains in a
concise manner.
Job Description Content and Format
The format of a job description should present the information in an orderly manner.
Because there is no standard format, job descriptions vary with the type of facility
and with the size and scope of the department. The following format, along with
some sample wording, is suggested as a guide:
Job title. The job should be identified by a title that clarifies the position. The
inclusion in the job title of such words as director, supervisor, senior,
staff, or clerk can help to indicate the duties and skill level of the job.
Examples of job titles that indicate such specificity are Physical Therapist
Vestibular and Balance Program Coordinator, and Health InformationCoding
and Reimbursement Clinical Specialist; Certified Documentation Improvement
Practitioner; and Voice Recognition Editor.
Immediate supervisor. The position and title of the immediate supervisor should
be clearly identified. This information reflects the organization chart. For
managerial positions, include information about succession plan responsibility.
Job summary. A short statement of the major activities of the job should
indicate the purpose and scope of the job in specific terms. This section serves
principally to identify the job and differentiate the duties that are performed
from those of other jobs. Sample wording might be:
This is a clerical position in the health information service of an acute care facility
affiliated with a medical school and a research institution. This full-time, day-shift
position is under the direct supervision of the Assistant Health Information
Administrator. The work is performed with relative independence and any
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exceptions to policy should be referred to the unit supervisor.
Job duties. The major part of the job description should state what the employee
does and how the duties are accomplished. The description of duties should
also indicate the degree of supervision received or given.
Job specifications. A written record of minimum hiring requirements for a
particular job comes from the job analysis procedure. The items covered in the
specifications may be divided into two groups:
1. The skill requirements include mental and manual skills, plus personal traits
and qualities, needed to perform the job effectively:
Minimum educational requirements
Licensure or registration requirements
Experience expressed in objective and quantitative terms, such as years
Specific knowledge requirements or advanced educational requirements
Manual skills required in terms of the quality, quantity, or nature of the
work to be performed
Communication skills, both oral and written
2. The physical demands of a job may include the following:
Physical effort required to perform the job and the length of time involved
in performing a given activity
Working conditions and general physical environment in which the job is
to be performed
Job hazards and their probability of occurrence
The date of latest revision is provided at the end of the description.
Exhibit 63 is a sample job description. Human resources manuals and
professional association publications are excellent sources of job description content
and wording.
EXHIBIT 63 Excerpts from a Typical Job
Description: Clerical Position
Job Summary
This is a clerical position in the health information service of an acute care
facility affiliated with a medical school and a research institution. This fulltime, day-shift position is under the direct supervision of the Assistant Health
Information Administrator. The work is performed with relative independence
and any exceptions to policy should be referred to the unit supervisor.
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Job Duties
1. Receives visitors to the department, processes their requests by routing
them to appropriate supervisors, assists requestor as needed, and schedules
appointments
2. Processes reports from dictated media and/or from rough draft and
transcribes according to prescribed format
Job Specifications
1. Fluency in English language, both oral and written expression
2. Ability to create final copy, from both dictation and handwritten copy,
error-free minimum of 70 words per minute
3. Minimum of high school diploma or its equivalent and at least 1 year of
secretarial experience or successful completion of postsecondary
secretarial school
Note flexibility in requirement 3; this fosters a nondiscriminatory approach to
hiring, giving flexibility to the manner in which an individual may qualify for
the position.
In some institutions, job specifications are organized as a separate record because
the information is not used for the same purpose as the information contained in the
job description. The specifications receive the most usage in connection with the
recruitment and selection of employees, as this part of the job description defines the
qualifications that are needed to perform the job. Job evaluations and the
establishment of different wage and salary schedules are other functions that depend
on the data contained in the job specifications.
Job Rating and Classification
Before employees are selected and hired, the organization develops a job
classification. This classification is based on the results of the job rating process. In
job rating, each set of functions within each unit of the organization is analyzed
using some set of common denominators. In health care, these variables include
complexity of duties; error impact; contacts with patients, families, and other
individuals both within and outside of the organization; degree of supervision
received; and nature of duties, ranging from unskilled to highly technical and
professional. Mental and physical demands as well as working conditions may also
be assessed because these variables may make a job different from seemingly
similar positions in the organization.
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When developing a job description, it is useful to compare the draft of the
description with the job rating scale specific to the organization. From this dry
run, changes in actual wording may result so that the final expression of job duties
and related conditions matches the categories or factors to be assessed. Without such
correlation between the job rating scale and the job descriptions wording, inequities
could be fostered. Similar jobs could receive different ratings based on a lack of
proper wording in a particular job description.
Ideally, the overall job rating process contains safeguards against discrepancies;
ideally, the human resources manager makes such job rating information available
to unit managers. It is still the duty and prerogative of line managers to take active
steps in these matters and anticipate the job rating process.
In addition to the overall job classification, the wage and salary and fringe benefit
package may be predicated on information gained in the job description or job rating
process. Another key to success in developing useful job descriptions is to assess the
written document for its adequacy in conveying information about the factors used
in job rating and wage and salary considerations.
Two additional outcomes of the job classification that concern the manager are
the determinations made for exempt and nonexempt positions under the Fair Labor
Standards Act (FLSA) and the applicability of a union contract in terms of jobs
included in a particular bargaining union. In both of these cases, information about
supervisory activity is critical. Thus, there is another benchmark against which to
measure the adequacy of the job description. Does it contain sufficient information
to justify inclusionor exclusionof a job in terms of overtime pay and related
FLSA provisions? Is the nature of the job clearly delineated in terms of rating as
skilled or unskilled, technical or professional, for purposes of union contract
applicability?
Recruitment
Certain steps in the recruitment process involve information derived from the job
description. Internal job posting may involve the placement of the complete job
description in a specified location, such as on an employee bulletin board. Potential
transfer employees essentially participate in a self-selection or rejection process as
they read this job description. They can take the opportunity to assess such practical
aspects of a job as shift work or weekend coverage requirements in terms of their
availability to work such hours.
The physical, mental, or technical demands of the job also may sway the
potential transfer employee to reconsider applying for a position. Then, too, the job
description may have the effect of encouraging applicants. Does the job description
contain enough information to help prospective employees make such a preliminary
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determination?
Those involved in the preliminary selection interviews, usually members of the
human resources department, need sufficient information about all the jobs in the
institution to carry out initial screening. The unit managers must convey, through the
job description, key points of information about duties, responsibilities, and
qualifications. It is important to note that the unit manager is the individual most
familiar with the work of the unit. This information must be conveyed in a way that
it can be understood by persons who are not involved in the unit or department on a
daily basis.
Awareness of the wide audience who will use the job descriptions will help the
manager write them in understandable form. The unit manager may find it useful to
try out the wording of a job description on another manager. Does the wording
convey enough information for this person, familiar with the healthcare setting but
not necessarily familiar with the details of the specific department, to form a basic
idea of the job?
The Final Selection Process
A major use of the job description occurs during the selection process as the
candidate is matched to the job. During the selection interview, information about
the duties, responsibilities, and qualifications is conveyed. One sensitive overlay to
the selection process, which includes all aspects of the interview, testing, and
physical examination, is strict avoidance of discriminatory practices, even
inadvertent discrimination.
When the job, as summarized in the job description, is the focus of the interview,
it is easier to avoid the pitfalls of interviewing that could suggest discriminatory
practices. Thus, with a job description that spells out such expectations as weekend
coverage, shift work availability, and similar requirements, the manager and
prospective employee can deal with that set of expectations without the manager
probing in any way into such questions as days of religious observance,
arrangements for child care, and other topics that are off-limits for direct inquiry.
The emphasis is on the job as it is described.
Job qualifications and mental, physical, and technical demands become the
objective measures of candidate suitability when they are derived from job duties.
These in turn foster a positive climate of compliance with nondiscriminatory
practices.
For example, if the job duties include frequent routine interaction with patients in
need of emergency care and the patient population involved is non-English
speaking, a qualification of fluency in a specific language is not discriminatory. If
the unit manager can tie each qualification to one or more job duties, the likelihood
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of discriminatory practices in the employment selection process is diminished.
Sometimes it may seem that one is stating the obvious, such as ability to read, write,
speak English (or some other language) with ease, hear, see, and liftso why spell
these out? These elements are specified in detail when they are true requirements.
The purpose of the job description, with its explicit requirements, is to provide all
parties with necessary information about the job so that there is no misunderstanding
later.
Another method to use in making a dry run of the job description that helps the
manager determine the level of detail needed under the foregoing conditions is
working with human resources management using a sample of applications that
have been received over some period of time. How does the managers job
description hold up? On what basis would the manager hire, or not hire, a particular
individual in light of the job description as it is written?
Employee Development and Retention
At each point of employee development, activities focus on the work to be done
within each job. Orientation and training programs take on greater meaning as they
are tailored to specific job duties and qualifications. Training outcomes can be stated
in terms of the trainees ability to perform the duties. This is another step toward
objective evaluation of candidates.
Job descriptions also provide a focus for performance evaluations. Has the
worker accomplished the duties and responsibilities made known in the job
description? Error correction, retraining, and, if necessary, disciplinary action are
carried out in the context of the job for which the individual was hired. In cases of
grievance, emphasis is given to the workers accomplishment of the job duties, with
the presumption that these have been made known to the worker. A comprehensive,
up-to-date job description is a valuable management document in such cases.
Finally, in cases of illness or injury under review by workers compensation
groups or agencies such as the Occupational Safety and Health Administration
(OSHA), the basic determination of job relatedness is made using the job
description.
Following is a summary of uses of the job description. How would the managers
current descriptions hold up when scrutinized in relation to each of these
applications?
Summary of Uses of the Job Description
The job description does the following:
Fosters or contributes to overall compliance with legal, regulatory, contractual,
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and accrediting mandates
Serves as a basis for job rating, job classification, and wage and salary
administration
Serves as a basis for determining exemption or inclusion under provisions of the
FLSA and collective bargaining agreements
Provides information to prospective employees and to employer representatives
during the recruitment and selection process
Serves as a basis for orientation and training programs at the time of initial
selection, transfer, or promotion
Serves as a basis for performance evaluation, error correction, retraining
requirements, and grievance determinations
Provides information to determine eligibility for claims under workers
compensation groups, OSHA, and similar programs
Jobs, like the organizational structure of a hospital, are dynamic in nature.
Changes in the size and nature of the organization, the introduction of new
equipment, or the employment of new treatment techniquesto mention only a few
factorshave a definite influence on the duties and requirements of jobs. Thus, the
manager and the employees of a department must review the description of each job
on a periodic, regular schedule (at least once a year). The document should be dated
when it is first prepared, redated when it is reviewed, and again redated when it is
revised. An up-to-date accurate job description is essential when the human
resources department recruits applicants for a job or when the manager hires new
employees, appraises the performance of existing employees, and attempts to
establish an equitable wage and salary pattern within the department.
THE MANAGEMENT INVENTORY
Part of planning and organizing involves the assessment of current and projected
staffing needs. One tool for gathering such information is the management
inventory, a simple, factual listing of each specific job; name of the incumbent; and
any relevant notation. Notation would include such known factors as: (1) an
employee who has given 3-month notice of intent to retire; a summer intern leaves
in late August; an employee who has requested and has been granted family leave
time starting on September 1, with a planned return date of December 15; and an
employee who has provided manager with military reserve duty dates, including a 2-
week span in mid-July. Managers also include training level accomplished or
needed, cross-training indications, changes upcoming because of system change,
and phasing out of certain functions. The management inventory is, of course, a
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highly confidential document used for planning purposes. It is compiled from
information given to the manager; managers may not inquire into personal matters
that might infer age or sex discrimination.
THE CREDENTIALED PRACTITIONER AS
CONSULTANT
Because the contemporary healthcare organization is frequently involved in new
patterns of organization, the credentialed practitioner is sometimes called on to be an
external consultant or independent contractor. Consultants offer advice and counsel
and carry out professional activities within the scope of their competence and
licensure. Consultative arrangements generally fall into three categories:
One-time-only arrangements wherein the consultant carries out an in-depth
assessment of current practices or assists in development of a major project.
For example, an occupational therapist might assist the management team of a
long-term care facility with its plan to open an adult day care service. The
occupational therapist would typically identify and describe the range of
activities for the occupational therapy units services; calculate and determine
the pattern of staffing needs for the unit; and identify equipment and space
needs, along with layout considerations.
Initial survey with implementation. In this instance the consultant and the
healthcare organizations representatives agree that the professional practitioner
will remain under contract to implement the initial findings. Using the example
given previously, the occupational therapist would be given the mandate to
contact vendors; compare vendor bids; and, with the organizations approval,
select the equipment and oversee its placement.
Ongoing maintenance of project or program. In this arrangement, the
professional practitioner agrees to provide continuous service over some
specific, and usually prolonged, period of time. For example, a physical
therapist is hired to upgrade the in-service training program at an industrial
health clinic. Having developed an overall training plan, based on the facilitys
needs, the physical therapist commits to a plan to provide the in-service
training on a regular basisfor example, one day per month for the upcoming
year.
THE INDEPENDENT CONTRACTOR
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When the professional practitioner is hired to provide regular, ongoing services for a
protracted period of time (as in the third example in the previous section), the
relationship of the practitioner to the contracting organization may fall into the
category of independent contractor. Both parties to such an arrangement need to
review pertinent federal and state laws and regulations regarding independent
contractor status. Particular attention should be given to the Internal Revenue
Codes definitions of independent contractors. Regulations set forth in HIPAA
contain specific provisions concerning privacy and confidentiality requirements for
business partners and independent contractors. Professional liability insurance
provisions, workers compensation laws, collective bargaining agreements, and
similar labor-related mandates need review as to their applicability to the particular
arrangements.
GUIDELINES FOR CONTRACTS AND REPORTS
Whether fulfilling the role of consultant or independent contractor, the professional
practitioner works under written contract and provides formal reports to the
administrative coordinators of the facility. Following are guidelines for the content
of contracts and reports.
The Contract
The professional practitioner, working with a properly qualified attorney, would
develop a contract specific to the given situation. The contract typically includes at
least the elements of a clear statement of parties to the contract, the period covered,
services to be provided, fees and payment schedule, ownership of materials, privacy
and confidentiality of patient and business information, and provisions for
termination of the contract. An attorney would provide the appropriate level of detail
and additional provisions necessary for a sound agreement. Appendix 6A is a
detailed excerpt from a contract between a health information specialist who
provides ongoing services to a long-term care facility.
The Written Report
The consultant provides the administrative coordinators with periodic written
reports, formal and detailed in their content. Following are guidelines for such
reports:
1. Consultant reports are formal business records and, as such, must be retained
by both the consultant and the organization for the required retention period
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for such business records. See the specific state laws and federal tax laws
governing the retention period.
2. Consultant reports are subject to inspection and review by licensing and
accrediting agencies and by third-party payment auditors. The report,
therefore, should be complete, formal, and accurate.
3. Keep the report focused on compliance with required licensure, accreditation,
and professional practice standards. Include both positive and negative
findings. A useful practice, and one that also motivates the recipients to
continue to strive for excellence, is to list the positive findings first, followed
by the heading Areas Needing Improvement.
4. Provide specific recommendations for each topical area needing improvement.
For example, suggest the content of an in-service training program on the topic
or provide sample forms or procedures.
5. Prioritize the findings in order of importance. To prioritize findings:
Priority Class One: Address any practice that has potential for direct harm to
the patient. An example in health information documentation would be
contradictory physician orders concerning medications. This finding would
be reported orally to the nursing staff as soon as it is identified by the
consultant. The written report, as follow-up, would contain the formal
recommendation for corrective practices, with the notation that an oral
report was made to the nursing staff in a timely manner.
Priority Class Two: Address any practice for which the facility received a
citation in the last external survey or auditor review, with particular
attention to the practices for which a plan of correction was filed with state
or federal agencies. Also, address any practice having repeat citations over
the past several years, even if the current survey showed full compliance for
the immediate year.
Priority Class Three: Address any practice that is out of compliance with:
State licensure requirements. For example, mention record retention
practices that do not meet the states required retention period.
Federal conditions of Medicare. For example, cite any failure to update the
patient plan of care according to the required time frames.
HIPAA regulations. For example, note any failure regarding the disclosure
of patient information without appropriate consent.
Accrediting standards (if the facility participates in an accreditation
program). For example, address the failure to document interdisciplinary
progress notes according to suggested standards.
Generally accepted principles of professional practice. For example,
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mention failure to put complete patient identification on each page of the
hard copy record or on each data entry for an electronic record.
Appendix 6B provides an example of a cover letter, a formal report with priority
indications, and a project timetable.
EXERCISE: CREATING ORGANIZATIONAL
CHARTS
For a work organization and a specific department or function with which you are
familiar, create two organizational chartsa master chart for the organization
overall and a supplementary chart depicting the structure and arrangement of the
specific department or function. (If you have no familiarity with an actual work
organization, invent an organization and department in chart form using the
chapters material for guidance.) Use these charts to answer the following questions:
1. Is the organization more appropriately described as centralized or
decentralized? Why?
2. Which management position appears to have the broadest span of control in
terms of number of direct reporting employees? Why?
3. What is the longest single departmental chain of command in the organization,
and how many levels does it consist of?
4. Assuming that dramatic losses of business activity have necessitated
reorganizing, revise the original master chart for the organization overall to
flatten the organization by at least one level in two principal chains of
command.
EXERCISE: DEVELOPING A JOB
DESCRIPTION
Select a healthcare profession or occupation and write a job description for it. It will
be most helpful to use an occupation in which you have worked or for which you are
preparing. Following completion of the job description, prepare a condensed
description of that job in less than one-half page that could be used for recruiting
purposes.
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Appendix
6A
Sample Contract for a Health
Information Consultant
Note: The following example is not intended as legal advice. The professional
practitioner who plans to enter into consultant activity should consult an attorney for
the development of a contract appropriate to the specific situation.
CONSULTANT AGREEMENT FOR HEALTH
INFORMATION SERVICES
Parties to the Agreement: The parties to this agreement are Emma Dean, MS,
RHIA, Consultant (referred to as Consultant), and The Gabriels Continuing Care
Center (referred to as Gabriels Center), Anywhere, Anystate. As a licensed
continuing care facility in this state, Gabriels Center is governed by the applicable
state and federal laws and regulations.
Effective Date: February 1, 2017. This agreement continues in effect until one of
the parties chooses to terminate it by providing a written notice to that effect 1
month prior to the termination date.
Independent Contractor: Consultants status is that of an independent contractor.
Consultant is not an employee or agent of Gabriels Center. Consultant is not a
participant in any benefits program, labor contract agreement, or any other program
offered by this facility. Consultant is not a designated officer in the continuity of
operations or succession plan of the facility.
Professional Competence: Consultant agrees to provide formal, written evidence of
professional competence as defined by the national credentialing body for health
information practice. This documentation shall be provided at the inception of this
contract and on an annual basis (on the anniversary date of this contract) thereafter.
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Scope of Service: Consultants activities are limited to the skilled care, assisted
living, and personal care components of Gabriels Center as currently configured.
Terms of Payment: The fee for services is ($_____) per quarter. A 5% increase
shall be made at the beginning of each new year of the contractual relationship if
this contract remains in effect. This increase shall be effective on the anniversary
date of the initial contract. Consultant, as an independent contractor, is responsible
for Social Security contributions and any applicable withholding tax or contribution
as required by federal, state, and local taxing authorities. Consultant will present a
written bill for services rendered for each quarter. This bill must be filed within five
working days of the conclusion of the quarter. A quarterly written report must be
filed at the same time. Gabriels Center agrees to pay Consultant within five working
days of the receipt of the quarterly bill and report. This is the whole and entire
reimbursement.
Confidentiality: Consultant agrees to keep confidential any and all information
about Gabriels Centers operations and practices and to follow HIPAA-compliant
practices. Reports shall be filed with the designated official contact of the center.
Ownership of Materials: Consultant agrees to develop materials such as, but not
limited to, policies, procedures, forms, job descriptions, and training programs for
use by Gabriels Center in its skilled and assisted living components. These materials
become the property of Gabriels Center. Gabriels Center agrees to limit their use
solely to these levels of care as currently configured. Gabriels Center agrees not to
sell or distribute the materials to any other component or entity. Gabriels Center
agrees to obtain Consultants permission to use the materials in any other manner.
The consultant retains the right to use the same or similar materials without facility
identification.
Responsibilities: Consultant will review the health information services and the
healthcare documentation practices of the skilled care, assisted living, and personal
care components of Gabriels Center.
Consultant will make at least quarterly site visits and remain available by
telephone and/or electronic messaging.
The specific duties are listed in the attached Key Activities of the Health
Information Consultant. Consultant will make formal, oral reports to the chief
executive officer or designate at the conclusion of each quarter at a mutually agreedon time and date. A formal, written report shall be filed within five working days of
the conclusion of the quarter. One interim written report per quarter shall be made at
a mutually agreed-on date.
Entire Agreement: This is the full and entire agreement as stated in these terms and
signed by both parties on the date listed below. This agreement may be amended in
writing with both parties signing and dating the acceptance of the changes.
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Chief Executive Officer Emma Dean, MS, RHIA
The Gabriels Continuing Care Center Health Information Consultant
Date: February 1, 2017 Date: February 1, 2017
KEY ACTIVITIES OF HEALTH INFORMATION
CONSULTANT (ADDENDUM TO FEBRUARY 1,
2017, CONTRACT)
Consultant shall oversee the health information system (HIS) and documentation
practices for the skilled and assisted living and personal care components as follows:
1. Identify applicable federal and state laws and regulations and generally
accepted principles of health information practice. Assess the degree of
compliance with these regulations and recommend improved practices
associated with areas needing upgrading. Assist the management team in
preparing for periodic federal and state reviews and related plan of correction
development.
2. Monitor proposed changes in applicable federal and state laws and regulations;
monitor trends in health information practices and provide the management
team with this information.
3. Prepare and periodically update the following documents:
Policy and procedure manuals
Forms design for hard copy and electronic data capture
4. Analyze and review each component of the health information system and the
documentation practices of the facility:
Patient identification
Creation and maintenance of official health record
Data entry and dictationtranscription/voice recognition editing
Record retention, storage, and retrieval
Coding and reimbursement support
Support data and studies for patient care reviews, quality improvement
studies, and management use
Release of information
5. Participate in staff development and in-service training:
Annual presentation of documentation standards to professional staff
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Training program for new HIS employees
Annual training program for each HIS employee
6. Assist management in the development of:
Staffing pattern
Job descriptions
Space allocation and equipment acquisition
Budget preparation
7. Participate in the patient care review committee and the emergency
preparedness committee:
Recommend items for consideration
Provide support materials for items under consideration
Attend regularly scheduled meetings
End of listing of key activities as of February 1, 2017.
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Appendix
6B
Sample Cover Letter and Report
Background information for this fictitious setting:
1. State-licensed as a continuing care facility; last licensure survey was
December 20, 2016
2. Privately owned and sponsored by a nonprofit corporation
3. Medicare certified under applicable provisions
4. Fiscal year: July through June
5. Components:
Independent Living: 100 units; average length of stay: 8 years
Eighty percent of residents move to the assisted-living or skilled unit when
one of these levels of care is needed
Assisted Living: 50 units; average length of stay: 3 years
Ninety-five percent of residents move to the skilled care unit when this
level of care is needed
Skilled Care: 90 units; average length of stay: 1.5 years
Personal Care: 30 units; average length of stay: 3 years
Annual discharges average 45, including 25 discharges to acute care; 10
discharges from skilled care, returning to the assisted living unit; 10 deaths
(natural causes)
6. Health Information Services (HIS): There is no full- or part-time credentialed
practitioner. The consultant was hired on February 1, 2010, and remains under
contract.
7. Expansion plans: The facility is considering the addition of an adult day care
unit, a memorycare/dementia care unit, and a home care service for the
independent living unit.
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COVER LETTER
July 5, 2017
Bernard Downey, Chief Executive Officer
The Gabriels Continuing Care Center
253 Main Street
Anywhere, Anystate 00999
Dear Mr. Downey:
I have enclosed the written report and bill for the AprilJune 2017 quarter. The
report reflects my findings and recommendations about the health information
services (HIS) of the skilled and assisted living components of your center.
As we discussed at our June 30 meeting, I will continue the regularly scheduled
duties and responsibilities as outlined in the current contractual agreement. As we
agreed, we will meet on July 12 to update and expand this contract to reflect my
involvement in the plans for the adult day care program, the home care project, and
the development of the personal health record for the independent living unit. We
also agreed to give additional efforts to the following topics:
Review and update of all HIS job descriptions and titles
Participation in a focused study of pattern of care and related documentation for
short-term, postacute care admissions versus balance-of-life admissions
Special review of documentation and reporting of suspected elder abuse,
including involuntary seclusion in the personal care unit
Focus on efforts to regain Five-Star Medicare rating
Focused review of pattern of admission from, and readmission to, acute care
facility for same diagnosis within (n) days
Focused review of pattern of care for patients with advance directives who are,
nevertheless, transferred to acute care
Thorough review of record retention policy and practice, with particular
attention to legacy hard copy records from the 2007 merger of three facilities,
along with planned destruction of all hard copy records for which the
mandatory retention period has been met
If you have any further question about these findings, please do not hesitate to
contact me.
Sincerely,
Emma Dean, MS, RHIA
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Health Information Consultant
Enclosures: quarterly report and bill for period ending June 30, 2017
QUARTERLY REPORT: HEALTH
INFORMATION SERVICES
April 1, 2017June 30, 2017
Report filed on July 5, 2017
Dates of Site Visits and Primary Activities
April 13: Continuing review of systems and documentation
Attended Emergency Preparedness committee; presented updated version of the
portable emergency file for individual residents
May 10: Continuing review of systems and documentation
Training program for new coder
May 16: Continuing review of systems and documentation
In-service training program on documentation requirements; presented to
professional staff
June 28: Attended Emergency Preparedness committee; finalized updated version of
portable emergency file
June 28: Completed suggested response to Plan of Correction
Met with chief executive officer to review quarterly report and discuss additional
activities regarding the Centers expansion
Persons Interviewed During Site Visits
Chief executive officer, director of finances, director of nursing, director of social
services, consultant occupational therapist, consultant physical therapist, staff
activities therapist, health information staff
Key Activities
1. Licensure review preparation: assisted with preparation for annual licensure
review, completed report sections relating to HIS, developed suggested Plan of
Correction responses for the deficiencies noted at the December 20, 2016, site
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visit by state agency
2. Monitoring of proposed changes in legislation and regulation and trends:
assisted in the development of an in-service training program concerning
medical identity theft prevention, assisted risk management and nursing
service in development of a procedure for providing photo identification for
residents who are admitted to the local hospital or who receive care at the local
hospitals clinic. I reviewed compliance with the licensure agreements
associated with computer software in the HIS; no breaches were identified. I
proposed the development of a project for the implementation of the personal
health record for the independent living unit. This project will be discussed
during the next quarter; the consultants agreement will be amended to reflect
this involvement.
3. Policy and procedure manual development: the section of release of
information was updated to reflect the changes associated with the newly
implemented computerized system.
4. Participation in staff development and in-service training: annual presentation
to professional staff on core data/documentation requirements was given on
May 16. The preliminary information on the photo identification issues was
also presented at this session. On-the-job training of the HIS coder was given
during the week of May 1216.
5. Committee participation: attended meetings of Emergency Preparedness
Committee on April 13 and June 8 to develop an updated version of the
portable emergency file for residents
6. Review of HIS: Each component of the HIS was reviewed.
Patient identification: The comprehensive system is in place; 100% accuracy
noted; each patient has full identification, documented at admission and
updated at least quarterly Practice needing improvement: some frail, elderly
patients have used, and continue to use, a familiar name (nickname) and that
is the name to which they most readily respond. (Examples: Sarah Smith uses
Sally as her familiar name; Jonathan Michael Lake uses Mike.) This familiar
name should be added to the identification information, noting that it is the
familiar and preferred name as used by the resident. The full legal name
should, of course, be listed. Discussion of these issues is appropriately
included at admission and in the patient care plan conference. Suggestion:
confer with legal counsel and risk management to develop an appropriate
policy and procedure.
Priority Class One: residents could become confused and/or agitated when
they are addressed using only a formal name.
Creation and maintenance of an official health record: A formal health record
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was readily located for each resident. In all but two cases, there were no data
entry errors within the records. In two cases, residents with the same first and
last name (but different middle names and dates of birth) were mixed. The
contents of these two records were promptly corrected under the supervision of
the director of nursing.
Practice needing improvement: proper data entry; attention to accuracy of
identification and data entry
Priority Class One: potential harm to resident
A second issue was noted: the creation of shadow charts. The physical
therapy, occupational therapy, and social services departments have created
their own full-scale health record; the content of these records duplicate some
portions of the official health record, and some information in the shadow
chart is not included in the official record.
Practice needing improvement: elimination of shadow charts
Priority Class Three: the applicable laws and regulations indicate that there is
one official health record.
Coding and reimbursement: A 10% sample of coding was carried out, giving
attention to completeness, accuracy, and timeliness. Completeness and
accuracy met the required standard, but there is a delay in timely coding due to
staff absence associated with illness and vacation. This affects the
reimbursement process, causing delay in that system.
Practice needing improvement: timely coding through provision of alternate
staff to carry out this function when regular staff is absent
Priority Class Three: reimbursement schedules require timely submission of
billing information.
Storage and retrieval: During the month of May, the closed (inactive) files
from 2001 to 2011 were moved to another location because of renovations to
the former storage area. The new location is a temporary onethe storage
shed on the upper campus. This storage area does not meet the privacy,
security, and protection requirements. The records are in boxes in the same
space as items for the craft and yard sale fund-raising events, there is only a
padlock on the door, there is no sprinkler system, and access is not restricted.
Before similar actions are taken in the future, and before remedial action is
taken now, it is necessary to check with the HIS consultant to ensure
compliance with laws, regulations, and best practice.
Practice needing improvement: relocation of records to secure environment;
recommended removal to a commercial storage facility that meets record
storage requirements or cull these records for destruction if the retention period
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has been satisfied.
Priority Class Three: applicable laws and regulations require secure storage.
A second issue was noted: The records from the 2016 discharges due to death
were not found in the central storage and retrieval unit. These records had been
inadvertently kept with the patient care review committee files. They were
subsequently retrieved and placed in their proper location.
Practice needing improvement: review and enforce the procedure for the return
of records after committee review.
Priority Class Three: applicable laws and regulations require secure storage.
7. Review of health information documentation: These findings are based on the
results of the routine reviews done at time of admission, patient care plan
conference, transfers within levels of care, and discharge. An additional 10%
sampling was carried out. Overall, there is continuing improvement in
documentation practices. However, the following areas need attention:
Patient care plan: The initial care plan and the first two updates are adequate;
there is only limited update of the plan reflecting changes in care when a major
episode occurs (e.g., bed rest or other restrictions due to a fall). Activities
therapy plans are not updated to reflect the circumstances of a residents
increased impairment due to physical or cognitive diminishment. The plan of
care for final weeks of care when a patient is close to death is not fully
reflective of palliative care, review of healthcare directives, and family
conference.
Physical examination: Approximately 20% of residents do not have their
annual physical examinations completed within the mandated time frames.
Transfer support documents: Approximately 10% of residents do not have upto-date transfer support data entries available at the time of transfer. The
average delay in providing these documents was 2 days.
In addition to the routine review of documentation, three special studies were
carried out. The findings were presented to the Patient Care Review committee and
were made part of the minutes of that committee:
Restraint-free protocol compliance
Adequacy of consent for treatment and for release of information
Adequacy of data entries/documentation at time of transfer into the Center and
at discharge to another facility
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CHAPTER 7
Committees and Teams
CHAPTER OBJECTIVES
Provide a generalized definition of a committee.
Differentiate among committees, standing as well as ad hoc, and plural
executives and task forces.
Describe the generally accepted purposes and uses of committees.
Enumerate the advantages as well as the limitations and disadvantages of
committees.
Provide guidelines for ensuring committee effectiveness.
Identify the role and functions of the committee chairperson.
Provide guidance for creating and preserving documentation of a
committees formal proceedings.
Examine the modern management phenomenon of the employee team (in a
number of possible forms) as a special case of the committee.
Committees have become a fact of life in modern organizations. The democratic
tradition in American society, the committee systems history of success in
organizations, and the legal and accrediting authority mandates for such activity
contribute to the widespread use of committees in healthcare organizations. The
committee structure complements the overall organizational structure because it can
be used to overcome problems stemming from specialization and departmentation.
The weakness of specialization is the potential loss of broad organizational vision on
the part of the individual manager; however, coordination of action and assessment
of the overall organizational impact of a decision may be facilitated when a
committee brings together a number of specialists for organized deliberation.
Healthcare organizations need committees to help consolidate the dual authority
tracks within the medical authority structure and the administrative/support
structure. The joint conference committee, consisting of representatives from the
medical staff, the board of trustees, and the administration, is commonly used for
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this purpose. Functions of healthcare organizations typically monitored and assessed
by committees include pharmacy and therapeutics, infection control, patient care
evaluation, surgical case review, health records, quality assurance, and patterns of
care review.
Committee participation, development of support data, and development of
policies and procedures is an expected part of the daily routine of the chief of
service, department head, or manager. A starting point for understanding the
importance and scope of committee activity in healthcare organizations is found in
legal and accrediting mandates that require such a framework. The executive
leadership officers of the organization develop the framework for compliance with
mandated reviews and oversight processes. This framework is incorporated into the
official bylaws, rules, and regulations of the organization. Usually, this framework
consists of a mix of committees and review boards, developed to meet the specific
needs of the organization. This framework also incorporates the required reviews
and oversight activities stemming from state licensure and regulation, federal laws
and regulations, and accrediting agency standards. Matters relating to the medical
staff (e.g., selection, credentials review, appointment, peer review) are usually
grouped under the purview of the Medical Executive Committee.
Each committee and review board is important, but some activities move into
prominence because of new or intensified interest in the topics related to such
groups. Historical examples include the increased role of the ethics committee in
response to the Patient Self Determination Act of 1990 or the Institutional Review
Board mandates for research on human subjects (1974). Both continue to deal with
recurring as well as emerging topics. The Quality Committee or the Performance
Improvement Program is an example of current, growing emphasis. This committee,
usually headed by the senior medical officer and the quality improvement officer,
focuses on developing and implementing organization-wide performance
improvement plan. Benchmark data, proven practice protocols, and institutional data
and trends provide the basis of the plan and its ongoing review. Membership on the
committee includes both direct patient care staff as well as managerial and support
staff/department representatives so that all aspects of care are coordinated and
reviewed.
Some organizations place all externally and internally mandated reviews in one
comprehensive committee: the healthcare compliance (corporate compliance)
committee of the board of trustees. A chief compliance officer oversees the
corporate compliance program. As a relatively independent and objective position
within the organization, the compliance officer develops, maintains, and
communicates the system-wide plan. The work entails a high degree of
collaboration with each department/service as well as with the organizations
committees and review boards. Examples of mutual collaboration involve risk
management, Health Insurance Portability and Accountability Act (HIPAA) review
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for data security, coding and reimbursement, claims review and processing, and
standards of conduct.
Because middle managers interact with these key committees, an understanding
of the nature of committees, their function, and their composition helps managers
foster committee effectiveness.
THE NATURE OF COMMITTEES
A committee may be defined as a group of persons in an organization who function
collectively on an organized basis to perform some administrative activity. A
committee is more than an informal group that meets to discuss an issue and share
ideas, even if such a group meets regularly. The manager who informally calls
together a team of subordinates or other managers to talk over an idea or problem is
not dealing with a committee. The emphasis in the committee concept is the creation
of a structure that has an organized basis for its activity and interaction and that is
accountable for its function. The predominant characteristic of the committee is
group deliberation on a recurring basis done in the context of a specific grant of
authority.
Committees may be temporary or permanent. The temporary, or ad hoc,
committee is created to deal with one issue, such as cost-containment compliance
initiatives, and its work is limited to that issue. If the problem assigned to an ad hoc
committee becomes a recurring one, it may be handled by an existing committee, it
may be referred to an existing department, or a new standing committee may be
created to deal with it.
Standing committees, which are relatively permanent, focus on recurring matters.
The individual members change, but the committee is continuing with respect to the
number of members, the distribution of representatives, and its basic charge. Typical
standing committees in healthcare organizations include those responsible for
dealing with credentials, infection control, patient care policies, patient care records,
and quality assurance. A department may have specific standing committees, such as
departmental quality assurance, safety control, or professional development
committees.
A committee may have either line or staff authority. If the committee has
authority to bind subordinates who are responsible to it, it is part of the line unit
structure. For example, a governing board may have an executive committee that
gives directives to the chief executive officer of the institution and thus exercises
line authority. A grievance committee, whose decision is binding because of a
policy or union contract, exercises line authority in producing its determinations;
managers are not free to act contrary to such decisions. In contrast, if the committee
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has an advisory relationship to line managers, it is a staff unit.
In actual practice, the distinction between line and staff authority of a committee
is sometimes blurred. A credentials committee of the medical staff may have limited
line authority in that, except for unusual cases, the next levels of authority are bound
by the recommendations it makes. A union contract governing faculty at a medical
school or university may require that a faculty committee review each case of
promotion and tenure and make a recommendation to the line officer, the dean, who
in turn must add a recommendation, with the final decision made by the board of
trustees. Participation in the decision process by several layers in the hierarchy is
mandatory in such cases. In that sense, the credentials committee of the medical
staff, as well as the promotion and tenure committee of a college, may be viewed as
a line committee with limited but explicit input into decisions concerning
professional colleagues. Their decisions are not final, but their recommendations are
well protected by custom and, in some cases, by law.
The Plural Executive
Although most committees are nonmanagerial in nature, there is a structural
variation in which a committee is created that has line authority and undertakes
some or all of the traditional functions of a manager. These committees are created
as a result of policy decisions. A familiar example in the healthcare setting is the
executive board of a national professional association. Established through the
bylaws of the organization, the executive board typically consists of the elected
officers and has the authority to act on behalf of the membership in prescribed areas.
The board of trustees in a hospital is also a plural executive, although it is almost
universal practice to appoint a chief executive officer and assign management
functions to that officer.
The plural executive may be established by law, as in federal regulatory agencies
(e.g., the Federal Communications Commission and the Securities and Exchange
Commission). The law creating such agencies stipulates that there be a regulatory
board which has line authority as a board. The board varies greatly in the amount of
power held and authority exercised. Although the board has formal authority, the
center of true power in the organization may shift from the executive board to the
appointed chief executive officer, who reports to the executive board.
The individual officeholders who constitute the plural executive must rely greatly
on an appointed officer, such as the executive director, and on the staff chosen by
that officer. Although the executive officer is in a continuing position, the plural
executive group may meet infrequently, and its membership may change as
frequently as every year. Furthermore, the members of the plural executive unit tend
to remain less visible, as they give directives to the executive, who issues these
under the offices title. This common practice often obscures the authority
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constellation proper to the plural executive and may even reduce it to one of
symbolic rather than actual authority and power.
The Task Force
A temporary organizational unit, the task force is created to carry out a specific
project or assignment and present its findings to some person or committee that has
line authority. It has as its focus highly specific work that requires technical
expertise. The task force analyzes the question, completes the research, and makes
its recommendations, which may take the form of a complete plan of action. Unlike
committees, which remain in existence until specifically dissolved, the task force
automatically ceases functioning when its assigned task is completed.
Members of a task force are chosen on the basis of technical competence and
specialized training to form a composite, interdisciplinary team. They are not
selected to represent a special group interest, and not every department or
organizational unit is represented. A task force rarely, if ever, has line authority. Its
findings sometimes are referred to a committee that deliberates issues of a basic
policy nature; the work of the task force complements that of committees by
providing technical research and preparing background information. The group may
be created as a result of committee deliberations; for example, the executive
committee or the board of trustees of a healthcare institution may wish to expand its
services or to develop an entirely new physical complex. These technical problems
could be referred to a task force for study; when the work of the task force is done,
the executive committee or board takes appropriate action.
Examples of these types of task forces include those concerned with the
pandemic response preparation. In this case, technical experts from several
disciplines were needed to study the issues and make recommendations.
Representatives from external agencies concerned with public health and safety
(e.g., police, county emergency management) were included to make certain that
these essential services were integrated into the planning.
Another example of the appropriate use of a task force is to focus on the trend
toward a renewal of domiciliary care, along with the reduction of long-term care
beds. A skilled care facility would benefit from setting up a task force to study this
issue, monitor the pending state regulations, review its marketing and outreach
plans, and make recommendations about contractual relationships with emerging
domiciliary caregiver enterprises.
A task force sometimes is created for its symbolic valuea common political
use. The various presidential commissions of the past decades are examples of the
use of task forces to call attention to an important issue (e.g., civil rights, space
technology, and care of the aged). To ensure that recommendations are made in an
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arena that is relatively free from vested interests and particular biases, a task force
rather than an administrative agency or department personnelmay be assigned the
responsibility of studying an issue.
THE PURPOSES AND USES OF COMMITTEES
Committees are created to fulfill various specific needs. The following purposes and
uses of committees include the advantages that accrue to an organization as a result
of effective committee structure development.
To Gain the Advantage of Group Deliberation
Many management problems are so complex that their impact on the organization as
a whole is best assessed through group deliberation and decision making. Decisions
may have a long-range effect, and no single manager likely has the knowledge
necessary to see all possible ramifications of a problem. In a committee structure, no
one manager bears the burden of a decision that will have far-reaching
consequences. Probing of the facts and their implications is likely to be more
thorough if the knowledge, experience, and judgment of several individuals are
brought to bear on the problem in a coordinated manner. The stimulation of shared
thinking may lead to a better decision than could be reached by an individual.
Finally, group deliberations may be mandatory in some organizations because of the
stipulations in a union contract, an accrediting agency, or a regulatory body.
To Offset Decentralization and Consolidate Authority
In the process of organizing, each manager is given only a portion of the
organizations authority. Normally, each manager receives sufficient authority to
carry out the responsibilities of the branch or unit of the organization over which
that individual has charge. When the organizational structure is consolidated, efforts
are made to avoid splintered authority. Yet, because of the limits placed on the
managers authority, every problem a manager faces cannot be solved, and every
plan cannot be implemented. It is necessary to consolidate organizational authority
through specific coordinating efforts, and committees provide an additional
organizational structure that can be used for this purpose.
The creation of a special-purpose committee to deal with a project or problem
involving several units of an institution is an acceptable means of augmenting the
normal organizational structure. If the problem is a recurring one, the structure itself
should be adjusted to consolidate authority in a formal manner. For nonrecurring
special problems, however, special-purpose committees are appropriate.
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Coordination among units in a highly decentralized organization may be fostered
through committees. The focus under these circumstances is on the need for
consistency of action and coordination of detailed plans among several units, which
are often separated geographically. A statewide health coordinating committee in
healthcare planning is an example of a committee created specifically for the
purpose of coordinating activity among units with wide geographical distribution
and multiple categories of membership.
To Counterbalance Authority
The checks-and-balances system in an organization is subject to many pressures.
When individuals in decentralized locations surrender authority to higher levels in
the hierarchy, there is an attendant desire to monitor those higher levels. For
example, to avoid a concentration of power in an executive director, a professional
organization or a union with nationwide membership may create an executive
committee with power to finalize all decisions, to approve the budget and authorize
payments over a stated amount, and to act as sole decision-making body in many
areas.
In a situation in which there has been significant fraud or deception or extreme
authoritarianism, an officer may be retained temporarily to avoid a public scandal
that would have negative effects for the organization. To limit the actions of such an
individual during the transition period, the authority of the office is stripped away
and placed in a special group that acts as a line committee in place of the official,
who retains only the title and selected symbols of office. This committee functions
until the officer is safely removed in a politically acceptable manner and a successor
is chosen. The committee structure can be costly in economic terms, but an
organization may be willing to pay the price to offset concentrated power and to
obtain a diffused authority pattern in certain circumstances.
To Provide Representation of Interest Groups
Occasionally, certain groups have a vested interest in an organization and seek
representation in its decision-making arenas, including committee participation.
Wanting to protect the value of their degrees, alumni of a college seek positions on
the board of trustees or on advisory committees to specific programs. Community
members concerned with both long- and short-range plans of a healthcare
organization seek input into patient care policies and community health programs
through committee participation.
The organization, in turn, is interested in obtaining the support of specific groups
and extends to them an opportunity to participate in its deliberations, often through
the committee structure. A college may seek alumni representation to consolidate
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financial support from that group. A hospital or health center may seek community
representatives for its advisory committee so that it can better determine local
sentiment, assess probable responses to changes in the pattern of services offered,
gain tangible financial support, and create goodwill toward the institution.
To Protect Due Process
In disciplinary matters, an organization may seek to reflect the larger societal value
of due process, even when there is no legal or contractual requirement to do so. For
instance, in recent years, an increase in litigation has added an almost legal flavor to
processes in which an individuals performance is evaluated. A committee of the
individuals peers, even if the peer group does not have line authority, may be
constituted to make a recommendation to the line officer or governing board.
Examples of this approach include the promotion and tenure committee of a
university, the ethics committee of a professional association, or the credentials
committee of a medical staff. A union contract may specify the composition and
function of a grievance committee to ensure that it includes line workers as well as
management officials.
To Promote Coordination and Cooperation
When individuals affected by a decision have participated in making that decision,
they are more likely to accept it and abide by it. Participants in group deliberations
develop a fuller understanding of each units role. The communication process is
facilitated, because the managers affected by the decision have had an opportunity to
present their positions, the constraints under which their departments function, and
their special needs, as well as to express disagreements. All members can evaluate
the overall plan, review their own functions, and become familiar with the tasks
assigned to other units that depend on their units output or, in turn, constrain the
work assigned to their unit. In its final decision or recommendation, the committee
states the assignments for each unit, and these are known to all. This approach is
especially valuable when the success of the work depends on the full understanding
and acceptance of the decision and plan of execution.
To Avoid Action
A manager who wishes to avoid or postpone an action indefinitely may create a
committee to study the question or may refer it to a panel that has a long agenda and
sends its findings to yet another committee for action. If members are selected
carefully or if the assignment to an existing committee is made strategically, action
will be slow. The issue may die owing to a lack of interest or may become moot
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because of a decision made in some other arena or because of the departure from the
organization of the individuals concerned. Although this intentional delaying tactic
can be misused by a manager, it may also be a positive strategy; for example, delay
through committee deliberation may be a form of buying time for issues to
become less emotionally charged.
To Train Members
Committee participation may be used as part of the executive training process.
Exposure to multiple facets of a decision, the defense of various positions, and the
development of insight into the problems and considerations of other managers
decisions are part of this training experience. The potential manager is assessed by
other members of the executive team during this interaction, and appropriate
coaching and counseling may be given to the management trainee.
LIMITATIONS AND DISADVANTAGES OF
COMMITTEES
Humorous and disparaging comments sometimes reflect the limitations and
disadvantages of committee use: a camel is a horse that was designed by a
committee, or there are no great individuals in this organization, only great
committees.
Committee interaction, with its emphasis on deliberation and group participation,
is slow. The committee structure, therefore, is not the proper arena when decisions
must be made quickly. The time consumed, including the hours spent in formal
meetings, is also costly. In highly decentralized organizations or professional
associations, travel and lodging costs alone may run well into the thousands of
dollars for a meeting of only a few members. The cost of an individual members
attendance (separate from travel and related costs) is calculated by establishing an
average hourly rate per member and multiplying the meeting time by this rate.
Additionally, there are costs associated with preparation, follow-up time, or the cost
of staff support and services. The results of committee action should offset the costs
in time, money, and overall effort.
Because of time pressures, committee deliberations may be cut short, thereby
eliminating the major advantages of the committee structure (i.e., group
participation and presentation of multiple viewpoints). The committee may be
indecisive because there is insufficient time to deliberate, or the discussion may
become vague and tangential, leading to adjournment without action. Members lack
of preparation prevents full discussion of issues. Being present and on time is only
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part of a committee members responsibility; member preparation is a critical factor.
There are several pitfalls to be avoided in regard to preparation. Material may be
prepared and distributed in a timely manner, but the committee members may fail to
brief themselves prior to the meeting. A member of a subcommittee may fail to
carry out an assignment that is critical for the panels further action. Staff aides or
the chairperson may be late in preparing items so that committee members arrive to
find large quantities of critical material at their places and are expected to reach
decisions even though they have not had enough time to develop an informed
opinion.
Absenteeism or tardiness may obstruct the committees work. If a quorum is
required, absence or lateness (or early departure) of several members may upset the
critical balance. When the discussion of an agenda item is dependent on a particular
members presence, this part of the meeting must be delayed or postponed if that
member is absent or late. Furthermore, time spent waiting for members to arrive to
provide a quorum or to discuss a particular agenda item generates cost with no
offsetting productivity.
Obstructionist behavior in committee meetings can limit debate. On the one hand,
a member who continually declines to give an opinion and who continually votes
abstain muddies the outcome. Such a committee may be seen as lacking in
decisiveness, and its recommendations may be set aside more easily. On the other
hand, an individual or a few members may try to dominate the committee. When
unanimity or at least major consensus is required, such members may refuse to give
in or may insist that the committee endorse their own suggestions for compromise.
If it is to act, the committee must accept this dominance by a few. A ready solution
to this problem is the encouragement of minority reports. Some open discussion of
group dynamics may also foster solutions to this type of roadblock.
Even with much goodwill and a high degree of commitment on the part of
members, certain aspects of committee dynamics tend to limit the groups
effectiveness. In seeking common ground for agreement and in dealing with smallgroup pressures to be polite and maintain mutual respect, diluted decisions or
compromise to the point of the least common denominator may characterize
committee outcomes.
Furthermore, a committee never can take the place of individual managers who
accept specific responsibilities and exhibit leadership. Managers must accept the
responsibility for certain decisions, even when they are unpopular. It may be
especially important to have a specific individual held responsible for decisions in
conflict situations. The proverbial buck stops at the highest level of officers, and one
manager must be the first among equals when it is a decision in that managers area
of jurisdiction.
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ENHANCEMENT OF COMMITTEE
EFFECTIVENESS
Committees, in spite of their limitations, are valuable for organizational
deliberations. Their effectiveness may be enhanced by the following actions:
Viewing committee activity as important and legitimate
Providing the necessary logistical support
Assigning clear-cut responsibilities and specific functions to the committee
Considering committee size, composition, and selection of members carefully
Selecting the committee chairperson carefully
Maintaining adequate documentation and follow-up activity
Creating task forces as an alternative to the proliferation of committees
Ensuring that members are sensitive to group dynamics and organizational
conflict
Legitimization of Committee Activity
The top management of an organization must create a climate in which the work of
committee members is valued. The evaluation system for merit raises and
promotions should include the assessment of individuals work on committee
assignments. Committee membership should be viewed positively by members
rather than merely tolerated as a duty. Job descriptions should include committee
assignment as a necessary component of the work. When staffing patterns are
established, work hours should be allotted for essential committee participation.
Committee structure should be streamlined so that action is purposeful and members
can see the results of their work. Training specifically for effective committee
involvement should be part of the overall training program for members rather than
left to chance.
Logistical Support
All necessary staff assistance should be given to the committee chairperson and
members. Staff assistants may prepare specific material, devise research questions,
gather necessary support data, and carry out follow-up activities. Clerical support
should be provided for recording and transcribing minutes and related documents.
Adequate space should be made available for meetings. Top management may
enhance committee workings by requiring that committee meetings be scheduled
regularly and that membership be drawn from several organizational components.
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Setting aside a certain block of time for interdepartmental meetings and proscribing
intradepartmental sessions during that period facilitates the coordination of
schedules. If it is deemed preferable, committee meetings may be scheduled for
longer periods of time at less frequent intervals.
Scope, Function, and Authority
When a committee is created, its purpose and function, as well as its scope of
activity, must be presented clearly. Will its purpose be merely to deliberate? Will it
deliberate and make a recommendation, or will its decision be a binding one? What
subjects will it consider? For example, will the medical care evaluation committee
concern itself only with assessments of the topics of quality assurance that are
mandated by outside review agencies, or will it expand its function to organizationwide quality assurance and education? Will patterns of care review remain a
separate function? Will the health information committee focus only on the
documentation requirements for inpatients or on the records of all patients who
receive care in the institution regardless of patient category (e.g., inpatient,
outpatient, group practice)?
The scope of the committees work is shaped by its authority. If the credentials
committee of the medical staff only makes recommendations to the governing
board, while the board retains final authority to make staff appointments, this
division of duties should be stated in the bylaws creating the panel and setting forth
its mandates. The committees accountability also needs delineation. To whom does
it make its reports? How frequently? Is coordination required with certain
administrative components or with other committees?
Committee Size and Composition
No absolute figure can be given as the optimal size of a committee. Given that open,
free deliberation is a major reason for a committee, the size of the group should be
small enough to permit discussion. At the same time, it should be large enough to
represent various interests. The organizations bylaws and charter may stipulate
required committee composition, which in turn will affect a committees size. Some
hospital policies, for example, state that all chiefs of service are members of the
executive committee; therefore, the size of the committee is determined by the
organizations department structure.
The need for a quorum to undertake official committee action presents special
problems if members schedules simply do not allow them to attend meetings on a
predictable basis. Committee size may be increased in order to ensure a quorum so
that business may be conducted.
Committee composition is one of the most important factors in the success of a
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groups work. Whether they volunteer, are appointed, or are elected, members
should possess certain personal qualities. Specifically, they should be able to meet
the following criteria:
Express themselves in a group.
Keep to the point.
Discuss issues in a practical rather than theoretical way.
Give information that advances the thinking of the group about the topic rather
than about themselves.
Assess a topic in an orderly yet flexible way.
Suppress the natural desire to speak for the sake of being heard or of saying
what they think the leader or some powerful member wants to hear.
The members also should have sufficient authority to commit the units or groups
they represent to the course of action adopted by the committee. If an individual is
appointed to a committee to represent a busy executive, that person should have the
power to cast a vote that binds the executive who deputized the member. Deputizing
is not without its hazards, but these potential problems may be avoided by careful
review and discussion between the executive and the representative before the
meeting.
Generally, committee members should be of approximately equal rank and status
in the organization to permit the free exchange of ideas. The presence of ex officio
members, who may be viewed as more powerful than the elected members, may
deter free discussion. Individuals who attend meetings as staff assistants should
respect the limits placed on their participation. There should be a clear
understanding that the duties of secretary of the committee are those of the
individual appointed or elected from within the group; other persons present to carry
out the clerical aspects of secretarial work, such as taking down the raw proceedings
from which minutes will be extracted, should not be asked to participate in the
discussion and should not volunteer information or opinions as they are not official
members. If a parliamentarian who is not a member of the committee attends the
meetings, this individual should confine any interaction with the committee to points
of parliamentary procedure and should withhold all opinions, agreements, and
disagreements concerning the issues under discussion. A group that appoints or
elects a committee should have confidence that only those individuals duly
appointed or elected will make decisions and recommendations on its behalf.
Although diverse points of view should be represented in deliberations, not every
participant must be a full-time committee member. Individuals can be invited to
attend a meeting or a portion of one to answer questions from the committee, share
information, or present a point of view. Like staff assistants, individuals who attend
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meetings as guests should respect the limits of their participation.
In summary, committee size and composition are matters of individual
organizational determination. Committees should be large enough to represent
various interest groups and ensure adequate group deliberation but small enough to
ensure that the deliberation will be effective.
Periodic Review of Committee Purpose and Function
There is an occasionally encountered phenomenon experienced by some
committees, primarily standing committees, although even ad hoc committees are
not totally immune. That phenomenon is the tendency of some committees to
remain in place, meeting regularly and cranking out meeting minutes, when the
essential reasons for their existence have either changed or vanished. By way of
example, consider the common and well-intentioned practice of resident or client or
customer representation committees or councils. Student representation groups in
higher education are another such structure, and employee representation groups are
yet another example. At an early stage in the life cycle of the organization, there
might have been many issues to resolve, with input from the client group being
useful in this regard. As practices became routinized, and as other structures were
put in place (e.g., a grievance process, an appeal process, an open forum with
management sessions, special focus committees), however, the original purposes of
the client representation group became diminished. What to do now? If there is still
a need for such a group, examine its mandate and its composition. Perhaps less
frequent meetings might be in order, with the capacity for scheduling more meetings
if a need arises. In this way, the representative structure is maintained but meetings
with virtually no agenda are avoided.
Some have likened a committee to a physical structure that, once built, tends to
remain in place in its original form even though it becomes empty or perhaps is just
partially occupied. In other words, committees are often seen as self-perpetuating or
even self-propagating, regardless of whether the reasons for their formation have
vanished or changed.
Any committee should be subjected to periodic review of its purpose and
function. This purpose and function might be referred to as a mission, perhaps a
charter, maybe simply a charge, or some other label to describe the reason for
its existence. Certainly some standing committees will not often require such
review. Consider, for example, the executive committee or the finance committee of
an institutions board of directors, which will likely remain in place as long as the
organizations basic mission remains unchanged. But even those supposedly stable
committees might benefit from periodic review. For instance, certain conditions in
the environment or perhaps in the organization itself might suggest some
appropriate change in committee membership or composition.
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The review of a committees purpose and function should not be left solely to the
committee itself. Depending on how some committee members feel about
membership on the committee, members could conceivably vote to continue a
useless committee or to disband a committee that has valid reasons to continue.
Some committee members, and certainly the committees current chairperson, can
legitimately be involved in the review. These people, being closest to committee
activity, will be in a position to provide information to others involved in the review.
It is most appropriate that the review be led by persons placed at the level of
management to which the committee reports. In other words, a committee of the
board of directors would be evaluated by the full board; a medical staff committee
would be evaluated by the medical staff leadership; an institutions safety committee
would be evaluated by a member or two of administration, including the executive
to whom the committee answers; and so on.
Some of the principal questions to be addressed by those evaluating a
committees purpose and function are these:
Has the mission, charter, or charge of the committee changed somewhat,
significantly, or not at all?
What would appear to be the net effect on the organization if this committee
were eliminated?
If this committee is to be retained, what changes, if any, should be made to its
mission, charter, or charge?
If this committee is to be retained, should the frequency of meetings be altered
in any way?
Can the functions of this committee be constructively combined with the
functions of another committee?
What changes, if any, should be made in committee structure and composition?
Should there be any changes made to the committees reporting requirements?
It is true that many committees tend to take on a life of their own. It is also true
that many in management feel they are committeed to death and could make good
use of the time that could be freed if they had fewer meetings to attend. It follows,
therefore, that regular, systematic review of committee purpose and functionat
least once per year for the majority of committeescan help weed out ineffective or
unneeded committees. In brief, periodically make each and every committee justify
its continued existence.
THE COMMITTEE CHAIRPERSON
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Selection and Duties
The position of chairperson of a committee may be filled in several ways. One is
direct appointment by the individual with the mandate and the authority to do so.
For example, the bylaws of an organization may direct the president of the medical
staff to appoint a committee chairperson. The manager of a department may be the
chairperson of a related committee as a matter of course, the director of the patterns
of patient care review program may be the appointed chairperson of the utilization
review committee, and the individual who holds the line position responsible for
safety will probably automatically become the chairperson of the safety committee.
Managers may appoint themselves chairpersons of committees that they
constitute and over which they wish to exercise control, or they may offset powerful
members by appointing as chairperson an individual sympathetic to their position.
Selection of committee chairpersons may or may not be left to the groups
membership. In committees where members are elected from the panel as a whole
and where there is an accepted egalitarianism in the group, this is a common
practice. The group conveys the idea that all those selected for membership have
equal ability and that equal confidence is placed in all of them. Conversely, the
group could also convey the idea that the committee is not very important so it does
not matter who is chairperson. A group that elects the members of a committee may
select the chairperson as a separate action by a special vote or may direct that the
individual who receives the highest number of votes automatically assumes the
chairpersonship.
Occasionally, the office is simply rotated among members of the committee to
avoid a power struggle. When a specific activity of a standing committee requires
extensive and recurring follow-up work and staff assistance is limited, the work of
the chairperson is divided by rotation; because the burden of staff support must be
shared by the chairpersons department or unit, this approach spreads the support
work over several organizational units. When the committees work is viewed as
mere compliance with bureaucratic red tape and the work is valued neither by its
members nor by the group as a whole, the position of chairperson is sometimes
downplayed by this rotation process. Finally, individual members may volunteer to
accept the assignment as chairperson because of a sense of duty, because of a desire
to advance themselves or protect some potentially threatened interest, or because the
committee deals with an issue within their field of expertise.
An able, well-qualified individual sometimes refuses to accept the position of
chairperson because it would limit his or her ability to participate in deliberations.
Eligibility factors sometimes determine the choice of a chairperson. Prerequisites
might include prior membership on the committee, tenure as a faculty member, a
specific number of years of service as a full-time employee, or a certain technical or
professional degree.
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A committee chairpersons duties include arranging for logistical support,
chairing meetings, and monitoring follow-up assignments. The logistical duties
include the following tasks:
Coordinating the schedules of committee members
Correlating committee activities with the work of related committees or
departments
Checking for compliance with mandated deadlines and actions
Obtaining meeting space
Issuing meeting notices as to time, date, place, and agenda
Coordinating and distributing support information before meetings
Preparing the agenda, including sequencing items according to priority
Chairing the Meeting
The chairperson sets the tone of meetings, controls the agenda to a major extent,
guides deliberation on the issues, and provides or denies opportunities for committee
members to express themselves. The degree of formality or informality is indicated
not only by the manner in which the chairperson conducts the business of the
meeting but also by an explicit statement. At the outset, the chairperson makes
known the rules of debatefor example, whether there will be general discussion
followed by a formal vote and whether strict adherence to parliamentary procedures
will be required throughout the meeting.
It is the duty of the chairperson to conduct the meeting efficiently by starting the
session on time, following the agenda, and providing sufficient time for deliberation.
Subtle leadership skills must be brought to bear as the chairperson referees the
members deliberations. The process of group deliberation and participation must be
protected and promoted. The chairperson must artfully provide time for individuals
to be heard, which involves far more than merely letting each person have a turn to
speak. Group cohesion must be fostered even when there are differences of opinion.
The agenda is usually prepared by the chairperson, who invites members to
provide timely input. Although the agenda is intended to guide the proceedings, the
chairperson may take an item out of sequence if the course of discussion creates a
natural opening for the deliberation of related agenda items. The chairperson keeps
the meeting flowing by moving from one agenda item to another at appropriate
times, calling the groups attention to work accomplished and work yet to be done.
The chairperson must seek to prevent polarization, overhasty decisions, or the
eruption of blatant conflict. It is the chairpersons duty to prevent the group from
moving into discussion of unrelated topics or returning to issues that have already
been settled. The chairperson periodically integrates the discussion by summarizing
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major points, calling for motions, and appointing subcommittees or individuals to
carry out special assignments.
To summarize the primary duties of the chairperson, in chairing a meeting this
individual should follow these guidelines:
Except in the face of highly unusual circumstances, always begin the meeting at
the stated time, and do not repeat information for late arrivals.
State the purpose of the meeting at the start and determine that everyone knows
why they are present.
Ensure that someone (a recorder) is assigned to record the proceedings for the
purpose of minutes and assignments, and that someone (a scribe) will capture
(via computer display, or some other means) points and ideas that arise for
discussion. (At a small meeting, these two activities could probably be handled
by a single person.)
Encourage discussion. Ask direct questions, especially of participants who
otherwise tend to remain silent. Consciously attempt to secure everyones
participation.
Remain in control of the proceedings. Do not lecture or dominate, do not tell
others what to say, do not argue with participants, and do not try to be funny.
Remain in control of the group itself. Do not permit tangential digressions, and
do not allow monopolizers or ego-trippers to take over or to intimidate less
vocal participants.
End with some specific plan. Allow no one to depart without full understanding
of the decisions made, actions to be taken, individuals responsible for
implementation, and when things will be done. Every meeting must end with a
statement of who will do what by when.
Follow up after the meeting to ensure, as necessary, that what was decided and
assigned has been accomplished.
Follow-up Activity
The final duty of the chairperson is follow-up. The chairperson participates in the
preparation of minutes either directly by formulating them or indirectly by
reviewing and approving them as prepared by the committee secretary. Periodic
reports must be made to administrative officials. In addition, the chairperson must
write letters to invite special guests, consult technical staff, hold informal sessions
with members between meetings, and attend subcommittee meetings or those of
related committees; all these duties fall within the category of follow-up.
The chairperson must periodically review the work of the committee. Is the work
satisfactory given the committees basic charge? Is the committee fulfilling its
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designated function? The minutes of several recent months may be examined and
specific follow-up inquiries made to individuals and subcommittees concerning the
progress of work assigned; agenda items that were set aside or those not discussed
for lack of time should be brought to the committees attention again. All unfinished
business should be monitored and active follow-up initiated. Exhibit 71 is an
excerpt from a form that may be helpful in following up on committee action.
EXHIBIT 71 Sample Format for Minutes
The committee directed its attention to new guidelines concerning the content
of discharge summaries. A random sample of discharge summaries dictated
during recent months was compared with the guidelines to determine areas of
noncompliance and areas of strength.
DISCHARGE SUMMARIES
February 8, 20n1
June 9, 20n0
COMMITTEE MEMBER ORIENTATION
Members often come to committees with varying degrees of knowledge about
committee purpose, function, and procedures. In most instances, therefore, some
orientation to a new committee assignment is recommended. This may amount to
little or nothing for a professional appointed to a committee involving a specific
function. For example, a nurse functioning as a quality assurance specialist may
need very little orientation to membership on the institutions quality assurance
committee. By comparison, someone appointed to a committee that cuts across a
number of functional lines may require more orientation and familiarization. For
example, an individual from the admitting department who is appointed to the
institutions safety committee may require more extensive orientation.
To cite some examples of committee member orientation:
In a particular small hospital, a new member of the safety committee meets with
the committee chairperson one on one for about an hour before the new
members initial meeting.
In a midsize not-for-profit human services agency, a newly appointed member
of the finance committee of the board receives a 2-hour orientation over lunch
with the agencys chief executive officer, finance director, and finance
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committee chairperson.
In a midsize hospital, a new member of the board of directors receives a halfday orientation with the hospitals chief executive officer and the executive
committee of the board.
Before ever agreeing to committee service, the person who is invited to serve
should be fully advised of the purpose and function of the committee, the time
commitment necessary, and the meeting schedule. Once this information has been
conveyed and an individuals agreement to serve is secured, the committee
chairperson can proceed with arrangements for a customized orientation depending
on the needs of the individual. It should, of course, go without saying that a
significant part of this orientation should involve answering the questions of the new
member.
MINUTES AND PROCEEDINGS
Sound practice requires that an organization maintain official documentation of
business transacted. Minutes serve as the permanent factual record of committee
proceedings. An explicit statement in bylaws or policies may state that the minutes
shall be maintained, including a record of attendance; that they shall reflect the
transactions, conclusions, and recommendations of each meeting adequately; and
that they shall be kept in a permanent file. Some other time frame for retention that
reflects the legal and statutory requirements for the organization may be stated.
Committee manuals should contain such information.
When properly formulated, minutes summarize business transacted, including
matters that require follow-up action, matters on which there is substantial
agreement or disagreement, and issues that remain open for committee deliberation.
Minutes are sometimes transmitted to individuals who are not currently members, as
determined by the policies on distribution and by legal and accrediting requirements.
The historical record provided in the minutes gives new members an overall sense of
committee activity. A surveyor checking for compliance with patterns of patient
care review requirements, for example, might request the minutes of the utilization
review committee over the past year. Representatives of The Joint Commission may
call for minutes and proceedings of the medical staff committees to help in
determining whether the staff is fulfilling its medico-administrative responsibilities.
In legal proceedings, the admissibility of committee minutes and proceedings as
evidence rests on the premise that these records were made in the normal course of
business at the time of the actions or events, or within a reasonable time thereafter.
Thus, minutes of the official business of the organizations committees must be
prepared, reviewed, and distributed in a timely manner (i.e., close to the time of the
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actual proceedings). This preliminary set of minutes is marked DRAFT to indicate
that it has not yet been approved. The minutes are reviewed formally at the next
meeting to obtain general agreement that their content reflects the business
transacted. Should a lawsuit be instituted regarding the possible negligence,
malpractice, denial of privileges, or discipline of a practitioner, the minutes of such
proceedings might, in some instances, be admissible as legal evidence; the laws on
this point vary from state to state.
It could be argued that minutes do not reflect all the business transacted by the
committee. The counterargument is a question: why not? The effort spent on proper
documentation in the normal course of business is a legitimate use of organizational
time and staff. It has also been argued that minutes could be altered to reflect
business that, in fact, was not transacted, but this is true of any form of
documentation. Review of minutes by all members is one way to safeguard
accuracy. Managers can only go forward guided by their own ethical code as well as
by the organizational and societal presumption that the work was carried out in
good faith.
Preparation of Minutes
Minutes are prepared in two stages. First, either the proceedings are transcribed in
their entirety by clerical staff or a summary of key points is compiled by a staff
assistant. Then, the official secretary to the committee (if there is such an officer) or
the committee chairperson formulates the official minutes from the transcript or
summary. If there is no clerical assistant or staff aide, the chairperson (or member
secretary) uses self-compiled notes to formulate the minutes. Any required approval
is obtained, and the minutes are sent out according to a prescribed distribution list.
The distribution process may be simplified by developing a standing list of the
names and titles of members, administrative officers to whom certain minutes are
sent because of their organizational jurisdiction, or the chairpersons of related
committees. The chairperson then needs only to check the names of those who are to
receive a particular set of minutes. It is useful to include the phrase Standard
Distribution and to list any additional individuals to whom minutes were sent as a
point of information. The inclusion of a list of support material or enclosures makes
the minutes more complete.
Exhibit 71 illustrates a format that makes it possible to scan the pages of a
volume of minutes and focus on specific topics. The topic key should be placed in
the right-hand margin; if the left-hand margin is used for the topic key, it may be
placed too deeply in a bound or semibound margin for ready reference. Inclusion of
the dates on which there was previous discussion gives the user an easy means of
reference to related information. This format generates an index of committee
topics, and members have the benefit of ready reference to past deliberations of a
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related nature.
Content of Minutes
Minutes are more than a mere listing of committee actions in chronological order.
The topics discussed are normally groupeda process facilitated by adherence to a
formal agenda. In relatively informal meetings, however, the discussion may be
diffuse and less focused on discrete topics than is a discussion in a meeting
conducted under strict parliamentary procedure.
The minutes should reflect what is done, not what is said. Adequate minutes as a
matter of course contain such information as the following items:
The name of the committee
The date, time, and place of the meeting
Whether it is a regular or special meeting
The names of members present (specify ex officio if appropriate)
The names of members absent (include a notation of excused absence if
appropriate)
The names of guests, including title or department as an additional indicator of
reason for attending
The opening paragraph of the minutes, which is relatively standardized, normally
includes the following information:
The name of the presiding officer
The establishment of quorum, if this is done routinely or at the request of a
member
A routine review of the minutes of the previous meeting, noting whether they
were reviewed as read or only as distributed and whether any corrections were
made
The proceedings are summarized. The names of those who made formal motions
are given, but the names of those who seconded the motions need not be recorded.
All main motions, whether adopted or rejected, are included.
The bulk of the business may be reflected in general discussion only. There are
five basic dispositions of agenda items, and each item should be listed with its
disposition:
1. Item is discussed and a formal motion is made; formal wording of motion is
given. Votes for and against, as well as abstentions, are recorded. Notation is
made whether motion is adopted or rejected.
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2. Item is discussed and there is general consensus. No formal motion is made.
Summary statement of general discussion is entered with notation that there
was general agreement with action taken.
3. Item is discussed and tabled informally or set aside for discussion at another
time because members need more information. Reasons for setting it aside
may be stated; indeed, it is useful to give this information for later reference.
4. Item is discussed, with subsequent formal motion to table it permanently.
5. Item is not discussed. This is not stated directly; item is simply carried as old
business.
A precaution is in order relative to outcomes 3, 4, and 5, concerning items that
are tabled informally, set aside for discussion at another time, tabled
permanently, or simply carried as old business. These particular actions
representing largely more inaction than actionare often taken for truly legitimate
reasons. Perhaps study is required, more information is needed, or the people most
appropriate to a particular item are not present. Often, however, items of business
that represent thorny, emotional, or generally controversial issues are repeatedly put
off via one or another of the means cited. Certain items of business seem to be put
off, then brought up again only to be put off again, and so on.
Some unresolved and recurring agenda items can languish without action forever,
such that they simply accumulate and nothing happens to them except postponement
after postponement. It is suggested that any accumulation of such agenda items be
reassessed regularly, with the intention, if possible, of either moving them onto an
active schedulefor example, To be addressed at the February meetingor
dropping them altogether. Often committee participants and other decision makers
behave as though they believe that an issue ignored long enough might just go away
of its own accord. It is true that occasionally some issues, even those involving
seemingly difficult or insoluble problems, simply vanish. Left unto themselves,
however, matters ordinarily proceed from bad to worse.
Whether a particular issue is thorny or controversial or not, and whether the issue
in question seems to defy rational solution, it falls to every committee member to be
aware that postponing a problem is, in fact, deciding not to decide. There may
often be completely valid reasons for doing so, but there can be a price associated
with this practice. The exercise of this no-decision option is itself a decision, and
frequently it turns out to be the decision of the greatest potential consequences.
Therefore, recurring or unresolved agenda items should not be allowed to coast in
open-ended fashion for a prolonged period of time. Either place them on a
reasonable track toward resolution, or get rid of them altogether.
A useful practice for providing background information for new members of a
committee or for review of past committee action is to include a rationale statement
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for each motion that is made. Although this is not required, such a statement
provides a succinct summary of the underlying reasons for an action:
It was moved and seconded that documentation review will be carried out by health
information department personnel for all patients in the long-term care/rehabilitation
unit whose length of stay exceeds 14 days. This review will be made on a weekly
basis for each patient.
Rationale: Because of the extended length of stay for this category of patients (an
average of 47 days in this facility), the detection and subsequent correction of patient
care documentation deficiencies should be carried out during the patients stay.
Both the positive and negative discussion of each topic may be summarized. If
there is a specific follow-up action to be taken and a committee member is assigned
this task, the name of the individual should be included in the minutes. If a
subcommittee is created, the names of its members are given. In the minutes of a
formal meeting, points of order and appeals, whether sustained or lost, are noted.
At the conclusion of the minutes, the name of the individual who compiled them
is given. The legend minutes compiled by may be used instead of the somewhat
archaic phrase respectfully submitted. If minutes are approved or reviewed by the
chairperson before distribution, this fact is stated. The minutes should be signed by
the person who compiled them (e.g., the committee secretary) and the person who
approved them for distribution. If the committee does not have an official secretary,
the chairpersons name and signature are entered.
Minutes and proceedings reflecting patient care often are summarized in tabular
form. See Exhibit 72, which reflects client safety assessment in home care.
WHERE DO TEAMS FIT IN?
In these days of expanding employee involvement, it is increasingly likely for
problem solving to be approached through the use of employee teams. Teams have
been at the forefront of the implementation of total quality management (TQM)
programs, as they were in previous undertakings under various other names, such as
quality circles, in which an individual circle was neither more nor less than an
employee problem-solving team.
EXHIBIT 72 Documentation Review: Geriatric
Clients in Home Care
Focus of review: documentation of risk assessment for
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falls in the home
Number of client records reviewed for proper documentation: 40
Standard of compliance: 100%
Actual compliance: 88%
Elements of documentation to be noted:
Age 75 or older
Cardiovascular medication
Psychotropic medication
Use of four or more medications
Cognitive impairment
Decrease in hip strength
Poor balance when walking
Prior falls in the home
Chronic pain/pain status
Environmental factors (e.g., rugs, stair rails)
Compliance by client with safety instructions
Compliance by family/caretakers with safety instructions
Todays team essentially fits within the broader definition of committee dealt
with earlier in this chapter. There are, however, some points of difference between
teams and the more traditional forms of committees. Like other committees, a team
may be standing, with a continuing life beyond its initial concern, such as a
departmental team that exists to continually scrutinize the departments procedures.
By contrast, a team may also exist temporarily to address a specific problem or
situation.
Generally, a team is seen as less formal or less structured than a committee.
People often see committees as existing by virtue of some higher authority, such as
the committees of the medical staff or the board of directors, or at least as
deliberative bodies established by higher management. By comparison, teams,
although perhaps standing in the sense of having open-ended assignments, are
generally perceived as nonpermanent.
The term committee is more likely to be associated with more formal processes
such as parliamentary procedure and the requirement for thorough minutes of
proceedings. Also, as compared with a team, a committee is more likely to be
associated with voting, which may or may not be a feature of a given teams
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activities.
Therefore, given the foregoing few points of variation, a team may be referred to
as a committee. There is, however, one unique dimension of an employee team that
deserves special attention, and that is the questionable legality of some teams
relative to their missions.
AS EMPLOYEE INVOLVEMENT INCREASES
Participative management and employee involvement have been talked about for
several decades and have been practiced in an increasing number of work
organizations since the human relations approach to management began to make
inroads into the authoritarian management of the past. Thanks to TQM and other
initiatives, more and more is being done with the involvement of employees by way
of teams. There are some good reasons for wanting to include employees in some
team activities and deliberations. In most instances, nobody knows a given job better
than people who do it every day. Also, it only makes sense to try to account for
employees needs and desires when designing a benefits program.
However, there are areas of employee involvement in which teams are seen as
intruding on the territory of labor unions. There is a constant risk that a given
employee team could be judged an illegal labor organization under the National
Labor Relations Act (NLRA). Suggestions for employee participation, although well
intended, readily lead to groups that could be considered as infringing on the rights
of collective bargaining organizations.
The problem has actually existed since the NLRA became law in 1935, but it was
brought into sharp focus by the Electromation decision of December 1992. In 1989,
Electromation, a manufacturer of electrical equipment, established several employee
committees. One was created to investigate bonuses, one to look at premium pay,
one to study absenteeism, one to examine employeremployee communications, and
one to deal with a no-smoking policy. Management defined the subjects, set the
number of members for each committee, appointed managers to all of the
committees, and paid workers to participate. When Electromations five employee
committees were challenged, the National Labor Relations Board (NLRB) agreed
with the challenge. (The NLRB is an independent federal agency created to enforce
the NLRA.) According to the NLRB, these employee representation committees
were essentially employer-dominated labor organizations that discussed wages and
other terms of employment. The NLRB concluded that the company was not simply
dealing with quality, productivity, or efficiency but was creating the impression
among employees that their differences with management were being resolved
bilaterally. The NLRBs reason for the ruling suggested that in establishing the
NLRA years earlier, Congress prohibited employer interference with labor
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organizations to ensure that such groups were free to act independently of employers
in representing the interests of employees.
Following the Electromation case, there was a similar case in which the DuPont
Company was ordered to disband seven labor-management committees, six created
for safety issues and one for recreation. In addition, there was a similar case in
which the Polaroid Corporation was forced to disband its long-standing employees
committee after the U.S. Department of Labor determined that it was actually a
labor organization.
Generalizing from the experiences of Electromation, DuPont, Polaroid, and
others, an employee team or committee might be considered to be an employerdominated illegal labor organization for any of a number of reasons. First, and
probably foremost, is if the group is dealing with wages, hours, benefits, grievances,
or other terms and conditions of employment. These are, of course, among the issues
most frequently subject to collective bargaining and are seen (at least by the NLRB)
as the exclusive province of unions. Second is if team suggestions or
recommendations result in management decisions but the group itself does not have
the power to make the decisions and if employees are elected to the group as
representatives of larger bodies of employees. Third is if (1) employees see the
group as a means of resolving their concerns with management and (2) meetings
appear to involve negotiation between employees and members of management.
Many in business consider the NLRBs decision in the Electromation case an
unfortunate occurrencean expression of Depression-era assumptions that
relationships between employees and employers must always be adversarial. The
strongly prolabor position of the NLRB often seems to work against the
establishment of a healthy employee relations climate in an organization.
Experiences stemming from the cases cited above seem to suggest that a violation
will most likely be found if an employee team is actually set up during a union
campaign, participation is made mandatory, and the employer picks the members or
controls the method of their selection.
Because of what happened with Electromation and other companies, there may
be a tendency for some organizations to shy away altogether from teams or
committees that include rank-and-file employees. Some justify a diminished
emphasis on teams by pointing out that attacking employee committees has become
an active tactic of unions that are either in place or seeking acceptance.
However, the Electromation case did not open up any truly new issues; it simply
brought some that had existed for years to the surface. Long before this case, it was
recognized that the more effective an employee team is, the more likely the NLRB is
to find it an illegally dominated and supported company union in violation of
existing labor law. However, potential difficulties should not be allowed to
completely deter the use of such a team. The active use of employee participation
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and input via teams or committees lies at or near the heart of every initiative
intended to improve quality or productivity. If management believes what is said to
employees about the value of their input, empowerment, and owning your job,
then management had best make maximum use of participative processes, including
teams.
EMPLOYEE TEAMS AND THEIR FUTURE
Avoiding Committee Paralysis
Rather than paralyze employee teams because of legal risk, it makes more sense to
look for ways in which management may make the fullest possible use of employee
input while avoiding legal entanglements. The value of including employees in
problem solving is undeniable; surely it makes sense to account for employees
needs and desires in making changes within the organization. The active use of
employee participation and input, largely via teams or committees, actually lies at or
near the heart of every TQM initiative.
Occasional Shortcomings of Teams
Some team members, especially managers serving on teams with nonmanagers or
others of perceived lesser rank, are unwilling to set aside position and power for the
sake of the team. Also, unequal levels of knowledge and ability among team
members can lead some team members to dominate the others, some to anticipate
their contributions will be diminished or overruled by the authority present, and
still others to become overwhelmed or lost in the crowd.
Some extremely important and highly disruptive effects on teams are found in
reward and compensation systems that continue to focus on individual effort rather
than on team performance. This has been a frequently encountered barrier to
successful TQM implementations as organizations have tried to alter how they do
business without changing the systems or processes by which they do business.
Indeed, some reward systems support individual performance to such an extent that
they can discourage teamwork.
Performance appraisals that do not account for team performance also present
barriers. An organizations performance appraisal process is usually one major
business support system that has to change dramatically to appropriately support the
activities and accomplishments of teams. In evaluating employees, most present
appraisal processes tend to identify starsthat is, the exceptional individual
performers. In reality, a team will not long remain a productive body if some
members feel they work in the shadow of a few people who are regarded as better
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performers and receive higher individual appraisal scores. Therefore, it is necessary
to change some employees concept of evaluation from a focus on the individual to
emphasis on the team. Moreover, because not all of the organizations employees
will be serving on teams, the performance appraisal process must offer a variation
by which to evaluate group efforts as well as continue to accommodate individuals
as usual.
There is another sort of shortcoming that now and then arises to frustrate the
well-intended efforts of some team members. This shortcoming comes in the form
of the coaster or free rider, who contributes only minimally to the teams work,
if at all, but stands to share the credit when the team, carried forward by its
productive members, registers successes. This apparent footdragger becomes a
concern of the other team members and especially of the team leader. Ordinarily a
teams leader will be a working leader who both serves as a contributing member
and provides some direction to the group as a whole. This leader must sometimes
lean on a nonproductive member to shape up or ship out. Indeed, if the leader
does not do so, discontent is likely to spread among the other team members. Thus,
individual team members will often directly address the slacker in their midst. The
well-run team that discovers one of these nonproductive members in its ranks will
be self-policing; that is, the team will either help to get the footdragger up to speed
or, failing that, have the individual removed or replaced.
Whether for TQM projects or any other undertaking that involves committees or
teams, lack of top management commitment to the process is a sure means of
undermining effectiveness. It should go without saying that top management that
fails to walk the talk will be perceived as insincere.
Some problems with teams are inherent in the labels used to describe these
bodieslabels such as self-directed, autonomous, and the like. These names are
misleading in that they convey the belief that these groups are independent and free
to act as they choose. No effective teams in business really provide their own total
direction. Instead, each team should be directed by its specific charge or mission or
assignment and by the goals of the organization. As such, all teams should actually
be interdependent with other organizational elements. Effective teams require clear
direction, comprehensive guidelines, and open, nonthreatening leadership.
What to Avoid in Using Employee Teams
It is possible to empower teams that include rank-and-file employees and use them
legallyto maximum effect by observing a few simple limitations:
1. Never allow an employee team to deal with terms and conditions of
employment, such as wages, hours, benefits, and grievances. Even
consideration of working conditions in general should be avoided. As a
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member of management who might be part of a team, do not deal with other
team members, and specifically nonmanagers, concerning terms and
conditions of employment. If a teams activities take it from a legitimate topic
into the realm of terms and conditions of employment, its direction should be
altered or it may be seen as being an illegal, employer-dominated labor
organization.
2. Do not solicit from teams complaints, grievances, or suggestions about terms
and conditions of employment. If such issues arise on their own, refer them to
the proper points in the organization, usually either administration or human
resources.
3. Do not let team meetings degenerate into gripe sessions in which members
simply complain about aspects of their employment.
4. Do not mandate employee participation, ask employees to represent other
employees, or sanction employee elections to choose representatives. Ask for
volunteers, and appoint all members.
5. Do not allow an employee team or committee to exist and function without a
clear, understandable mission or charge and without fully and plainly
delineated limits on its authority and responsibility.
Proper Focus of Effective Employee Teams
Short of actually establishing teams or committees to wrestle with certain issues, a
number of steps can be taken to encourage employee participation. It is possible,
and frequently desirable, to consider bringing together loosely defined groups of
managers and employees simply to brainstorm ideas, gather information, and help
define problems, as long as no proposals are offered or recommendations made. It is
also proper to assemble an employee group to share information and observations
with management, again, as long as no proposals or recommendations are made.
Beyond one-time or limited informal gatherings and in the realm of actual teams
or committees, use the following points of focus:
1. When establishing a team or committee, identify it up front as not intended as
an employees channel to management. Define a clear mission or charge
before soliciting team membership, and have the teams functions and limits
identified before any team activity begins.
2. Keep the team focused on productivity or quality improvements only. This
pursuit requires clear guidelines and plenty of continued vigilance. It is
difficult to talk about quality, efficiency, productivity, and such without
conditions of employment becoming involved, so be constantly aware of the
potential need to redefine the teams boundaries periodically. Also, be mindful
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that in such a gathering of employees it is sometimes all too easy for a
complaint or two to trigger a full-blown gripe session.
3. Staff teams with volunteers, or use rotating membership selected by some
means that is not management dominated.
4. If a team is empowered to make a final management decisionthat is, the
team decides in place of management, not just makes recommendations to
managementit can be seen as acting as management. This is acceptable. In
fact, it has been suggested that the ultimate protection against being ruled an
illegal labor organization exists when the team can make final decisions in its
own right.
5. If an issue is sufficiently narrowly defined that all persons affected by it can be
included in a single group, a committee of the whole including everyone, is
usually legally safe. In such an instance nobody can be seen as representing
anyone else.
6. For standing committees or long-lived teams, maintain a majority membership
of managers. A committee or team composed of a majority of managers stands
less chance of being adjudged illegal under the NLRA. Such teams do present
a significant drawback, however; a team composed mostly of managers is far
less likely to be seen as a legitimate vehicle for employee participation.
7. Rather than always creating teams or committees that tend to develop a
continuing existence, consider establishing specific problem-solving or workimprovement ad hoc groups, each with a specific, well-defined charge and a
specific problem to solve, and disband each group after its goal has been
attained. Such ad hoc groups can much more safely consist of a majority of
nonmanagers than can permanent teams or committees. For teams composed
largely of rank-and-file employees, however, it is legally safest to have
management representatives serve as observers or facilitators, without the
power to vote on proposals or dominate or control the group.
For collaborative group problem solving and participative decision making in
general, it is always appropriate to bring into the group those people who have the
skills needed for dealing with the groups charge. It is necessary, however, to
recognize that those persons who have skills pertinent to the problem at hand will
likely have greater influence on group decisions.
Recognize also that teams or committees become unwieldy as they increase in
size. Small groups are generally better; active participation in tasks seems to
decrease with increases in group size. In fact, team participants tend to rate small
groups as more satisfactory, positive, and effective than larger groups.
Employee participation may well be the key to continuing increases in quality,
efficiency, and productivity. Employee participation is essential. As noted earlier, no
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one knows the inner workings of a job better than the person who does it day in and
day out. Also, there are few, if any, problems whose solutions are not enhanced by
multiple viewpoints and inputs. A team brings to the problem the power of the
group. To cite a highly pertinent quotation from an anonymous source: I use not
only all the brains I have, but all I can borrow.
EXERCISE: COMMITTEE STRUCTURES
In no more than 100 words, describe the structure and size of a healthcare
organization that has a board of directors and a formal committee structure. This
description would most appropriately be of a hospital or nursing home, preferably
one with which you are familiar, but it can be imaginary if you have no direct
familiarity.
For your chosen organization, you are to design a complete two-part committee
structure. This process will consist of naming (1) the committees you would expect
to exist under the auspices of the board of directors and (2) the administrative
committees you would expect to exist. For each committee you name, provide a
one- or two-sentence description of its mission, and indicate the approximate
number of committee members and any primary expertise that might be required on
the committee. (To complete this exercise, it may be necessary to perform some
research into healthcare organization committee practices.)
CASE: THE EMPLOYEE RETENTION
COMMITTEE MEETING
Background
General Hospital has an administrative committee known as the Employee
Retention Committee. This groups role is to address issues having a bearing on
turnover, with a stated goal of reducing undesirable turnover and thus enhancing
retention. The committee consists of the following personnel:
Dave Andrews, an administrative assistant who inherited chairmanship of this
committee on entering his position with the hospital. He called the present
meeting about 10 days earlier, having notified two of the other members by
telephone and two in person.
Harriet Roberts, the hospitals employment manager.
John Dawson, a staff nurse in the intensive care unit.
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Alice Morey, director of food service.
Arthur Wilson, staff physical therapist.
The meeting was scheduled for 1:00 P.M. in Andrews office. Andrews returned
from lunch at 1:08 to find Roberts and Wilson already there. At 1:12 Dawson
entered and Andrews said, Id like to get started, but wheres Alice?
Somebody responded, Dont know.
Andrews dialed a number and received no answer. He then dialed the call center
and asked for a page. A moment later a call came in.
Turning from the telephone, Andrews said to the rest of the group, She forgot.
Shell be here in a minute.
Dave, I wish you had a larger office or a better place to meet, said Dawson. I
dont know how were going to fit another person in here.
I know its small, Andrews answered, but both conference rooms are in use
and I couldnt find another place. Say, holler out to Susan and tell her to find
another chairwell need it.
Wilson said, Dave, can you open your window a little? Its already stuffy in
here.
Andrews opened the window a few inches. Just then Alice Morey arrived,
squeezing into the office with the extra chair that had just been located. It was 1:18
P.M.
Andrews said, I guess we can get started now. He shuffled through a stack of
papers and said, Ive got a copy, if I canoh, here it isof a recent turnover
survey done by the human resources directors in the region. He looked at Roberts
and said, I assume you have this?
Yes, theres a copy in my office. But I didnt know I needed to bring it.
Andrews said, Well, I think that from this we can assume
Dawson interrupted, Dave, wouldnt it be better if we could all see it? Then you
could go through it point by point.
Andrews said, I guess youre right. I have just this copy. He turned toward the
door and called out as he waved the document, Susan, I need four copies of this.
Right now, please.
Turning back to his pile of papers, Andrews said to the group, The last time we
got together there were a number of things we decided to look for. I dont remember
just what we assigned to whom, but Ive got it here somewhere. For a half-minute
or so he leafed through the papers before him, then he turned to his desk and began
to leaf through folders in the file drawer.
While Andrews was looking, Morey turned to Roberts and said, Say, what have
you been doing about finding that new dietician we need? Youve been dragging
your feet on the employment requisition for 3 weeks and Elaine is leaving in another
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week and we still havent had any candidates to interview.
Roberts responded. Her sharp tone sparked a defensive reaction and a lively
discussion ensued.
Andrews located the paper he was seeking and Susan returned with the requested
copies. Andrews distributed the copies and fixed his attention on Morey and Roberts
as he waited for an opening in their discussion. At 1:32 the group returned to the
subject of employee turnover.
Now, about this regional survey, Andrews began.
Wilson said, What about the survey? I thought you wanted to start with the
things we agreed to do the last time we met.
Who cares, said Roberts, lets just get started.
Dawson looked at his watch and said, Lets get started and finished. I have an
ICU staff meeting at 2:00.
The meeting settled down to a discussion of the regional survey and the
preliminary information each person had gathered since the previous meeting. At
exactly two minutes before 2:00 Dawson excused himself to attend his staff
meeting. At 2:08 Morey was called over the paging system; she left the meeting and
did not return.
At 2:12 Andrews said he felt they had tentatively decided on their next step but
required some input from the two parties who had already left. He then started to
excuse the other two with the suggestion that they get together again after 2 weeks,
but his telephone rang and he answered it himself, his usual practice, and talked
some 4 or 5 minutes before returning his attention to the two remaining in his office.
He said, I guess thats it for now. Ill set a time for the next meeting and let you
know.
When the last of the participants left, Andrews called Susan to remove the extra
chair. As she did so, he reflected gloomily on how difficult it was to get anything
substantive out of a committee in this organization.
Instructions
1. Perform a detailed critique of the Employee Retention Committee meeting.
List the occurrences or omissions that you believe indicate faulty committee
practice, and state why you believe so and what should have been done
differently.
2. Comment on the composition and membership of the Employee Retention
Committee, and indicate how you would structure and position such a
committee and how you would thoroughly describe its mission, purpose, or
charge.
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CHAPTER 8
Budget Planning and
Implementation
CHAPTER OBJECTIVES
Explain the basic revenue cycle and assert the critical need for constant
attention to cash flow.
Enumerate the requirements of successful budgeting.
Introduce the budget as a special-purpose financial plan that is an essential
part of the department managers planning function.
Enumerate the various types of budgets employed and identify the
commonly encountered budget periods.
Differentiate between traditional budgeting and zero-based budgeting
approaches.
Enumerate the steps in the budget cycle.
Relate the dynamics of the budget approval process to the development of
the budget.
Identify the steps in budgetary control through analysis of budget variances.
THE REVENUE CYCLE
Described in its simplest possible form, the revenue cycle consists of comparing
money coming in with money going out. However, for a given healthcare
organization of any appreciable size, this cycle is far from simple and only partly
predictable. Money does not always come in according to an established pattern, but
much of the money that must go out is expected to move according to an established
pattern (payroll and certain other expenses such as utilities) or be paid out on
external demand (e.g., bills from suppliers).
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Revenue Sources
There are two broad categories of revenue: operating and nonoperating. Of primary
interest here is operating revenueincome generated by providing services for
patients or clients. Nonoperating revenue is that coming from other sources related
to the organizations existence, such as grants or donations.
Operating revenue originates from a number of sources, including the
government programs Medicare and Medicaid, insurers such as the not-for-profit
Blue Cross and Blue Shield programs and commercial insurance carriers, contracts
with managed care organizations, uninsured patientcare pools, and private-pay
patients (this last being a small and shrinking amount). Each of the different thirdparty payers has a somewhat different set of reimbursement rules usually resulting
in different billing practices.
For the majority of healthcare organizations, the most significant sources of
revenue are Medicare and Medicaid, followed by Blue Cross and Blue Shield and
managed care organizations (which are often one and the same). Revenue flows in
from these sources but not always at a predictable rate. The largest portion of
reimbursement is related to numbers of patients served. Consider, however, some of
the variations that can occur:
Fluctuations in number of patients served, perhaps because of outbreaks or
epidemics, seasonal variations due to a facilitys location (e.g., resort area),
weather events or disasters, competition with other providers in the area, and in
general any event or circumstance that can cause activity to increase or
decrease
Variable payment practices of the third-party payers. Payment for providers
services arrives weeks or months after the services are rendered. Sometimes
this lag is predictable, but occasionally it changes. Some payers will reject a
billing submission because of errors and require revision and resubmission
(sometimes seen as a payer tactic used to delay payment in support of its own
cash-flow circumstances)
Fines and penalties assessed for billing errors, not unusual with governmental
programs, and fines and penalties arising from changing regulations (e.g.,
readmission rates for certain categories of care under the Affordable Care Act)
Delays in collecting copays and deductibles from patients
Revenue never received because of treatment of uninsured, underinsured, and
indigent patients. At times, this is significant
Changes in reimbursement systems, such as changes in International
Classification of Disease (ICD) coding from ICD-9 to ICD-10; problems
associated with very late billing; and the practice of bundled care, wherein a
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flat rate is applied (and known ahead of time) for precare, inpatient admission,
and postcare
The preceding issues are some of the more commonly encountered factors
affecting the receipt of revenue by a healthcare provider organization. The point to
be stressed here is that an organizations cash flowwhat comes in as well as what
goes outrequires careful and often aggressive management.
Cash and the Revenue Cycle
There is an extremely simple bit of wisdom to remember in connection with the
management of the revenue cycle: cash is king.
The organizations cash budget for any given year sets the stage for the
management of the revenue cycle. This budget addresses cash needs against
projections of cash to be received over the period covered by the budget (usually 1
year). The pattern of cash-in versus cash-out is extremely important because of the
need to remain solvent in the short run. It does little good to appear rich on
paperto have impressive amounts of money owed to the organization, say in the
form of extensive accounts receivableif there is not enough cash in the bank to
pay current bills or to meet payroll.
Should cash be in extremely short supply, the organization might become more
aggressive in collecting accounts receivable or perhaps delay payment of a few bills
to more closely match cash receipts. A lack of cash can also lead to short-term
borrowing that sometimes results in difficulties in obtaining credit and creates more
operating expense because of interest rates. Many an organization in todays
healthcare climate has found itself in a hand-to-mouth existence in managing cash
flow.
Cash is king because it is the ultimate necessity for organizational solvency.
Organizations of all sizes and in all lines of business are subject to the same ultimate
financial constraint: revenue must be sufficient to cover expenditures within a
reasonable period. Many businesses that once looked good on the balance sheet
with a fortune in accounts receivable and large amounts of nonliquid assetshave
ceased to exist simply because of negative cash flow.
THE BUDGET
Budget preparation and administration are major duties of the department head.
Before dealing with the actual budget calculations, the manager must understand the
basic concepts and principles of budgeting. The budget details presented here are
treated from the perspective of the department head rather than the accountant or
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top-level administrator. In addition, this presentation is intended for the
inexperienced manager; terms are defined and examples are provided in detail to
facilitate budget preparation and analysis by an inexperienced user.
The first part of the discussion treats basic concepts such as budget periods,
budget types, uniform code of accounts, approaches to budgeting, and the overall
budget process. The second part of the discussion focuses on the details of the
budget proper: capital expenses, personnel budget, supplies, and related expenses.
All dollar values and examples are fictitious and intended only to illustrate budget
calculation processes.
Sound budgetary procedures are based on six requisites:
1. Sound organizational structure so that the responsibility for budget preparation
and administration is clear
2. A consistent, defined budget period
3. The development of adequate statistical data
4. A reporting system that reflects the organizational structure
5. A uniform system or code of accounts so that data are meaningful and
consistent
6. A regular audit system so that variances are explained in a timely manner
USES OF THE BUDGET
Budgeting is both a planning and controlling tool. As a plan, the budget is a specific
statement of the anticipated results, such as expected revenue to be earned and
probable expenses to be incurred in an operation for a future defined period. This
plan is expressed in numerical terms, usually dollars. A statement of objectives in
fiscal terms, the budget is a single-use plan that covers a specific period of time; it
becomes the basis of future or continuing plans when the incremental approach to
budgeting is used, whereby the next budget is formulated through the addition of
specific increments to the existing budget. It is a statement of what the organization
intends to accomplish, not merely a forecast or a guess.
When the budget is properly administered, it becomes a tool of control and
accountability in that it reflects the organizational structure, with each unit or
department given a specific allocation of funds based on departmental goals and
functions. The budget is an essential companion to the delegation of authority; the
line manager who has the responsibility for developing the plans for the department
or unit must be given the necessary resources to accomplish the approved plans. In
turn, this manager accepts responsibility for assigning specific budget amounts to
the personnel and material categories and monitoring the use of these resources.
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Because the budget permits a comparison of planned with actual performance,
control is enhanced. The department head is responsible for those costs that are
controllable, such as overtime authorization, supplies, and equipment purchases, but
not for those that are arbitrarily assigned to the departmental budget, such as fringe
benefits calculated as a flat percentage of personnel budget or administrative
overhead calculated as a flat percentage of operating costs.
BUDGET PERIODS
A budget specifies the amount to be spent in a predetermined period. This budget
period varies according to the purpose of the budget. The capital equipment or
improvement budget may be developed for a long period, such as a 3-, 5-, or 10-year
period; the budget for supplies, expenses, and personnel costs may be developed for
the immediate fiscal year. Given the various regulatory requirements for long-range
planning and budgeting for capital improvements in healthcare organizations, these
organizations commonly have such a combination of long- and short-term budget
periods.
The accounting period encompassed by the overall budget framework is the fiscal
year. The fiscal year may or may not coincide with the calendar year. In the past,
many hospitalsespecially teaching institutionsused the July through June cycle,
which tended to reflect the movement of house staff at the end of the teaching year.
In recent years, however, a number of government entities have encouragedand in
some instances have essentially requiredthe adoption of the calendar year as the
fiscal year.
Within the accounting year, there are a number of accounting periods. It is
common practice to keep track of payroll and certain other expenses on the basis of
1, 2, or 4 weeks and to accumulate this information for 13 4-week accounting
periods in the year; however, other important financial information is accumulated
by calendar month either because it is necessary to do so or because this is clearly
the most sensible data collection period.
Because of the inevitable presence in the budget of some information in 2- and 4-
week increments and some in full-month increments, it is usually necessary to
manipulate some of the figures by adding in or backing out certain amounts at either
end of a period to have complete financial information for the period of interest.
Periodic Moving Budget
Another approach to the definition of budget period is the periodic moving budget.
In the moving budget, the basic forecast for the year is adjusted as specific periods
are completed. As each period is completed, an equal time period is added:
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The periodic moving budget allows the manager to make use of the more up-to-date
information that becomes available as each period closes and, therefore, to make a
more accurate prediction. In organizations using the 500-day plan or similar longrange plans with periodic (e.g., 200-day moving update) review points, this type of
budgeting is the natural process.
Milestone Budgeting
In milestone budgeting, the budget periods are tied to subsidiary plans or projects.
As these milestone events are accomplished, costs can be determined and budget
allocations for the next segments of the project can be established. The budget
periods are not uniform but rather depend on the projected time frame for the
subsidiary plan. During the implementation of the electronic health record, for
example, several milestone events would be noted, with budgeting forecasts
associated with each segment. Milestone budgeting usually covers more than one
year. Recall the discussion of project management and the 500-day plan in Chapter
5 as an example of periodic and milestone budgeting.
TYPES OF BUDGETS
The budget may be developed to give emphasis to one of several aspects of the
overall plan. The revenue and expense budget is the most common type of budget. It
reflects anticipated revenues, such as those from sales, payment for services
rendered, endowments, grants, and special funds, and it includes expenses, such as
costs associated with personnel, capital equipment, or supplies. In the personnel or
labor budget, projections are based on the number of personnel hours needed or the
types and kinds of skills needed rather than on wages and salaries, as in the
personnel costs of the revenue and expense budget. A production budget expresses
the information in terms of units of production, such as economic quantities to be
produced or types and capacities of machines to be used.
The fixed budget presumes stable conditions; it is prepared on the basis of the
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best information available, such as past experience and forecasting. The plans,
including cost and expense calculations, are made on the basis of this expected level
of activity. The variable budget concept was developed because operating costs, and
level of activity may fluctuate. For example, a university may calculate its unit
budgets according to credit hours generated, but student enrollment may be lower
than anticipated; a hospital may use dollars per patient-day or average census as its
basis, but the daily census in the hospital may drop and remain low. Thus, costs and
expenses are established for varying rates. As actual income and operating costs
become known, the budget is adjusted. The periodic moving budget is used with
variable budgeting, as is the step budget.
The step budget is a form of variable budgeting in which a certain level of
activity is assumed and the impact of deviations from this level of activity
calculated. If the manager wishes to show several possibilities predicated on various
factors, such as level of production or number of clients served, the step budget is
used. These other levels may be greater or less than the basic estimate. For example,
a step budget showing probable estimates plus pessimistic and optimistic allowances
might be developed. The advantage of using the step budget is that it permits (or
even forces) the manager to examine the actions required in the event of a variation
from the estimated revenue and expense. When a step budget is prepared, the fixed
costs and revenuesthat is, those that are not tied to volume of service, production
levels, or other factors related to operational costsare stated. Then the variable
revenues and costs are calculated according to the volume of service, operating
costs, anticipated revenues, and similar factors.
The master budget is the central, composite budget for the total organization; all
the major activities of the organization are coordinated in this central budget. The
department budgets are the working, detailed budgets for each unit; they are highly
specific so as to permit identification of each item as well as close coordination and
monitoring of revenue and expense. To coordinate the several department or unit
budgets into a master budget and to make budget processes consistent, a uniform
code of accounts and specific cost centers must be developed.
The Uniform System or Code of Accounts
The standard classification of expenditures and other transactions made by an
organization is the uniform system or code of accounts (also referred to as the
uniform chart of accounts). Such a uniform code of accounts contains master codes
and subdivisions to reflect such information as the specific transaction (e.g.,
personnel expense, travel expense, capital improvement) and the organizational unit
within which the transaction occurred (e.g., food service, human resources, public
relations). The delineation of the specific organizational unit facilitates
responsibility reporting, because it becomes possible to relate specific expenditures
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to the manager in charge of that organizational unit.
The chief financial officer of the organization develops the necessary guidelines
for a uniform chart of accounts. These guidelines typically reflect those of national
associations of healthcare financial management professionals. These account codes
are used in the budget to group line items, such as a purchase requisition or a
position authorization request. Account codes for a particular institution might
include:
200 Furniture
210 Capital Equipment
520 Equipment Rental
530 Equipment Maintenance and Service Contracts
580 Purchased Services (e.g., an outside contract with a coding and abstracting
service)
600 Education and Travel
610 Dues and Subscriptions
Budget worksheets are coordinated with these account codes, with specific items
listed, line by line, under each account code. Line item is a term commonly used to
refer to such specifications. For example, the worksheet for budget preparation and,
subsequently, the line items of the budget for the category of Dues and
Subscriptions reflect the item in detail and the unit with which it is associated:
The code of accounts varies from one institution to another; the items and costs
given here are for illustrative purposes only.
Cost Centers
An activity or group of activities for which costs are specified, such as food service,
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maintenance and repairs, telephone service, and similar functions, is a cost center.
Usually predetermined, cost centers generally parallel the department or service
structure of the organization. For example, direct patient care cost centers, with their
associated codes, may include:
45 Physical Therapy
46 Occupational Therapy
47 Home Care Program
48 Social Services
49 Radiology
Administrative cost centers may include:
50 Computer and Information Service
51 Health Information Service
52 Admissions Unit
53 Food Service
Additional cost centers reflect costs associated with the overall expense of
operation:
1 Employee Health and Welfare Benefits
2 Depreciation: Buildings and Fixtures
3 Depreciation: Equipment
4 Payroll Processing
Responsibility Center
A unit of the organization headed by an individual who has authority over and who
accepts responsibility for the unit is a responsibility center. These centers parallel
the organizational structure as outlined in the organizational chart. The departments
or services are responsibility centers, each with its detailed budget. The cost center
codes and responsibility centers normally parallel one another.
APPROACHES TO BUDGETING
The two major approaches to the budgeting process are incremental budgeting and
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the zero-based system (historically referred to as the planningprogramming
budgeting system [PPBS]; currently referred to as planningprogramming
budgetingexecution, or PPBE).
In incremental budgeting, the financial database of the past is increased by some
given percentage. For example, the personnel portion of the budget may be
increased by a flat 5% over the last budget period allotment, capital expenses by 7%,
and supplies by 4%. There is some efficiency in this approach, because the projected
calculations are relatively straightforward. There is also a danger, however;
significant changes, shifting priorities, or pressing needs within some unit of the
organization may be overlooked. As with incremental decision making, there is an
implicit assumption that the original money and resource allocation was
appropriately calculated and distributed among organizational units. Incremental
budgets are object-orientedthat is, they are developed in terms of personnel,
materials, maintenance, and supplies. Traditional budgeting is control-oriented,
whereas PPBS, or PPBE, is planning-oriented.
The PPBS was mandated in the Department of Defense in the early 1960s. PPBS
(or a similar performance-based approach), as the name implies, emphasizes the
budgeting process in systems terms. The outputs for specific programs are assessed,
and resource allocation and funding are related directly to the program goals. It is
also referred to as zero-based budgeting because past dollar allocations are not the
basis of projection.
A major feature of this approach is its departure from the traditional 1-year
budget cycle. Funding is projected for the period of time (frequently 3 or more
years) needed to achieve the goals of the program. In the planning phase, the general
objectives are stated and refined, the projected schedule of activities is established,
and the outputs are specified. These refined objectives are grouped into programs,
resulting in a hierarchy within the plans.
The alternate means of achieving the plans are assessed through costeffectiveness analysis. Units of measure for the outputs are developed (e.g., number
of clients to be served, length of hospital stay, geographical area to be covered).
Costs and resulting benefits for each approach are calculated, and the best
alternative in terms of costbenefit ratio is selected. With this approach, managers
seek to increase the number of factors that can be used to provide top-level decision
makers with sufficient information to make the final resource allocation. An
adequate information system is, therefore, required; this is consistent with the classic
systems approach, which includes an information feedback cycle.
The PPBS approach has several disadvantages. First, it is a time-consuming
process, involving long-range planning, development and comparison of alternatives
in terms of cost-effectiveness, and final budgeting. Second, not all goals can be
stated precisely; not all worthy objectives can be quantified in specific measures,
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with a specific dollar cost attached. Third, there is the presumption that all
alternatives are known and attainable. Fourth, the value, the legitimacy, and the
actual survival of the program or organization are questioned. This, in turn, reopens
conflict and exposes the accumulation of internal and external politicsthe power
plays, the bargaining, and the trade-offs that have developed over time. The concern
for program survival may intensify to the point that line managers may seek to
withhold negative information, and the feedback cycle may become distorted.
Although the zero-based budgeting approach is probably not used in preparing
the routine budget for the ongoing operations of the organization, it is the approach
underlying the cost justification for special projects of great magnitude. For
example, the managers of a healthcare facility might commit to a major change in
computer applications or support systems. Millions of dollars may be involved in
the conversion to the new system. Detailed analysis of the project will typically
include cost comparisons of several vendor options, with specifics provided for
each. Cost breakouts for such a project are presented by category, such as illustrated
in the following example:
Financial services module:
Application software $700,000
Software maintenance/yearly $150,000
Implementation services $600,000
(one-time cost in year one)
Training:
No cost in year one; included in implementation
Annual cost for consultant training staff $90,000
Licensing feesannual $50,000
(subject to review at end of 3 years)
In both approaches, the budgeted funds are used during the designated period,
with any unspent funds being turned in at the end of the fiscal year. However, some
organizations follow a revenue retention rule to reward efficiency: a department
keeps a portion of unspent funds at the end of the year to augment the upcoming
years funds.
THE BUDGETARY PROCESS
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Initial Preparation
The budgetary process is cyclic; the feedback obtained during one budget period
becomes the basis of budget development for the next period. The budget process
usually begins with the setting of overall limits by top management. The supply
chain manager is a key participant throughout the budgeting process, overseeing
procurement, vendor compliance, and contracts. The specific guidelines for budget
preparation reflect the mandatory federal, state, and accrediting requirements as well
as union contract provisions and the financial assets of the organization. The
timetable and particular forms to be used in budget preparation are issued along with
these guidelines.
Development of the unit budget is the specific responsibility of the department
manager. In some instances, a department manager may wish to use the grassroots
approach to budgeting, in which unit managers or supervisors prepare their budgets
and submit them to the department manager for coordination into the overall
department budget. The supervisors or unit managers must, of course, be given
sufficient information and guidance to carry out this function. An alternative way of
involving supervisors and subordinates is to ask for suggestions about equipment
needs, special resources, or supplies. In highly normative organizations, such as a
university, there may be an advisory or review committee composed of selected
employees who make recommendations to line officials regarding budget
allocations. In any event, the department head bears the responsibility for final
preparation, justification, and control of the budget.
During the budget preparation phase, the manager reviews, challenges, and
updates the working assumptions. Trends are noted, priority needs are identified,
and initiatives for the upcoming year are stated. Effective managers rely on a
continuous process of gathering facts throughout the year. Information includes
changes in workload quantity and patterns (e.g., an increase in the number of
industrial health-related cases, the opening of a satellite clinic for school health).
Equipment and maintenance logs reflect the useful life estimates or depreciation
values of all major items, including the cost of maintenance and repair. Delayed
maintenance of the physical structures is noted. The department history log (similar
in concept to the classic wheel log of a ships captain) is reviewed; this log shows
the ongoing history of departmental changes in systems and in departmental capital
improvements (e.g., rewiring, painting) as well as major systems changes (e.g.,
introduction of off-site storage, ongoing conversion from hard copy to electronic
health records).
The availability of previously unavailable external resources is identified, as in
ensuring the availability of a reliable transcription service for outsourcing this
function in health information services. The increased availability of specialists in
an area of occupational therapy opens up the possibility of introducing new service
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in that unit of patient care.
Major trends in the field of professional practice, along with emerging
department issues, are noted and appropriate initiatives stated. A department
managers initiatives might include increasing retention through in-service
education programs and bonus or incentive plans, developing more specialist
coverage, upgrading work stations, introducing new treatment modules, or
developing outreach programs in community-based locations.
The Review and Approval Process
Competition, bargaining, and compromise in the allocation of scarce resources
personnel, money, and spaceoccur in the review-and-approval phase of the budget
process. It is important for the manager to have the necessary facts to support budget
requests; control records to demonstrate fluctuations in the workload, staffing needs,
equipment usage, and goal attainment are essential sources of such information.
The internal approval process begins with a review of the departments budget by
the department heads immediate budget officer. Compliance with guidelines is
checked, and justifications for requests for exceptions are reviewed. The
organizations designated financial officer may assist the chief executive officer in
coordinating the department budgets into the master budget for the organization, but
the chief executive officer is the final arbiter of resource allocation in many
instances.
There is continuing emphasis, both within the organization and from external
pressures, on cost containment, and a cost-containment committee may be involved
in the budget review process. Current voluntary efforts contribute to the
routinization of this aspect of budget review. Cost-containment committees vary in
structure and mandate, but their tasks typically include advising, investigating, and
even participating in the implementation of cost-containment measures. Such a
committee should have a questioning attitude as its primary philosophical stance;
data are scrutinized and compared in an effort to identify areas where costs can be
contained.
The budget hearing or review provides the department manager with an
opportunity to make the case for his or her unit. Forthrightness and thorough
preparation should characterize the managers presentation. As the individual closest
to the special issues of the particular unit, the manager should use this occasion to
brief higher-level managers on critical issues. The manager should indicate
willingness to trade off certain costs so that another department, with a more
pressing need, may be accommodated; in turn, the manager should be able to make
the argument for why such a trade-off is not possible. A manager might be willing to
defer major improvements as well as routine maintenance (such as annual painting
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of the department) until another year, thereby freeing money for use by another
department needing new equipment or increased staffing. This deferred maintenance
might be tied to planned changes for the coming year, such as implementation of a
major upgrade in equipment because of a technological change not yet available this
coming budget year but definitely available in 2 more years. Instead of viewing the
budget process as a winlose proposition, a manager could partner with other
department heads to preview mutual needs and trade-offs, thus fostering a winwin
approach.
The customary planning approach of overaim or contingency planning is the
usual principle followed in budget development. During the budget review, the
manager would be prepared to give an optimistic, best-case scenario estimate (e.g.,
revenue increased, turnover decreased); a worst-case scenario, with definite
indicators of expenditures that can be reduced or cut should this become necessary
at a later time in the budget year; and a middle-ground estimate. During the review
process, the values of open communication and integrity are paramount so that
prudent, cost-effective decisions can be mutually agreed on.
The final approval for the total budget is given by the governing board. In
practice, a subcommittee on budget works with the chief executive officer, and final,
formal approval is then given by the full governing board, as mandated in the
organizational bylaws or charter of incorporation.
The budgets of organizations that receive some or all of their funds from state or
federal sources may be subject to an external approval processfor example, by the
state legislature or the federal budget bureau. A certain predictable drama in the
budget process becomes more evident in the external review process. There is a tacit
notion that budgets are padded because budget requests are likely to be cut. The
manager attempts to achieve a modicum of flexibility in budget maneuvering
through overaim. There is also a necessary aspect of accountability, however. The
public more or less demands that federal or state officials take proper care of the
public purse. Even as clients (the public) seek greater services, they want cost
containment, especially through tax relief. Public officials, then, must dramatize
their concern for cost containment, partly by a highly specific review of budget
requests and a refusal to approve budgets as submitted.
Conversely, should an agency request a budget allocation that is the same as, or
less than, that of a previous year, it might be seriously questioned whether the
agency is doing its job. At best, the manager must recognize the subtle and overt
political maneuvers that affect the budget process.
Implementation Phase
The final phase of budgeting is the implementation stage, when the approved budget
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allocation is spent. During this phase, revenues and expenses are regularly compared
for example, through periodic budget reconciliation. Should revenues fall short of
the anticipated amount or should unexpected expenses arise, there may be a budget
freeze or certain items may be cut. For example, overtime may be prohibited;
personnel vacancies may not be filled, except for emergency situations; and supplies
or travel money may be eliminated.
Specific internal procedures must be followed to activate budgeted funds in the
normal course of business. For example, the budget may contain an appropriation
for certain supplies, but a companion requisition system must be used to effect the
actual purchase of such supplies. When an individual worker is to be hired, a
position authorization request may be used to activate that position as approved in
the budget. Finally, during the budget year, preparation for the following budget
period is made, bringing the manager full circle in the budget process (Exhibit 81).
Budget variance review and the periodic audit are discussed later in this chapter.
EXHIBIT 81 Annual Budget Plan: Based on Fiscal
Year July 1 to June 30
CAPITAL EXPENSES
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An organization owns and operates capital facilities of a permanent or
semipermanent nature, such as land, buildings, machinery, and equipment. Capital
budget items are those revenues and costs related to the capital facilities. These
expenses may be centralized as a single administrative cost for the entire
organization, or they may be specified for each budgetary unit. The manager at the
departmental level is normally concerned primarily with capital improvements for
the department, such as acquisition of additional space, renovation and repairs,
special electrical wiring, and painting.
The second capital expense in the departmental budget is major equipment. The
equipment budget usually includes fixed equipment that is not subject to removal or
transfer and that has a relatively long life. Major equipment that is movable is also
included. The distinction between major and minor equipment is usually made on
the basis of the cost and life expectancy of the item; major equipment commonly
includes any item over a specific cost (e.g., $1,000) that has a life expectancy of
more than 5 years. As with other aspects of budgeting, however, a specific
organization may use some other cost or life expectancy factor to define major
equipment/capital equipment expense. Major fixed equipment includes the heating
fixtures, built-in cabinets or shelves, and appliances. Major movable equipment
includes file cabinets, patient beds, computer stations, and a variety of treatment
modular equipment.
When budgeting for major equipment expenses, the manager may calculate the
acquisition cost and prorate this cost over the expected life of the equipment.
Depreciation costs are a factor in equipment selection. The budget guidelines
developed by the chief financial officers staff includes reference tables for
estimating the useful life of major equipment and a formula to calculate composite
depreciation rates for each unit of equipment. Vendors for major equipment
generally provide depreciation data as part of the support information relating to
their products. An item that is more costly to acquire may be less expensive in the
long run because of a lower operating cost, longer life expectancy, or slower rate of
depreciation. This information should be included on the supplemental information
forms used to justify equipment selection.
The worksheet for capital expenses includes the account code number from the
uniform code of accounts, item description, unit cost, quantity, and total cost
(Exhibits 82 and 83).
SUPPLIES AND OTHER EXPENSES
The many consumable items that are needed for the day-to-day work of the
department are listed under the category of supplies. It may be tempting at first to
group all these items under Miscellaneous, but the clear delineation and listing of
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such items in the appropriate budget category alerts the manager to the magnitude of
these costs and facilitates control. Items considered consumable supplies typically
include routine items such as pens, pencils, notepads, letterhead stationery, staples,
scissors, rubber bands, and paper clips. Such detailed calculations for these kinds of
supplies may seem tedious, but the dollar value of these items is, in fact, significant.
The stockpiling of unnecessary quantities takes up space, invites petty theft, and
may lead to excess inventories of items that become outdated (e.g., forms, specialty
supplies for equipment no longer in use). Common-sense practices of regular
inventory control and good recordkeeping by an office manager provides a
department head with both the planning and the control appropriate to a seemingly
incidental cost. Postage is included in this category unless it is absorbed as a central
administrative line item.
EXHIBIT 82 Sample Worksheet for Capital
Expenses: Health Information Services
EXHIBIT 83 Sample Worksheet for Capital
Expenses: Physical Therapy
A given department may have special consumable supplies that are essential to
its operation. The direct patient care units incur expenses related to medical and
surgical supplies, for example. The clinical laboratory has a major expense in
reagents. A health information department may have continuing expenses associated
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with the transition from hard copy records to electronic media. Thus, there may still
be a need for color-coded, preprinted folders used for patient records. Special forms
approved and mandated for medical record documentation (e.g., the fact
sheet/identification sheet used in the admission unit, the preoperative anesthesia
report form used in the surgical unit, the laboratory requisition/report form for
laboratory studies) may be charged to each department as they are requisitioned and
used. An alternative practice is to charge the health information department or
central forms design unit with the cost of all preprinted forms. When the emphasis
in the budgeting process is on control, however, it is preferable to charge the unit
using such supplies so that administrative control may be fixed.
EXHIBIT 84 Sample Worksheet for Supplies and
Other Expenses: Health Information
Services
Special expenses commonly incurred at the department level include the lease
and rental of equipment; the purchase of technical reference books, software, and
periodicals; training and education costs; and travel and meeting expenses.
Contractual services for a special activity (e.g., transcription, statistical abstracting,
special laboratory studies) are included under the expense category.
The worksheet for budget requests for supplies and expenses typically includes
the required account number from the organizations uniform code of accounts, the
item description, the item cost, and the total requested (Exhibit 84).
Notice that the budget worksheets reflect the totals for each line item. The
manager retains the detailed calculations in a working file for reference during
budget presentation and then for use during budget implementation. These working
files contain levels of detail about specifications such as brand names, software
details, discounts, and usual vendors. Examples of such details include the following
working file notations:
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Books, Subscriptions, and Training Materials $600.00
Webinars and DVD Seminars for Training $800.00
Coding Update for Emergency Department Services $161.00
Hospital Outpatient Reporting Module $242.00
Nonphysician Practitioner Services: Coding and Reporting $190.00
Notes to file: Obtain from AHIMA as authoritative source; also use discount by
purchasing four at one time. These references are needed for coding and reimbursement
update for the coming year. All will need annual replacement.
Maintenance and Repair
Cost allocations are made under this category to reflect both routine maintenance
and occasional repairs. Two approaches to these arrangements are:
1. The fee-for-service plan: Payment is made for time and materials per service.
The price may vary, usually by way of an increase, but this method may be
cost-effective for equipment that is new and still under warranty. Newer
equipment generally needs few repairs, if any, early in life.
2. The service agreement: A contract, with fixed cost, is made with a service
company. This agreement typically includes preventive maintenance as well as
rapid on-call service. For departments having a mix of new and older
equipment, such plans are cost-effective.
A mix of the two approaches is a third possibility. Cost comparisons of these
approaches would provide the manager with a basis for decisions in this matter.
Specialty References and Licensure Software
A required line item is associated with the legal requirement to pay licensure fees
for software packages. Specialty software is needed in most departments, and the
associated licensing fees are generally charged to the department. This is a line item
that must be calculated in detail and may not be cut even when other expenditures
must be reallocated. The budget justification document is the licensure software
agreement, which specifies this obligation to pay a periodic fee for usage.
Specialty references (books, periodicals, and software) constitute another
consideration for resource allocation. Certain references change from year to year,
reflecting external agency requirements and practices. Examples include the latest
interpretations of coding and reimbursement guidelines, accrediting standards,
prescription drug references and compendia, and guidelines on certain aspects of
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clinical practice. These references are needed for the proper processing of mandated
reimbursement practices. As with software licensure agreements, some of these
costs cannot be omitted or reduced. These items are, of course, differentiated from
other journal subscriptions, software, or references that, although highly desirable
and convenient, are not absolutely necessary and could be cut should a financial
emergency occur.
Staff Development
This set of line items reflects costs associated with staff development, including
travel and training opportunities and material. Costs associated with travel are
among the most vulnerable of line items. The manager should have a welldeveloped rationale for such expenditures; these costs should be linked to specific
departmental and organizational goals, with their related projects. For example,
attendance by the manager at a national meeting of a professional association
provides the manager with opportunities to preview systems and equipment on a
scale not available locally. Such a meeting may also provide critical updates
concerning new mandates, as well as methods of complying with existing
requirements such as accreditation, risk management, or reimbursement
requirements. Specialty-oriented tutorials may be available at such events, providing
the manager with updated skills that he or she can then teach to department staff.
For example, a hospital may be planning to increase its observation unit capacity;
health information services must, therefore, be up-to-date in the coding and billing
strategies under outpatient payment systems. Attendance at a training session at a
national meeting would pay dividends because of the resulting upgrade in coding
and billing quality.
In developing travel budget estimates, the general policies of the organization are
followed; for example, travel should be conducted by the most cost-effective means,
with lodging and per diem limits specified. As part of recruitment and retention of
specialty staff, managers (with appropriate approval) sometimes offer a guaranteed
amount of time and money for such travel. When such agreements have been
entered into, that part of the travel cost is a given and may not be cut.
Examples of cost calculation associated with training, along with ideas for cost
justification, are included in Chapter 9.
THE PERSONNEL BUDGET
The cost of personnel is typically the largest category of expense in the budget of a
healthcare organization, accounting for as much as 85% of the total budget in many
cases. Personnel costs include the wage and salary calculation for each position and
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for each worker, including anticipated raises (e.g., cost of living increases, merit
increases) and adjustments resulting from a change in status (e.g., from probationary
employee to full-time, regular employee). The department manager normally
calculates these costs. Special justification for an increase in the number of positions
or for adjustments to individual salaries or wages is also included.
Also calculated and justified by the department manager are those costs
associated with vacation relief, overtime pay, temporary or seasonal help, and signon bonuses. Specific support information may be required for these budget requests,
such as a calculation of the personnel hours required to give proper departmental
coverage and a calculation of the hours not available to the organization because of
vacation time and holidays. If there is a high employee turnover rate or a distinct
pattern of absenteeism, historical information, such as the average time lost over the
past year or several years as a result of these circumstances, may be cited as support
information.
In calculating the costs for personnel needs, the manager deals with impersonal
coststhat is, those costs associated with the position, regardless of the incumbent.
Such costs include the wage or salary range for the position and the number of fulltime equivalent (FTE) positions. In addition, there are other costs that are associated
with the incumbent and change with the holder of the position; these costs include
those associated with the number of hours scheduled for work each week, the
number of years in the job category, the eligibility for merit increases, and the
anniversary date for a scheduled increase in pay. The following factors must be
considered in any budget calculation:
1. Minimum wage. Federal and state laws mandate a base pay rate for certain
jobs. Some categories of temporary help may be exempt from this wage; the
manager must seek the guidance of the human resources specialist for details
of this provision.
2. Union contract stipulations. Each class of job and each incumbent must be
reviewed in light of contractual mandates for basic wage as well as mandatory
increases. Where there is more than one contract in effect, the provisions of
each contract must be reviewed and applied as appropriate. Wage and salary
increases on a straight percentage basis may be mandated. In some cases, the
contract may state that either a given percentage or a flat dollar amount,
whichever gives the greater increase, is to be awarded. A hiring rate may be
indicated for employees on new-hire status; a related job rate may be
indicated, with the employee moving to the job rate at the end of the
probationary period (Table 81).
3. Organizational wage and salary scale. Except for the specific provisions of
union contracts, the organizational wage and salary scale applies. Positions are
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listed by job category or class, and the individual employees rate is calculated
from this scale. Increases may be in terms of a percentage or in terms of step
increases dependent on the number of years in the position.
4. Cost of living increase. The organizational guidelines or contract provisions
establish cost of living increases. Frequently, this amount is given as a flat
percentage increase added to the base rate of pay, although it may be given as
a flat dollar amount added to the base rate of pay.
5. Area wage and salary considerations. Periodically, benchmark data are made
available within a geographic region. Such data are generally developed by a
chamber of commerce group, regional healthcare organizations, or labor
unions, to reflect the market-basket costs of the region. Similar to overall cost
of living calculations reflecting nationwide factors, these area wage and salary
surveys drive the costs associated with hiring and retention of workers. These
data are usually refined to reflect several variables: size and complexity of the
healthcare organization, profit versus nonprofit enterprises, years on the job,
and specialty training and credentialing.
6. Merit raise or bonus pay. These costs may be shown as an overall amount
given to the department as a whole. The manager may not be able to assign
dollar amounts to an individual worker at the beginning of a year, because the
merit award may not be given until some time period has passed and the
worker has earned the increase. Specific guidelines are given to the manager
concerning the calculation of merit or bonus pay as part of the base rate of pay
or as a one-time increase that does not become part of the employees base rate
of pay.
7. Special adjustments. From time to time, a special adjustment may be made to
the wage or salary structure. An organization that is adjusting its wage and
salary structure to satisfy Equal Employment Opportunity Commission
mandates may grant a one-time adjustment to a class of workers or an
individual (e.g., women and/or minority workers) to bring their rate of pay in
line with other workers pay scales. When long-term employees rates of pay
shrink as compared with those of incoming workers, a special one-time
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adjustment may be made to keep the comparative wages of new versus longterm employees equitable.
The budget worksheet or budget display sheet generally includes the following
items, which progress logically from the factual information based on the present
salary of the incumbents to the projected salary through the coming budget period:
1. Position code or grade code, obtained from the master position code sheet for
the department and organization.
2. Position description: abbreviated job title or category.
3. Budgeted FTEs: the number of personnel hours per position divided by the
hours per full-time workweek. Example (based on a 40-hour workweek):
Worker A 40 hours
Worker B 27 hours
Worker C 20 hours
Worker D 13 hours
Total = 100 hours = 2.5 FTEs
4. Employee number, usually assigned by personnel division or payroll division
for identification of payroll costs and employee records.
5. Employee name: name of incumbent. If position is vacant, this information is
noted.
6. Actual FTEs: number of employed workers and number of vacancies (see
Exhibit 85 for an example of calculating FTEs in the health information
department budget process).
7. Current rate of pay: hourly rate, biweekly rate, or job rate. The hourly rate is
calculated by dividing the total salary by the number of work hours per budget
period, and the biweekly rate by dividing the total salary by 26. The job rate is
usually specified in the wage scale, especially as given in a union contract.
8. Projected annual base salary, calculated by multiplying the rate by the
appropriate unit of time. This projected salary is specific to the incumbent.
Should the incumbent separate from the organization with the replacement
worker hired at entry-level pay, the annual base salary would be lower.
EXHIBIT 85 Calculating FTEs for Health
Information Services
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To calculate the number of employee hours needed to process the work in a
given function, the manager first establishes the basic definition of a full-time
equivalent position. This calculation is based on the usual workweek as defined
by the facility:
1 FTE = 40 hours/week
40 hours/week 52 weeks = 2,080 hours/year
The hours needed may be concentrated in one full-time position or distributed
between two or more part-time workers to total 2,080 hours/year. The latter
method provides flexibility.
The second part of the staffing calculation consists of estimating the volume
of work to be done.
Work standard: 24 minutes to process one request
Volume per day: 30 requests
30 requests 24 minutes = 720 minutes needed
1 FTE = 480 minutes per work day
1.5 FTE needed to process 30 requests per day 480/720.0
Needed: 1.5 FTE to process 30 requests per day.
9. Incumbents anniversary date, used to calculate cost of living or other raise
associated with date of employment.
10. Projected annual increase because of cost of living increase, merit or bonus
pay, or special adjustments.
11. Projected total salary: present salary plus projected annual increase.
Example
Grade Code 4
Position Title Compliance Specialist
Shift Full-time, day
Incumbent M. Caretto
Current Biweekly Pay $1,575
Projected Annual Base $40,950
Anniversary Date Dec. 20 of current year
Projected Annual Increase $1,250
Projected Total Salary $42,200
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Hours per Pay Period (biweekly) 80 hours
DIRECT AND INDIRECT EXPENSES
A department budget also reflects costs under the categories of direct and indirect
expenses. Direct expenses typically include salaries, services and contracts, dues and
subscriptions, and equipment. Indirect expenses are charged to the departmental
budget on a formula basis or some process of assessment. These indirect costs are
associated with the organization as a whole and are prorated per department.
Examples of indirect costs and their units of assessment are shown in Table 82.
BUDGET JUSTIFICATION
As mentioned earlier, support or explanatory documentation may be required for
budget requests. If a particular type of equipment is requested, the manager is
expected to explain why that particular model or brand is needed. The reasons may
include compatibility with existing equipment, guaranteed service contracts,
availability, or durability. Projected patient usage is another element of support data;
the acquisition of a particular item may enhance patient care because of its safety
features.
Sometimes the facility may need an item simply to remain competitive and
thereby retain a given patient population. The budget justification may take the form
of a cost comparison, such as that between rental or long-term lease of equipment
and outright purchase plus maintenance costs. For a health information department,
a cost comparison between an in-house word processingtranscription unit and a
contractual service might be included.
The Budget Cut
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When financial exigencies warrant a budget adjustment, either in the form of a
partial reduction in a line item or category or the elimination of an entire
expenditure, the manager uses the budget justification details to guide this process.
Certain items cannot be cut (e.g., software licensure agreements, sign-on bonuses
promised to specific employees). The manager looks to those categories of planned
overage to determine which items to reduce or cut. For example, desired staff
training programs may be best accomplished by sending workers off-site, but
adequate programs could be developed by the management staff and offered at
substantial savings.
Similarly, bulk purchases (e.g., a 3-year supply of custom-designed forms) could
be cut back to the purchase of 1-year supply. The discount for the bulk rate might be
lost, but in a tight budget situation of a given year, this more limited expenditure
might be necessary to meet the bottom line. Another option might be available
from wage and salary lines: a manager could delay hiring a replacement when a
vacancy occurs. The wage and fringe benefit amount could be used to pay for a
temporary or contract worker. By delaying the hire of the new full-time worker until
the next fiscal year, the pay increase is also saved. Alternatively, the manager could
fill the position immediately but at an entry-level pay grade.
Cost Comparison
Budget justification also includes cost comparison. One example would be that of
comparing costs of in-house or outsourced medical transcription/editing. This type
of information would also be the basis for requests for proposals when the selection
process is implemented.
BUDGET VARIANCES
During the fiscal year, the manager receives periodic reports showing budgeted
amounts versus amounts spent. This report may categorize such information under
the headings of overbudget or underbudget for the period and for the year. The
manager uses this information as a monitoring and control device. A particular
units budget may include money for overtime that is assigned arbitrarily to budget
quarters. A periodic report may show that the manager was overbudget in that
category for the quarter but not for the year. Such a report is an internal warning
system that alerts the manager to that line item. Filed with higher-level management,
the variance report reflects the managers awareness of the expenditure for the
quarter and its relationship to the yearly amount as a whole. Should there be some
unexpected cause for using these overtime funds, such as high absenteeism because
of employee illness or injury, this information is noted in the variance report.
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Underbudget indicators require similar explanations as part of the control process
in budgeting. Explanations for underbudget items are not required in every instance,
but particular attention must be given to large sums that have not been spent because
of delay factors in the outside environment. For example, the purchase of a large,
expensive piece of equipment may be included in the budget for the fiscal year. If it
is not available until the next fiscal year, the delay could throw a carefully planned
budget out of balance; that is, funds are not expended in the year, and no funds are
allotted for this purchase in the upcoming budget. The manager should anticipate
such a situation and make arrangements for the transfer of funds in a timely way.
Direct patient care service budgets include projections of care to be rendered.
Actual revenue generated per patient visit is compared with projected revenue. The
explanationsoverprojections or underprojections of care to be renderedare made
by the budget officer for the service. If patient care services are below those
projected, plans for increasing services may be included with the explanation.
Example of Variance Analysis
Exhibit 86 displays a year-to-date summary of expenditures. The fiscal year in this
example runs from July through June. This report reflects year-to-date costs as
posted through April 30, the close of the third quarter. The department manager
reviews these figures for the following purposes:
1. Verify the accuracy of posting (making sure costs are posted and none are
omitted due to error). The department daily ledgers are compared to this
official listing prepared by the finance office.
EXHIBIT 86 Summary of Expenditures, Year-toDate
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2. Review specific object codes where the actual costs exceed the approved
budgeted amounts. An item may be over budget for the period but not for the
year. The manager would note these and prepare explanations.
3. Review specific object codes where actual costs are below the approved
budgeted amounts. If the allotted money is not going to be spent in the
approved category, the manager may seek approval to use these funds for some
other need. Particular attention is given to an underbudget category in which a
major expense has been, or soon will be, incurred but that has not yet been
posted. Object code 138, Computer License Agreement, reflects a major cost
yet to be postednamely, the fourth-quarter payment.
THE GENERAL AUDIT
Through the related processes of posting entries to the proper line items, monitoring
variances and explaining their causes, and tracking each item from its budgeted
approval entry through its actual expenditure, the manager has developed an audit
trail. The required forms, documentation, and approvals for actual expenditures all
dovetail with these practices to provide sound control over the financial resources.
The department manager will usually carry out periodic partial audits during the
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fiscal year, and both internal and external auditors will carry out a full audit at least
once during the year.
Examples of such audit practices include the prevention of ghost employees or
ghost patientsevery employee will be clearly identified as to job title, hours
worked (payroll data), and paycheck issued and processed. In some organizations,
all employees must sign in person for paychecks on a random or regular basis to
prevent such potential fraud. The audit trail of a given patient is easily tracked: (1)
the master patient index provides name and other identifying information, (2) a
complete and accurate patient care document should match this information, (3)
names of care providers are matched against provider rosters, and (4) billing records
are matched against the documentation of the care.
Similarly, expenses relating to purchases of equipment can be tracked by noting
the purchase requisition, the installation date, the actual location of the equipment at
the time of the audit, and the appropriate entries in the equipment inventory.
The Audit Committee
An audit committee is formed to assist the board of trustees in fulfilling its oversight
responsibilities. This committee monitors the integrity of the organizations
financial statements and its compliance with legal and regulatory requirements (e.g.,
the Centers for Medicare and Medicaid payment/fraud controls) and works with
independent outside auditors. The committee also reviews and monitors compliance
with ethical codes for senior financial officers, chief executive officers, and
department managers. The organizational values of integrity and stewardship are
promoted through such ongoing activities, closing the loop from plan through
execution, with each step properly documented.
SAMPLE BUDGET: HEALTH INFORMATION
SERVICE
Note: The figures are only examples. Actual rates will vary geographically and over
time. The sample budget has been revised from that appearing in the previous
edition to reflect current job titles, categories. and wages.
Background planning notes for upcoming fiscal year:
1. Department is in final stages of migration from hard copy records to electronic
health records. Planned completion is in 18 months (all 12 months of
upcoming budget year plus 6 months of the following budget year).
2. Starting July 1, work order charges are $200.00 for initial response to work
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order request. On average, the department has had 14 requests per budget year.
3. The department plans to sponsor an on-site meeting of the regional
professional association and a week-long promotion effort regarding health
information management, privacy, and security. Costs associated with this plan
include food, parking, printing (in house), and promotional/commemorative
items.
4. Books, software, and journal subscription line items include the costs for
updates of coding, billing, and accrediting resources.
Budget premises:
1. Fiscal year: July 1June 30
2. Workweek: 40 hours/week; 2,080 hours/year per FTE
3. Cost of living increase: 5% of current base rate (see Table 83 for detailed cost
of living calculations by position title)
4. Effective date of cost of living increase: January 1
5. Overtime rate: time and a half, based on current base for employee
6. Holiday pay: regular base rate (for employees who work on a scheduled
holiday: double time, calculated on current base for each employee)
7. Temporary agency rate: average rate is $13/hour for clerical workers, no fringe
benefits given
8. Sick pay: calculated on each employees current base
9. Fringe benefits: 29% of total wages and salaries for the department; 29% for
each individual employee
10. Wage and salary calculations are displayed to show these details:
Factor Example
Current annual base $58,000
JulyDecember of current calendar yeartotal
earnings
$29,000
January 1 cost of living increase (5%) $2,900
New annual base effective January 1 $60,900
JanuaryJune of coming calendar yeartotal
earnings
$30,450
Total needed for full 12-month period of the fiscal
year
$29,000 + $30,450 =
$59,450
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Table 83 displays the wage and salary by position and title.
Health Information Department Budget
Personnel Costs
Equipment
324
Supplies
Services
325
Cost Transfers
Summary
Personnel Costs $810,165.00
Equipment $74,945.00
Supplies $64,539.00
Services $44,850.00
Cost Transfers $6,360.00
TOTAL $1,000,859.00
EXERCISE: ADJUSTING THE BUDGET
Using the sample budget for the health information management service, adjust the
budget to reflect the changes described below. Indicate the line item and the amount
of the change, and make any note about the change (e.g., that an item cannot be
eliminated or further reduced). Assume that it is possible to move funds from one
line item to another.
1. What would be the dollar impact if the 5% increase planned for January 1 were
reduced to 3.5% and postponed until April 1?
2. As an alternative cost-saving strategy, determine the annual savings if all
hourly staff were reduced from 40 to 37.5 hours as their standard workweek.
Consider the top three staffdirector, compliance specialist, and registries
coordinatoras salaried and thus unaffected by the workweek change.
3. Determine the total dollar impact if both of the foregoing strategies were
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implemented together. Remember that the pay increase affects everyone, but
the 37.5-hour week affects just the hourly staff.
4. Prepare a request for funding from an external vendor to cover the costs of the
health information management regional meeting and health information
management week outreach efforts.
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CHAPTER 9
Training and Development: The
Backbone of Motivation and
Retention
CHAPTER OBJECTIVES
Acknowledge the importance of and necessity for employee orientation
programs and ongoing training and development activities.
Relate orientation, training, and development to the management functions
of planning, organizing, directing, and controlling to employee motivation.
Identify the components of effective employee orientation programs.
Recommend an approach to communicating standards of conduct and
behavior to new employees.
Identify the components of employee training programs.
Explore the availability of resources for training and development activities.
Identify the components of the clinical affiliation/clinical practice program
and contract.
EMPLOYEE DEVELOPMENT
It is a fundamental responsibility of every manager to endeavor to shape and
enhance the behavior of employees so that they possess the necessary knowledge,
skills, and attitudes to fulfill their assignments according to the policies, rules, and
regulations of the institution. Advances in technology necessitate continual
retraining of experienced employees to perform new and altered tasks. Training and
staff development are the fundamental means by which behavior can be improved to
meet the immediate and long-range needs of the institution.
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Training and development are ongoing activities, beginning with the orientation
of a new employee and continuing throughout the employees tenure with the
organization. Participation in formal orientation and training programs must be
documented for each employee, with copies of all reports provided to the employee
for personal use and placed in the official personnel record of each employee.
Relationship of Training and Development to the Basic
Management Functions
The need for sound orientation and training flows from several considerations. The
mission and values of the organization usually include a commitment to quality.
Certain organizational policies and practices usually reflect the intent and
expectation that internal developmentthat is, promotion from within the
organizationis the norm. Concurrently, the organization continuously seeks to
meet its external mandates, which include requirements for appropriate orientation
and training. The licensing and accrediting agencies include in their surveys and site
visits reviews of such programs. Also, labor contracts may contain explicit
provisions for training programs and related benefits, such as compensatory time for
training programs attended at off-site locations. With the increased attention being
paid to succession planning and the continuity of operations, cross-training for key
positions has become yet another reason for managers to develop appropriate
training programs.
Quality improvement programs and risk management oversight both require
proper orientation and training. Management concerns such as employee evaluation
or performance review, assessment of productivity measures, and the operation of
merit and bonus pay programs all requireif only out of fairness to employees
that all workers be properly oriented and trained for their jobs.
The employee who knows what is expected and how to completely perform the
work is likely to be a productive employee who experiences job satisfaction. When
employees are generally satisfied, complaints, grievances, and job turnover decrease
accordingly. The management team further assists employees in their personal
development and their growth on the job by making additional training possible
for example, through tuition reimbursement benefits, release time for educational
purposes, additional stipends for incidental costs (books, fees, travel), and so on.
As a practical matter, training is necessitated by the need for workers who
possess specific knowledge and skills. When the labor pool in the area does not
provide a ready source of specially trained support staff, managers must engage in
planned training to meet their staffing needs.
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ORIENTATION
A sound beginning for each newly hired employee provides a positive atmosphere
of mutual expectation between the employee and management. Ideally, the formal
orientation will be brief, highly focused, and completed on the workers first day of
employment or as soon as possible thereafter. Orientation is a responsibility shared
by the department head, the human resources department, and other designated
specialists such as those in employee health and safety, information technology
services, and public relations. The orientation program elements common to all
employees are ordinarily developed and coordinated by the human resources
department. Information and special practices associated with a specific department
that is, a departmental orientationis the responsibility of that departments
manager.
General Orientation
The typical content of a general orientation program includes the following
information:
A brief history of the organization along with explanation of its mission and its
vision
The institutions ownership form, mode of governance, and administrative
structure
An overview of the various departments and services
A review of specific employee policies, including:
Drug, alcohol, and substance abuse considerations
Sexual harassment
Nondiscrimination issues
Conflict of interest prohibitions and gifts
Dress codes
Use of computers, accessing the Internet, using electronic mail (e-mail)
Computer security and passwords
Privacy and confidentiality of all aspects of patient care
Security, fire and safety, and disaster plans
Infection control
Review of the organizations disaster plan
An additional portion of the general orientation ordinarily consists of a review of
employee benefits, with direct assistance provided to new employees in signing up
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for such benefits. If workers are covered under a specific labor union agreement, the
provisions of the applicable contract are explained at the general orientation.
The outline of the contents of a typical general orientation to a healthcare
provider organization appears as Exhibit 91.
Departmental Orientation
The departmental orientation aspect of the new employee orientation is customized
to the individual worker. The mission and goals of the department are shared. The
departmental organizational chart, including names as well as job titles, is made
available. The manager pays particular attention to acquainting the new worker with
the other employees who will likely share common duties and work space.
Preferably the manager will have made prior arrangements with an established
member of the group to act as a buddy to the new employee to facilitate the
transition into this new work environment.
EXHIBIT 91 General Orientation Contents and
Checklist
The following checklist is initiated in General Orientation, following which it
will be permanently retained in the employees personnel file. It is to be
completed and submitted to the Human Resources representative at the
conclusion of General Orientation.
Employee Name (please print)
___________________________________________________________________
Affiliate or Division (if applicable)
___________________________________________________________________
Department
___________________________________________________________________
Orientation Topics (Initial to indicate completion of each topic)
______ Organizations mission, vision, and values
______ Organizations history and structure
______ Overview of operations: how all departments work together
______ Bloodborne pathogens/tuberculosis control
______ Compliance mandate: standards of conduct
______ Confidentiality of patient-related information
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______ Cultural proficiency: diversity awareness
______ Domestic violence and its signs
______ Electrical safety and the Safe Medical Device Act
______ Emergency preparedness (disaster plan)
______ Fire safety
______ Hazardous communications and the right-to-know law
______ Improving organizational performance
______ Risk management
______ Incident reporting
______ Infection control
______ No-smoking policy
______ Patient rights
______ Professional misconduct
______ Security management and crime watch
______ General age-specific competencies
______ Use of the organizations property and systems
______ Internet, e-mail, and social media use
______ Introduction to personnel policy and procedure manual
______ Received identification badge
______ Completed and submitted confidentiality statement
______ Received and reviewed employee handbook and submitted signed
receipt
Departmental policies, procedures, work standards, and productivity monitors, if
any, are highlighted, with the understanding that these will be explained in detail
during the formal training period. Issues relating to patient safety and privacy are
reiterated, and the confidentiality statement is again reviewed and signed by the
employee (if this has not already been done at time of hire or at the general
orientation). So oriented, the new employee is ready for the transition to the training
phase.
The outline of one possible departmental orientation schedule appears as Exhibit
92. The departmental orientation may vary from one department to another
depending on the nature of any given departments work.
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Of Special Concern: Standards of Conduct and Behavior
An organizations code of ethics is reflected in its standards of employee conduct
and behavior, which in turn are usually published in complete form in a personnel
policy and procedure manual and in summary fashion in an employee handbook.
Certain behavioral expectations should be emphasized with every new employee,
and the new-employee orientation presents the best opportunity for doing so.
Conflict of Interest
An organizations employees ordinarily retain the right to engage in outside
business or financial activities as long as these activities do not interfere with the
complete performance of their duties. It is necessary for the working healthcare
professional to avoid both actual conflict of interest and any behavior that creates
the appearance of conflict of interest. The issue of appearance is important; a
perceived conflict may not in fact be real, but to the perceiver, perception is reality.
A conflict of interest occurs when ones loyalty becomes divided between job
responsibilities and some outside interest. A conflict of interest may be perceived
when an objective observer of ones actions has cause to wonder whether the actions
are motivated solely by organizational concerns or by external concerns.
Conflict of interest is the area of ethical concern likely to emerge most often in
the management of a department. Some of the following guidelines apply to
employees at all levels, whereas some are most pertinent to specific employees (e.g.,
purchasing agents). Because many of these considerations affect employee behavior,
they are important to every department manager. Whether you are a manager or
nonmanager:
Never place business with any firm in which you or your family or close outside
associates have an interest.
Derive no personal financial gain from transactions involving the organization
unless the organization is advised ofand approves ofyour potential benefit.
EXHIBIT 92 Department Orientation Contents and
Checklist
This form is to be initiated by the department manager or other designated
individual for each new employees department-specific orientation. Please
complete the form and submit it to Human Resources following orientation; the
completed form will be retained in the employees personnel file.
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Employee Name (please print)
___________________________________________________________________________Affiliate or Division (if applicable)
___________________________________________________________________________Department
___________________________________________________________________________Orientation Topics (Manager, preceptor, or instructor should initial on
completion of each topic)
_____ Welcome, tour of department, introduction to staff
_____ Department fire and life safety requirements
_____ General safety rules, specific hazards, personal protective equipment
_____ Infection control practices, if applicable
_____ Review of job description and performance expectations
_____ Reporting incidents and emergencies
_____ Departments role in emergency or disaster
_____ Age-specific competencies, if applicable
_____ Work hours, schedules, time reporting, absence reporting
_____ Dress code
_____ Parking
_____ Employee health department and annual health review requirement
_____ Pay rate, pay cycle, pay increase policy, performance appraisal process
_____ Telephone use and paging process
_____ Grievance procedure and progressive discipline process
_____ Continuing education, mandatory requirements
_____ Other considerations (if any) unique to the employees position
___________________________________________________________________________I have reviewed the foregoing topics with my supervisor (or preceptor or
instructor) during my orientation.
_______________________________________________________________________
Employee Signature
I have reviewed this employees completed orientation form.
_______________________________________________________________________
Supervisor Signature
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Conduct all aspects of a personal business venture outside of the organizational
environment and on nonwork time. This guideline is regularly violated and
often implicitly condoned by management through failure to address the
offending behavior. For example, soliciting orders for cosmetics, food
containers, jewelry, and so on during work hours is in violation of ethical
standards. Also, using the organizations equipment to make photocopies for a
part-time activity or other outside interest is similarly in violation.
In situations in which you have the authority to hire or so recommend, do not
employ relatives.
Do not solicit, offer, accept, or provide any consideration that could be
construed as conflicting with the organizations business interests, such as
meals, gifts, loans, entertainment, or transportation.
Do not accept gifts exceeding the maximum value established by the
organization (limits may exist in amounts up to perhaps $50 but are commonly
lower). Never accept gifts of cash in any amount.
Safeguard patient and provider information against access or use for financial
gain by unauthorized interests.
If in doubt, disclose the situation and seek resolution of an actual or potential
conflict of interest before taking what might later be seen as an improper action.
Questions concerning potential conflicts of interest can usually be addressed with
the organizations human resources department.
Finally, in many organizations managers and professionals are asked to sign a
conflict-of-interest statement, indicating either the presence or absence of potential
conflicts. This statement is usually the same as that executed by members of the
board of directors.
Use of Organizational Assets and Information
It is the responsibility of all employees to protect the assets of the organization
against loss, theft, and misuse. Neither may the organizations property be used for
personal benefit, nor may it be loaned, sold, given away, or disposed of in any
manner without appropriate authorization.
The organizations assets are intended for use for business purposes only during
legitimate employment. Improper use ordinarily includes unauthorized personal
appropriation or use of tangible assets such as computers and copiers and other
office equipment, medical equipment, vehicles, supplies, reports and records,
computer software and data, and facilities. Intangible assets such as intellectual
property; trademarks and copyrights; and proprietary information, including
computer programs, confidential data, business plans, and such must be protected as
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vigorously as tangible property.
It also is necessary to protect patient property and information in accordance with
established policies requiring patient information to be shared only with those who
are authorized to receive it and have a legitimate need for it.
The responsibility for protection also extends to proprietary information entrusted
to the organization by vendors, referral sources, contractors, service providers, and
others. This standard includes the requirement to use only legally licensed computer
software, with the use of bootleg or pirated software considered illegal as well as
unethical.
Concerning information, an organizations ethical standards of conduct may set
forth the following principles:
It is prohibited to disclose proprietary information to anyone external to the
organization, whether during or after employment, except as specifically
authorized.
All organizational property and information in employees possession must be
surrendered on termination of employment.
Referral Practices
The laws governing Medicare, Medicaid, and other federally sponsored programs
prohibit payment in any form in return for the referral of patients. The federal
antikickback statute imposes criminal penalties for knowingly and willfully seeking
or receiving payment for referring patients. The kinds of payments prohibited by the
statute include kickbacks, bribes, and rebates. The Self-Referral Law (known as the
Stark law) prohibits physicians holding a financial interest with an entity providing
any designated health service from referring Medicare and Medicaid patients to that
entity. The law also prohibits billing federal healthcare programs for items or
services ordered by a physician who has a financial relationship with the billing
entity.
These and additional considerations may be incorporated in an organizations
ethical standards of conduct in the following manner:
No employee shall solicit, receive, offer to pay, or pay remuneration of any kind
in exchange for referring or recommending referral of any individual to another
person, department, or division of the organization for services or in return for
the purchase of goods or services to be paid for by a federal program.
No employee shall offer or grant benefits to a referring physician or other
referral source to secure the referral of patients or patient business.
No physician shall make referrals for designated health services to entities in
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which the physician has a financial interest through either ownership or a
compensation arrangement.
No physician shall bill for services rendered as a result of an illegal referral.
Political Activity
An organizations code of conduct often includes an expectation that employees
who participate in political activity will ensure that they are not doing so as
representatives of the organization. There is, in fact, a legal prohibition against
political activity by not-for-profit hospitals and nursing homes, and participating in
political activity can jeopardize the employers tax-exempt status.
Employee Privacy
Although personnel files remain the property of the employer, the organization will
have a privacy policy limiting access to these files to those persons having a
legitimate need for the information. The policy will usually state that personnel
information will be released externally only on employee authorization or in
response to a subpoena or other legal order.
Patient Confidentiality
Records relating to or concerning individuals to whom the organization is providing
or has provided service should be held in the strictest confidence. It is a violation of
the ethical code of conduct to reveal patient information to anyone outside of the
organization without the express written authorization of the patient (or the patients
guardian, administrator, or executor), or a court order or other appropriate legal
instrument. Within the organization, patient information is to be retained in
confidence and revealed on a need-to-know basis only.
Employee Relationships
The following is a suggested model for the portion of an organizations ethical
standards of conduct addressing relationships with employees:
Every employee will be treated and judged as an individual on the basis of individual
qualifications without regard to race, gender, sexual orientation, religion, national
origin, age, disability, veteran status, or other characteristic protected by law. This
pledge extends to all areas of the employment relationship, including hiring,
promotion, benefits, training, and discipline.
[The organization] will conscientiously observe all federal, state, and local laws
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and regulations applicable in any way to the employment relationship.
[The organization] is committed to providing a work environment in which
employees are free from harassment, sexual or otherwise. No employee will be made
to feel uncomfortable in the work environment through exposure to coarse, profane,
or sexual language or derogatory comments.
Employees are encouraged to express themselves freely and responsibly through
established channels and procedures. Complaints will be treated as confidential
information and will be revealed only to those who need to know as part of a process
of investigation or resolution. Interference, retaliation, or coercion by any employee
against an employee who registers a concern or complaint will not be tolerated.
We will observe the standards of our professions and exercise judgment and
objectivity at all times. Significant difference of professional opinion will be referred
to the appropriate management for prompt resolution.
We shall show respect and consideration for one another regardless of position,
status, or relationship.
Contemporary Concerns: E-mail and the Internet
The use of e-mail and the Internet by business has been becoming more widespread
for a number of years, and it is clear that their use will likely continue expanding for
some years to come. These technologies have also been experiencing widespread
personal use; in fact, their use in the personal realm may well be growing
considerably faster than their business applications. The phenomenon of social
networking has taken off to an extent that far exceeds the expectations of all but an
optimistic few. Just as e-mail has always been able to do, social networking can and
does intrude on business.
No modern business technology is more misused and abused than e-mail. E-mail
is even more problematic than the next most misused and abused business
technology, the photocopier. Many photocopiers, as we all know but frequently
choose to ignore, handle a significant volume of non-business copying, ranging
from cartoons, jokes, and recipes to announcements, schedules, and newsletters for
outside organizations. E-mail not only carries a high volume of nonbusiness
material, butunlike the photocopieralso carries business information that is
communicated in slapdash, generally careless fashion that frequently serves more to
raise questions than to convey information.
If you have to spend one-third to one-half of your e-mail time sorting through
unimportant communications and personal information before getting into pertinent
messages, many of which you must then interpret or question before passing along
or acting upon, then your e-mail is out of control. The discussion on communication
offers specific guidelines for the business use of e-mail.
E-mail and the Internet have facilitated significant increases in efficiency in a
number of activities, but they have also given life to a number of practices that are
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contrary to reasonable expectations of employee conduct. In other words, these
modern computer-based conveniences are highly susceptible to abuse. For this
reason, it is necessary to establish rules for their use.
Policy
Each organization should develop a formal policy governing the use of its Internet
facilities, including e-mail systems, clearly stating that these technologies are to be
used for business purposes only by employees and other authorized users and they
are subject to the following standards and requirements.
Internet
Only authorized employees are allowed Internet access and then only for valid
business reasons. Assigned account numbers and access codes are personal to each
user and must not be shared with others. Management reserves the right to deny or
terminate access to the Internet at its own discretion.
Employees do not have an expectation of privacy with respect to their use of the
organizations Internet facilities. Any and all messages, data, images, or other
information received, transmitted, or archived using the Internet facilities may be
accessed, copied, and used by systems administrators and management. Also, any
messages, data, or images may be disclosed to legally entitled third parties such as
regulators, law enforcement agencies, and courts. The organization reserves the right
to monitor, log, and filter Internet access by employees.
Prohibited uses of Internet facilities include, but are not limited to, the following:
Viewing, displaying, copying, or communicating libelous, threatening, or
sexually explicit material, material that fosters a hostile work environment, or
material that fosters discrimination of any kind as defined in the Civil Rights
Act of 1964 and subsequent antidiscrimination laws
Supporting an outside activity, whether a commercial venture, charitable or
political cause, or other private undertaking
Developing personal home pages
Recreational surfing during work hours
Playing games
Electronic Mail
All employees are advised that e-mail is available within the organization for
business use only. Transmitting jokes, cartoons, recipes, personal messages, and
other non-business-related information constitutes misuse of the organizations
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communications capacity and misuse of work time.
All users of e-mail should also be aware that in spite of individual accounts and
passwords, an individuals e-mail can be readily accessed by unauthorized persons
and may also be subject to monitoring internal to the organization. There is no
expectation of e-mail privacy; all e-mail messages are potentially public.
Social Networking Media
These personal platforms of social interaction present a challenge concerning the
right of an individual to free self-expression versus the organizations need to
uphold its mission and its public image. A few considerations come to mind. Yes,
one has a right to free speech, but at the work site, issues such as the protection of
patient privacy or the maintenance of a nonhostile workplace for employees must be
addressed. How far can the employer go to limit the use of off-duty action, using
personally owned devices? Certainly the generally accepted standards of ethical and
professional behavior continue to be the expected norm. The use of the
organizations logo, badges, identification insignia, or symbols is another area
where limits would be set. Orientation and training focusing on maintaining a
nonhostile workplace could include a discussion of the impact of negative
comments made about ethnic, religious, and similar sensitive topics on ones social
networking site. When a person chooses to make these attitudes public, they are, in
fact, public and could be used as examples of how he or she is potentially biased.
When an employee is under consideration for advancement, the information and
views posted in these forums may well be included in the assessment.
Another aspect of social networking simply falls under the heading of rude
behavior. At a meeting, when one or more attendees are sending or receiving instant
messages, the message to the rest of the group is simple: these individuals do not
value the interaction of the group and are being disrespectful of the other attendees
time. In addition, these individuals, either inadvertently or by design, might be
sending information about the proceedings to someone outside the room. As a
general rule, employees should use electronic devices so that all those in their
presence may feel psychologically safe.
TRAINING
An organized, formal training program designed to meet certain objectives is the
most effective method of changing the behavior of employees. To establish such a
program, the manager and those individuals involved in the organized training
activities must (1) identify training needs, (2) establish training objectives, (3) select
appropriate methods and techniques, (4) implement the program, and (5) evaluate
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the training outcomes. (See Appendix 9A for excerpts from a training program
designed for release of information specialists.)
Identification of Training Needs
The manager reviews various aspects of the work, including individual employee
performance, to determine training needs. Such detailed review might include the
following elements:
1. Comparison of specified job requirements (as stated in the job descriptions)
with current or new employee skills.
2. Analysis of performance ratings. Where are workers having difficulty meeting
accuracy or productivity standards? Where are errors concentrated? Is there a
pattern of difficulty in some technical aspects of the work?
3. Analysis of personnel records and reports. Is there a pattern of lateness,
absenteeism, accidents, safety violations, client complaints, or equipment
damage?
4. Analysis of short- and long-range plans. These often indicate the need for
training in new procedures or in skills for dealing with new client groups.
5. Analysis of current trends and changes in laws, regulations, accreditation
standards, and new technologies. When new regulations or standards are
promulgated (e.g., the False Claims Act required reporting) or new
technological support becomes available (e.g., a new software program),
retraining is required.
6. Just-in-time training. In rare circumstances, a group of workers might be
pulled from their regular work and posted to a work situation where
immediate, specific training is needed. Examples of these circumstances
include blizzard or hurricane preparations, when patients need to have
appointments canceled and rescheduled. A team of workers would receive the
necessary training to make these calls, assess the patients concerns and needs,
and make the new appointment. Another example of the use of just-in-time
training is a situation in which all visitors must be screened or rerouted, such
as during a pandemic. The screening team would receive instructions
appropriate to the changing situation, perhaps as often as every 2 or 3 hours.
EXHIBIT 93 Analysis of Grievances (May to
October)
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A director of health information systems used an analysis of grievances over 5
months (Exhibit 93), a quarterly audit of the storage and retrieval function (Exhibit
94), and a 4-year long-range plan excerpt (Exhibit 95) to determine training
needs. The first aspect of this overall analysis focused on the question: is this a
systems problem or a training problem? Notice that six incidents in Exhibit 93
involved work standards and procedures, indicating a systems problem. Then notice
that there are several incidents that indicate a specific training needfor example, a
worker who is unable to meet work standards, the series of misfiles in the
storage/retrieval area, and the supervisor and the uneven application of department
policy.
The audit of the storage and retrieval system (Exhibit 94) leads the manager to
review the system itself (dual system for historic reasons, available space and
possible overcrowding, lighting, general housekeeping). The manager then notes
that there are specific training needsto make certain that the workers understand
the two different filing systems and to review safety and ergonomics to prevent
injury.
The short- and long-range plans for the organization and the department (Exhibit
95) provide yet another series of training needs. For example, as the healthcare
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organization undergoes its expansion of specialties (home care, hospice, sports
medicine), there will be a need to train the health information specialists in the
related aspects of documentation, coding, and registries appropriate to those
services. There is a training need that is still conditional: the continuing
implementation of the electronic health record, which depends on external mandates
and regulations to implement this system. The manager would revisit the long-range
plan periodically as training needs become certain.
EXHIBIT 94 Audit of Storage and Retrieval System:
Legacy Files (July to September)
Percentage of misfilesactive records; terminal digit, color-coded system:
Percentage of misfileslegacy records; terminal digit, color-coded
system:
14%
Percentage of missing or incorrectly placed outguides: 11%
Percentage of loose reports misfiled in records: 8%
Percentage of permanently lost records: 4%
Percentage of records unavailable at time of appointment: (appointment
request had clear patient ID)
33%
Number of Accidents/Incidents
Falls from ladder: 3
Back strainmoving/accessing boxes of emergency room reports: 1
Eye injuryhit in eye by falling outguide: 1
Bruised hip due to file cabinet drawer jammed open: 1
Other Problems Noted
20% turnover rate
All employees in unit = entry level
Poor housekeeping in inactive area; active storage = okay
Active storage area: terminal digit and color coded
Inactive storage area: middle digit and different color-coded record jackets
EXHIBIT 95 201205 Long-Range Plans (excerpt)
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Organizational Expansion:
Sports medicine outpatient clinicjuvenile sports injuries July 202
Participation in regional telemedicine program July 202
Affiliation with local universitys college of health
professions
September
202
Home care and hospice program July 203
Adolescent crisis day care program January 204
Contract with regional industry-on-site clinic January 204
Departmental objectives (in addition to plans stemming from organizational
expansion):
Conversion to EHR: continuing development until completion in 204
(dependent on status or regulations and technology for EHR)
Move to new buildingCampus #2 January 205
Once training needs have been identified, the manager must establish the
objectives for the program. The objectives should be written in measurable terms
and should state the specific outcomes to be achieved at the conclusion of the
training program. For well-established, performance-related outcomes, the training
objectives are specific and stated in measurable terms, because the desired results
can be factually determined through recordkeeping. Written objectives serve as the
fundamental guide for organizing the program and evaluating the desired outcomes.
This type of training objective is stated in stylized language. Usually each
objective contains the following elements:
The statement of the main focus (what is to be demonstrated or stated).
The level of mastery or an acceptable performance level (e.g., error-free or
with 100% accuracy). When mastery-level performance is adopted, a realistic
time limit to obtain mastery (e.g., after a certain number of practice sessions)
may be stated.
Any conditions, such as use of specific regulations or use of designated
equipment.
A time frame or performance standard, which may be presented in stages, with
an initial phase of untimed performance followed by progressively increased
performance levels until the work standard is met.
These training objective elements may be stated in whole or in part at the
beginning of the training design for each unit and need not be repeated. For
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example, the various activities or processes that the trainee carries out must be in
accordance with the specified policies and procedures. Having stated this
condition initially, the training specialist need not repeat it for each learning
objective.
A second type of training objective focuses on affective mattersnamely, values
and attitudes. Their measurement is less tangible, so a performance level would not
usually be stated. Exhibit 96 is an example of a training program that emphasizes
the underlying values of patient privacy and dignity. Workers who are not involved
in direct patient care could benefit from such a program in that their own
understanding of the importance of their behind-the-scenes work will be increased.
Direct patient care providers, who sometimes feel burdened by the paperwork
requirements, could be given this opportunity to take a fresh look at how their
documentation and review efforts foster a climate of positive values.
A third type of training objective is that associated with patient and family
education. Examples include program offerings to such groups as parents of autistic
children, family caregivers for patients with Alzheimers disease, and support
groups for a specific clinical situation. The objectives of this type of educational
offering include the following:
EXHIBIT 96 The Health Record: Mirror of Dignity,
Privacy, and Patient Participation
The content of the health record reflects the important quality-of-life indicators
of patient dignity, privacy, and participation in the treatment/care process. The
policies and practices associated with health record systems and functions
support these considerations. Review of institutional policies and practices
provides both management and caregivers with a tool for assessing
commitment to these values. Participants in this training session will have an
opportunity to increase their understanding of the underlying values that find
expression in the documentation and review processes. Specific attention will
be devoted to the following topics:
1. Quality of Life: Indicators of Patient Care
2. The Health Record: Mirror of Dignity, Privacy, Choice, and Participation
a. Patient rights documents
b. Consent for treatment
c. Guardianship and power of attorney
d. Use/access of ones own financial recourses (as in a long-term care
facility)
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e. Patient care plans, with specific emphasis on patient and family
participation
f. Supportive care plans in end-of-life situations
g. Activities therapy plans, including the specific expression by the patient
about declining to participate in some activities
3. Health Information Processes and Practices
a. Relationship of these processes and practices to the protection and
enhancement of privacy and dignity
b. Specific practices:
i. Release of information
ii. Correlation of financial/billing information and documentation
iii. Timely and thorough review of documentation during the inpatient
stay and at time of discharge
4. Audit Topics
a. Privacy and dignity: compliance with external directives and the
organizations mission and core values
b. Participation by patient in healthcare decisions: comparisons of patient
expressions of wishes and values with elements in the plan of care
c. Compliance with end-of-life (living wills) directives
1. Providing information about community resources
2. Enabling participants to use support services
3. Coming to terms with the limits and the possibilities associated with the given
clinical situation (e.g., stroke or breast cancer survivor)
4. Strategies for dealing with individuals (including family and neighbors as well
as the general public) who are not familiar with special needs associated with a
given clinical situation (e.g., an autistic child)
A measurable outcome would not be included in a general program offering, but
when such training is part of the patient care plan, monitoring of progress would be
included.
Training Module Content
Detailed content is developed for each sequence of the training module when the
training plan focuses on performance outcomes in job-related training. The manager
takes care to use materials consistent with professional standards. Materials made
available from professional associations are reliable and up-to-date. There is an
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advantage to using such resources: these training materials represent best practices
and widely accepted methods. They have been developed and vetted by teams of
experts and supported by research. They are revised on a regular basis to reflect
changes in requirements. The testing materials have been developed by experts in
testing design. The materials reflect the body of knowledge required for
certifications at various levels.
The manager augments these standardized materials with information specific to
the organization. Finally, the manager sequences the training modules in logical
order. For example, a training module on the release of information would follow a
training module on the Health Insurance Portability and Accountability Act
(HIPAA).
Training Methods and Techniques
The manager has many training methods available to achieve the desired outcomes.
The methods most often used are profiled next.
Job Rotation
Job rotation is a popular approach to staff training and development. Under a
rotational scheme, job assignments may last anywhere from 3 to 6 months. This
approach gives an employee the opportunity to acquire the broad perspective and
diversified skills needed for professional and personal development. Job rotation can
also be used to introduce new concepts and ideas into the various units within the
department and to help individual employees to think in terms of the whole program
rather than their immediate assignments.
Job rotation also supports the concept of cross-training. In cross-training,
employees working in different jobs that are comparable in pay grade and skill level
are trained in each others jobs. This provides the manager with increased flexibility
in covering positions in times of absence or fluctuating demands, and it provides
employees with variety in their work and the opportunity to learn and grow.
Formal Lecture Presentations
The lecture method is one of the oldest techniques used in training and development
programs. The fundamental purpose of the lecture is to inform. The lecture format
saves time because the speaker can present more material in a given amount of time
than can be presented by any other method. The lecture should be supplemented by
visual aids, however, or the results are likely to fall short of the instructional goals.
During the lecture, employees are passive. Outside disturbances or mental
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wanderings frequently distract individuals and render the lecture ineffective.
Seminars and Conferences
The major purpose of seminars and conferences is to allow for the exchange of
ideas, the discussion of problems, and the formulation of answers to questions or
solutions to problems. The opportunity for employees to express their own views
and to hear other opinions can be very stimulating. Employees who actively
participate are more committed to decisions than they would be if the solutions were
merely presented to them. Remember that true and lasting learning occurs in direct
proportion to the amount of individual involvement in the discussion process.
Role Playing
Acting out situations between two or more persons is a training method used
successfully with all levels of employees. Interviewing, counseling, leadership, and
human relations are a few of the content areas in which role playing has been used.
By playing the roles of others, employees gain valuable insight not only from their
own actions, but also from the comments of observers.
Committee Assignments
Through committee assignments, employees can explore topics or problems to gain
a broader or new perspective, experience situations involving the resolution of
different ideas, learn to adjust to someone elses viewpoint, and practice reaching
decisions. Committee assignments also offer opportunities for employees to assume
positions of leadership that they would not otherwise have.
Case Studies
Based on the premise that solving problems under simulated conditions enables
employees to solve similar problems in actual work situations, the case study
method requires employees to become actively involved in problem-solving
situations, either hypothetical or real. The case studies used in developing problemsolving skills should be carefully selected and pertinent to the job so that their use
meets the training and development requirements of the employees.
Program Implementation
Throughout the implementation phase, the physical and psychological environment
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must be constantly monitored. For example, the time schedule, the learning
environment, and the pace need to be checked periodically.
The primary consideration in any training program is the establishment of a time
schedule to provide the greatest educational impact possible without reducing work
output or, in healthcare institutions, patient care. The training program and the
methods to be used should be announced well in advance. This approach allows
everyone involved sufficient lead time to arrange individual schedules so that work
assignments can be adequately covered during the employees absence.
The arrangement of the room in which the training is to occur can either promote
or handicap the process of learning. It is important to ensure that each participant
can see and hear each member of the group. The traditional classroom setting in
which the teacher sits in the front of the room and the participants are seated in
neat rows should be avoided whenever possible, because it creates a stiff and formal
atmosphere. One of the best arrangements for a training session is to put the tables
in an open-ended rectangle, with chairs placed only on the outside perimeter. In
addition, the room should be well lighted and adequately ventilated.
The pace and timing of each session are also important during the
implementation phase of a training program. The function of pace is to maintain
interest; therefore, the pace should be quickened when interest begins to wane, or it
should be slowed if individuals are having difficulty absorbing content. A training
session should not last longer than 2 hours. In fact, a 1-hour session is believed to
produce better results. If a 2-hour session is necessary, a break should be allowed at
the midpoint. Common sense and individual attention spans dictate how long adults
accustomed to active work can be kept relatively immobile.
Evaluation of Outcomes
Probably the most difficult aspect of a training program is evaluating the outcomes
to determine whether they are or are not what was desired. This difficulty arises
because there are no concrete and precise measuring tools for assessing changes in
behavior and attitudes. Outcomes must be measured indirectly and conclusions
based on inference. The evaluation is not just a single act or event but an entire
process. Evaluation is made easier, however, if objectives have been clearly stated in
measurable terms.
A before-and-after comparison may be a useful way of evaluating change. If the
manager and those individuals involved in the training program assess the behavior
factors they wish to change before training and examine the same factors after
training has been concluded, they can determine if a change occurred.
For material of a factual nature, where precise knowledge should be
demonstrated, fact tests are used. More commonly, however, trainees are evaluated
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through performance tests. Each trainee has activities to carry out; these are drawn
from the usual work of the job. The final evaluation may be carried out in stages:
practice activity, followed by real work activity under immediate supervision,
followed by real work activity with diminishing levels of immediate supervision.
The evaluation brings the training process full circle. Each trainee has been given
specific objectives to attain, appropriate didactic and practice materials have been
explained, and practice activities with appropriate feedback and correction have
been provided. The evaluation, therefore, consists of determining the trainees
capacity to perform the work outlined in the job description and specified through
the detailed policies and procedures of the department.
Resources for Training
The manager should endeavor to provide timely and thoroughly developed training
materials. The cost of training materials and the time to be expended are also factors
to consider. The manager can use to advantage the many programs developed by
professional associations. For example, the American Health Information
Management Association has developed training programs for coding, making it
easier for health information department employees to enhance that particular skill
set. Distance learning is yet another option in which both technical and professionallevel courses are readily available.
Some topics are common to several disciplines, thus enabling the management
team to share resources and split the cost over multiple groups of employees. The
training material for HIPAA implementation represents one such training program
that is suitable for interdepartmental use.
Training, while desirable as well as necessary, can be costly. Budget decisions
and justification for such expenditures may be systematized by reviewing training
resources against a set of criteria. Exhibit 97 reflects such an assessment. Good,
solid justification of necessary training activity is essential. Surely every department
manager has heard executive management consistently praise the value of training
when conditions are at least stable financially. Nevertheless, when a financial crunch
arises and it is necessary to reduce expenditures, the education and training budget is
often one of the first areas cut.
Addressing Diversity
It is highly probable that the majority of healthcare managers will be called on to
manage increasingly diverse work groups. The diversities encountered in the
workforce may be rooted in ethnicity, religion, race, gender, or social differences,
but in the work organization all of these areas of difference have been gathered
under the term cultural diversity or just simply diversity. This term represents a
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broad range of differences, also implying, for example, differences in values,
assumptions, expectations, and needs.
EXHIBIT 97 Budget Justification for Training
Resource
Title of
Resource:
Confidentially Speaking: Keeping Patient Information
Private
Sponsor: Norton and Collins, Inc.
Target Population:
New employees of Health Information Services
Students accepted for clinical internship in Health Information Services
Employees needing a refresher course in basic principles
Job Skill: Fostering and maintaining confidentiality of patient information
Cost:
Two-part video: $104.00
Shipping and handling: $11.00
Total cost: $115.00
Additional notes:
1. Video can be reused within the department.
2. Video can be loaned to other departments.
3. Video content has been reviewed by experts in the field of HIPAA
compliance.
4. Content meets continuing education approval by national association.
Labor projections continue to advise organizations that in the early decades of the
21st century, the majority of new entrants into the workforce are likely to be
women, minorities, and immigrants. This has become true in a number of areas of
health care.
It is reasonable to assume that the majority of people are most at ease around
others who look, think, and act as they do. However, these days rarely do people of
a single cultural group populate an entire function, department, or organization.
Rather, it is common to find most employee populations culturally mixed to some
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extent. Lack of understanding of the differences between and among cultures gives
rise to difficulties for the manager, often indicating the need to train managers and
staff in matters of diversity.
Workplace tensions can arise from failure to recognize or understand cultural
differences, and these tensions can cause interpersonal conflict, reduced
productivity, absenteeism, turnover, and charges of discrimination and other legal
complaints. In addition, communication problems arise from language and literacy
concerns related to individual background, and other issues develop from lack of
cultural awareness and respect.
In the workforce in general, it is now and will become increasingly more
necessary to interact with people who have different values and beliefs. Increasing
diversity in the workforce is unavoidable, especially in health care. In health care,
diversity is present at all working levels. Although in health care, diversity is
greatest in the entry-level positions in housekeeping, nursing assistance, and food
service, it is also significant in professional areas such as nursing service.
Recognizing Differences
In the absence of knowledge of cultures other than our own, people incline toward
stereotypes in their thinking about others. Although stereotypes are usually
superficial or simply wrong, they nevertheless tend to influence thinking and
decision making.
A manager should be able to respect each employee as an individual and hold all
employees to the same standard of job performance. Yet in the one-to-one
relationship between manager and employee, the manager must recognize individual
differences that are culturally based. A few examples of differences one may
encounter as a manager are:
In some cultures, prolonged, direct eye contact is acceptable, whereas in others
it is considered rude and improper.
People from some cultural backgrounds believe it is disrespectful to offer
opinions or suggestions to a superior (potentially quite frustrating to the
manager who wants employee input).
Workers from some cultural backgrounds are uncomfortable with being singled
out in any way, even for praise.
Workers from some cultural backgrounds will point out their own successes
with pride, whereas others will remain silent no matter how successful; to
them, self-praise or self-promotion is not acceptable behavior.
In some cultures, physical touching or entering anothers close personal space is
acceptable, but in some it is not.
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Some male workers from certain cultures may be extremely ill at ease reporting
to a female manager.
These and other factors add up to numerous individual differences that a manager
may have to account for in relating to each individual member of a work group.
In the ManagerEmployee Relationship
All employees should be expected to adapt to the reasonable requirements of the job
and the workplace as necessary, but they always bring their individualism to the job
as well. The effective manager always remains aware of individual differences and
respects these differences in the relationship with each employee.
It is also to the managers advantage to become familiar with applicable aspects
of antidiscrimination laws. In reacting to culturally based individual differences, it is
sometimes possible to unintentionally enter into discriminatory practices out of
ignorance of the law.
What about Diversity Training?
Every healthcare employee, and especially every healthcare manager, stands to
benefit by attending a sound cultural diversity program and making a determined
effort to learn about the cultures prevalent in a department or organization. The
manager must not only successfully relate to each employee but also must deal with
the interactions between and among employees to ensure that equal treatment,
opportunity, and respect exist for all. It seems at times like a nearly impossible task
to treat all employees alike regarding observance of policies while recognizing and
adjusting for cultural differences among employees.
Along with the term cultural diversity, one is also likely to hear of cultural
competence or cultural proficiency. Diversity itself must be prevalent and valued
before one may be considered culturally competent or culturally proficient. Thus, in
promoting the need to value diversity, the organization is encouraging the process of
including the perspectives of underrepresented, nondominant groups to ensure they
have a voice in the organization.
The shape and substance of any particular organizations diversity training will
depend considerably on the cultural mix within the organization. There are,
however, a few general guidelines to keep in mind when considering diversity
training:
As with total quality management and other organization-wide undertakings,
diversity training must have the visible participation and support of top
management. Many potentially beneficial programs have withered and died
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because top management either did not provide visible support or provided
token support at the start before backing away.
Anecdotal evidence suggests that the most effective diversity training programs
are those conducted by outside providers engaged for that purpose. When
presented by insiders, there is sometimes the perception that the division or
department presenting the program is advancing its own agenda.
The presenters of the most effective programs should be seen as more or less
culturally neutral. That is, no single underrepresented group should be seen as
dominant such that some participants might perceive that this group is simply
advancing its own agenda.
Even highly successful diversity training should be repeated or reinforced
periodically. For many participants, such training is counter to lifelong beliefs,
attitudes, and prejudices that cannot be erased or altered by a one-time
presentation or program.
It is clear that in the coming few decades, the more effective organizations will
be those that successfully manage workforce diversity and tap the maximum
potential that each employee has to offer.
MENTORING
Professional practitioners may find themselves in the special teaching role of
mentor. Mentoring is a process in which a more experienced and usually older
person guides and nurtures a younger or less experienced employee. The mentoring
relationship may be informal and limitedfor example, in the instance of a senior
practitioner encouraging a visiting student during the students part-time job.
Alternatively, the relationship may be formal and limited, as in the relationship of
the clinical supervisor during training rotation or in assisting with thesis supervision.
The relationship may then become informal and ongoing, as in a partnership of
interest, leading to shared projects, copresenting at workshops, and coauthoring
papers.
Network
A network is a group of individuals who communicate through formal and informal
channels and willingly promote one another for mutual benefit. The network
members trade services, ideas, recommendations, and tips to further their own
development and success. The various state and national professional associations
are examples of networks.
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Peer Pals
Peer pals boost one anothers careers by sharing information and strategies. They
share one anothers strengths and weaknesses because they are on the same
developmental level.
CLINICAL AFFILIATION/CLINICAL
PRACTICE PROGRAM AND CONTRACT
Healthcare organizations typically include education and research in their mission.
In developing their client base, managers include healthcare practitioners who are in
training. These clients are identified in the clientele network (Chapter 3) as
secondary clients whose needs are important and deserving of attention.
Practitioners-in-training also become a source of potential employees, thus helping
the managers in their recruitment outreach. Supervising practitioners-in-training is
part of managers leadership role as well; they are effective role models through
their support of the educational efforts of colleges, universities, and specialty
training programs. Managers recognize the importance of clinical rotation because
of their own experience as students. They appreciate and understand the professional
association/credentialing requirements that include clinical practice.
Organizational Responsibility and Coordination
There is on-going interaction among peer professionals about shared interests and
concerns. The need for clinical rotation is one recurring topic. The initial discussion
of, and request for, developing a clinical rotation sequence often starts at this
informal level. Formal responsibility and coordination are the next steps, usually
involving the chief academic officer of the healthcare facility. This executive-level
manager develops policies and procedures, including legal guidelines, for accepting
student practitioners in the clinical setting. The department manager determines the
availability of the department for specific kinds of rotations, their length, and their
scope. When an agreement has been reached between the academic institution and
the healthcare site, department managers prepare their employees for the presence of
a student observer/participant. This manager assumes responsibility for on-site
supervision of the student. The academic institution maintains responsibility for
students as well. For example, the outline and description of the content and
sequence of the clinical rotation is developed by the academic department, and the
assignment of a grade for the coursework is the responsibility of the faculty.
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Elements of the Clinical Affiliation Agreement
There are a number of considerations about placement of a student in the clinical
site. Although these formalities may seem bureaucratic, their purpose is the mutual
protection of the healthcare organization, its patients and workers, and the academic
institution and its students. The affiliation agreement is developed to address aspects
of the training and typically includes the following elements:
1. Organizational name of the parties to the agreement.
2. Length of agreement. A certain number of students (n) are accepted for a
specific time period (e.g., September lNovember 30) for the particular
activities associated with the clinical rotation. The names of the students are
listed.
3. Stipulations of trainee status. Students are not employees or independent
contractors, even if they are receiving a stipend. They are not eligible for any
fringe benefits, unionization eligibility, or workers compensation. A student
should sign a statement indicating this so that there is no misunderstanding.
4. Stipends or support (e.g., room and board, meal plan). If either is provided,
either by the academic institution or the healthcare organization, the tax
consequences to the recipient are the responsibility of the recipient.
5. Liabilities. The healthcare organization restricts its arrangements with
academic institutions, accepting students only if the academic institution
carries proper insurance to cover field placement of its students. Furthermore,
a student receives orientation about the healthcare organizations policies,
procedures, and rules about standards of conduct; use of social media;
protection of patient privacy; and confidentiality provisions about patient care
interactions. The privacy of the employees is also emphasized. The use of
organizational assets and information, prohibition about political activity, and
similar limits on behavior are included in the initial briefing. A student must
sign a confidentiality agreement, pledging to maintain confidentiality about the
site, the patients, and the workers.
6. Removal from clinical placement. The healthcare organization reserves the
right to have students recalled by the educational institution if they do not
carry out the agreed-on activities or behave in a nonprofessional manner.
7. Intellectual property and copyright considerations. Reports, computer software
development, data, photographs, and images and similar material covered by
the usual concept of intellectual property become the property of the healthcare
organization. Students shall be permitted to use such material in their academic
reports, without identifying patients, workers, or the organization. Subsequent
use of the material shall be covered by the usual understandings of intellectual
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property and copyright considerations. The director of affiliations of the
healthcare organization coordinates the requests for such approval.
8. Designated contacts. The academic institution shall provide the name and title
of the faculty coordinator for clinical placement. The healthcare organization
provides the name and title of the department manager who is accepting the
supervision of the student while on-site.
9. Contract. This is dated and signed by the officials from each party to the
agreement.
EXERCISE: WHAT TO DO WHEN BUDGET
CUTTING THREATENS TRAINING?
Any department manager who has been through a financial belt-tightening exercise
has undoubtedly collided with one of the fundamental contradictions encountered in
organizational life: top managements verbal support of training and its importance,
followed, when budget trimming becomes necessary, by the early reduction or
elimination of training funds. You are to explain why this fundamental contradiction
exists, and describe which arguments you might use in defense of your education
budget.
Also, many people tend to view all expenditures in terms of costs versus benefits;
education comes up short in their eyes by very nearly defying costbenefit analysis.
In defense of your education budget, which the budget director has said must be
reduced by half or more, you are to do the following:
Develop an argument for keeping as much of your education budget as possible.
Describe how you would go about attempting to measure the results of
education.
CASE: THE DEPARTMENTS KNOW-IT-ALL
Several weeks ago, physical therapist Willis Patrick said to his boss, Glen Jones,
director of physical therapy, Glen, the way that we develop the budget in this
department doesnt make much sense. We just take last years actual expenses and
stick an inflation factor onto it and make some other guesses. We really ought to be
budgeting from a zero base, making every line item completely justify itself every
year.
Glen said something about simply following the instructions issued by the
finance department and doing it the way all the managers were told to do it. He
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pursued the matter no further.
A few days later Willis approached Glen, saying, Dont you think the way we
do performance appraisals ought to change? Surely most smart managers know its
better to evaluate employees on their anniversary dates than all at once, the way we
do it now.
Glen again answered to the effect that he was simply doing what he had to do to
comply with the policies and practices of the organization. They discussed the
matter for perhaps 5 minutes. Although Glen was not going to start working to
inspire change in the performance appraisal system, he nevertheless felt led to
concede that Willis had brought up a number of good points. It struck Glen that his
employee was idealizing an appraisal system in almost textbook terms; it seemed
flawless in theory, but Glen had been through enough actual systems to be able to
recognize a number of potential barriers to thorough practical application.
In the ensuing 2 to 3 weeks, Willis had more and more to say to Glen about how
the organization should be managed. In fact, it took Willis only a matter of days to
get beyond generalized management techniques such as budgeting and appraisals
and start offering specific advice on the management of the department.
Glen quickly came to realize that he could count on Willis to offer some criticism
of most of his actions in running the department and most of administrations
actions in running the hospital. Glen did not appreciate this turn in his relationship
with an otherwise good employee. Glen had always seen Willis as an excellent
physical therapist, perhaps somewhat opinionated but not to any harmful extent.
Recently, however, he had come to regard Willis as a sort of conscience, a critical
presence who was monitoring his every move as a manager.
The worsening situation came to a head one day when Willis attempted to
intercede in a squabble between two other physical therapy employees. When Glen
entered the situation, he proceeded to criticize Glens handling of the matter in front
of the other employees.
Glen took Willis into his office for a private one-on-one discussion. He first told
Willis that although he was free to offer his suggestions, opinions, and criticisms
regarding management, he was never again to do so in the presence of others in the
department. Glen then asked Willis, It seems that lately you have a great deal to say
about management and specifically about how I manage this department. Why this
sudden active interest in management?
Willis answered, Last month I finished the first course in the management
program at the community college, a course called Introduction to Management
Theory. Now Im in the second course, one called Supervisory Practice. I know
what Im hearingand quite honestly, its pretty simple stuffand when I see
things that I know arent being handled right, I feel that I have an obligation to this
hospital to speak up.
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Glen ended the discussion by again telling Willis that he expected all such
criticism and advice to be offered in private and never again in front of other
employees. Overall, the conversation did not go well; more than once Glen felt that
Williss remarks were edging toward insubordination. Because of the uneasy feeling
the discussion left with him, Glen requested a meeting with the hospitals vice
president of human resources.
After describing the state of the relationship between him and Willis in some
detail, Glen spread his hands in a gesture of helplessness and said, Im looking for
advice. Apparently on the strength of a course or two of textbook management, this
guy suddenly has all the answers. What can I do with him?
Questions
1. If Willis does, indeed, act as though he has all the answers, what can Glen do
to encourage modification of this attitude?
2. If you were Willis, how should you best proceed in applying your newly
acquired knowledge of management? Explain and provide an example.
3. What are the possible reasons behind Glens growing aggravation with Willis?
List a few possible reasons and comment on the validity of each.
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Appendix
9A
Training Design: Release of
Information
BACKGROUND INFORMATION AND NEEDS
ASSESSMENT
The department manager completed a thorough review of the release of information
function as part of a quality improvement study. The study included the following
areas of focus:
1. Risk management study: HIPAA breach prevention with more than
satisfactory compliance.
2. Review of licensure and accrediting standards: no problem area identified; no
plan of correction required.
3. Turnover rate in the unit: 30% higher than the department as a whole.
4. Management inventory review: potential problem identified. No one is crosstrained for the release of information (ROI) positions; no one has been
promoted internally to ROI positions for the past 4 years.
5. Productivity standards: adequate to above average for most functions except
those associated with in-person and telephone requests, with only an 80% level
achieved by workers.
6. Patient/client satisfaction survey results: reflected significant dissatisfaction
with ROI responses to in-person and telephone requests. Typical comments
included the following: it was confusingall those details; how are we
supposed to know the rules?, I felt like I got the run-around; it was
overwhelming … all those details, and worker was very impersonal; kept
referring to the policy. It all seemed like a huge mess of red tape to me.
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7. Worker satisfaction survey results: reflected satisfaction with most working
conditions. Workers felt well-trained in the technical functions of their work
but expressed concerns at being put on the spot, feeling bullied by
aggressive or upset clients who did not understand the consent and fee
requirements, and feeling badly that they could not help the patient/client
who clearly had a pressing need for the requested information. They felt
poorly trained to deal with difficult situations and expressed the desire to
transfer out of this area of work because of this stressful aspect.
8. Focused study: determined which kind of request and what steps in the process
were generating the most difficulty. Findings showed that, with the success of
the regional health information exchange, information for continuing care was
not problematic. The gradual implementation of the electronic health record
and the related portal-access processes were satisfactory. The three areas of
concern, reflected in both patient and worker surveys were these:
a. The fee structure and its application
b. Release of information for records of deceased patients
c. Dealing with one-to-one interactions with upset or angry clients
THE REDESIGN OF THE TRAINING PROGRAM
CONTENT
In light of the background findings and needs assessment, the manager added an
initial phase of training to emphasize the value and importance of the ROI function.
With the assistance of the social service department and the human relations
department, the manager developed a training module for communicating with
distressed patients/clients. This initial phase was then followed by the technical
training module (see below).
Phase One: Valuing Our MissionValuing Your Role
The objectives are to assist the trainee in understanding and valuing the overall
mission: service to the patients/clients and their role in this process. To emphasize
the interpersonal nature of the work, this presentation is made in a small group
setting; the manager presents the key points in a discussion format rather than as a
formal lecture. Role playing is used to provide the trainees with interactive
experience reflecting the challenging aspects of dealing with difficult situations. Key
points include the following:
Identifying examples of difficult situations, such as a client who needs
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information immediately because:
He or she is late in filing a benefits claim and will miss the final deadline.
He or she is receiving bill collection notices from the hospital for failure to
pay.
He or she needs immediate assistance relating to disability claim or workers
compensation claim and has no other means of support.
He or she is eligible for special program assistance (e.g., learning disability)
but the deadline for providing support information is next week.
He or she is a family member of a recently deceased patient but is not the
executor of the estate and does not understand why he or she cannot have
information.
Acknowledging the conflict experienced by worker who wants to help but must
follow the designated procedures. Small-group discussion of this topic: when
you are the perceived source of the red tape and your role in offsetting the
impersonal aspects of formal organizations.
Valuing the workers role as facilitator in assisting patients/clients in navigating
the system.
COMMUNICATION IN STRESSFUL
SITUATIONS
A social service or human relations specialist presents information about
communication in such situations. This is applied to the common situations
(identified above) through role playing. After the completion of Phase One, the
trainee continues with learning the technical aspects of the work (Phase Two). An
excerpt of a training design for processing written requests follows.
Phase TwoRelease of Information Functions
Purpose
Overall training objective
Assumptions
Resources
Training sequence and performance level
Methods
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Purpose
This training module is designed to enable the trainee to perform the release of
information duties as delineated in the job description and prescribed in detail in the
applicable policies and procedures.
Overall Training Objective
The objective is to gain the ability to process written requests for release of
information from the patient health record maintained by this facility.
In accordance with the healthcare organizations policies and procedures as well
as applicable federal and state laws and accrediting standards
With 100% accuracy
Within the established time frames and priority indications
Within the work standards parameters
Assumptions
1. The trainee meets the job qualifications except for knowledge and skill in
release of information.
2. The trainee has successfully completed the training modules for:
Computer competency in job-related heath information systems software
utilization
Privacy and confidentiality, including HIPAA, ARRA, and HITECH
Overview of release of information function
Patient health record content and sequence
3. There is a comprehensive policy and procedure manual for release of
information.
4. There are validated work standards.
Resources
During this training process, the trainee will use
1. The release of information policy and procedure manual, including the
reference grids for the following items:
Authorization requirements and examples
Content and format of acceptable authorizations
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Fee schedule and transmittal forms
Cover letters and sample responses
2. Software for tracking and completing each request
3. Fictitious requests and health records
Training Sequence and Performance Level
The training sequence is based on the steps described in the procedure manual. The
trainee learns to process standard requests, followed by nonstandard requests.
1. The trainee processes a standard request by performing each step with 100%
accuracy, then proceeds to the next step.
2. After having demonstrated the ability to complete each separate step, the
trainee processes a standard request through the complete cycle with 100%
accuracy.
3. The trainee processes a nonstandard request by performing each step with
100% accuracy, then proceeds to the next step.
4. After having demonstrated the ability to complete each separate step, the
trainee processes a nonstandard request through the complete cycle with 100%
accuracy.
5. After having demonstrated the preceding abilities, the trainee is given a mix of
standard and nonstandard requests to process with 100% accuracy within the
work standards parameters.
Methods
An in-basket exercise is used to introduce the material. Lecture and demonstration
are used to explain each step.
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CHAPTER 10
Adaptation, Motivation, and
Conflict Management
CHAPTER OBJECTIVES
Address the necessity for properly and thoroughly integrating each
individual employee into the organization and describe the common
techniques of integration.
Introduce the theories that address present-day employee motivational
concerns and provide the manager with insight into the conditions and
circumstances that inspire employees to perform.
Specifically address the motivational concerns arising in conjunction with
reengineering, reorganizing, and other practices resulting in downsizing of
the workforce.
Develop an understanding of the origins of conflict, especially in the
organizational setting, and describe how to address conflict constructively.
Describe the essential need for discipline within the organization and
introduce the concept of progressive disciplinary action, differentiating
between problems of performance and problems of conduct relative to rules
and policies.
Briefly examine the role of the collective bargaining agreement (union
contract) in the avoidance of and as necessary the control of conflict.
ADAPTATION AND MOTIVATION
To get work done efficiently and effectively, managers must motivate workers and
assist them in their adaptation to organizational demands. Individuals must fit into
the organizational framework. There is a close relationship between the managers
concern for employee motivation and the adaptation activities and controlling
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function of the manager. The worker who fits into the organization and who values
an assigned role is likely to be motivated more readily than one who does not
experience such feelings of belonging. In turn, when workers fit into the
organization, the need to control or modify activity or behavior through disciplinary
action is reduced.
Adaptation to Organizational Life
Two specific conditions that exist as a result of organizational structure illustrate the
need for an explicit management process to help integrate the individual into the
organization:
1. The need to offset the effects of decentralization
2. The need to coordinate the many individual functions that result from
departmentation and specialization
Overall goals and policies are established at the highest levels of the
organizational hierarchy, but the actual work is carried out at every level.
Occasionally, conflicting directives, or what seem to be conflicting directives, are
issued from the central authority.
Additionally, the number of individuals who enter the organization and the
different manner in which these individuals react to the complexities of
organizational life must be taken into consideration. These individuals not only have
different values, different personalities, and different life experiences, but they also
belong to other organizations, some of which may have values that compete and
even conflict with the values embodied in the workplace. Some of the patterns of
accommodation to organizational life may be functional for the organization but
dysfunctional for the individual. Potential conflict must be offset, and the
personality mixes of workers and clients must be melded into smoothly functioning
interpersonal relationships.
Techniques for Fostering Integration
Events and conditions should be anticipated as fully as possible, and the courses of
action to be taken for designated categories of events and conditions should be
described. Authorization of the course of action applicable to any category may be
permissive; it may spell out several series of steps from which the employee can
choose. To prevent undesirable actions from arising, sanctions or penalties should
be established for those who commit these offenses. The policy manual, the
procedure manual, the employee handbook, the medical staff bylaws, and the
licensure laws for the various health professionals are all routine management tools
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for guiding behavior and fostering integration.
Work Rules
Rule formulation has generally been accepted as a management prerogative
embodied in the control function. Work rules are related to motivational processes
because they contribute to a stable organizational environment. They serve several
functions in an organization:
They create order and discipline so that the behavior of workers is goal oriented.
They help unify the organization by channeling and limiting behavior.
They give members confidence that the behavior of other members will be
predictable and uniform.
They make behavior routine so that managers are free to give their attention to
nonroutine problems.
They prevent harm, discomfort, and annoyance to clients.
They help ensure compliance with legislation that affects the institution as a
whole.
The organization has a positive duty to protect both clients and workers with
regard to health, sanitation, and safety. In addition, it must seek to prevent behavior
that has the potential of alienating or offending clients. Because they deal with
patients and their families in stressful situations, healthcare organizations have
specific obligations in this area.
Incentives and Sanctions
Both incentives and sanctions can be used to induce compliance. Incentives are
bonus pay, merit increases, and special time off. Sanctions are demotion,
suspension, and written reprimands. An essential element in any system of sanctions
is the development of adequate feedback mechanisms and correction where needed.
Employee evaluation and training processes can provide feedback and correction on
a routine basis.
Selection
Managers may increase the likelihood of worker satisfaction with the organization
by developing recruitment and selection strategies to enhance this possibility. By
recruiting from groups with a positive predisposition toward the organization, such
as students in training rotations at the organization, managers will be able to attract
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employees who already value the organizations mission. When an organization has
a long-standing relationship with its surrounding community and is recognized as
the best place to work, managers are able to recruit and select individuals who are
accustomed to the presence and practices of the organization. The more selective an
organization is, the more effective the involvement of its members tends to be. Their
commitment to organizational values is deeper, and they need fewer external
controls.
In recruiting members, the highly selective organization should try to appeal to
an audience composed of individuals who are favorably disposed toward the values
of the organization, even at the preselection stage. Recruitment information may
indicate, either implicitly or explicitly, the need to conform.
Training
Workers who are unsettled because of rapid changes in work processes, or potential
employees who have been out of the workforce, will benefit from an active, wellpublicized training program geared toward these needs. For example, their technical
skills can be modified so that they will perform the work according to the specific
procedures unique to the organization. Orientation programs have been developed in
hospitals to familiarize professionally trained individuals (e.g., technologists) with
particular routines. Businesses often use rotating management internships to foster
integration of newly graduated management majors. Training that enhances internal
transfer and promotional opportunity is yet another motivational tool.
Identification with the Organization
Managers tap into the human need to belong by using tangible expressions of
organizational identity to help foster identification with the organization. Recall the
early stages in the life cycle of an organization: a well-developed expression of
mission is reflected in a motto, a logo, or some other readily identifiable symbol. A
manager seeks to use these icons as sort of internal advertising telling employees,
You are a part of this excellent organization. The manager uses these simple but
effective means of building up identification with the organizationyes, the coffee
mug, the cap, and the T-shirt are all small but effective means of keeping the
organization and its mission at the forefront. They are used because they work. The
development of a sense of identification is good for the organization, but it can also
be good for each individual.
The Work Group
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An employees particular mindset is continually reinforced by his or her work
group. Through the work group, the individual becomes assimilated into the
organizationor is perhaps prevented from being properly assimilated. In addition
to the formal prescriptions regarding work activities, informal patterns of behavior
arise among members of the group. The individual learns the unwritten rules as well
as interpretations of the written rules. The informal organization of the work group
also satisfies an essential human needthe need to belong. Nonconformity with
group norms could lead to expulsion from the group, which would eliminate a vital
source of information and communication as well as an arena in which to air
conflicts that stem from the formal organizational role demands.
THEORIES OF MOTIVATION
On the one hand, the manager seeks to develop a workforce that fits the
organization; on the other hand, the manager must remain aware of the basic needs
of the workers. The art of motivating is built on this recognition of human needs.
Motivation is the degree of readiness or the desire within an individual to pursue
some goal. The function of motivating or actuating is essentially a matter of leading
the workers to understand and accept the organizational goals and to contribute
effectively to meeting these goals. In motivating or actuating, the manager seeks to
increase the zone of acceptance within the individual and to create an organizational
environment that enhances the individuals will to work. As self-motivation
increases, the need for coercive controls and punishment decreases.
Bases of Motivation
Needs are the internal, felt wants of an individual (they are also referred to as drives
and desires). Incentives are external factors that an individual perceives as possible
satisfiers of felt needs.
A manager may gain insight into aspects of motivation in several ways:
Observation of existing work situations
Review of cultural expressions concerning work
Studying the work of management theorists who have addressed the concept
Observation of Existing Work Situations
Consider the response in your work setting to these two basic questions: Why do the
employees (including you) work? Why do they work in this specific setting? The
answers surface quite readily. One employee might say, I work because I need the
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money. I need money to procure basic goods and services for daily life and for those
additional items that constitute the good life. Another might give as the reason, I
dont really have to work but I want to keep involved; this work is meaningful to the
community and it gives me a reason to get out of the house and be around people.
Attractive and necessary fringe benefits might be the magnet for still other workers
the college tuition benefit for a worker or a member of the family, health
insurance coverage, special discounts on pharmacy products, or day care for
dependent children or aged parents.
In answering the question Why work at this specific organization?, workers
might offer a variety of responses. Everyone in our family started out here; it is our
tradition, says one worker. Another might indicate he or she is feeling stuck, even
trapped: Its the only place that is hiring right now and we cant relocate, so here
we are for now; we will move on when there is opportunity. It is a rsum
enhancer, states a new entrant into the workforce. It is the place to be if you want
to be on the cutting edge of practice, says another. Yet another person might belong
to the sponsoring religious or fraternal organization and enter the workforce of its
organizations because of this affiliation. As noted earlier, attractive fringe benefits,
including flexible work schedules, may be the main source of attraction.
When managers sort through these reasons, they can readily see a mix of internal
and external motivators they can then use to enhance worker satisfaction. The
satisfied, motivated worker more readily contributes to the organizational mission
than the dissatisfied or indifferent employee.
Cultural Expectations about Work
Another avenue for considering work and motivation is the study of cultural
expectations about work. These cultural attitudes are readily expressed in classic
literature, art, and drama. They are evidenced in musiceverything from coal
miners roots music lyrics, to seafaring chanteys, to 9-to-5 contemporary offerings.
Television and movies represent the full range of the work setting, presenting both
the comical and the dramatic aspects. One can identify repeated themes: the worker
as hero, the manager as remote, the team as valuable, or the work setting as uplifting
or repressive. Such cultural influences seep into everyone. The management team
remains aware of this potential and develops positive motivational practices to offset
what is negative and enhance what is good.
Motivational Theories
In reviewing published works concerning theories of motivation, a manager will see
that studies of motivation tend to deal with several broad questions: What satisfies
human needs? And, therefore, what satisfies workers needs? When one or several
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basic needs are met, what is the next level of motivators to be activated? Is
motivation internal to the worker, part of our basic human makeup, dependent on
external practices, or a combination of all these factors? Undertaking individual
research into the various available theories of motivation can provide the manager
with insight into a number of aspects of employee behavior.
PRACTICAL STRATEGIES FOR EMPLOYEE
MOTIVATION
Motivation may be described as the drive, impetus, or initiative that causes an
individual to direct his or her behavior toward satisfaction of some personal need,
using need in the broader sense of the word to describe something one pursues
because its attainment represents fulfillment of a sort. Considering motivation in this
light, we might question whether it is possible for anyone to motivate another
human being to do anything or pursue anything.
It is, in fact, not strictly possible to motivate another person. The best that can be
done is to create the circumstances under which an individual can become selfmotivated. It is much like the old saying, You can lead a horse to water but you
cant make it drink. One can create what would seem to be ideal conditions and
structure seemingly perfect circumstances, but these alone provide no guarantee of
successful employee motivation because there is no way of making someone
respond appropriately if the person does not care to respond. Most people in work
organizations are subject to the same overall collection of needs, but the mix of
needsthat is, the differing emphasis on the various needs that drive an individual
may vary greatly from person to person. In brief, what motivates one person
may have little or no effect on another individual. This necessitates generalizing to
some extent and recognizing that any particular motivational strategy may work
with some people and fail to work with others who are similarly situated.
Motivators
The true motivating forces, or at least the strongest of the genuine motivating forces,
are to be found in the work itself and are all describable as opportunities. The
genuine sources of motivation are the opportunity to:
Accomplish or achieve and be recognized for doing so
Acquire new knowledge
Do work that is both challenging and interesting
Do work that is meaningful or that makes a societal contribution
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Assume responsibility
Be involved in determining how the work is done
The foregoing opportunities are likely to include the primary motivators for a
great many employees, provided that these employees are at least nominally
satisfied with the environmental factors surrounding their employmentthat is, the
potential dissatisfiers.
Dissatisfiers
The potential dissatisfiers are the environmental factors that exist in all aspects of an
employees relationship with the organization. They generally do not motivate
workers, but they can easily lead to employee dissatisfaction if they are not
maintained at a level acceptable to the employee. These potential dissatisfiers can be
grouped in five categories:
1. Salary administration, primarily the perceived overall fairness of salaries and
benefits
2. Potential for promotion and growth and the extent to which this is or is not
present
3. Personnel policies, or how each employee is treated both as an individual and
relative to other employees
4. Working conditions and the extent to which they promote well-being relative
to what is expected
5. Communication in all of its forms, including knowledge of the organizations
plans and prospects, regular feedback on performance, individual
confidentiality, and higher managements responsiveness to employee
questions and concerns
Motivational Strategies
The first four of the five dissatisfiers listed previously have much to do with the
overall organization and are perhaps mostly beyond the control or direct influence of
the department manager. The final one on the list, communication, depends in part
on the organizations policies and practices but also depends to a considerable extent
on the individual managers behavior. Any specific motivational strategy must take
into account the relative strength of potential dissatisfiers, so it might be said that an
initialand continuingmotivational strategy is the maintenance of the
environmental factors so as to minimize their potential effects as dissatisfiers. Other
active motivational strategies that might be used include the following:
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Performance appraisal. Making full use of the organizations performance
appraisal process, preferably including self-appraisal participation and
faithfully including appraisal interviews, serves a number of communication
needs and can also provide recognition for work well done (only very rarely is
it not possible to convey something positive in an appraisal). However, the
formal appraisal done annually or perhaps semiannually is not enough; the
manager should dispense praise when earned and in general maintain an
ongoing communicating relationship with each employee.
Job rotation, job enrichment, and job enlargement. These strategies generally
involve expanding or enlarging jobs or rotating duties. Such actions provide
employees with the opportunity to gain new knowledge and can serve to inject
increased interest and challenge into the work.
Delegation. Related to the foregoing strategy concerning job expansion, proper
delegation well administered can provide employees with added interest and
challenge, the chance to acquire new knowledge, and the opportunity to take on
increased responsibility.
Awards and honors. Employee awards and honors programs provide visible
recognition that can go a long way toward satisfying some employees needs
for recognition and appreciation. Such programs often include Employee of
the Month and Employee of the Year selections.
Career ladders and parallel-path progression systems. Such systems provide
the opportunity for capable individuals to advance themselves professionally
without necessarily seeking entry into management, thereby satisfying a
continuing need for learning, growth, status, and recognition.
Incentives and bonuses. Although it may be argued that in and of itself money is
not a particularly strong motivator, it nevertheless looms large as a driving
force for some workers. Often the monetary value of an incentive or bonus
does not count nearly as strongly as the act of achievement. For some
employees, it can truthfully be said that the money becomes primarily the
score in the quest for accomplishment.
Employee participation. Allowing employees to participate in establishing or
revising methods, procedures, and processes is potentially one of the strongest
individual motivators. In addition to involving the employee in determining
how the work is done, doing so provides increased responsibility, adds interest
and challenge, and promotes the acquisition of new knowledge.
Motivation in Critical Incidents
From time to time, an organization experiences difficult situations in which workers,
along with management, may experience a sense of defeat. By way of example,
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consider the long-term care facility with a history of excellence. Year after year, it
passes the licensure review with flying colors. Then there is one unfortunate
incident: a caregiver fails to report a patient-to-patient altercation until 2 days after
the incident. This omission is noted by the on-site surveyors, who flag the
organization for the incidence of patient abuse. The staff is devastated because they
have taken such matters seriously and have had no prior instances.
A second example of a difficult situation stems from ever-increasing external
regulations: the organization works diligently to comply with these requirements,
only to find more regulations to follow. The current emphasis on disaster rehearsal
to the point of failure is well meaning, but down in the trenches, it is hard to be
enthusiastic when one is set up to fail.
A third example may be found in the difficult situation of budget freezes or cuts.
There may be a season of dry promotions, no raises, and cutbacks in fringe benefits.
Yet despite these measures, the worker is expected to give full effort.
A fourth example occurs when one or a few caregivers commit extensive fraud in
billing. This serious infraction attracts extremely bad publicity for the facility. Other
workers may bear the brunt of this criticism in their community and social settings:
Oh, you work at that placewas your department involved in the fraud?
In each of these situations, particular attention must be given to motivational
practices, starting with fostering a climate of trust. Trust is enhanced by
transparency: Yes, this happened. Yes, this is what management did about it. Yes,
here is information you can share with others. Timely and accurate information, the
presence of feedback, and the encouragement of all workers that things are going
wellthese are all motivational strategies that are appropriate for critical incident
situations.
APPRECIATIVE INQUIRY
Appreciative inquiry (AI) represents yet another tool that can be used in critical
situations, because it helps shift the focus back to the good done by the employees.
AI is an approach to organizational change and development that begins with
examination of what is working well and appreciation, through active recognition
and expression, of the best of the individual and the group or organizations
experience. Developed in the mid-1980s by Dr. David Cooperrider, Suresh
Srivastva, and their colleagues at Case Western Reserve University, AI has been
applied in a variety of organizational settings, including large federal agencies such
as the Department of Health and Human Services, business ventures, and
professional associations.
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The Appreciative Inquiry Process
When a manager uses the AI approach, the focus is on the values and mission of the
organization and the positive experiences of the individual members of the
organization. In the healthcare setting, this can be broadened to include client or
patient groups as well as the professional, technical, and support staffs. The
operative assumption is the understanding that somethingperhaps even many
thingsare working well. These positive experiences are explicitly recalled and
actively noted as successes. Using these positive accomplishments, the group then
builds on them to envision improvements. A set of goal statements is developed, or
updated, based on the newly energized vision of the organizations efforts.
By way of example, consider the difference in two methods of dealing with
patient safety, risk management, and incident reporting and review. In a more
traditional approach, the emphasis is on the number, causes, and characteristics of
the problems relating to patient safetyfor example, number of falls, medication
errors, or misdiagnoses. In an AI approach, the emphasis is on the goal of making
this organization the safest possible environment for patients, staff, and visitors. The
review process would still include specific data such as those noted earlier.
However, the data would be cast in the context of all the care that is given without
mishap. Specific problem areas will usually decrease simply as a result of positive
efforts at improvement of safety practices.
Motivational Aspects of Appreciative Inquiry
Appreciative Inquiry is a planning process which, by its very nature, includes
motivation through positive reinforcement of that which is good. The process
diffuses potential conflict because the best results of both individuals and
departments or divisions are emphasized. Cooperation and enthusiasm for
participation are enhanced.
Managers have many opportunities in their ongoing work to apply AI. Consider,
for example, the usual concerns associated with preparation for outside surveys and
reviews, such as accreditation or licensure inspections. The preparation of the survey
report necessarily involves fact gathering. Instead of using the mindset that many
vague problems will come to light, the management team could start by reaffirming
the organizations best practices, noting them, and then isolating those areas needing
improvement. Consider a report prepared by a consultant. The areas of compliance,
which represent the majority of the day-to-day practices, are clearly listed, following
which the areas needing improvement are identified.
Another situation of potential concern and conflict is associated with periodic
labor contract negations. Typically, each party brings to the table its list of concerns
and demands. Using an AI approach, however, the starting point would be a
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reflection of those areas of managementlabor relations and those provisions of the
contract that have enhanced the accomplishment of the organizations mission.
When an organization as a whole, or a group within an organization, has
experienced much change and yet another major change must be absorbed, AI can
be used to coalesce the positive energy needed to carry on. For example, the
implementation of the Health Insurance Portability and Accountability Act
regulations involved major changes affecting budgeting, vendor selection,
collection, processing, and release of patient care information. In taking on this
challenge, the health information manager and the professional association as a
whole recalled its long-standing commitment to privacy and confidentiality with the
concomitant successes in these areas. These managers were easily motivated to take
leadership roles in implementing these new requirements regarding confidentiality
and security of patient care information.
Using the AI approach, a manager carries out an employee performance review
using as a starting point the employees assessment of the work and his or her
contribution to the departments mission. The manager would invite the employee to
identify all the areas where he or she is performing well and then discuss those areas
where performance could be improved.
Using the framework of AI, a manager continually seeks to take advantage of
opportunities to express public appreciation for all that is going well. The customary
declaration of a week highlighting one or another department is an example of this
practice. The nomination of employees as Employee of the Month or similar
recognition events reflect an AI attitude. The celebration of milestones in a
professional organizations life cycle is yet another opportunity to reflect on past
accomplishments, leading to emphasis on future endeavors.
MOTIVATION AND DOWNSIZING2
Reducing labor cost is usually the most common goal of reengineering or
reorganizing or other organizational restructuring efforts that result in downsizing
(i.e., the reduction of the workforce). A considerable amount of thought and effort
are required in structuring and implementing a staff reduction in a manner that will
be as fair as possible to all concerned while supporting the organizations primary
responsibility for delivering quality health care. However, the effort associated with
downsizing cannot end simply when the employees who have been identified for
separation have been released. For those at all levels who remain with the
organizationand in essentially all workforce cutbacks, the people who remain are
far more numerous than those who leavethe implementation of a reduction-inforce (RIF; sounds like riff in the language of human resources management) is
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the beginning of a completely new work situation in what will, and what in fact
must, become an altered organization culture. Although many will tend to seek a
business as usual state of affairs following a staff reduction, they will find that this
is not possible.
What Follows Downsizing?
A significant downsizing will forever alter many employees beliefs and attitudes
concerning their employment. Consider the following:
For many years, healthcare workers saw reductions occurring in other industries
in their communities while feeling relatively safe against the likelihood of ever
being laid off. For a long time, many felt certain that health care, as an
absolutely essential service, would remain untouched by the economic
concerns that plagued other industries.
Many healthcare workers long enjoyed a sense of employment security that has
now been severely damaged.
Healthcare workers have been awakened to the fact that health care is now
subject to many of the external forces that plague other industries. That is, there
are forces beyond their control that are causing permanent changes to health
care.
The immediate responses to a healthcare organizations downsizing can include the
following:
Many employees may initiallyand permanently, if positive steps are not taken
feel more like they are a cost of doing business rather than valued
members of a work organization. They come to view themselves as simply
another commodity that the organization will probably purchase less of in the
future.
Employee commitment to the organization will tend to erode as perceived
employment security is diminished.
Employee morale will be automatically reduced.
Some key staff the organization desires to retain may resign to seek
employment in environments they may perceive as more stable, further
negatively affecting the morale and outlook of those who remain.
Managers, with their thinking still governed by former ways of doing things,
may try to compensate for lost staff by increasing the use of overtime and
temporary help. They will experience additional frustration as controls are
placed on hiring and on the use of overtime and temporaries.
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In the time immediately following downsizing, there is a severe risk of cost
reductions becoming universally perceived as a higher priority than people. It is
true that cost control is an essential element of survival; the healthcare organization
that cannot adapt to financial reality will not survive to employ anyone. People,
however, still remain the driving force. It is people working together who must
bring the organization into line with financial reality, yet the same organizations
continued existence then and forever will depend on serving people.
What must follow downsizing is a revitalization of the remaining workforce. An
organization cannot and should never attempt to simply lay off a number of
employees and call on those who remain to close ranks and continue as before. All
who remain have a more difficult and more responsible task looming before them,
and the organizations top management should endeavor to give all of the support
and assistance that can reasonably be provided in making the transition to a leaner,
more purposefully directed organization.
The Necessity of Reducing the Workforce
Although the scenarios have differed to some extent from state to state, healthcare
provider organizations across the nation have been experiencing reductions in
revenue from most payment sources or revenue increases that fall short of covering
increasing operating costs. Further significant revenue shortfalls will likely be
occurring because of additional limitations placed on reimbursement levels by most
payers. The simple fact of the matter is that the healthcare system is being forced by
external circumstances to continually deliver the best of care while holding down
increases in costs. Because the demand for service remains as high as ever and, in
many respects continues to grow, the system is called on to accomplish more results
with limited resources.
One may hope that realistic cost-containment activities, pursued as a normal
course of business, would help an organization avoid or at least lessen a major
financial crunch. However, the problem remains the same regardless of its
immediate magnitude, and it must be dealt with. The communication issues are
difficult enough when faced squarely with realistic data on a year-to-year basis; they
become all the more difficult when the workforce has long been conditioned to
believe that nothing serious is amiss.
In brief, when downsizing is planned and before the cuts occur, the workforce
must be given every opportunity to understand why this is going to happen. The
more openly the employees have been treated all along and the more frankly they
have been advised of the organizations real circumstances on a continuing basis, the
easier it will be to communicate why.
Any downsizing, while preferably designed and recommended by senior
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management and the medical staff leadership and approved by the board of
directors, should proceed after all other reasonable efforts to reduce costs have been
explored as follows:
All realistic short-term savings opportunities should be identified and
implemented.
Before the actual reduction occurs, maximum effort should be expended to
reduce staff through attrition by freezing hiring in most positions and, as much
as possible, transferring current employees into areas of greatest need.
Overtime should be severely curtailed, essentially reserved for true emergencies
only and approvable by only a select few. Also, the use of temporary help
should be curtailed (along with overtime, agency temporary help can tend to
increase under staff reduction pressure if not closely monitored).
Supply inventories should be reduced to levels conforming to the true needs
indicated by reduced levels of activity.
It must be stressed that no matter how much cost-control effort precedes
downsizing, the reduction itself is never the end of the process. For the
organizations continued financial viability and effectiveness, it becomes the job of
all employees to pursue continuous cost control in concert with continuous quality
improvement if the organization is to prevail as a quality provider of health care.
The Employees Who Remain
A RIF instantly establishes two different groups of employees: those who leave and
those who remain. Except in rare instances, those who remain far outnumber those
who leave. Judging from many of the healthcare staff reductions that have occurred
in recent years, it is not unusual for the survivors to outnumber those leaving by
eight, nine, or ten to one.
Management must recognize that the manner in which it deals with the
reductions survivors has a considerably greater bearing on the organizations future
than how the terminations related to the RIF have been addressed. Those who have
departed are gone, probably forever, but the survivors are there and are critical to the
organizations future.
Stress and stress-related fear among those who remain following a layoff is
natural, predictable, and essentially universal throughout the organization. A fully
understandable feeling among survivors is the fear that they may be the next to go.
To counter this fear, some top managers have essentially promised that this is it
no more layoffs or allowed employees to believe that the condition is only
temporary and that employees will most likely be called back. Any belief in either of
these scenarios must not be encouraged; more than a few managers who have
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promised no more layoffs have been severely contradicted by worsening reality.
It becomes necessary to unite the survivors into a forward-moving team and to
motivate them to work harder in a leaner, more efficient, and yet initially a
completely alien situation. Through a concentrated and continuing communication
program, the survivors of the reduction need to learn:
Why they remain and what will be expected of them, why the old organization
is gone forever, and how they can help shape the new organizational culture
that will be emerging
That as the survivors of the reduction they are among the best in their
occupations and that is essentially why they are still in place
That a future in which continually doing more with less will remain critical to
organizational survival and continued employment
Immediate and Natural Reactions to Downsizing
The issues emerging in the wake of downsizing are all essentially people issues.
The major issues that surface usually include the following:
The short-term loss of talent in the form of productive employees the
organization would wish to retain. At special risk are valuable free-agent
employees, those professional and technical workers whose primary loyalty is
to an occupation and whose movement between and among organizations may
be governed more by labor market circumstances than by ties to a specific
organization.
An immediate drop in productivity, precisely at a time when productivity
increases are needed for the sake of long-term survival. This occurs because
morale has dropped and employees are preoccupied with issues of security and
concern for their future.
Increases in the use of sick time, healthcare benefits, on-the-job accidents,
medication errors, and other lapses in quality. These are often experienced
during and after downsizing, again because of employees concern for their
employment.
Employee Motivation Following Downsizing
Under normal circumstanceswithout the direct prospect of a reduction in the
workforce and with each employees reasonable expectation of continued
employmentjob security and wages are not particularly active motivating forces.
Rather, as noted earlier, they are potential dissatisfiers; as long as wages and job
security are perceived as reasonable, the concern for them is largely secondary.
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However, when these are disturbedwhen raises are eliminated, for instance, or
when security is perceived as threatenedthese become factors in heightening
employee dissatisfaction, which in turn negatively impacts motivation.
It becomes necessary to help the surviving employees reestablish a sense of
equilibrium with their altered surroundings and achieve a relative sense of security.
An employee who may come to work each day wondering Will I be next? will be
neither effective nor productive. As long as an employee is preoccupied with
personal survival, individual productivity will decline at the time its improvement is
needed more than ever.
It is necessary to communicate with employees fully, completely, and repeatedly
until they understand that:
Nobodyneither the organization nor a labor unioncan absolutely guarantee
continued employment.
A certain amount of stress is inevitable regardless of what management does
following downsizing, but stress can be energizing as well as debilitating and
can serve as a spur to improvement.
A future emphasis on improved productivity is essential to survival as an
organization.
Employees aggregate job performance is the organizations best survival
guarantee, and as far as individual employees are concerned, their performance
is their own best job security.
The most potent motivating forcesperhaps the only true long-run motivating
forcesare inherent in peoples work. These forces are, of course, the opportunity
to learn and grow, to do interesting work, to contribute, and to feel a sense of
accomplishment and worth. However, these motivators can work only when
employees are able to feel relatively secure and reasonably compensated.
Management needs to provide conditions under which all employees can become
self-motivated and then act on that belief.
Attendant to employees motivational needs, the organization might also consider
the creation of incentive programs and other flexible rewards to encourage and
acknowledge innovation, commitment, and enhanced productivity. Overall, top
management should at all times let employees know what is expected of them and
tell them exactly how this desired behavior will be rewarded.
Changes in Managers Roles
Any significant downsizing is bound to include the elimination of some
management positions or the combination of selected management positions. In the
presence of a generally flatter management structure, managers and their superiors
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are both likely to find their roles enhanced. They will essentially assume new roles,
roles that are more challenging and that require more direct decision making.
The individual who directly supervises others will be the organizations primary
conduit for communication with staff. At each management level, the manager is
always a critical link in the movement of information up and down the chain of
command. The first-line manager is the primary communicating link between each
direct reporting employee and the rest of the organization. As the one member of
management who the employee knows best and the one whose role it is to be the
employees communicating link, the manager influences the attitudes and outlooks
of a significant portion of the organization. Thus as the individual employee views
the manager, so too is he or she likely to view the organization. In other words, if a
manager of 15 people is seen as distant, uncommunicative, and uncaring, then 15
people are likely to see the total organization as distant, uncommunicative, and
uncaring. Because the size of direct reporting work groups generally increases
following downsizing and flattening of the organization, the influence of the
individual manager becomes even more significant.
Some of the managers key concerns after downsizing are:
The need to be conscious of the employees motivational needs and to work to
control turnover both immediately and over the long term.
The need to function as a strong advocate for the staffto achieve the best for
those who must leave as well as for those who remain.
The need to begin preparing to work with the survivors, helping them to
internalize the dramatic change well before the reduction is fully implemented.
The need to actively encourage employee participation more than ever before,
stressing involvement and drawing all possible employees into the decisionmaking processes. More than ever, the supervisors focus needs to be we,
never I or you.
The need to develop and use employee teams to the maximum possible extent.
The need to communicate, communicate, communicate at all times, remaining
in touch with employees fears and concerns even when some of the answers
have to be We simply dont know yet, but well keep you informed.
CONFLICT
Conflict is an inevitable component of cooperative action, and the effects of conflict
are felt by all participants in organizational life. Indeed, in a sense organizational life
largely consists of carefully orchestrated conflict, so much so that one of the classic
functions of a manager is to ensure coordination, which includes promoting
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cooperation and minimizing conflict.
Dictionary definitions of conflict use terms such as variance, incompatibility,
disagreement, inner divergence, and disturbance. Conflict is basically a state
of external and internal tension that results when two or more demands are made on
an individual, group, or organization.
The Study of Conflict
The manager and healthcare practitioner must understand the phenomenon of
conflict within organizations so that they can make it acceptable, predictable, and
therefore manageable. Conflict must be accepted as an inevitable part of all group
effort. The causes of conflict are found primarily in the organizational structure,
with its system of authority, roles, and specialization. The clash of personal styles of
interaction can be analyzed so as to deal more effectively with such clashes.
Conflict can be accepted as an element of change, a positive catalyst for
continual challenge to the organization. Aggression may be accepted and channeled
to foster survival. If conflict is not channeled and controlled, it may have negative
effects that impede the growth of both the individual and the organization.
In certain situations, conflict may clarify relationships, effect change, and define
organizational territories or jurisdictions. When there has been an integrative
solution, resulting from open review of all points of view, agreement is strengthened
and morale heightened. Conflict tends to energize an organization, forcing it to keep
alert, to plan and anticipate change, and to serve clients in more effective ways.
ORGANIZATIONAL CONFLICT
Managers can assess organizational conflicts by using a theoretical model, which
frees them from the bias created by their own immediate involvement in the conflict.
By analyzing conflict in a relatively objective manner, a manager can deal with it
more positively and more easily. The following is a basic model for such an
analysis:
1. The basic conflict
a. Overt level
b. The hidden agenda
c. The source of conflict
2. The participants
a. Immediate and primary participants
b. Secondary participants
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c. The audience
3. The provision of an arena
4. The development of rules
5. Strategies for dealing with organizational conflict
Exhibit 101 is an example of the use of this model.
EXHIBIT 101 Conflict Model with Example
The Basic Conflict
Overt
issue
Habitual lateness and/or absenteeism of employee
Hidden
agenda
Growing employee resistance to managerial authority
Sources Human need versus organizational need Organizational structure
Participants
Immediate Unit supervisor and employee
Secondary Chief of service, personnel director
Audience Other employees with similar problems with work schedule, other
managers with similar employee disciplinary problems, and higher
levels of management who monitor organizational climate
Arena Grievance procedure
Rules Work rules related to attendance, procedures for filing grievances
Strategy Limitation of conflict to unit members
The Basic Conflict
Overt Level
As a starting point, the manager analyzing a conflict describes the obvious problem.
This process of naming the conflict elements provides focus and clarifies the issues
that are at stake. Examples include the following problems:
Habitual lateness by an employee
Delays in transport of patients from inpatient services to physical therapy or
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occupational therapy services
Lack of clarity about job responsibilities
Delays in treating patients, causing patients to wait unduly for their
appointments
The Hidden Agenda
Although the overt issue may be the true and only substance of the conflict, there is
sometimes another area of conflict that constitutes a hidden agenda. This hidden
agenda may be the true conflict, or it may be an adjunct issue. The process of
naming the conflict and describing its elements helps bring to light any hidden
agenda that may exist.
Conflict issues are buried for several reasons. For instance, they may be too
explosive to deal with openly, or subconscious protective mechanisms may prevent
a threatening subject from surfacing until the individual in question has a safe
structure and the necessary support to deal with it. Within an institution, the climate
may not be appropriate for accepting conflict, or organizational resources may be
insufficient to deal with it.
The subtleties of intraorganizational power struggles cause certain aspects of
conflict to remain hidden. Individuals may choose to obscure the real issue as a
means of testing their strength, of determining points of opposition before plunging
ahead with an issue, or of checking the intensity of opposition. Periodic sparring
over issues that never seem to be resolved is a clue to the existence of a hidden
agenda. For example, the hospital budget issue of billing a medical group practice
for certain administrative services may surface each year and be subjected to
temporary resolution. The root of the problem is not the allocation of money, but
rather the creation of a new institutional structure. As a consequence, organizational
control of outpatient services is at stake.
The Sources of Conflict
The definition of a conflict should indicate its primary sources: competition for
resources, authority relationships, extraorganizational pressures, and so on. As
discussed earlier, organizational conflicts are ultimately due to the individuals who
participate in organizational activities.
The Nature of the Organization
Organizations with multiple goals face competing and sometimes mutually
exclusive demands for available resources. A hospital, for example, must safeguard
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against malpractice claims through active risk control management, yet it must also
contain costs. The rules, regulations, and requirements imposed by the many
controllers of the organization identified in the clientele network may be a source of
conflict. Shifting client demand and changes in the degree of client participation in
the organization may lead to conflict when an increase in the allocation of resources
for one group is a loss for another. The authority structure is another clue to
potential conflict; members of coercive organizations are more frequently in conflict
with the organization than are members of normative institutions.
The Organizational Climate
An emphasis on competition as a means of enhancing productivity, as in the use of
the deadly parallel organizational structure or the use of a reward system that
emphasizes competition among individuals or departments, may cause conflict. The
intentional overlap and blurred jurisdiction of units can produce continual jockeying
for organizational territory. Competition for scarce resources may be sharp, with
resulting conflicts, coalitions, and compromises. The subtleties of an institutions
power struggles, the shifting balance of power (e.g., a growing union movement),
and the need to demonstrate power constitute another facet of organizational
climate. Denial of conflict is a potential source of trouble, because it removes a safe
outlet for the resolution of conflict before it becomes a serious problem.
The Organizational Structure
The complex authority structure of healthcare organizations (i.e., a dual track of
authority coupled with an increasing professionalism among the many specialized
workers) creates situations of potential conflict. Professional practitioners, such as
nurses, physical therapists, clinical psychologists, and social workers, are trained to
assess patient needs and to take actions within the scope of their licensure or
certification; however, their ability to make decisions is limited by the hierarchical
organizational structure. This problem is compounded when the individual
practitioner has a legal duty to act or refrain from acting that is in direct opposition
to the hierarchical system, such as when a nurse refrains from giving a medication
that would be harmful to the patient even when the physician has (inadvertently)
ordered such a dosage.
Physicians, in holding staff appointments, find themselves required to shift
regularly from their roles as independent practitioners when functioning outside the
healthcare facility to more limited roles as members of the organizational hierarchy.
This regular role shift may also be required of the physical therapist, nurse
practitioner, or occupational therapist who functions as an independent agent in
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private practice and at the same time participates in the patient care process as a staff
member of a healthcare institution.
Conflict may also arise from specialization within the organizational structure
when individuals attempt to carry out their assigned activities. For example, the
social worker might seek to place a patient in a long-term care facility, but the
utilization review coordinator must impose strict guidelines in terms of days of care
allotted under certain payment contracts. The health information manager must
develop a system of record control, although many users of records find it more
practical to retain records in restricted areas of their own. The purchasing agent must
comply with certain regulations on deadlines, budget restrictions, and auditing
procedures in spite of individual needs. Specialization within the complexities of
bureaucratization leads to frustration, misunderstanding, and conflict.
Superiorsubordinate relationships constitute another area of potential conflict.
The organizational chart is, in fact, a suppression chart that specifies which positions
have authority over and literally suppress other individual jobs or units. The
legitimacy of a leaders claim to office is continually assessed. The power, prestige,
and rewards built into the hierarchical system all represent gain for some and related
loss for others. The erosion of traditional territory associated with line management
results from activities clearly intended to remove some authority from line
managers. These activities include client or worker involvement in decision making.
The process of management by objectives, in which workers are directly
involved in setting and assessing objectives, commands much attention for its
motivational value. Also, streamlined processes, such as central number assignments
or patient bed assignments, have much merit as systems improvements, and a central
pool of patient aides, assistants, and transporters is an alternative to assignment by
department. Yet each of these processes erodes the distinct territory of one or
several managers, whose ability to make decisions is affected by such changes.
Increased specialization in some technical areas leads to a more frequent use of
functional specialists. Although the line manager retains authority, the specialist
must be included in the planning and decision-making process; the line manager is
no longer the sole agent in charge.
Unions may move into management territory in several areas relating to
personnel management and direct work assignment. In the collective bargaining
process, the nature of the work, who will do it, and how much will be done may be
issues. Union gains may be management losses.
Individual Versus Organizational Needs
Human needs and values must be welded into the organizational framework. A large
number of clients and workers enters the organization, and they have different
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values, experience, motives, and expectations. The degree to which each individual
internalizes the values of the organization and accepts a primary identity derived
from the institution varies greatly. Individuals who do not participate directly in the
accomplishment of organizational goals or in the institutional authority structure
tend to identify less with the organization and view its demands less favorably than
those who participate more fully in direct, goal-oriented activities.
Solutions to Previous Conflicts
New problems may arise from solutions to previous conflicts. The use of
compromise as a strategy in dealing with conflict tends to leave all participants
somewhat dissatisfied. At the next opportunity, one or more participants may seek to
reopen the issue in an attempt to regain what was lost, particularly if the loss was
acute. The loser may build up resources and enter into an active state of aggression
when such resources have been accumulated, such as a nation defeated after a war
(e.g., Germany after World War I). When there is a consistent denial pattern, the
conflict may go underground for a time, then emerge again with greater force.
Again, managers should realistically examine the negative consequences of conflict
resolutions so as to minimize their recurrence.
The Participants
The immediate participants in the conflict can be identified readily as the individuals
or groups caught in the open exchange.
The secondary participants are the individuals called in to take an active role,
such as persons at the next level of the hierarchy. A manager may consult with a
senior official to whom the individual involved in the conflict reports or with a staff
adviser, such as a labor relations specialist. A unit manager may be required in some
instances to refer conflict to the next level for resolution, as in some grievance
procedures. In the case of a unionized employee, a representative of the union, such
as a shop steward, may be involved. A neutral party may be called in by both
sides in a labor dispute (e.g., a mediator or an arbitrator). Occasionally, a manager
may consult informally with certain marginal individuals, such as those in the
department or organization who have an overlapping role set, a supervisor whose
domain spans several activities, a client who is also on an advisory committee, or
another department head who has faced similar situations. Because they link groups,
these individuals are sought out to test a potential solution or to obtain information
and even advice.
A third category of participants may be classified as the audience. This category
may include the following:
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The clients. If the conflict is overt and severe, the clients may turn to other
organizations for the necessary services so as to avoid the conflict. Uncertainty
may cause tension within this group, however, and clients may become active
participants. A client group alienated from the institution may develop its own
system to meet its needs.
The public at large. This group may seek action through recourse to some
government agency, and an agencys intervention into the conflict may take the
form of additional regulation of the organization. The conflict may be brought
into the public arena; for example, a labor dispute may be taken to court. The
net effect of intervention by some agent on behalf of the public at large is the
opening or broadening of the conflict, which removes it from the immediate
control of the original parties to the dispute.
A potential rival or enemy. While one group and its opponents are absorbed in
conflict, a third group whose energies are not drained by conflict may seek to
expand its services and attract the clients of the groups locked in the dispute.
Individuals or groups with similar complaints. Some observers may seek to
press a similar claim if the right side wins. In the case of employee unrest, a
labor organizer may consider more active unionization attempts. Independent
practitioners who seek greater autonomy in the practice of health care may
monitor changes in organizational bylaws or state licensure regulations and
find gains made by one individual or group of practitioners to be the catalyst
needed to obtain similar gains. In malpractice cases, jury awards are monitored
and publicized. As the basis for a certain kind of claim is expanded through a
trend in court decisions, more individuals may advance their cases. Without
extensive publicity of the benchmark cases, this basis of claim might not have
arisen. A worker who sees another worker win a concession from the manager
about some work rule will more readily press a similar claim.
The opportunist. Some individual or group may seek to enter the conflict as
champion or savior. Such action may be undertaken by individuals seeking to
raise themselves to leadership positions.
In many cases, members of the audience not only cheer and jeer, but they also
become active participants, thereby expanding the conflict in terms of the number of
individuals or groups who must be satisfied in any solution.
Conflict should be resolved at as low an organizational level as possible. The
facts are better known by the immediate participants, who are able to communicate
directly. Also, because the number of participants is limited, agreement on a solution
may be more easily obtained. Top levels of management should be involved only
rarely in conflicts within the organization, because their involvement might give
undue weight to the problem, establish precedent, and force the setting of policy that
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escalates resolutions to a higher level. The resources of top management should
generally be reserved for critical issues.
The Provision of an Arena
The development of a safe, predictable, and accessible arena tends to create a sense
of security and to keep the problems from becoming diffuse. The aggrieved know
where to turn and what to do to seek redress. The provision of an acceptable arena is
also efficient. The individuals involved give their attention to it in a highly
structured manner, and it establishes clear boundaries to the conflict: It is legitimate
to bring issues of conflict to this place, through this structure, at these designated
times. The court system and legislative debate are such arenas in the larger society.
In organizations, arenas include the structured grievance process for employees
(Exhibit 102), the appeals process for the professional staff member seeking staff
appointment, or the complaint department for customers. Committees in which
multiple input is invited are also common arenas for the resolution of conflict.
The Development of Rules
Rules serve to limit the energy expended on the conflict process. The provision of
rules has a facesaving and legitimizing effect; it is permissible to disagree, equal
time is guaranteed, and each point of view is aired. The rules also provide a basis for
the intervention of a referee or neutral party. The rules may be developed to allow a
cooling-off period so that the issues can be put in perspective.
EXHIBIT 102 Excerpts from Grievance Procedure
Any grievance that may arise between the parties concerning the application,
meaning, or interpretation of this Agreement shall be resolved in the following
manner:
Step 1: An employee having a grievance and his Union delegate shall discuss it
with his immediate supervisor within five (5) working days after it arose or
should have been made known to the employee. The Hospital shall give its
response through the supervisor to the employee and to this Union delegate
within five (5) working days after the presentation of the grievance. In the
event no appeal is taken to the next step (Step 2), the decision rendered in this
step shall be final.
Step 2: If the grievance is not settled in Step 1, the grievance may, within five
(5) working days after the answer in Step 1, be presented in Step 2. When
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grievances are presented in Step 2, they shall be reduced to writing on
grievance forms provided by the Hospital (which shall then be assigned a
number by the Department of Human Resources at the Unions request),
signed by the grievant and his or her Union representative, and presented to the
Department Head and the Department of Human Resources. A grievance so
presented in Step 2 shall be answered in writing within five (5) working days
after its presentation.
The time frame given by the rules reduces uneasiness, because participants are
assured of a legitimate opportunity to present the issues. Conflict remains under
control.
Strategies for Dealing with Organizational Conflict
Two strategies for dealing with conflict are opposite in nature: limitation and
purposeful expansion. A manager assesses a conflict situation and makes a
judgment. Is the wiser course of action one in which the conflict is allowed to
become greater? With this approach, there is the risk that the organization could lose
control as conflict is widened, and it is unlikely that both sides will be reinforced
equally. Conflict is best kept private, limited, and therefore controllable. Yet there
might be an advantage to conscious expansion. The underlying purpose of the
intentional expansion of conflict is to demonstrate its immediate effect on the clients
or the public, who in turn will bring pressure on the opposing party to end the
dispute. The immediate involvement of the client group is sought in the hope that it
will act as a catalytic factor, forcing quick resolution. For example, a teachers union
may go on strike at the beginning of a school year, a coal miners union may strike
during the winter, and traffic officers may conduct a slowdown or job action during
the height of the Fourth of July traffic to the shore.
The routinization of conflict is an additional strategy wherein conflict is accepted
as a normal part of organizational life. Thus, the conflicts are anticipated. Certain
conflicts are identified and contingency plans are developed. For example, a strike
plan is developed in anticipation of possible conflict arising at the conclusion of a
contract cycle. Such an event may be short-lived, with more of a symbolic value as a
kind of catharsis as a biennial event. The energy associated with such conflict is
brought to the surface and played out in a scripted fashion; it is predictable and
therefore manageable. Other strategies for the routinization of conflict include, for
example, co-optation, strategic leniency, preformed decisions through policy and
procedure development, and the selection of individuals who fit the organization.
In addition to such conscious strategies, a manager should make use of the
general principles of sound organization. When used properly, these principles bring
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about stability and reduce conflict. Known policies and rules, sufficient orientation
and training of members, proper authorityresponsibility designations, and clear
chains of command and communicationall of these practices foster cooperation
and mutual expectation, with the attendant reduction of undue conflict.
Finally, awareness of burnout and programs to prevent it can contribute to the
reduction of conflict and enhance motivation. Such programs are discussed in
another section.
DISCIPLINE
The attitudes, emotions, and motivations of each employee within an organization
affect not only the degree to which goals and objectives are attained but also
influence the behavior of other employees. The manager of any unit or department
must be concerned with the conduct or behavior of all employees within that unit or
department. A managers guidance of a work group is best supported and facilitated
by: (1) establishing reasonable standards of conduct, or work rules, and informing
employees of these standards, and (2) enforcing all rules consistently and humanely.
The word discipline has acquired different and sometimes less-than-favorable
connotations over the years. In the military context, the word is usually associated
with order, consistency, and unquestioning obedience. In the context of the work
organization, however, the word is strongly associated with the use of authority, and
it carries the disagreeable connotation of punishment. However, a brief foray into
the origins of the word reveals that discipline comes from the same root as disciple
and as such actually means to teach so as to mold. Thus at one time, teaching was
the primary intent of discipline, the process of shaping or molding the disciple.
Nevertheless, for the most part, in the context of the work organization, people have
come to associate disciplineand therefore disciplinary actionwith punishment.
Although much disciplinary action necessarily includes elements of punishment,
its primary objective must never be punishment itself. Rather, the principal purpose
of disciplinary action should be correction of behavior. Therefore it is a requirement
of disciplinary action that for all but the most serious infractions, the transgressing
party be afforded the opportunity to correct the offending behavior. The obvious
exceptions are those instances of behavior that are sufficiently serious to prompt
correction by removing (that is, terminating) the offenders without a second
chance. These exceptions arise in a relative minority of disciplinary situations; for
the greatest part, disciplinary action is properly directed toward correcting errant
behavior.
In addition to using disciplinary action to improve employee behavior, at times it
can help motivate employees so they become self-disciplined and thus more
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effective in the performance of their jobs. However, no matter how skillfully it is
applied, disciplinary action will always carry something of a negative connotation
for many employees, so in the long run calling attention to correct behavior is more
effective in promoting self-discipline and cooperation than calling attention to
incorrect behavior. In other words, disciplinary action is necessary and has its place,
but praise ultimately proves more powerful in inspiring acceptable performance and
behavior. Even in an organization where employees exhibit a high degree of
independence and self-discipline, a manager must occasionally apply disciplinary
action of some kind because rules have been broken.
At this stage of the discussion, it is necessary to make a distinction between two
kinds of employee problems with which the manager may be confronted: problems
of performance and problems of conduct or behavior. When a manager speaks of
taking disciplinary action, he or she is talking of addressing problems of conduct or
behaviorthat is, problems that involve the breaking of rules or the violation of
policies. In addressing these kinds of problems, although it is usually his or her
purpose to correct the errant behavior, the process frequently involves warnings of
various kinds. Thus, the process can acquire a negative connotation and be
perceived as including punishment. Most, if not all, problems of conduct or
behavior involve violations that are willful or that at least result from carelessness or
indifference. Such violations are considered the fault of the perpetrators.
Problems of performance are an entirely different matter. The warnings,
suspensions, and other measures described within a progressive disciplinary process
are inappropriate for problems of performance. Such problems, which usually
encompass an employees failure to meet the minimum expectations of the job, are
not considered willful violations of rules. Therefore, problems of performance must
be addressed through counseling and retraining as necessary, using a process that is
entirely corrective in nature and not punitive in any respect. The progressive
disciplinary process, then, is applicable only to problems of conduct or behavior and
not to problems of performance.
Distasteful as the application of disciplinary action may be, it is the managers
responsibility to act promptly, firmly, and consistently when action is called for.
Disciplinary action should follow the misconduct as closely in time as possible. The
only significant reasons for ever delaying disciplinary action even briefly are to
allow tempers to cool, perhaps to investigate a situation and decide how to proceed,
or to take the time and opportunity to secure a private one-on-one meeting with the
offending individual. Every instance of disciplinary action must be treated as a
confidential matter, handled in private; it is, quite bluntly, nobodys business but
that of the offending employee and the manager.
Progressive Disciplinary Action
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Several steps constitute the progressive disciplinary process. Not all of these steps
will be applicable in all instances; at which step the process is entered and how
many steps are applied will depend on the nature of the specific infraction. The steps
comprising a complete progressive disciplinary process are described next.
Counseling
The initial step taken to address a number of kinds of noncritical errant behavior
should be counseling. In a one-to-one meeting with the manager, the employee
should be told the nature of the perceived problem, why it is a problem (or how it
can become a problem), what the rules are concerning this behavior (with specific
reference to handbooks and policy manuals), what the possible consequences of this
kind of behavior are, and within what period of time correction is expected. This
should be accomplished without reference to any kind of warning; it is simply an
important, job-related discussion between manager and employee.
The manager should document each counseling session. Some organizations use
a specific form for documenting counseling sessions, but a simple handwritten note
retained in departmental files should be sufficient.
Oral Warning
Repeated problem behavior following counseling should be addressed using the
more formal early stages of the progressive disciplinary process, specifically the oral
warning. The oral warning stage, often regarded as involving a counseling session
itself, should be used only after the employee has failed to respond to informal
counseling.
EXHIBIT 103 Record of Oral Warning
Employee Name __________________________________ ID No.
__________
Department ____________________________________ Hire Date
_________
Job Title and Grade ______________________________ Job Date
__________
Infraction or incident; policy reviewed and discussed:
Dates of counseling sessions or discussions concerning the same policy:
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The employee must take the following action:
Employee Signature ________________________________ Date
___________
Manager Signature _________________________________ Date
___________
This record will be maintained in departmental files. If further action is
required for the same offense, it will be forwarded to Human Resources for
inclusion in the personnel file.
The oral warning should be documented by the manager, preferably on a form
created for that purpose. Exhibit 103 presents an example of a simple oral warning
form.
Often someone will argue that if the oral warning is documented, it is actually
a written warning. It may seem so, but the difference between a written warning and
an oral warning lies in what goes into the employees personnel file. The record of
an oral warning should be retained in department files; it should go into the official
personnel files only as part of a subsequent warning for the same kind of behavior.
One might logically ask that if it is truly to be an oral warning, why document
it at all? This is done because the oral warning is a step in the published progressive
disciplinary process. When an employment relationship breaks down and legal
problems result, it can become necessary to provide evidence that every step in the
process was followed.
Written Warning
The written warning follows the oral warning as necessary, with this documentation
automatically included in the employees personnel file. Exhibit 104 is an example
of a written warning form.
EXHIBIT 104 Written Warning
Employee ___________________________________ Name ID No.
__________
Department ____________________________________ Hire Date
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__________
Job Title and Grade _______________________________ Job Date
__________
Infraction or incident; policy reviewed and discussed:
Dates of previous actions related to the foregoing:
The employee must take the following action:
Employee Signature ___________________________________ Date
__________
Manager Signature ____________________________________ Date
__________
This record puts the employee on notice that additional violations will result in
more serious disciplinary action such as suspension without pay or discharge.
An employee whose improper behavior has not been corrected following
counseling, oral warning, and written warning is in a position in which failure to
change is likely to lead to loss of income via suspension and perhaps eventual loss
of employment. By this stage, the manager and the employee have been together on
the subject of the employees behavior problem at least three or more times. It is
time for the manager to bring other resources into the process.
Before Suspension
Before proceeding to the suspension step, the manager should consider referring the
employee to one of two available sources of assistance: the employee health service
or the human resources department. If in any of their numerous contacts, the
employee has given the manager reason to believe that he or she may be
experiencing health problems of any kind, a referral to the employee health service
is in order. If the problem appears to possibly lie in the employees attitude or in
other difficulties unrelated to health, the referral should be to human resources. In
the ideal system, the human resources department will include an employee relations
specialist or employee ombudsperson, but in the absence of such specialists, most
human resources generalists can fill the employee relations role.
This referral puts the employee in contact with someone who may be able to
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point the way toward resolution of some underlying problem. Also, a
knowledgeable person other than the manager is brought into the process, and this
new participant may be able to get through to the employee where the manager
could not. This step provides the employee with a more distinct opportunity to
correct the problem behavior. Also, the involvement of human resources can be
helpful in instances in which tension or strain exists between the department
manager and the employee.
Suspension and Discharge
If the referral step described previously proves unsuccessful, suspension without
pay, which in many systems ranges from 1 to 5 days, may follow. Eventually,
discharge will likely be necessary if nothing up to and including suspension without
pay is successful in changing behavior. Exhibits 105 and 106 are examples of
forms used to document suspension and discharge, respectively. However, a wellfunctioning referral program for employee behavior problems will significantly
reduce the use of the clearly punitive steps of suspension and discharge.
EXHIBIT 105 Suspension Without Pay
Employee Name __________________________________ ID No.
___________
Department ______________________________________ Hire Date
___________
Job Title and Grade _______________________________ Job Date
___________
Infraction or incident, and rule or policy reviewed and discussed:
Previous Disciplinary Actions:
Date: Action Taken:
Suspended for ____ days from the above date. Report back on regular shift on
____.
Or
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____ Time off waived by manager for the following reason (waiver does not
lessen the severity of the action):
Employee Signature ______________________________________________
Date ___________
Manager Signature ______________________________________________
Date ____________
This is a final warning. Failure to respond appropriately may result in
discharge.
EXHIBIT 106 Notice of Discharge or Dismissal
Employee Name ____________________________________________ ID
No. ___________
Department ______________________________________________ Hire
Date ___________
Job Title and Grade ________________________________________ Job
Date ___________
Your employment is being terminated for the following reasons:
Previous Disciplinary Actions:
Date: Action Taken:
____ Check here to indicate whether the employee desires an exit interview to
discuss benefits status. If this opportunity is declined, continuation-of-benefits
information will be mailed to the employees home address.
Employee Signature
_______________________________________________ Date
____________
Manager Signature
________________________________________________ Date
____________
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There is an important point to address concerning suspension without pay. Note
that in Exhibit 105, the manager has the option to waive the time-off requirement
of a suspension. The manager is permitted to use this option on occasions when the
enforced time off for a suspension would leave an important job untended or an area
critically understaffed. However, the employee must be strongly advised that waiver
of time off does not lessen the severity of the disciplinary action as far as the official
record and future actions are concerned.
The manager who believes there is cause to discharge an employee should take
the case to the human resources department for thorough review before initiating
action. Given the legal environment of the times, most organizations today require
human resources or administrative review and concurrence for most discharges. This
review is conducted to determine whether all bases have been covered from a legal
perspective and whether the record clearly demonstrates that the employee was
given the opportunity to correct the inappropriate behavior. Because of the time
required to accomplish it, this review serves another extremely important function in
ensuring that no employee is ever fired on the spot or otherwise terminated in the
anger of the moment.
Some severe infractions must, of course, be dealt with as they occur. However,
immediate firing is never the answer. The offending employee should instead be
sent home on indefinite suspension pending investigation and resolution.
Not all kinds of infractions will require the application of all the foregoing steps.
A mild infraction, such as tardiness (within a few minutes of starting time) may, if it
becomes chronic, eventually require all of the steps described previously. A more
serious infraction, such as sleeping on duty, may call for a written warning or
suspension on the first violation and discharge on the second violation.
The organizations human resources department ordinarily provides guidance for
determining the severity of disciplinary action for specific infractions. Differences
exist among organizations as to which kind of action applies to which sort of
infraction, but guidelines might include the following:
For typical minor infractions such as chronic tardiness, absenteeism, or perhaps
discourtesy, the progression might consist of first, oral warning; second,
written warning; then 1-day suspension; then 3-day suspension; and finally
discharge.
For more serious infractions, such as conducting personal business on work
time, unexcused absence, or failure to report for work when scheduled, the
progression might consist of written warning for the first offense, then 3-day
suspension, and finally discharge.
For still more serious infractions such as insubordination, falsification of
records, or violation of confidentiality, the complete progression might consist
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of a written warning for an initial offense and discharge for a second offense.
For the most serious infractions, there is no progression; these incidents call for
discharge on the first and only offense. Typical serious infractions include
theft, fighting on the job, possessing or using alcohol or illegal substances on
the job, bringing weapons onto the premises, deliberate destruction of property,
and absence without notice for three consecutive scheduled days (considered
job abandonment).
Heading Off Infractions Before They Occur
The manager who observes an employee apparently headed toward a point where
disciplinary action will be necessary is advised to introduce counseling before true
progressive discipline is necessary. For example, if the manager sees that a
particular employee is developing a poor attendance record and is closing in on the
point at which disciplinary action is called for, the manager should address this
problem via counseling with the employee before such action is necessary. It is the
unfeeling manager who, observing that an employee is approaching the point where
disciplinary action is necessary, will allow the circumstances to continue until action
is unavoidable. It is better by far for both manager and employee to use counseling
in an effort to head off the problem before it fully develops.
Appeal Procedure
Numerous organizations use appeal procedures to address employee complaints
about work-related matters. Such matters can include, for example, disciplinary
actions, performance evaluations, and decisions based on specific interpretations of
policy. A typical appeal procedure might include the following steps or some
variation of them. The time frames given are simply what one organization might
specify.
An employee with a complaint should first address the issue with the immediate
supervisor.
If the employee is not satisfied with the supervisors response, within a week of
the meeting he or she may complete a simple appeal form (obtained from
human resources) and schedule a meeting with the appropriate department head
(the manager to whom the supervisor reports). If the department head is the
immediate supervisor, this step and the following step are omitted.
Within 2 weeks the department head will review all facts and circumstances,
investigating as necessary, and render a decision in writing on the appeal form.
If not satisfied with the department heads response, the employee may take the
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appeal to the member of administration to whom the department head reports.
As in the previous step, within 2 weeks the administrative representative will
render a decision in writing.
If the employee remains unsatisfied with the response, the appeal is then taken
to the director of human resources, who will convene a three-party ad hoc
appeal committee consisting of one staff employee, one management
employee, and one human resources representative. Within 2 weeks this
committee will submit a confidential recommendation to the director of human
resources.
As necessary, the director of human resources will review the complaint and
recommendation with administration or legal counsel for legal or other
significant implications. Once cleared at this level, the recommendation
becomes final and binding.
The employee does, of course, have external options for appeal, such as the
Equal Employment Opportunity Commission and the State Division of Human
Rights. However, if the organizations representatives have applied the appeal
procedure honestly and impartially, the chances of a successful external
challenge are severely limited.
Grievance Procedure
The word appeal was used throughout the foregoing procedure to differentiate the
process from that which might be embodied in a collective bargaining agreement
(union contract). Collective bargaining agreements invariably use the term
grievance in the same sense that appeal might be used in a nonunion context. As in
the nonunion appeal process, a union grievance procedure uses several steps that
take the complaint up through succeeding levels of consideration. The essential
differences arise from the involvement of union officials and perhaps outside
arbitrators or mediators.
One form of grievance procedure is presented in Appendix 10A, Sample
Collective Bargaining Agreement. In that document, Article Fifteen covers the
grievance procedure.
THE LABOR UNION AND THE COLLECTIVE
BARGAINING AGREEMENT
Since the National Labor Relations Act was amended in 1975 to remove the
exemption of not-for-profit hospitals, workers in healthcare organizations have been
permitted by federal law to organize into labor unions. The specific exemption of
401
not-for-profit hospitals had been in place since 1947, so between 1947 and 1975 the
only active union organizing that occurred in not-for-profit institutions was that
made possible by the labor relations laws of a few states.
The typical collective bargaining agreement reflects managements and the
unions efforts to contain and control conflict and provide a framework for the
resolution of disagreement. Appendix 10A contains a typical collective bargaining
agreement. The entire agreement is included in this appendix to provide the
complete context of the formal relationship between employer and union. However,
with specific reference to conflict both actual and potential, attention is called to the
following articles:
Articles Six and Seven, in which the contracting parties agree to the limitation
of conflict during the life of the agreement
Articles Fourteen and Fifteen, which provide for the orderly resolution of
disciplinary actions and complaints by employees against management
Articles Eight through Twenty, which address the specifics of working
conditions, hours of work, benefits of employment, and other employmentrelated matters in a manner intended to provide clear guidelines for practice
and, therefore, to avoid conflict or minimize the chances of conflict occurring
Although some members of the healthcare organization, especially managers and
professionals, may find a collective bargaining agreement restrictive because of the
apparent limitations it places on actions of various kinds, the overall clarity of the
provisions in a well-written contract, plus the fact that the contract has been
negotiated by management and workers together, so that both sides own the
agreement, can sometimes foster positive organizational relationships. When the
occasional conflict does occur, the provisions of the contract can guide its
resolution.
LABOR UNIONS IN HEALTH CARE: TRENDS
AND INDICATORS
At present, the healthcare industry is not significantly unionized, with approximately
7.2% of all eligible nonmanagerial employees in all healthcare settings working
under union contracts as of the end of 2013, up slightly from 7.0% as of the end of
2012.
3 Approximately one-fourth of the countrys hospitals have some unionized
staff, but in a great many instances these unions are limited to specific groups and
do not represent total employee populations. Overall, union representation in health
care is substantially less than in all other industries; the strongest union penetration
402
involves public sector employees at about 35.3% of eligible workers, as compared
with 6.7% of eligible workers in the private sector.
3 At the same time, however,
indicators suggest that union penetration in health care is trending upward.
Numerous union attempts to secure representation seem on the surface to have
resulted in a surprisingly high percentage of union victories. However, it is
misleading to compare numbers of union elections with union victories; many
elections are called off by unions or otherwise not pursued if circumstances suggest
that the unions are likely to lose.
Why is unionization presently increasing in health care, and why do some of the
unions seem to be concentrating on healthcare employees? Consider the following
factors:
Healthcare employment is large and growing. Health care has long since passed
manufacturing and is presently second only to government in number of
employees. Large groups of nonunionized employees attract union attention.
Health care has for several years been in an especially unsettled state. Mergers,
acquisitions, closures, systems formation, and various downsizing activities
have resulted in layoffs or displacements of employees as healthcare delivery
patterns have changed. This unsettled state renders many employees
susceptible to union overtures.
Health care was once considered by many to be essentially recession-proof, but
that is no longer the case. With all of the changes occurring in health care,
employees have seen many of their fellow workers laid off as a result of the
effects of the aforementioned circumstances plus the ever-tightening web of
financial constraints placed on the healthcare system. There are now fears
concerning job security where no such fears existed in the past.
In numerous hospitals, cutbacks in staffing have raised nurses concerns over
both the safety of patients and the well-being of nurses themselves. Complaints
about the effects of long shifts, extra shifts, and mandatory overtime have
driven some nurses closer to unions, and the nurses unions have taken up these
staffing issues on their behalf.
Many of the foregoing circumstances, plus healthcare employees concerns for
other employment-related matters, are reflected in the issues emerging prominently
in union contract negotiations. The industry is seeingand for a while should
continue seeingdiscussions, disputes, and demands addressing the following
issues:
Job security, as new patterns of care delivery continue to evolve and uncertainty
concerning continued employment prevails.
The employers share of the cost of employee health insurance. As health
403
insurance rates continue climbing, employers are endeavoring to shift a greater
portion of these costs to employeesa move strongly resisted by employees
and unions.
Pension plans and associated employer contributions to them, as organizations
continue to abandon defined-benefit plans and increase their reliance on
defined contribution plans, such as 401(k) plans.
Staffing levels, especially from nurses but possibly from other professional
groups as well.
Pay rates, which are always a source of contention, although in many instances
these concerns may be secondary to some of the other issues.
Unions of all stripesin health care and elsewherehave begun working
together to push a national legislative agenda. Within health care, three unions have
joined together to put forth a single front in support of a new legislative agenda.
These efforts have included support of the proposed Employee Free Choice Act.
The Employee Free Choice Act, introduced as a legislative bill in congress in
2009, proposed to amend the National Labor Relations Act to bypass the secret
ballot representation election if the majority of eligible employees sign a petition or
authorization card. Union opponents expressed concern that the peer pressure,
harassment, and coercion that can accompany an open petition could enable unions
to rapidly make progress in unionizing the healthcare industry. Also, the bill would
have required employers and unions to enter binding arbitration to produce a
contract no later than 120 days after a union is officially recognized. The bill would
also have increased penalties on employers who discriminate against workers for
union involvement. The Employee Free Choice Act has not become law and for all
practical purposes is tabled and unlikely to go forward any time soon, if at all.
CASE: A MATTER OF MOTIVATION: THE
DELAYED PROMOTION
Background
With considerable advance notice, the director of health information management
(HIM) resigned to take a similar position in a hospital in another state. Within the
department it was commonly assumed that you, the assistant director, would be
appointed director; however, a month after the former directors departure, the
department was still running without a director. Day-to-day operations had
apparently been left in your hands (apparently, because nothing had been said to
you), but the hospitals chief operating officer had begun to make some of the
404
administrative decisions affecting the department.
After another month had passed, you learned through the grapevine that the
hospital had interviewed several candidates for the position of director of health
information management. Nobody had been hired.
During the next few weeks you tried several times to discuss your uncertain
status with the chief operating officer. Each time you tried, you were told simply to
keep doing what youre now doing.
Four months after the previous directors departure, you were promoted to
director of HIM. The first instruction you received from the chief operating officer
was to abolish the position of assistant director.
Instructions
1. Thoroughly analyze and describe the likely state of your ability to motivate
yourself in your new position. In the process, comment to whatever extent you
feel necessary on your level of confidence in the relative stability of your
position and explain how it might affect your performance.
2. Describe the most likely motivational state of your HIM staff at the time you
assumed the directors position, and explain in detail why this state probably
exists.
CASE: CHARTING A COURSE FOR CONFLICT
RESOLUTIONITS A POLICY
Background
The setting is an 82-bed hospital located in a small city. One day an employee of the
maintenance department asked the supervisor, George Mann, for an hour or two off
to take care of some personal business. Mann agreed, and he asked the employee to
stop at the garden equipment dealership and buy several small lawnmower parts that
the department required.
While transacting business at a local bank, the employee was seen by Sally
Carter, the supervisor of both human resources and payroll, who was in the bank on
hospital business. Carter asked the employee what he was doing there and was told
the visit was personal.
On returning to the hospital, Sally Carter examined the employees time card.
The employee had not punched out to indicate when he had left the hospital. Carter
noted the time the employee returned, and after the normal working day she marked
the card to indicate an absence of 2 hours on personal business. Carter advised the
405
chief executive officer (CEO), Jane Arnold, of what she had done, citing a longstanding policy (in their dusty, and some would say infrequently used, policy
manual) requiring an employee to punch out when leaving the premises on personal
business. The CEO agreed with Sally Carters action.
Carter advised Mann of the action and stated that the employee would not be paid
for the 2 hours he was gone.
Mann was angry. He said he had told the employee not to punch out because he
had asked him to pick up some parts on his trip; however, he conceded that the
employees personal business was probably the greater part of the trip. Carter
replied that Mann had no business doing what he had done and that it was his
Mannspoor management that had caused the employee to suffer.
Mann appealed to the CEO to reopen the matter based on his claim that there was
an important side to the story that she had not yet heard. Jane Arnold agreed to hear
both managers state their position.
Instructions
1. In either paragraph form or as a list of points, develop the argument you would
be advancing if you were in George Manns position.
2. In similar fashion, thoroughly develop the argument you would advance if you
were in Sally Carters position.
3. Assuming the position of the CEO, Jane Arnold, render a decision. Document
your decision in whatever detail may be necessary, complete with explanation
of why you decided in this fashion.
4. Based on your responses to Questions 1 to 3, outline whatever stepspolicy
changes, guidelines, payroll requirements, or something elseyou believe
should be considered to minimize the chances of similar conflict in the future.
NOTES
1. David L. Cooperrider, Peter F. Sorensen Jr., Diana Whitney, and Therese F. Yaeger,
eds. Appreciative Inquiry: Rethinking Human Organization Toward a Positive Theory of
Change (Champaign, IL: Stipes Publishing, 2000).
2. Portions of this section are adapted from C. R. McConnell, The Effective Health Care
Supervisor, 8th ed. (Burlington, MA: Jones and Bartlett Learning, 2015), Chapter 25,
Reengineering and Reduction in Force, 466472.
3. Union Members, 2013, News Release, Bureau of Labor Statistics, USDL-14-0095,
January 24, 2014.
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Appendix
10A
Sample Collective Bargaining
Agreement
(Fictitious in all respectsfor training use only to illustrate various aspects of
contract agreement)
ARTICLE CONTENT PAGE
One Intent and Purpose 2
Two Recognition 3
Three Union Security 3
Four No Discrimination 6
Five Management Rights 6
Six Union Activity 7
Seven No Strike; No Lockout 8
Eight Hours of Work and Overtime 9
Nine Rate of Pay; Shift Differential 10
Ten Probationary Employees 12
Eleven Seniority; Layoffs and Promotion 12
Twelve Safety and Health 17
Thirteen Resignation 17
Fourteen Discipline and Discharge 17
Fifteen Grievance Procedure 18
Sixteen Arbitration 20
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Seventeen Holidays 21
Eighteen Vacation 23
Nineteen Sick Leave 25
Twenty Leave of Absence 26
Twenty-One Insurance and Pensions 26
Twenty-Two Terms of Agreement 27
COLLECTIVE BARGAINING AGREEMENT BETWEEN JGL MEMORIAL
HOSPITAL AND THE CLERICAL AND TECHNICAL HOSPITAL
EMPLOYEES GUILD OF GREATER NEW CITY METROPOLIS, AFL-CIO
AND ITS AFFILIATE LOCAL 123B
This agreement dated January 4, 20N1, to be effective as of February 1, 20N1, is
entered into between JGL MEMORIAL HOSPITAL (herein called the Hospital)
and Clerical and Technical Hospital Employees Guild of Greater New City
Metropolis AFL-CIO AND ITS AFFILIATE Local 123B (herein called the
Union).
ARTICLE ONE: INTENT AND PURPOSE
1.1 Whereas, the Hospital is engaged in furnishing an essential public service vital
to the health, welfare, and safety of the community and more particularly of the
patients seeking and receiving service at the hospital; and
Whereas, both the Hospital and its employees have a high degree of
responsibility to provide such services without interruption of this essential service;
and
Whereas, both parties recognize this mutual obligation, they have entered into
this Agreement to promote and improve the mutual interests of the Hospital and its
employees and to establish and maintain cooperation and harmony between the
Hospital and its employees;
Now, therefore, in consideration of the mutual promises and obligations herein
assumed, the parties agree as follows:
ARTICLE TWO: RECOGNITION
2.1 The Hospital recognizes the Union as the sole collective bargaining Agency for
all technical and clerical workers including messengers, mailroom workers, unit
clerks, clerks and clerk typists, secretaries, and other technical workers as certified
408
in the State labor relations board certification of December 11, 20N1.
2.2 The Unit specifically excludes supervisors, temporary workers, casual workers,
and students.
2.3 Part-time work employees who work 20 or more hours per week shall be
covered by the terms of this agreement on completion of the probationary period.
2.4 The number of part-time employees shall not exceed 5% of the total number of
bargaining unit employees in each department as of February 1, 20N1. Temporary
employees and students and independent contractual employees may not be hired
for a period longer than 4 months per job per year.
ARTICLE THREE: UNION SECURITY
3.1 It shall be a condition of employment that all employees of the Hospital covered
by this agreement who are members of the Union in good standing on the effective
date of this agreement shall remain members in good standing and those who are not
members on the effective date of this agreement shall, after the 60th day actually
worked, following the date of signing this agreement, or its effective date,
whichever is later, become and remain members in good standing in the Union. It
shall also be a condition of employment that all employees covered by this
agreement and hired on or after the date of signing or its effective date, whichever is
later, shall, after the 60th day actually worked following such date, become and
remain members in good standing in the Union.
3.2 The failure of any employee to become a member of the Union at the required
time shall obligate the Hospital, on written notice from the Union to such effect and
to the further effect that Union membership was available to such employee on the
same terms and conditions generally available to other members, to forthwith
discharge such employee. Furthermore, the failure of any employee to maintain his
Union membership in good standing as required herein shall, on written notice to the
Hospital by the Union to such effect, obligate the Hospital to discharge such
employee. Following such notification to the Hospital, the employee shall be given a
period of not more than 30 days during which he shall be given an opportunity to
reestablish his membership in good standing with the Union.
3.3 The Union agrees that the payment of regular monthly membership dues and
initiation fees shall constitute membership in good standing.
3.4 The Hospital shall for the term of this Agreement deduct union dues and
initiation fees from such employees who are members of the Union and who
individually and voluntarily notify the Hospital through written authorization to the
Hospital for deductions from any wage paid to such employee. The Hospital agrees
409
to make such deductions on the first payday of each month or at such other time as
both the Hospital and the Union shall mutually agree and shall remit such monies
promptly to the designated officer of the National Union. The Hospital shall supply
the Union with a list of those employees for whom deductions were made and the
amount of deductions per current month.
3.5 The Hospital will furnish the Union each month with the names; addresses;
Social Security numbers; classification of work; dates of hires; names of terminated
employees, together with their dates of termination; and the names of employees on
leave of absence and specific kind of leave of absence. Employees shall promptly
notify the Hospital of changes in their names and addresses.
3.6 The Union shall indemnify and save the Hospital harmless against any claims,
demands, suits, and other forms of liability that may arise out of action taken or not
taken by the Hospital for purposes of compliance with these provisions.
ARTICLE FOUR: NO DISCRIMINATION
4.1 There shall be no discrimination against or for an employee because of race,
color, creed, national origin, political belief, sex, age, Union membership, or
nonmembership by the Hospital or by the Union.
ARTICLE FIVE: MANAGEMENT RIGHTS
5.1 Unless expressly included in this Agreement, nothing herein contained shall be
construed to limit the Hospitals right to exercise the functions of management
under which it shall have, among others, the right to employ, supervise, and direct
the working force; to discipline, suspend, and discharge employees for just cause; to
transfer and lay off employees because of lack of work; to require employees to
observe reasonable work rules and regulations not inconsistent with this Agreement;
to determine the extent to which its properties, equipment, and facilities shall be
maintained and/or operated or shut down; to introduce new or improved methods
and/or procedures; to determine the services to be rendered to patients and the
schedules of maintaining such services; and otherwise to manage or conduct the
facility, provided that these provisions shall not be used for the sole purpose of
depriving any Hospital employee of work. The above rights are not all inclusive, but
indicate the type of matters or rights that belong to and are inherent to Management.
Any of the rights, power, and authority the Hospital had prior to entering this
collective bargaining agreement are retained by the Hospital except as expressly and
specifically abridged, delegated, granted, or modified by this Agreement.
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ARTICLE SIX: UNION ACTIVITY
6.1 Except for Union activity expressly provided for in this agreement, no employee
shall engage in any Union activity, including the distribution of literature, which
could interfere with the performance of work during working time or in working
areas at any time.
6.2 Union representatives (or designees) shall have reasonable access to the Hospital
for the purpose of administering the provision of this agreement, provided they
obtain clearance from the designated Hospital official, who shall not unduly restrict
such access.
6.3 The Hospital will provide bulletin boards for Union use for the purpose of
posting only Union notices. Such bulletin boards shall be located at places readily
accessible to the employees place of work. The Union will be permitted to post on
these boards such notices of a noncontroversial nature, copies to be submitted to the
Labor Relations manager prior to posting.
6.4 The work schedules of employees elected as Union Delegates shall be adjusted
so far as practicable as to permit attendance at regularly scheduled meetings after
normal working hours, provided the Hospitals operations shall not be impaired. The
Union shall give reasonable notice to the Labor Relations manager of such regularly
scheduled meetings and the names of such delegates.
ARTICLE SEVEN: NO STRIKE; NO LOCKOUT
7.1 During the terms of this agreement, neither the Union nor the employees shall
engage in any strike, sit-down, sit-in, slow-down, cessation, stoppage, interruption
of work, boycott, or other interference with the operations of the Hospital.
7.2 The union, its officers, agents, representatives, and members shall not in any
way, directly or indirectly, authorize, assist, encourage, participate in, or sanction
any strike, sit-down, sit-in, slowdown, cessation or stoppage or interruption of work,
or other interference of the operations of the Hospital, or ratify, condone, or lend
support to any such conduct or action.
7.3 Should any strike, slow-down, picketing, or other curtailment, restriction, or
interference with Hospital functions or operations occur that the Union has not
caused or sanctioned either directly or indirectly, the Union shall immediately:
(a) Publicly disavow such actions by the employees or persons involved.
(b) Advise the Hospital in writing that such action has not been caused or
sanctioned by the Union.
411
(c) Post notices on the Union bulletin boards stating that it disapproves of such
actions and instruct the members to return to work immediately.
(d) Take such other steps as would reasonably ensure renewed observance of
provisions of this Article.
7.4 The Hospital shall have the right to discharge or otherwise discipline all
employees or the Union on their behalf without having recourse to the grievance
procedure and arbitration, except for the sole purpose of determining whether an
employee participated in the prohibited action.
7.5 During the terms of this Agreement, the Hospital shall not engage in any lockout
of any employee.
ARTICLE EIGHT: HOURS OF WORK AND
OVERTIME
8.1 A period of 8 hours shall constitute a regular days work, and 40 hours shall
constitute a regular weeks work in any one day or in any one week. A work day is
defined as the continuous 24-hour period beginning at the employees regular
starting time.
8.2 All work performed by an employee in excess of 40 hours in any 1 week shall be
paid for at the rate of time and one-half.
8.3 The Hospital shall distribute and allot overtime work to best suit the efficient
operation of a department and will make every reasonable effort to distribute in a
reasonable way the overtime work equitably among the employees of the
department in which the overtime occurs, provided the employee is qualified to
perform the work.
8.4 All employees shall receive a 1-hour paid lunch period, which shall be counted
as time worked. The Hospital will schedule this lunch period.
8.5 There shall be no pyramiding or duplicating of overtime rates. Hours
compensated for at overtime rates under one provision of this Agreement shall be
excluded as hours worked in computing overtime under any other provision. When
two or more provisions requiring the payment of overtime rates are applicable, the
one most favorable to the employee shall apply.
8.6 Employees shall be required to work overtime when assigned for the proper
administration of the Hospitals operations.
ARTICLE NINE: RATES OF PAY; SHIFT
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DIFFERENTIALS
9.1 Job classifications and rates of pay and progression in existence on the day of
this agreement are set forth in Attachment A, which is made part of this agreement.
9.2 If during the term of this Agreement new job classifications are established or
substantial changes are made in existing job classifications covered by the
bargaining unit, the Hospital will put the new or changed job classification into
effect and establish a rate of pay therefor. Such rate will be discussed with the Union
in advance, with the objective of obtaining its agreement. The Hospital may then
install the rate with or without agreement; when installed after agreement, no
grievance may be filed with respect to the rate. If installed without agreement, the
employee(s) affected or the Union may within 30 days present a grievance
protesting the rate if that rate does not bear a proper relationship to existing rates. If
no grievance is filed within the 30 days or if the grievance is settled, the new rate
will become part of Attachment A (wage scale) and shall not be subject to challenge
under the grievance procedure.
9.3 Full-time employees working on a shift that begins on or after 3:00 P.M., and
before 4:00 A.M., shall be paid a shift differential of (n amount) per hour. An
employee who is entitled to a shift differential for work on his regular shift shall
receive the shift differential for overtime hours that are an extension of the regular
shift. A shift differential shall not be paid when employees are authorized to
exchange shifts temporarily for personal reasons.
9.4 A shift differential shall not be gained or lost as a result of an extension of a shift
caused by overtime.
9.5 If an employee is regularly assigned to a shift receiving a shift differential, the
differential shall be included in calculating the employees vacation, holiday, and
sick leave pay.
ARTICLE TEN: PROBATIONARY EMPLOYEES
10.1 New employees and those hired after a break in continuity of service of more
than 6 months will be regarded as probationary employees until they have actually
worked 60 days and will receive no continuous service credit during such period.
During this period of probationary employment, probationary employees may be
disciplined, laid off, or discharged as exclusively determined by the Hospital, and
the Hospital shall not be subject to the grievance and arbitration provision of this
Agreement.
Continuing employees who apply for and are accepted into another job/position
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are considered probationary employees for 25 working days. See Article 11.9 for
related stipulations.
10.2 The rate of pay for new employees and those hired after a break in continuity of
service of more than 6 months shall be the hiring rate for the job. The rate of pay for
continuing employees shall be the grade level rate of pay.
ARTICLE ELEVEN: SENIORITY; LAYOFFS
AND PROMOTIONS
11.1 Seniority is defined as an employees length of continuous regular full-time
Hospital service last date of hire. Employees who were hired the same day shall
have their seniority established by lot and carried subsequently on the seniority list.
11.2 Seniority is computed from the day of last hire, on completion of the
probationary period delineated in Article Ten.
11.3 Seniority shall accrue
(a) During any authorized leave of absence with pay
(b) During an authorized leave of absence without pay because of personal illness
or accident for a period of 6 months or less, or maternity leave for a period of 1
year
During military service, as provided by federal law, an employee will not accrue,
but will not lose, seniority during an authorized leave of absence without pay.
11.4 An employee will lose seniority when he
(a) Voluntarily terminates his full-time employment
(b) Is discharged for cause
(c) Willfully exceeds the length, or violates the purpose, of an authorized leave of
absence
(d) Is laid off for a period of 6 months or the length of the employees service
with the Hospital, whichever is less
(e) Fails to report in accordance with a notice for recall from layoff within 48
hours of the time specified in the notice sent by certified mail to the last address
furnished to the Hospital by the employee. The Hospital shall send a copy of the
notification to the Union.
(f) Fails to report for recall to the assigned job
An absence from work for three consecutive work days without notice or
permission shall be deemed a voluntary resignation.
11.5 An employee who is or has been promoted or transferred out of the bargaining
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unit and who is later transferred back into the bargaining unit by the Hospital shall
be credited on returning to the bargaining unit with the seniority he would have had
if he had remained continuously in the bargaining unit.
11.6 In the event of a layoff in a department, temporary employees shall be laid off
first, then probationary employees, then regular part-time employees, and then
regular full-time employees on the basis of their Hospital-wide seniority. In the
event a full-time permanent nonprobationary employee is scheduled to be laid off
from a department, he or she may either bid for a posted vacant position in
accordance with the provisions of Section 7 or displace another employee within the
department of equal or lesser grade on the basis of Hospital-wide seniority, provided
he has the ability to perform said job within 25 working days. The immediate
department manager shall determine the employees acceptability.
11.7 Employees on layoff shall be recalled as follows:
(a) To a position, if open, previously held successfully in department by the
employee regardless of place on the recall list
(b) In reverse order of layoff on a Hospital-wide basis to other open positions
with the following provisions:
1. Employees may not upgrade from the recall list.
2. The employee must be acceptable to the hiring supervisor.
3. The employee must have the ability to perform the open position. The hiring
supervisor shall determine the employees acceptability for that position
during the applicable probationary period for a newly hired employee in that
grade level.
4. When probationary or part-time employees are laid off, they shall have no
recall rights.
11.8 Promotional opportunities
(a) Openings for bargaining unit positions shall be posted for five (5) work days.
(b) Employees within a department will be given preference for promotion to a
higher-paying job in the department.
(c) All bids must be submitted in person and in writing to the Office of Human
Resources within the five (5) work days.
(d) An open position shall be defined as a position that has been posted and for
which no acceptable bidders have been found.
(e) An employee who has been promoted in pay grades six (6) to ten (10) shall
not be eligible for further promotion for six (6) months.
(f) An employee who has accepted a promotional opportunity shall have twentyfive (25) working days to prove that he or she can perform in the new position.
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(g) An employee who has accepted a promotional opportunity and fails the
probationary period shall return to his or her previous position. If this position
has been filled, the employee may be offered an open equivalent position. If none
is available, the disqualified employee shall be laid off, subject to recall
according to the provisions of Section 11.7.
11.9 The rate of pay during the probationary period is that of the grade level of the
job.
ARTICLE TWELVE: SAFETY AND HEALTH
12.1 The Hospital agrees to provide reasonable safeguards on the premises for the
health and safety of its employees. Two employees from the bargaining unit
mutually agreed on by the Hospital and the Union shall serve on the Hospital Safety
Committee.
ARTICLE THIRTEEN: RESIGNATION
13.1 An employee who resigns shall give the Hospital 2 weeks advance written
notice.
13.2 An employee who fails to give such notice or whose employment is terminated
shall forfeit unused vacation time, provided it was physically possible for the
employee to give such notice.
ARTICLE FOURTEEN: DISCIPLINE AND
DISCHARGE
14.1 No employee who has completed his probationary period shall be discharged or
disciplined without just cause. If disciplinary action becomes necessary in the
interest of proper operation of the Hospital, care of the patients, and general
employee welfare, such actions of the Hospital shall be subject to the grievance
procedure. The Hospital agrees to furnish copies to the Union of disciplinary notices
resulting in suspension or discharge of an employee.
14.2 Any grievance resulting from action taken as outlined in the preceding section
must be filed in writing according to the grievance procedure outlined in Article
Fifteen.
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ARTICLE FIFTEEN: GRIEVANCE PROCEDURE
15.1 Any grievance that may arise between the parties concerning the application,
meaning, or interpretation of this Agreement shall be resolved in the following
manner:
Step 1. An employee having a grievance and his Union delegate shall discuss it
with his immediate department head within five (5) working days after it
arose or should have been made known to the employee. The Hospital shall
give its response through the department head to the employee and to this
Union delegate within five (5) working days after the presentation of the
grievance. In the event no appeal is taken to the next step (Step 2), the
decision rendered in this step shall be final.
Step 2. If the grievance is not settled in Step 1, the grievance may, within five (5)
working days after the answer in Step 1, be presented in Step 2. When
grievances are presented in Step 2, they shall be reduced to writing on
grievance forms provided by the Hospital (which shall then be assigned a
number by the Office of Human Resources at the Unions request) signed by
the grievant and his Union representative, and presented to the Department
Head and the Department of Human Resources. A grievance so presented in
Step 2 shall be answered in writing within five (5) working days after its
presentation.
Step 3. If the grievance is not settled in Step 2, the grievance may within five (5)
working days after the answer in Step 2, be presented in Step 3. A grievance
shall be presented in this step to the Office of Human Resources. The Office
of Human Resources shall hold a hearing within five (5) days and shall
thereafter render a decision in writing within 5 days.
15.2 Failure on the part of the Hospital to answer a grievance at any step shall not be
deemed acquiescence thereto, and the Union may proceed to the next step.
15.3 An employee who has been suspended or discharged, or the Union on his
behalf, may file within five (5) business days of the suspension or discharge a
grievance in writing in respect thereof with the