JWI 551: It’s All About The Patient Lecture Notes What are Organization Design and Organization Structure and How Are They Connected? Consider the current state of the U.S. healthcare system. It is a vast web of organizations, systems, and procedures. From the perspective of the patient—the consumer of healthcare – it can be extremely confusing to work out how care actually gets delivered and where to go for treatment. As a healthcare leader, you need to understand how things work inside all of the different units that make up the healthcare system. That understanding can lead to improvements in system design and the creation of new structures that promote more effective coordination and delivery of care. Healthcare is like most other industries in one respect. There is no “one size fits all” solution when it comes to the design of an organization. The reason: the right design depends on a wide range of factors, such as the social and legal environment, the type of work being performed, the technology available, and the leadership strategy. In other words, different In a March 12, 2012 Becker’s Hospital organizations have different needs, goals, and strategies, Review article, Ben Sawyer, executive vice and these factors have a direct impact on the type of president of Healthcare performance structure that is needed. Organization Design is the arrangement of responsibilities, authority, and flow of information within an organization. Organization Design results in Organization Structure1. Or, to express it in another way: Structures determine Operations. Does Organization Design Matter in Healthcare? The answer is a resounding “Yes”. There are countless examples in healthcare where organizations have added new services or provided new offerings but never thought about how the organization should be structured. This failure has resulted in the creation of Silos—where people work in their units and there is little interaction or communication across teams, divisions, improvement company Care Logistics commented "The fragmentation and variability associated with silo operations is the root cause of inefficiency and the biggest obstacle [to flow],… one of the first steps in eliminating silos is changing the mindset of everyone in the hospital, from the CEO to the front-line workers. People need to move from department- to systemwide thinking about hospital operations to deliver care in a coordinated manner. While changing one's way of thinking after years of working under a different philosophy can be challenging, there are steps hospitals can take to work towards a silo-less organization”. 1 Burns, Lawton Robert, Elizabeth H. Bradley and Bryan Weiner (2012). Health Care Management Organization th Design & Behavior, 6 Edition. Clifton Park, NY: Delmar Cengage Learning. © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 2 of 12 JWI 551: It’s All About The Patient Lecture Notes and departments. The problem of silos has significant implications for patient care and outcomes. In particular, there is strong evidence that, when care is well coordinated, patient outcomes are positively impacted. In addition to the concern about patient outcomes, silos also have negative implications for operational efficiency. Understanding Structure Probably the simplest way to illustrate the structure of any organization is to show it in an Organization Chart. This provides leaders with a quick view of the various roles that make up the organization and it gives them insight into the expectations for various roles. For example, an organization chart shows you who manages whom and it illustrates the spans of control. It also helps leaders to understand relationships, dependencies, and communication patterns. As a current or future leader in healthcare, you must study and learn your organization chart and know how to interpret it. This is important because, as you are learning in this course, structure affects overall relationships and communication. Types of Organizational Structure in Healthcare There are many types of organizational structure in healthcare. Let’s examine some of them more closely. As we do so, think about how the different structures affect the delivery of care to the patient. Line Structure This is a traditional, bureaucratic organizational design, where authority and responsibility are clearly defined. This top-down structure leads to efficiency and simplicity of relationships, but it can create monotony and alienate workers. It also makes adjusting to sudden changes in the environment or marketplace difficult. There is a strong emphasis on adhering to an established chain of command and communication protocols; going outside of the normal chain of command is not encouraged and is considered inappropriate. Example: Large Healthcare organizations. The organization chart in the figure below shows a typical Line Structure organization. © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 3 of 12 JWI 551: It’s All About The Patient Lecture Notes Ad Hoc Structure This is a modification of the Line Structure organization. It is often used to get a project done within a more formally structured line organization. It removes some of the rigidity of the Line Structure and is a way for the people involved to deal with a great deal of information. Once a project is completed, the structure is taken down. The result of this approach is a decrease in the strength of the chain of command. Employees often feel less loyalty to the mother organization. Example: Special Project or Initiative © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 4 of 12 JWI 551: It’s All About The Patient Lecture Notes Matrix Structure This structure is created to focus on product and function. It has both a vertical and horizontal chain of command. There is a dual authority hierarchy. Rules are less formal and there are fewer levels of hierarchy. Decision-making can, however, be slow. There are many people who need to share information. This can lead to confusion and frustration. The main advantage of a matrix structure is the centralization of expertise, which help lead to good patient outcomes. Staff education and adequate staffing are two of the supporting functions required to achieve these good outcomes. Example: A hospital group may have a Product section and a Functional section. Employees in the Product section manage supplies and logistics, while those in the Functional section manage nursing care, physician schedules, and overall delivery of care. Service Lines Service Lines work by defining specific groups of patients and organizing the delivery of care around the needs of each group. It is considered to be a patient-centered approach to the delivery of healthcare services. A Service Line is a horizontal system that spans multiple provider entities, in contrast to the vertical system represented by traditional healthcare organizations. Service Lines are created for one or more of the following purposes: Ø Monitor expenses Ø Facilitate marketing Ø Manage a service as a business entity, including coordination of patient care Service Lines represent a major departure from the disconnected silos of traditional Healthcare organizations. According to Sabrina Rodak (2012): The increasing emphasis on hospital-physician alignment and coordinated care has caused many hospitals to change their clinical department structure from the traditional silo model to a service line model. Service lines are designed to promote integrated care and collaboration, while the silo system tends to © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 5 of 12 JWI 551: It’s All About The Patient Lecture Notes create a segmented organization with little communication or partnership between separate 2 departments. Service Lines help hospitals to meet both quality and cost goals—two objectives of the Triple Aim that we examined in Week 1. Example: Service Lines are formed around diseases or conditions (e.g. orthopedic, cardiovascular, oncology), patient populations (e.g. pediatrics), or specific technologies (e.g. transplants). Flat Design As the name suggests, the goal of this design is to remove the layers of the hierarchy by flattening the chain of command and decentralizing the organization. There are still lines of authority but more decision-making takes place at the level where the actual work is happening. Managers sometimes struggle with the surrender of control that comes with this type of structure. When this is the case, the old bureaucratic characteristics may persist. The example below shows how Flat Design impacts the organization of a Nursing Division. 2 Rodak, Sabrina. “From Silos to Service Lines: Integrating Care to Meet Hospital Goals” Becker’s Hospital Review June 8, 2012. © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 6 of 12 JWI 551: It’s All About The Patient Lecture Notes Innovative Healthcare Organization Structures Now let’s explore some of the more creative organizational structures in the field of Healthcare. The modern Healthcare system is full of innovative and forward-looking models from which we can learn. Shared Governance This idea dates back to the mid-1980s. According to the Shared Governance Task Force (2004), it is: A dynamic staff-leader partnership that promotes collaboration, shared decision making and accountability for improving quality of care, safety, and enhancing work life … It is based on decentralized 3 decision-making and everyone having a "voice". Governance is shared among board members, nurses, physicians, and management. Joint practice committees become the key group structures. They assume power and accountability for decisionmaking. Professional communication is egalitarian. See the figure below for an illustration. 3 Vanderbilt University Medical Center, Shared Governance Q & A. VanderbiltHealth.com (2017). © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 7 of 12 JWI 551: It’s All About The Patient Lecture Notes Co-Management In this organizational model, physicians oversee and manage each service line — such as orthopedics, oncology, or cardiology — while the hospital oversees administrative matters, such as budgets, marketing, and personnel issues. Co-management allows for integration of hospitals with specialist physicians without requiring the physicians to become hospital employees. Quality improvement is a major goal of this arrangement. Physicians are rewarded with incentive bonuses for reaching certain quality measure and bonuses, hospitals see higher reimbursements under this pay-for-performance model, and patients receive better care. Co-Management Agreement (CMA) This is a tool that is used to set up a Co-Management structure. It is “a contractual relationship between physicians and a hospital that results in a shared-responsibility management structure for a specific service line”4. The shared responsibility is for patient care. CMAs are considered to be an example of an Alternative Payment Model. They gained popularity in the mid-2000s and are still being pursued today in the post-ACA implementation era. The reason: patients, payers, and providers all continue to look for high quality care at a lower cost. CMAs have the potential to increase alignment between hospitals and physicians and to support the achievement of the mutually beneficial goals of increased quality, efficiency, and better patient care. The most basic concern in all CMAs is the patient. Examine the chart on the next page, which illustrates the eight common operational elements in a CMA. This chart illustrates in detail how the Co-Management organizational principle is applied across an organization and what factors must be in place to make implementation of this structure possible. 4 Bushnell, Brandon D. “Co-Management Arrangements in Orthopedic Surgery” American Journal of Orthopedics 2015. June; 44(6):E167-E172. © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 8 of 12 JWI 551: It’s All About The Patient Lecture Notes Eight Common Operational Elements in Co-Management Agreements (CMAs) Example: Tucson Medical Center and Orthopedic Surgeons © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 9 of 12 JWI 551: It’s All About The Patient Lecture Notes Clinically Integrated Network (CIN) According to Butts et al. (2012), this model can be defined as: A health network working together, using proven protocols and measures, to improve patient care, decrease cost, and demonstrate value to the market. Once the CI network can demonstrate a value 5 proposition, payors and large employers are approached to support the network. Clinically Integrated Networks have emerged in the post-reform environment, since both hospitals and physicians are now held more accountable for the delivery of higher quality, better coordinated, more efficient care at a lower cost. Clinically Integrated Networks are made up of 7 components6, as illustrated in the figure above. Clinical Integration is one of the few ways in which health systems and independent providers can work together to meet the demands of Population Health. Recent data shows that there are over 500 Healthcare organizations in the U.S. presently pursuing Clinical Integration models of operation. Example: Long Island Health Network, Vanderbilt Health Affiliated Network, Catholic Health Initiatives (offered in 12 states) 5 Dennis Butts, MBA, Michael Strilesky, Manager, and Matthew Fadel, MBA, MSM, Senior Associate, Dixon Hughes Goodman. “The 7 Components of Clinical Integration Network” Becker’s Hospital Review October 19, 2012. 6 Ibid © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 10 of 12 JWI 551: It’s All About The Patient Lecture Notes Accountable Care Organization (ACO) According to the Centers for Medicare and Medicaid (CMS), an ACO is a group of doctors, hospitals, and other providers who work together to give coordinated high quality care to their Medicare patients. The goal of coordinated care is to ensure patients, especially the chronically ill, get the right care at the right time, while avoiding duplication of services and preventing medical errors. As an incentive, when an ACO succeeds in delivering high-quality care and spending healthcare dollars more wisely, it will share in the savings that it achieves for the Medicare program. Medicare offers several ACO programs, which are described below. Ø Medicare Shared Savings Program: this helps a Medicare feefor-service program provider become an ACO. This program is a result of the implementation of the Affordable Care Act. It focuses on coordination and cooperation among providers with the goals of improving quality for Medicare Fee-For-Service (FFS) beneficiaries and reducing unnecessary costs. Eligible providers, hospitals, and suppliers participate in the Shared Savings Program through an Accountable Care Organization (ACO). Better outcomes and increased value are the top priorities of this program. Ø Advance Payment ACO Model: this is a supplementary incentive program for selected participants in the Shared Savings Program. It is designed for physicians and rural providers who work together to give coordinated care to Medicare patients. Through the Advance Payment program, participants receive upfront monthly payments, which they can use to make investments in their care infrastructure7. There are 35 ACOs participating across the U.S. Ø Pioneer ACO Model: this is a program designed for early adopters of coordinated care who are already experienced in coordinating care delivery to patients across care settings. It allows these provider groups to move more rapidly from a shared savings payment model to a populationbased payment model on a track consistent with, but separate from, the Medicare Shared Savings Program. It is designed to work in coordination with private payers by aligning provider incentives, which will improve quality and health outcomes for patients across the ACO, and achieve cost savings for Medicare, employers and patients.8 Note: The Pioneer ACO program is no longer accepting applications9. 7 http: ://innovation.cms.gov/initiatives/Advance-Payment-ACO-Model/ http: //innovation.cms.gov/initiatives/Pioneer-ACO-Model/ 9 www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/index.html 8 © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 11 of 12 JWI 551: It’s All About The Patient Lecture Notes According to the May 2014 analysis by Salt Lake City-based Leavitt Partners, there are more than 625 ACOs in the United States. Examples: Networks of Community Health Centers, Walgreens, Bellin-ThedaCare Health Partners (WI), Bon Secours Health System Good Help ACO (MD), Carolinas Healthcare (NC), Robert Wood Johnson Partners (NJ), Scott & White Healthcare Walgreens Well Network (TX). What Is The Best Way to Structure A Healthcare Organization to Deliver High Quality, Cost Effective, and Coordinated Care to the Patient? Two major takeaways from this lecture are the great diversity of organization structures within the field of healthcare and the rapid evolution that is taking place. The challenge for leaders in our field is: How do you operate your increasingly complex organization in an environment asking you to do more with less, drive growth, and deliver value? In thinking through this challenge, consider questions like these: Ø What value does the healthcare industry and your specific market demand? Ø What value would an integrated delivery model add to your organization? Ø How can the different functions and programs of your organization combine and collaborate without adding overhead costs? Ø What is the current patient experience in your organization, and what do you want it to be in the future? As you think about these questions, remember this: the most fundamental function of a healthcare organization is to deliver care to the patient. The organization’s choice of structure is important because it has a direct impact on the delivery of patient care. A Closing Thought There is no single solution when it comes to the design of organizations in healthcare. The marketplace is too varied and complex for simple structural solutions. Leaders must spend time studying the organization in which they work, to understand its history, characteristics, and goals, before making decisions about new structures. To find the best design, they must consider and study the actual work it performs, the environment it operates in, and the overall strategy of the organization. © Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of Strayer University. JWMI551 Page 12 of 12 Amy, St. Joseph’s Healthcare is currently fairly well designed for maximum patient value. The organizational structure is classic of a large healthcare organization – it contains one CEO/President, six VPs and many Directors and Coordinators. Most programs also have another level of informal leadership, typically called supervisors, unit leads or specialists. The structure could absolutely stand to be flattened somewhat. For example, the Food and Nutrition department has supervisors, coordinators, a Director of Food Services, all reporting to the Support Services VP who is also the CFO. Looking at this week’s lecture notes, removing layers and decentralizing the command can be beneficial. It moves more power to where the work is happening. At SJHC, this would look like having a VP Support Services, and then having a Manager of Food Services (as well as a Manager of Housekeeping, etc.) who oversees all dietary employees. Modern Health Insights (2012) warns that you must be prepared for push back with any major change. With the consideration and potential implementation for this change, there must be engagement from the affected groups. What issues do they see with changing the leadership reporting structure? Does this lead to decreased opportunity for advancement? Will they feel more heard? Less? It is possible to flatten an organization and look back and realize it was a mistake; it must be done strategically and with emphasis on buy-in and communication. Another insight from this week’s materials was the demand for a creation of a level of organizational reporting for outpatient services. Currently we run this “from the side of the desk”, not often giving it much time or attention. It would be beneficial to create a Supervisor of Outpatient Food Services to truly respond to this trend in the market. More services than ever do not require an overnight stay or formal admission, but the patients are still in the building over meal times and require food. Cosgrove (2011) tells us that the average hospital stay has reduced by three days. We need to capture this population in our quality and satisfaction assurance and increase our service to them. JWI 551: It’s All About the Patient. Week 2 Lecture Notes: Organization Design and Care Coordination Modern Health Insights. (2012). Hospital service line organization: Innovation in approaches and strategy Cogrove, D. (2011). A Healthcare Model for the 21st Century: PatientCentered, Integrated Delivery Systems. Retrieved from https://my.clevelandclinic.org/-/scassets/files/org/about/modelhealthcare/amga-mar-2011.ashx?la=en SanJay, What I believe Tom Northrup is saying is that the processes that an organization uses defines the results they are getting. For example, if an organization is seeing unsatisfactory results, then something must be wrong with the design and/or structure the organization is employing (Welch,1). In the context of health care operations, I believe this statement can be used to understand the patient experience. For example if multiple patients are having a negative experience at the organization, then a problem is present and the current design of the organization might not be able to correct or deal with the patient complaints. Northrup's statement can be used to help identify weaknesses in the design of the organization and by reverse engineering the problem by looking at negative results, new solutions or changes to the design of the organization might come about. While I do not work in the Healthcare industry currently, I do have an example of a change in structure based on Northrup's comment. In Ontario, the Rouge Valley Hospital developed a "Birthing Center" because the previous facilities at the hospital were not well equipped to deliver a comfortable experience for women in labor (Stantec,2). The hospital was previously not maximizing the value for the patients because of the lack of space and equipment. Now with the Birthing center opened, the hospital created value for patients as well as developed new branches in their structure by creating teams of nurses and doctors who are solely focused on helping with the process of birthing at this birthing center. References: 1. JWI 551(2019). Week 2, Lecture 1. It's All about the Patient. Retrieved from Jack Welch Insititute 2. Stantec (2019). Rouge Valley Health System - Regional Birthing and Newborn Centre. Retrieved from https://www.stantec.com/en/projects/canada-projects/r/rouge-valley-health-system-regionalbirthing-and-newborn-centre
Purchase answer to see full attachment