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© Murat Inan / EyeEm / Getty Images Case Study Leadership for Health Professionals: Theory, Skills, and Applications Third Edition Gerald R. Ledlow D1. The CEO of our two-hospital system wanted to build a third hospital within our market. The health system was financially sound, so there was never a question as to whether we could afford to pay for a new hospital. However, this market already had eight other hospitals, so it was questionable whether an additional new hospital was needed. I was not in favor of building this third hospital. However, the CEO insisted, and she proceeded to develop plans to build this new hospital. She brought in nationally known consultants and coached them to find a way to justify building a new hospital. At a very important board of trustees meeting, the system CEO and the outside consultants presented their case for building a third hospital that included data I knew was incorrect. At the end of this 3-hour presentation, one of the leading board members, who knew me well and trusted me, asked for my frank opinion. He asked me whether the information they had presented was correct and whether I recommended that the board approve this new hospital. Well, my whole career flashed before my eyes as I considered my response. All the board member wanted was a yes or a no. If I said yes, the new hospital would go forward, and I eventually would become president of the entire system. If I said no, then my tenure with this system would probably come to an end. This was a big decision for me, and I had a lot to lose. My family and I had a very comfortable house on the ocean, and my children were happily attending private schools. I replied to the board member that no, the consultants’ information was not correct, primarily because they misunderstood (or misrepresented) the soon-to-be-implemented prospective payment system (PPS). The consultants tried to justify building a new hospital by arguing that, under PPS, the length of stays in all our hospitals would increase, and currently there wasn’t enough bed capacity in this market area to handle the increased volume. However, that information was absolutely incorrect. Anybody who understood the PPS knew that the length of stays were going to decrease, and that our hospital’s occupancy would decrease, which is exactly what eventually happened. Before PPS, we were running at about 93% occupancy. After PPS, our occupancy decreased to about 57%. Therefore, my statement to the board was absolutely correct. When I told that board member “No, this information is not correct, and we do not need a new hospital,” the whole board meeting blew up. They went absolutely bananas, and voted not to build this new hospital. After the board meeting, the system president brought me aside and wanted to know what I was doing. And I replied, “I wasn’t going to lie to the board. If you want to lie to the board, that’s up to you.” I knew that my future there, particularly the prospect of becoming system president, was over from that meeting. Within 18 months I had left that system and taken over the presidency of another system. Two years later, the board member who had asked my opinion at this board meeting died in a plane crash. After his death, the system CEO again proposed building a third hospital. This time, the board approved, and they actually built that hospital. It was a major mistake. The hospital was not really needed, and the debt became a big drag on the balance sheet. Fortunately, I went on with my career and became president of another system, where I was very happy. That was probably the most explosive board meeting I’ve ever been a factor in a major decision, and I’ve had some very interesting ones. Content Link: Ledlow & Stephens, Leadership for Health Professionals: Theory, Skills, and Applications, 3rd Edition, Jones & Bartlett Learning, 2017 Chapter 9: Leadership and the Complex Health Organization Chapter 10: Ethics in Health Leadership Chapter 12: Understanding the Executive Roles of Health Leadership Copyright © 2018 by Jones & Bartlett Learning, LLC, an Ascend Learning Company 2   ❚ Case Study Name: Date: Section: D1. Case Study Questions 1. If you were the COO, how would you have handled the question from the board member about whether the new hospital was justified? 2. How would you have dealt with the system president who was lying to the board and was about to change your career path? 3. Would you have said yes to the board member’s question of whether the hospital was justified in order to protect your career and your family? Copyright © 2018 by Jones & Bartlett Learning, LLC, an Ascend Learning Company Chapter 9 Leadership and the Complex Health Organization: Strategically Managing the Organizational Environment Before It Manages You “We need leadership on the fundamentals of eating right, exercising, and not smoking. I am interested in getting people to use the healthcare system at the right time, getting them to see the doctor early enough, before a small health problem turns serious.” Donna Shalala, U.S. News and World Report, “America’s Best Leaders” (2005) Learning Objectives • Identify the strategic direction elements of the strategic plan, identify the other elements of the strategic and operational plan, describe each of these elements in summary, and outline which internal and external environmental factors influence the strategic plan. • Distinguish the levels of organizational culture and summarize the actions and behaviors a health leader would perform to proactively and positively change organizational culture. Learning Objectives, cont. • Predict and relate how strategic planning can positively influence organizational culture (and the internal environment); describe how strategy selection (competitive, adaptive, etc.) reinforces those changes to organizational culture and the internal environment. • Analyze how external and internal environmental factors influence the strategic plan and the organizational culture of a health organization. • Design a methodology to perform internal environmental scanning, monitoring, and assessment and external environmental scanning, forecasting, and monitoring for a hospital or group practice, public health organization, longterm care organization, or stand-alone allied health practice or retail pharmacy. Learning Objectives, cont. • Interpret the current external environmental factors in the health industry; translate your interpretation into a critical list for action for a health organization and appraise each element on the critical list for action as to where it should be addressed by the health organization (strategic plan, directional strategies, external/internal environment, organizational culture, etc.) noting that critical list items may impact more than one area of the health organization. Mission, Vision, Values, Strategies, Goals, Objectives, and Action Steps • Leaders in health organizations utilize a strategic system of leadership and management. • The health leadership team most likely will utilize a strategic and operational planning process to derive an organization’s mission, vision, strategies, goals, objectives, and action steps. Mission, Vision, Values, Strategies, Goals, Objectives, and Action Steps, cont. • Mission, vision, and values are guideposts that leaders utilize to focus the health organization’s collective energy and resources. • “Mission, vision, values, and strategic goals are appropriately called directional strategies because they guide strategists when they make key organizational decisions.” − Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2006). Strategic Management of Health Care Organizations (5th ed.). Malden, MA: Blackwell; p. 187. • A health organization’s mission is tied to its purpose. – Purpose is what the organization does every day to meet the needs and demands of the external environment. Stakeholders • Stakeholders are individuals, groups, community members (individual and collective), and companies that interact with your organization: – – – – – Patients Customers Staff members Suppliers The community • Stakeholders can directly and indirectly influence the success of your organization. Purpose and Vision • An extension of purpose is a health organization’s mission. – Mission is why your organization exists, what business it is in, who it serves, and where it provides its products or services. • Vision is an aspiration of what the organization intends to become. – Vision is the shared image of the future organization that places the organization in a better position to do its mission/fulfill its purpose. Strategies, Goals, and Objectives • Strategies, goals, and objectives are the sequential building blocks of planning to successfully achieve the mission, but also to strive to achieve the vision of the health organization. • “Strategic goals are those over-arching end results that the organization pursues to accomplish its mission and achieve its vision.” − Swayne, L. E., Duncan, W. J., & Ginter, P. M. (2006). Strategic Management of Health Care Organizations (5th ed.). Malden, MA: Blackwell; p. 187. • Strategies follow “a decision logic of development.” Goals • Goals translate the broad strategies of the vision into specific statements for organizational action by focusing the organizational resources to achieve the strategy to build the vision. – Goals are broader statements, sometimes aspirations, and are hierarchically above objectives. Objectives • Objectives align organizational resources to meet the stated goals. – Objectives should be measurable, assigned to a responsible person or agent or owner, have timelines for completion, and be frequently reviewed by the health organization leadership for progress and resource sufficiency. Action Steps • Action steps (or action plans) are created to produce a step-by-step or task-level implementation sequence for each objective. – Each task in the action steps (or plan) has a responsible person(s) or owner, a time range for accomplishment, and may have a measureable variable as well. – Action step owners “report” to the objective owner who “reports” to the goal owner, who ultimately reports to the leadership team at the strategy level. Mission, Vision, Values, Strategies, Goals, Objectives, and Action Steps, cont. • Mission, vision, values, strategies, goals, objectives, and action steps are essential components of the strategic system of leadership and management. • Health leaders utilize the strategic system’s tools, such as planning (strategic and operational), to transform, guide, and develop organizational culture to focus the collective energy and resources of the health organization to effectively, efficiently, and efficaciously serve its purpose. Mission, Vision, Values, Strategies, Goals, Objectives, and Action Steps, cont. • “Strategy-making processes are organizational-level phenomena involving key decisions made on behalf of the entire organization.” – Dess, G. G. & Lumpkin, G. T. (2005). Emerging issues in strategy process research. In M. A. Hitt, R. E. Freeman, & J. S. Harrison (Eds.), The Blackwell Handbook of Strategic Management. Malden, MA: Blackwell; p. 3. Understanding the Internal Environment • Internal scanning, monitoring, and assessment of the health organization are vital leadership activities; effective leaders are effective internal organization scanners, monitors, and assessors. – Most important elements of understanding the internal health organization’s environment should focus on systems such as human resources management system, supply chain system, technological system, information system, and culture and subcultures. – The salient theme is one of integrated synergy among all the health organization’s systems. Scanning, Monitoring, and Assessing • Specific areas of scanning, monitoring, and assessing for the health leader are: 1. Competitive advantage and the unique or distinctive competencies the organization possesses (centers of excellence for example) 2. Strengths and weaknesses of the organization 3. Functional strategies for implementation of strategies that are supported by goals, objectives, and action steps 4. Operational effectiveness, efficiency, and efficacy 5. Organizational culture (Is the culture aligned with the organization’s direction?) Institutional Factors • Institutional organizations and environments highlight the importance of social, political, and psychological aspects of organizational dynamics. • The institutional view, in essence, is an assessment of the organization’s situation as compared against a health leader’s predetermined standard or benchmark or expectations as compared with competitors. Van Wijngaarden, J. D. H., Scholten, G. R. M., & Van Wijk, K. P. (2012). Strategic analysis for health care organizations: The suitability of the SWOT analysis. The International Journal of Health Planning and Management, 27(1), 34–49. Institutional Factors, cont. • Institutional organizations focus on the reproduction of organizational activities and routines in response to external pressures, expectations of professionals in the industry, and collective norms of the institutional environment. • Most often health organizations are a hybrid of institutional and technical environments. Resource-Dependent Organizations • The resource-dependent organization desires to maintain autonomy and remain relatively independent of its environment. • One of the basic propositions of the resourcedependent organization is that leaders must be aware that the most efficient or effective organizations do not always survive. Not surprisingly, organizations with the most power survive. Resource-Dependent Organizations, cont. • Power is defined as the ability to secure and maintain the most stable and most respected networks of resource chains. • In the resource-dependent environment, the organization requires resources to gain and maintain power and therefore must (sometimes reluctantly) interact with the environment. − Pfeffer J., & Salancik, G. (1978). The External Control of Organizations: A Resource Dependence Perspective. New York: Harper and Row. Contingent Organizations • Contingent organizations are more flexible and rely less on rigid policies and practices. – These organizations utilize more loosely established internal best practices. – This organization will be loosely coupled. • Within this type or organization, a leader’s success is based on a unique amalgam of internal and external factors. – Organizational and environmental factors are contingent on each other. Contingent Organizations, cont. • The leadership approach is always based on the organization's current situation. • The underlying assumptions of contingent organizations are based on the premise that organizational structures are open and are not organizationally egalitarian. – There is no one best way to organize, and any one way of organizing is not equally effective in another organization. • The contingent view utilizes a scenario-based methodology. Understanding the External Environment • Understanding the external environment focuses on scanning, monitoring, forecasting, and assessing the macro and micro forces of the external environment. – Scanning involves identifying the subtle to dramatic signals of macro and micro forces change. – Monitoring focuses on deriving meaning from a pattern of observations from scanning macro and micro forces. Understanding External Environment, cont. − Forecasting is the active development of projections and likely scenarios based on patterns indicated from monitoring. − Assessing is prioritizing and quantifying the impact of changes in the macro and micro forces’ external environment, considering scenario forecasts in that valuation. • Categories to give leaders structure through which to scan, monitor, forecast, and assess a dynamic health industry: − Macro-environmental forces − Health care environmental [micro-environmental] forces − SWOT analysis Program Guidelines • PHEP program guidelines provide the basis for assessment of capabilities and functions for public health preparedness. • HPP program guidelines provide the basis for assessment of capabilities and functions for healthcare delivery organizations/hospitals. Both of these programs are funded and managed separately but now require alignment and integration to provide a better “picture” of preparedness. Horizontal Factors • Horizontal organizations are organizations that have cooperative relationships, affiliations, or ownership rights with multiple outside agents and actors. • Horizontal organizations seek to maintain a level of homeostasis with all elements internal and external to the establishment. Vertical Factors • The horizontal organization is in stark contrast to the vertical organization. • The vertical organization builds a monument unto itself and seeks to minimize reliance on any and all outside stakeholders and actors. – In the true sense of organizational dynamics there are actually few true vertical organizations. As a result, when we speak of vertical organizations, we refer to organizations that attempt to control the environment first rather than living in the environment and becoming a participatory member within the community. Dynamic Factors • Dynamic organizations are those that do not qualify as either vertical or horizontal organizations. However, there is a tendency for many dynamic organizations to fit into the open and horizontal architecture. • Different possibilities in the environmental characteristics constantly require the creation of new and different ways of positioning the organization for success. Organizational Culture • From a broad perspective, health leaders assess the external and internal environments of the organization, determine what organizational culture will best meet the needs of the external environment, then design, develop, implement, and refine the organizational culture. • From this “big picture” view, leadership seems simple, yet accomplishing the task of organizational alignment with the external environment requires a focused, clear appealing vision that is well communicated and leadership and management team actions consistent with that vision. Organizational Culture, cont. • From this standpoint, leaders must be knowledgeable and competent about organizational dynamics, culture, communication, assessment and analysis, and change management. – All of these areas are important, yet culture is the fabric that weaves all of these components together. Organizational Culture, cont. • To begin moving an organizational culture toward change, the health leader should: – Model the behavior you expect yourself. – Communicate expectations and train other leaders, managers and staff. – Revise structures and reporting relationships. – Conduct team-based planning and policy development. – Use primary and secondary mechanisms (discussed later in this chapter). Organizational Culture, cont. • To begin moving an organizational culture toward change, the health leader should (cont.): – Be consistent and communicate often to the organization. – Continue to scan, monitor, and assess the internal health organization environment while you scan, monitor, forecast, and assess the external environment. Organizational Culture, cont. • Defining organizational culture – Organizational culture is a complex construct that incorporates many concepts and multitudes of variables. – It consists of a large set of largely ignored or invisible assumptions that deal with how group members interpret both their external relationships (external environment) and their internal relationships with each other. Culture is an outcome of group learning. – As people solve problems together successfully, a condition for culture formation exists. Organizational Culture, cont. • Defining organizational culture (cont.) – Edgar Schein defines culture as a pattern of basic assumptions that are invented, discovered, or developed by a given group as it learns to cope with its problems of external adaptation and integration. – These assumptions have worked well enough to be considered valid and, therefore, have to be taught to new members as the correct way to perceive, think, and feel in relation to their problems, challenges, and opportunities. Organizational Culture Levels • Level 1: Artifacts and creations – These elements are most visible and include the organization’s constructed social and physical environment. – This level includes technology, art, visible and audible behavior patterns (visible but often not decipherable) such as written and spoken language, overt behaviors, and how members demonstrate status. Organizational Culture Levels, cont. • Level 2: Values – These are testable in the physical environment; they are testable only by social consensus (such as taking care of patients). – Central values provide the day-to-day operating principles by which the members of the culture guide their behavior. – As values are taken for granted, they gradually become beliefs and drop out of consciousness, just as habits become unconscious and automatic. Organizational Culture Levels, cont. • Level 3: Basic underlying assumptions – These include relationship to the environment; nature of reality, time, and space; nature of human nature; nature of human activity; and nature of human relationships (taken for granted, invisible, preconscious); implicit assumptions tell group members how to perceive, think about, and feel about things. – These assumptions are taken for granted; members would find behavior based on any other premise inconceivable. Interpersonal Interaction Model • This typology categorizes organizational cultures into one of four types: – Power culture: Strong leaders are needed to distribute resources. Leaders are firm, but fair and generous to loyal followers. If the organization is badly led, there is rule by fear, abuse of power for personal gain, and political intrigue. Interpersonal Interaction Model, cont. • Four organizational culture types (cont.): − Achievement culture: Results are rewarded, not unproductive efforts. Work teams are self-directed. Rules and structure serve the system, but not as an end by themselves. A possible downside is sustaining energy and enthusiasm over time. − Support culture: Employees are valued as people, as well as a workers. Employee harmony is important. The weakness is a possible internal commitment without an external task focus. Interpersonal Interaction Model, cont. • Four organizational culture types (cont.): • Role culture: There is rule of law that outlines clear responsibilities; reward systems are tight, with tight coupling to responsibilities. This type provides stability, justice, and efficiency. Its weakness is in impersonal operating procedures and a stifling of creativity and innovation. Societal Expression Cultures • There are different types of culture, just like there are different types of personality. Sonnenfeld identified the following four types of cultures: – Academy culture: Employees are highly skilled and tend to stay in the organization, while working their way up the ranks. The organization provides a stable environment for employees to develop and exercise their skills. Examples are universities, hospitals, large corporations, etc. Societal Expression Cultures, cont. • Four types of culture (cont.): − Baseball team culture: Employees are "free agents" who have highly prized skills. They are in high demand and can rather easily get jobs elsewhere. This type of culture exists in fastpaced, high-risk organizations, such as investment banking, advertising, etc. Societal Expression Cultures, cont. • Four types of culture (cont.): − Club culture: The most important requirement for employees in this culture is to fit into the group. Usually employees start at the bottom and stay with the organization. The organization promotes from within and highly values seniority. Examples are the military, some law firms, etc. Societal Expression Cultures, cont. • Four types of culture (cont.): − Fortress culture: Employees don't know if they'll be laid off or not. These organizations often undergo massive reorganization. There are many opportunities for those with timely, specialized skills. Examples are savings and loans, large car companies, etc. • Office of Minority Health, United States Department of Health and Human Services. (2013). What is cultural competence? Retrieved from http://minorityhealth.hhs.gov/templates/browse.aspx?lvl=2&lv lID=11. Defining Leadership from an Organizational Culture Context • The unique and important function of leadership, as contrasted with management or administration, is viewed as the conceptualization, creation, and management of organizational culture. Culture is a learned and evolved system of knowledge, behavior, attitudes, beliefs, values, and norms that is shared by a group of people. Defining Leadership from an Organizational Culture Context, cont. • “Leaders go beyond a narrow focus on power and control in periods of organizational change. They create commitment and energy among stakeholders to make the change work. They create a sense of direction, then nurture and support others who can make the new organization a success.” − Bennis, W., Parikh, J., & Lessem, R. (1996). Beyond Leadership: Balancing Economics, Ethics, and Ecology (rev. ed.). Cambridge, MA: Blackwell. • Health leaders led people and manage resources within a framework of organizational culture. Changing and Adapting Organizational Culture • Primary embedding mechanisms – Health leaders have a set of powerful tools, behaviors, and mechanisms to develop, refine, maintain, or change organizational culture. These are: • What leaders pay attention to, measure, and control • Leader reactions to critical incidents and organizational crises • Deliberate role modeling, teaching, and coaching by leaders • Criteria for allocation of rewards and status • Criteria for recruitment, selection, promotion, retirement, and excommunication Changing and Adapting Organizational Culture, cont. • Secondary reinforcement reinforcement mechanisms reinforce the primary embedding mechanisms. The following are of the most importance: − − − − The organization’s design and structure Organizational systems and procedures Design of physical space, facades, and buildings Stories, legends, myths, and parables about important events and people − Formal statements of organizational philosophy, creeds, and charters • Schein calls these “secondary” because they work only if they are consistent with the primary mechanisms. Discussion Questions • What are the strategic direction elements of the strategic plan? What are the other elements of the strategic and operational plan, and what are the different challenges a health leader faces in institutional, resource-dependent, and contingent environments? What strategies might you suggest the leader could implement for successful outcomes? • Discuss the levels of organizational culture and summarize the actions and behaviors a health leader would perform to proactively and positively change organizational culture. Discussion Questions, cont. • Can you predict how strategic planning can positively influence organizational culture and the internal environment? How does strategy selection (competitive, adaptive, etc.) reinforce those changes to organizational culture and the internal environment? Discussion Questions, cont. • Can you analyze how external and internal environmental factors influence the strategic plan and the organizational culture of a health organization? Highlight the basic differences between vertical and horizontal external environments compared to internal institutional, resource-dependent, and contingent environments. What are the strategies a health leader operating in these environments might be able to leverage to ensure success? Discussion Questions, cont. • Discuss a methodology to perform internal environmental scanning, monitoring, and assessment and external environmental scanning, forecasting, and monitoring for a hospital, group practice, public health organization, long-term care organization, or stand-alone allied health practice or retail pharmacy. Discussion Questions, cont. • Explain how you would interpret the current external environmental factors in the health industry; translate your interpretation into a critical list for action for a health organization. How could you appraise each element on the critical list for action as to where it should be addressed by the health organization (strategic plan, directional strategies, external/internal environment, organizational culture, etc.) noting that critical list items may impact more than one area of the health organization? Exercises • Identify the different challenges a health leader faces in institutional, resource-dependent and contingent environments? What strategies should a health leader implement for successful outcomes? Write this answer in one to two pages. • Summarize the levels of organizational culture and estimate the actions and behaviors a health leader would perform to proactively and positively change organizational culture in one to one and a half pages. Exercises, cont. • Explain how strategic planning can positively influence organizational culture and the internal environment. Describe how strategy selection (competitive, adaptive, etc.) reinforces those changes to organizational culture and the internal environment in one to two pages. Exercises, cont. • Analyze how external and internal environmental factors influence the strategic plan and the organizational culture of a health organization, highlighting the basic differences between vertical and horizontal external environments compared with internal institutional, resource-dependent, and contingent environments? What are the strategies a health leader operating in these environments might be able to leverage to ensure success? Provide your answer in two to three pages. Exercises, cont. • Design a methodology to perform internal environmental scanning, monitoring, and assessment and external environmental scanning, forecasting, and monitoring for a hospital, group practice, public health organization, long-term care organization, or stand-alone allied health practice or retail pharmacy in one to two pages. Exercises, cont. • Evaluate and interpret the current external environmental factors in the health industry; translate your interpretation into a critical list for action for a health organization. How could you appraise each element on the critical list for action as to where it should be addressed by the health organization (strategic plan, directional strategies, external/internal environment, organizational culture, etc.) noting that critical list items may impact more than one area of the health organization? Chapter 10 Ethics in Health Leadership “Healthcare executives should view ethics as a special charge and responsibility to the patient, client, or others served, the organization and its personnel, themselves and the profession, and, ultimately, but less directly, to society.” American College of Healthcare Executives, 2009 Learning Objectives • Define distributive justice, ethics, morals, and values. Describe how they are used by leaders in decision making. • Explain four ethical principles that guide decision making associated with patient care. • Apply at least two ethical frameworks or distributive justice theories, with examples of moral practice of a leader, to an ethical issue in a health organization. Learning Objectives, cont. • Analyze arguments and make a recommendation for health leaders to adopt utilitarian and/or deontological postures in their organization, and differentiate potential decisions leaders would make between the two frameworks to support your analysis and recommendation. • Compile a list of available options a leader in a health organization has to develop for an integrated system of ethics and moral practice, and summarize the potential impact of each option regarding appropriate ethical adaptation across the organization. Learning Objectives, cont. • Compare and contrast at least three ethical frameworks or distributive justice theories for the topics of patient autonomy, beneficence, nonmaleficence, and justice, and interpret the moral practice associated with those frameworks (at least three) for a right-to-life issue and for the practice of euthanasia. Ethics in Health Leadership • Ethics and the application of ethics, morality, are leadership responsibilities. – Too often, ethics, ethical practice, and discussions of ethics are placed in a legal context of liability reduction and “legalism.” • Health organizational culture development that includes an ethical framework, systems integrated in ethical expectations, and moral practice of ethical actions and behaviors are leadership responsibilities, not legal counsel responsibilities. – Health leaders model the behavior expected in the organization; this especially includes being a moral actor. What Is Ethics? • Ethics is defined as a moral philosophy between concepts of right and wrong behaviors linked to resource allocation. – It deals with values relating to human conduct with respect to the rightness and wrongness of actions and the “goodness” and “badness” of motives. – Ethics in the health field can further be defined as a set of moral principles and rules of conduct for health professionals to follow. What Is Ethics? cont. • Ethics also can, at times, be culturally defined. – This links back to distributive justice theories, cultural values, and beliefs, and how a culture selects and applies a model of resource allocation based on societal norms and mores. Difference Between Ethics, Values, and Morals • Values are enduring beliefs based on some early form of indoctrination and experience. – Values are learned from parents, the community, school, peers, professional organizations, and personal self-development, to name only a few areas. – Recall Rokeach’s model of values–beliefs– attitudes. Difference Between Ethics, Values, and Morals, cont. • Morals are applied practices derived from an ethical framework that is based on values and resource allocation beliefs. Different from values, morals comprise the principals on which decision making is based. – Morality is the level of compliance to an ethical framework. – Morals are the actions and outcomes of the human condition processed over time as evaluated against the ethical framework based on values and resource allocation principles. The Difference Between Ethics, Values, and Morals, cont. • In Aesop’s fable of The Grasshopper and the Ants – The “moral” of this story is that it is always best to prepare for one’s future in the face of the uncertainty of the environment. However, because this “lived experience” may take an individual’s entire lifetime to learn, the experience is shared through the lived experience of others through moral tales. Setting Ethical Standard in the Health Organization • Health leaders face ethical dilemmas in the daily work of delivering health services and products within the health organization. • Health leaders may often find themselves torn between owing allegiance to the financial stability of the organization and the charitable nature of the health profession. • Stakeholder expectations are expressed and integrated through board of directors or board of trustees membership that represents the communities served and the advocacy of stakeholder expectations by senior leadership of the health entity and within internal committee structures of the organization, such as with the ethics committee. Setting Ethical Standard in the Health Organization, cont. • The ethics committee has three main purposes: education, consultation, and policy review. – Challenges of the committee include internal organizational principle conflict, values contradiction, leadership team decision making, and community and industry ethical attitudinal changes. • The health organization should have an individual appointed on staff as the resident ethicist to assist in decision and policy making. • The establishment of an ethics committee that meets on a regular and reoccurring basis can likewise keep the leadership informed of relevant and legitimate issues confronting the health organization. Ethics in Health Leadership • Example: When actions and ethics collide – During the financial collapse of many U.S.-based organizations in the fall of 2008, Congress reacted by providing over $700 billion to organizations that had run themselves into the ground through bad business practices and risky financial behaviors. However, it was later learned that the CEOs of many of these financially insoluble organizations were still going to receive annual bonus checks up to $620,000. Common Ethical Dilemmas • Common ethical dilemmas in health organizations – Ethical dilemmas in health organizations generally arise out of professional, or values-based, conflicts of interest. – According to the American College of Healthcare Executives, a conflict of interest occurs when one has conflicting duties or responsibilities and meeting one of them makes it impossible to meet the other. The classic example occurs when a decision maker for one organization is also a decision maker or influence for another organization with which business is transacted. Relationship Morality • Ethical dilemmas in the health organization are inevitable. In the field of health leadership, ethical dilemmas occur at three levels: micro, macro and meso. – The micro level involves individual issues, such as relationships between individuals and leaders. – The macro level involves societal or community issues that reflect governmental actions or social policies. These are typically culturally based. – The meso level involves organizational or professional issues. Ethics in Health Leadership • Business and financial ethics • Contracts and negotiations Ethics in Health Leadership, cont. • Right to life issues – Roe v. Wade • Euthanasia Ethics of Policy Making in U.S. • Understanding the patient’s spirituality base in decision making – To adjust to the spiritual needs of patients entering the health system, leaders should strive to be aware of the diverse beliefs within their organizations and foster a high degree of sensitivity and respect for those beliefs. – Specific beliefs and practices to consider include, but are not be limited to: • • • • • Healing rituals Dying, death, and care of dead bodies Harvesting and transplanting organs End of life and right to life decisions Use of reproductive technologies Ethical Codes Adopted by Health Industry • Two of these theories are contrasting frameworks: utilitarianism and deontology. • Issues surrounding patient rights of autonomy, beneficence, nonmalificence, and justice important as well. • Common ethical codes or frameworks should be integrated with the cost, quality, and access paradigm considering changes to the health system or resource allocation of health resources. Distributive Justice • At the foundation of ethics is distributive justice. – Distributive justice is a set of theories or ideologies that attempt to instill a set of values, ideals of fairness based on those values, and beliefs in the allocation of resources, food, water, housing, wealth/money, opportunities, materials, etc., throughout a society. Distributive Justice, cont. • At its root, ethics is a framework that is based on a distributive justice theory or combination of those theories; ethics is an extension of resource allocation and the methods of that allocation while morality or morals is the level of congruence to that ethical framework. Utilitarianism • Utilitarianism is a theory that takes as its primary aim the attainment of maximum possible happiness of a society as a whole. • This goal is to be achieved in such a way that one first checks what makes every particular individual in a society happy, then sums up all these various wants and preferences, and finally finds out how to satisfy the greatest number of them. Egalitarianism • Egalitarianism is a set of closely related theories that without exemption advocate the thesis that all members of a society should have exactly equal amount of resources. Libertarianism and Deontology • Libertarianism – Libertarianism suggests that the market or market forces should determine the distribution of resources in a society. • Deontology – Deontology is the opposite of utilitarianism. It is an ethical framework and philosophy of resource allocation that suggests actions should be judged right or wrong based on their own values and principle driven characteristics. Pluralism • Pluralists hold that goods that are normally distributed in any society are too different to be distributed according to only one criterion. To almost every one of these various kinds of goods we should apply a criterion that is characteristic for it. Thus we have diverse spheres of justice in which there are different criteria that tell us which distributions are morally right. Autonomy, Beneficence, Nonmaleficence, and Justice • Autonomy: The patient's right to self governance and medical decision making • Beneficence: The requirement of the health organization to do “good” • Nonmaleficence: The requirement for the health organization to do no harm • Justice: The obligation to give each patient fair resource allocation (services and products associated with the care process) Difference Between Medical Ethics, Clinical Ethics, and Bioethics • Clinical ethics refers to the ethics of the clinical practice of medicine and with ethical problems that arise in the care of patients. – Includes traditional professional medical ethics that place the patient at the center of consideration. • Traditional medical ethics were deficient in the face of technological advances of recent years; this reality has giving rise to bioethics. – Bioethics’ first concern is with “the intersection of ethics and the life sciences” and later expanded to include human values. Difference Between Medical Ethics, Clinical Ethics, and Bioethics, cont. • Health organizations have to balance and develop systems to adhere to medical and clinical ethical standards as well as bioethical standards. Health Leaders Are Part Ethicist Steps to ensuring ethical framework in health organization: • Establishing and chartering ethics committees with authority • Requiring staff attendance, participation, and evaluation of education programs • System of policy development and review • Seeking consultation by utilizing consultants with similar values and moral practices • Integrating professional, clinical, and business ethical performance through leader role modeling and subordinate reinforcement (rewards and punishments) Health Leaders Are Part Ethicist, cont. • Fostering a positive ethical climate within an open and supportive communication environment (For example, it is acceptable to tell leadership about a mistake of error.) • Reviewing relationships with external stakeholders, partners, and entities with which the health organization has contract relationships to evaluate ethical framework and moral practice congruence with the health organization Health Leader’s Challenge: Where to Start? Questions for health leaders to consider when creating ethics system in their organizations: • Which values does the organization hold? • On what distributive justice theoretical framework should ethical decisions be based? – Does that framework apply to all situations and if not, when does the framework not apply and what framework takes its place? − How do values of the health organization get put into practice? Health Leader’s Challenge, cont. • How does a health organization establish an ethical framework and moral application of principles (planning, group discussions, professional associations, laws and regulations, community expectations, community needs, etc.)? • Does the health organization have an ethical statement or creed highly visible and accessible by all stakeholders? Health Leader’s Challenge, cont. • To embed the ethical foundation and moral actions, which systems need to be in place, such as committees, policies, procedures, enforcement of those policies and procedures (consider: should coupling be tight or loose regarding ethical frameworks and moral behavior and actions?), and leadership role modeling considering customers’/patients’ expectations, business conduct and operations, negotiations, contract agreements and compliance, legal/regulation compliance, error remediation (how do you resolve errors made?), and health service and/or product delivery? • How can leadership decisions remain consistent to the ethical framework over time? How do you know you are consistent? Health Leader’s Challenge, cont. • How can organizational culture incorporate the ethical framework and moral application of principles the health organization holds important? • How does the health organization integrate its ethical framework and moral applications into its strategic planning, decision making, and daily operations? Health Leader’s Challenge, cont. • How does the health organization integrate its ethical framework and moral application into the communities they serve and to the interface and external stakeholders of the health organization? • How does the health organization ensure internal staff and subordinate adaptation to the ethical framework and moral application of that framework (training, annual updates, rewards and punishments, etc.) to long-term employees and to new employees (orientation, training, etc.)? Health Leader’s Challenge, cont. • Who keeps the health leadership team accountable to the ethical framework and moral application of established principles? • Is the ethical framework and moral application of those principles reasonable, relevant, and realistic? How are boundaries established? Health Leader’s Challenge, cont. • Who (individuals, groups, legal counsel, etc.) has the authority to initiate an ethical incident report, an ethical discussion, an ethical incident investigation, an ethically attributed reward or punishment? Is the health organization legally or liability oriented to ethical considerations, leadership oriented, or both? (What may be legally “moral” to limit liability may not be leadership “moral” to do what is right.) Regulatory Compliance • Much integrates with governmental payment (reimbursement with taxpayer funds) as part of fiduciary responsibility. • Much deals with private/personal financial gain done outside the care process. • How does the example organization create a system of regulatory compliance? Discussion Questions • Define distributive justice, ethics, morals, values, and conflict of interest. Can you describe how they are used by health leaders in decision making? • Explain four ethical principles that guide decision making associated with patient care. How can leaders use these principles in decision making with a health organization? Discussion Questions, cont. • How could you apply at least two ethical frameworks or distributive justice theories, with examples of moral practice of a leader, to an ethical issue in a health organization? What would be the results? • Should health leaders adopt utilitarian and/or deontological postures in their organization? How could you differentiate potential decisions leaders would make between the two frameworks? Discussion Questions, cont. • What available options does a leader in a health organization have to develop for an integrated system of ethics and moral practice? What would be the potential impact of each option regarding appropriate ethical adaptation across the organization? • How would the utilization of at least three different ethical frameworks (distributive justice theories) react with regard to patient autonomy, beneficence, nonmaleficence, and justice? How would the application of moral practice associated with those frameworks (at least three) be different for a right-tolife issue and for the practice of euthanasia? Exercises • Define distributive justice, ethics, morals, and values. Describe how they are used by leaders in decision making in one page or less. • Explain four ethical principles that guide decision making associated with patient care in one page or less. • Apply at least two ethical frameworks or distributive justice theories, with examples of moral practice of a leader, to an ethical issue in a health organization in two pages or less. Exercises, cont. • Analyze arguments and make a recommendation for health leaders to adopt utilitarian and/or deontological postures in their organization, and differentiate potential decisions leaders would make between the two frameworks to support your analysis and recommendation in two to three pages. Exercises, cont. • Compile a list of available options a leader in a health organization has to develop for an integrated system of ethics and moral practice, and summarize the potential impact of each option regarding appropriate ethical adaptation across the organization in one to two pages. Exercises, cont. • Read the Case Study of the Transferred Employee in the text and answer the following questions in two to three pages. – – – – – – What do you do? Do you change the documents? Do you go back and confront your supervisor? What is your decision and why did you make it? What is your next course of action? What other factors do you consider and what other actions do you take? – Which ethical framework or distributive justice theory best supports your decisions regarding the case and why? Chapter 12 Understanding the Executive Roles of Health Leadership “Necessity does the work of courage.” George Eliot, Romola Learning Objectives • Identify the steps, characteristics, and behaviors a health leader should take to build relationships with internal and external stakeholders. • Explain the Parity of Health Care model and its usefulness to health leaders. • Construct a health organization stakeholder list and predict at least two motivations of each stakeholder considering cost, quality, and access to health services and products. Learning Objectives, cont. • Compare and contrast internal health organization stakeholder motivations and issues. • Using previously discussed theories and models, combine two or more theories or models into a practical stakeholder management and relationship development model. • Evaluate internal and external health organization stakeholders and justify their motivations, needs and aspirations with regard to health services and products. Leadership for Physicians, Nurses, Administrators, and Medical Function Directors • Health leadership is situational and contextual, influenced by cultural constructs, and moderated by relational factors. • The myriad internal stakeholders and their differences are complex in both breadth and depth; in simple terms, health leaders need to lead people and manage resources to direct the collective energy toward successfully achieving the mission of the organization. Leadership for Physicians, Nurses, Administrators, and Medical Function Directors, cont. • Similar to leading an orchestra, health leaders must get everyone working together to perform the mission; to do this, leaders must understand and motivate the various stakeholders in different ways while staying consistent to organizational strategies, goals, and objectives. Leadership for Physicians, Nurses, Administrators, and Medical Function Directors, cont. • As the coordinated management of meaning model suggests, each group (formal or informal) in the health setting has a life script, a contract, and certain expectations that embody the culture of its group, profession, and specialty. Physician Leaders • Health leaders need physicians to diagnose, treat, and refer patients to their organization and/or their program or prescribe their services or products. Without physicians, including surgeons, health organizations would not realize reimbursements or other revenues for the patient care process, surgeries, procedures, or referrals. Physician Leaders, cont. • With this in mind, health leaders need to create a symbiotic, trusting, and integritybased relationship with physicians. This is especially true of physician leadership, both formal leaders such as the chief of the medical staff and clinical department leaders and informal leaders among the physician and surgeon groups. Physician Leaders, cont. • Health leaders should visit and know all physicians that practice and refer patients to their organization; these visits should be regular and at times when physicians are not engaged in patient care. • Health leaders should seek input from physician leadership on important decisions within the organization and provide frequent feedback on the decision process as well. Nurse Leaders • Nurse leaders are important to the health organization in that they provide care for your patients on an ongoing basis, provide patient education, and perform a variety of tasks that require clinical expertise. • In most health organizations such as in a hospital, nurses comprise the largest personnel expense for the health organization as a whole. Nurses are needed to “staff” hospital beds, work in health programs, provide home health services, and any number of other jobs in health. Nurse Leaders, cont. • Nurse leaders, as physician leaders, want to be respected, trusted, and sought out for input on decisions impacting the care process and nurse responsibilities. • Nurses want good work environments, with reasonable patient care loads (usually four to six patients per nurse per shift for average acuity patients); they want to be treated with respect by administrators, physicians, and other medical staff personnel, and to have some level of selfgovernance (nurse education, scheduling, etc.). Nurse Leaders, cont. • Building a solid relationship with nurse leaders is like building a relationship with anyone where trust, respect, and honesty form the foundation for interaction. • As with physicians, meet with nurse leaders and ask how to best build great relationships with them and other nurse leaders. • Most nurses will respect the courage and intent to build a good relationship with them. Administrative Leaders and Medical Function Leaders/Department Heads • Building professional and effective relationships with administrators and medical function leaders (such as pharmacists, laboratory, etc.) are important to build a cohesive team of superiors, peers, and subordinates. • Building relationships with these leaders should, again, be built on trust, respect, and honesty. • Different leaders will have different foci and motivations. Administrative Leaders and Medical Function Leaders/Department Heads, cont. • From the strategic plan, strategies, goals, and objectives were developed. • As a health leader it is your responsibility to determine where your responsibilities intersect with other leaders’ responsibilities. • Once you have determined these key intersections, it is imperative to meet with, discuss with, and develop an approach to meet organizational goals among the various units, departments, or sections the plan assumes. • This objective approach to building relationships is also a good approach. Administrative Leaders and Medical Function Leaders/Department Heads, cont. • Meet with other leaders regularly and get to know them as people, respect them, learn to empathize with their particular professional situation, and learn to work together. • In all relationships, physician, nurse, administrator, or department leader, problem solving and compromising build relationships (remember conflict management styles) while avoidance and competing tend to tear down relationships. Building Professional Relationships – In building professional relationships, seek guidance from mentors in relationship building; listen, listen, and listen; be respectful, honest, and find value-added reasons to interact regularly with all leaders. – Health leaders conduct the orchestra of health professionals within their organization. The differences between “noise” and a masterful symphony are coordination, timing, team work, each player playing his or her part with skill, consistency, and leadership. Stakeholder Dynamics • Stakeholder dynamics are critically important for leaders of health organizations to be aware of; this reality becomes more salient as leaders rise in position within the health organization. • Stakeholders are groups, individuals, and associations that influence an organization. They can be categorized into three groups: internal, interface, and external. Stakeholder Dynamics, cont. • Health organizations have a particularly complex set of stakeholders. • Can you identify internal, interface, and external stakeholders for a health organization? Stakeholder Dynamics, cont. • While the numbers of stakeholders in health organizations can be numerous, there are four main types of stakeholders to consider in any healthcare decision making. These include: 1. 2. 3. 4. Patients Payers Employers Providers Stakeholder Dynamics, cont. • These four stakeholders make up a new term in managed care called the managed care quaternion. • The managed care quaternion (MCQ) model was developed in the early part of 2003 by Coppola. The MCQ has gained popular support within governmental organizations, as well as some state Medicaid agencies. Managed Care Quaternion • Collectively, stakeholders in the managed care quaternion affect all aspects of health organizational life. These include patient care, payment, reimbursement arrangements, external costs, and other policy affecting organization survivability. Patients, payers, employers, and providers all play a vital role in the operations of any health organization. Managed Care Quaternion, cont. • With any one of the four major stakeholders of the managed care quaternion omitted in the decision-making process for a healthcare entity, failure at some level is sure to occur. • However, the MCQ model alone is not a model upon which to base policy or decision making. It is more beneficial to view the model in concert with the Iron Triangle of health care. Iron Triangle • The concept of the Iron Triangle was developed by Kissick in the early 1990s during the managed care revolution in the U.S. Kissick coined the term Iron Triangle to demonstrate the difficulty in selecting priorities for health as they relate to healthcare costs, quality, and access. Iron Triangle, cont. • Healthcare costs, quality, and access are kept in balance by the expectations, cultural goals, and economics of the society that supports the industry. • Any angle (or construct) in the triangle can be increased, but only at the expense of the other two. • The concept of the Iron Triangle has been used by health leaders for over a decade to guide strategic plans, organizational vision, and mission statements. The Parity of Health Care • The Parity of Health Care is a unique model that juxtaposes the managed care quaternion and the Iron Triangle together in an interrelated medium, which allows leaders to forecast the impact of new policy decisions that may impact the organization. • The challenge with health leaders regarding employers, patients, providers, and payers is in maintaining high satisfaction with each stakeholder along the continuum of care as she or he relates to aspects of cost, quality, and access. The Parity of Health Care, cont. • For example, a primary care clinic without extended and weekend office hours may be regarded as low quality to the patient and employer, but high quality to the payers and by the providers that work in the clinic. • However, if employers and patients continue to perceive lack of extended and weekend office hours as low quality, dissatisfaction with the overall health plan may result • How do we balance stakeholder demands? Sword of Damocles • In continuing to understand the difficult nature of the relationships between the Iron Triangle and the managed care quaternion, we offer a metaphor from classical literature called the Sword of Damocles. • In Greek mythology, the Sword of Damocles represents “ever-present peril.” • It is also used as a metaphor to suggest a “frailty in existing relationships.” Sword of Damocles, cont. • In the Parity of Health Care, the Sword of Damocles represents an inability of any one stakeholder to reach sustained consensus for priorities of cost, quality, and access. • With health priorities constantly changing due to environmental demands, it is no wonder why agreements on health policy are difficult to reach. Sword of Damocles, cont. • An understanding of the Parity of Health Care can be helpful to health leaders for strategically forecasting threats to relationships amid stakeholders, while also balancing priorities among those stakeholders. • The following slide presents a conceptual model of the Parity of Health Care. Discussion Questions • What are the steps, characteristics, and behaviors a health leader should take to build relationships with internal and external stakeholders? • What is the Parity of Health Care model and explain its usefulness to health leaders? • Select a health organization stakeholder and predict at least two motivations of that stakeholder considering cost, quality, and access to health services and products. Are his or her issues justified? Discussion Questions, cont. • What would the issues be to compare and contrast at least two internal health organization stakeholder motivations and issues? How does a health leader empathize with those stakeholders to build a relationship? • Using previously discussed theories and models, what two or more theories or models would you utilize to construct a practical stakeholder management and relationship development model? What constructs facilitate those theories or models to be useful in stakeholder management? Discussion Questions, cont. • What theory or model would you use to evaluate internal and external health organization stakeholders? Can those theories or models justify stakeholder motivations, needs, and aspirations with regard to health services and products? Exercises • Identify the steps, characteristics, and behaviors a health leader should take to build relationships with internal and external stakeholders in one to two pages. • Explain the Parity of Health Care model and its usefulness to health leaders in one page. • Construct a health organization stakeholder list and predict at least two motivations of each stakeholder considering cost, quality, and access to health services and products in two or less pages. • Compare and contrast internal health organization stakeholder motivations and issues in one to two pages. Exercises, cont. • Using previously discussed theories and models, combine two or more theories or models into a practical stakeholder management and relationship development model in three pages or less. • Evaluate an internal and external health organization stakeholder and justify their motivations, needs, and aspirations with regard to health services and products in two pages or less.
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Ethics in Health Leadership
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15th April 2018

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Ethics in Health Leadership
Ethics in Health Leadership
I would have approached the leader that I am answerable to and explained the whole
situation to him or her. I would have explained that the data presented by the system president
and the external consultants is wrong and that opening a new hospital would not be in the best
interest of this hospital. This is because the new hospital is not justified under distributive justice.
The market forces in this case should have a great influence on the allocation of resources and in
this case, the market forces indicate that the new hospi...


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