Health Care Human Resource Management

12 Jun Health Care Human Resource Management

Assignment 2: Human Resource Management Training Proposal

Due Friday 5/24/19

Imagine you have been selected to conduct a recruiting and staffing training program for a group of new human resource management (HRM) employees at a health care company. You need to prepare a proposal for the organization outlining your strategy for the training program. Write a six to eight (6-8) page paper in which you:

1. Create an overview of the process and steps involved in human resource planning, recruiting, interviewing, selecting, and hiring of employees.

2. Develop a comprehensive strategy for training new employees. Focusing on the role of the new employees within the organization.

3. Propose two to four (2-4) training strategies aimed at motivating the employees to learn key aspects about their new jobs.

4. Determine key issues that human resource management employees would be likely to encounter in the health care field. Prepare a plan that will enable the new employees to address each issue which includes instructional strategies, resources that will be utilized, and evaluation criteria for determining success.

5. Design at least three (3) visual components that enhance the program you have outlined, such as charts or diagrams.

6. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not quality as academic resources.

Your assignment must follow these formatting requirements:

· Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow SWS or school-specific format. Check with your professor for any additional instructions.

· Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

Chapter 10

Niles, N. J. (2013). Basic concepts of health care human resource management. Sudbury, MA: Jones and Bartlett.

Current Trends in Healthcare Human Resource Management

Introduction

The diversity of the healthcare workforce, healthcare globalization, use of technology, the focus on teamwork in patient care, accountable care organizations, the pay for performance model, and use of social media as a communication tool are current trends in health care that affect healthcare human resource management (HRM).

The diversity of employees and of patients in the United States is increasing. The U.S. Census Bureau projects that the Asian and Hispanic populations will both triple and the African-American population will double by 2050 (Salisbury & Byrd, 2006). Through 2050, there will be U.S. healthcare labor shortages with serious shortages in remote and rural areas resulting in the hiring of international employees (What’s Different About Rural Health Care?, 2011). More U.S. patients are seeking healthcare services internationally because of the high costs of U.S. health care. Healthcare service delivery is affected by the use of technology. The implementation of electronic health records has increased nationally. The focus on teamwork in health care is a new trend. Use of social media as a communication and education tool is a future trend. Each of these initiatives requires HRM training and development. In addition to these trends, the formation of Accountable Care Organizations (ACOs) requires orientation of employees to a new organizational structure. This chapter will describe these trends and the role that HRM plays in this changing environment.

 Increasing Diversity in the Healthcare Workforce

Workplace diversity can be defined as an environment that recognizes the unique contributions that individuals with many types of differences can make (Diversity in the Workplace, 2011). Traditionally, males have dominated management positions. Women and minorities have been underrepresented in senior healthcare management. In a recent survey by the American College of Healthcare Executives (ACHE), women employees were more likely to serve as department heads and men were more likely to serve as CEOs, presidents, or vice presidents. Over a 15-year period of ACHE surveys, the proportion of women and other protected classes that were promoted to senior management did not significantly increase (Women in Healthcare Administration, 2011). The ACHE has recommended the following actions to correct this prevailing situation:

1. Develop promotion policies that focus on promoting a qualified diverse workforce.

2. Routinely review salaries of senior management to ensure there is no discrimination.

3. Review the organization’s mission and vision statements for its focus on diversity.

4. Survey employees regarding diversity issues in the workplace, and routinely provide educational programs for employees regarding attitudes toward diversity (Gathers, 2003).

These actions can be implemented in collaboration with the human resources (HR) department and senior management. For the first two recommendations, HR can provide metrics for each policy such as number of women in senior management positions and the number of other protected classes in senior management positions. These metrics can be measured with historical data to observe any positive trends. For the last two recommendations, in conjunction with HR, senior management should work with all levels of employees to review the mission and vision statement and to implement the survey.

Cultural Competency Model

Another way to increase diversity in health care is the development of a cultural competency model. In 2002, the Institute of Medicine issued a report indicating that minority patients often received a lower quality of care in the U.S. system. New initiatives were taken to address these issues; however, in 2007 the National Healthcare Disparities Report indicated that the disparities had not greatly improved (Clark, 2006). In 2009, the Joint Commission and the National Committee on Quality Assurance began to develop standards for healthcare organizations to create a culturally sensitive environment for both employees and healthcare consumers. It has been documented that there is greater mistrust of healthcare providers among minority patients. This could in part be the result of lack of communication due to language barriers or low literacy. The issue of language barriers could have adverse outcomes for medical care (Andrulis, 2003). Betancourt, Green, Carrillo, and Ananeh-Firempong II (2003) defined the concept of cultural competency as the healthcare system’s ability to provide patients quality care that is tailored to meet their social, cultural, and language needs. In 2006, Lehigh Valley Health Network, located in Allentown, Pennsylvania, implemented an organization-wide cultural competency model to produce equitable care to its patients. Its patient base encompassed urban, suburban, and rural communities that included Latino, Middle Eastern, and Southeast Asian populations. Prior to its cultural awareness project, the network’s diversity initiatives were limited and showed mixed results. This new project was supported by senior leadership and implemented by the HR department. Other healthcare facilities that have developed a cultural competency model include White Memorial Medical Center in Los Angeles, California; Kaiser Permanente in San Francisco, California; and Sunset Park Family Health Center at Lutheran Medical Center in Brooklyn, New York (Betancourt, Green & Carrillo, 2002).

Gertner et al. (2010) and Hunt (2007) developed the following guidelines to create a culturally competent healthcare organization:

1. Strategic cultural plan: The organization must review its strategic plan and include a mission and vision statement that addresses diversity in the organization.

2. Standardized patient data collection: Patient registration is standardized to ensure patient demographic data are routinely collected.

3. Baseline employee survey: Prior to project implementation, surveys are given to assess baseline cultural awareness by employees.

4. Education program: Based on these employee surveys, an educational program is developed to address any employee weaknesses regarding cultural awareness. Part of the education program includes language assistance services to assist with translation, if needed.

5. Recruitment of diverse employees: Hiring diverse employees creates an environment of cultural acceptance of healthcare consumers.

6. Cultural materials: Culturally appropriate multimedia materials are developed and distributed to the network for both employees and consumers.

7. Systematic implementation: The organization must embrace these changes at all levels. Any changes are reviewed annually to ensure cultural competency.

8. Employee performance measurements: Include employee performance measurements to ensure cultural competency is maintained.

An organizational-wide initiative for cultural diversity provides a sustainable organizational culture. As the United States becomes more culturally diverse, healthcare systems need to reflect the values, beliefs, and behaviors of patients (Betancourt et al., 2002). Achieving cultural competency promotes equitable health care. Diversity in the workplace is a necessity because patient diversity has increased. Patients are more comfortable seeking health care from an individual who is similar to them in ethnicity, age, or gender, so it is important for models such as the cultural competency model and the ACHE recommendations to be implemented to increase diversity.

 Healthcare Globalization

Medical Tourism

The globalization of healthcare has occurred because of the diversity in both employees and healthcare consumers and the increase in services being offered outside the United States as an alternative to costly U.S. medical procedures. More countries have developed medical expertise to provide healthcare services at a much lower cost than in the United States. This phenomenon has developed into medical tourism, which means that patients opt to have medical procedures performed outside the United States because the cost is less while quality is maintained. Many U.S. patients seek international care because they are uninsured or underinsured. Most patients seek overseas care for dental, cosmetic, orthopedic, and cardiovascular services.

A recent McKinsey & Co. report indicated that in addition to cost savings, 40% of international patients seek advanced technological health care, 32% seek better healthcare services, and 15% seek faster medical care. In 2007, the number of U.S. patients seeking medical care overseas ranged from 500,000 to 750,000. The medical tourism market is currently a $20 billion market with projected increases to more than $100 billion within the next 5 years (Medical Tourism, 2011). According to a recent liver transplant patient, a U.S. hospital would have charged him $450,000 for the procedure, and that hospital could not schedule the procedure for months. He went to India and was charged $58,000, which included a 10-week hospital stay for both himself and his spouse (Ellis & Shanley, 2011).

According to a 2009 survey by the ACHE, the number of individuals who will travel for overseas medical treatments will double by 2014. This concept of medical tourism is becoming more popular because treatments provided outside the United States often cost one half or less than the cost of treatments provided in the United States (Pavarini, 2009). This movement of patients is becoming more common. There are several websites that promote medical tourism, such as www.medicaltourism.com and www.medretreat.com. Many Central and South American countries have strong reputations for elective surgeries. India is offering affordable high-quality care with prices 10% less than the cost of those in the United States. Thailand, Malaysia, and Singapore are popular for cardiac surgery (Horowitz, Rosensweig & Jones, 2007).

Because of this global trend, U.S. companies are now offering international medical packages for their employees because it is more cost effective. Basic Plus Health Insurance is offering its members an option of overseas care at hospitals accredited by the Joint Commission International. They entered into an agreement with Companion Global Healthcare, a medical tourism facilitator located in Columbia, South Carolina, to develop a network of approved services in foreign locations (Companion Global Healthcare, Inc., 2011).

Although the quality of international care continues to be debated, medical tourism continues to increase in popularity. Both the Joint Commission International and the International Organization for Standardization provide quality management services for global healthcare services. The Medical Tourism Association is a nonprofit membership organization that promotes quality of care and education regarding this type of health care (About Medical Tourism, 2012).

U.S. Healthcare Organizations Offer Overseas Services

In addition to foreign healthcare organizations offering more services to U.S. citizens, more U.S. healthcare organizations are now offering their healthcare services overseas. Managers, including HR managers, must continually address the following differences in international management (Byars & Rue, 2006):

1. Sociocultural: norms and values, religious beliefs, and educational levels that influence the delivery of healthcare services. Employees must be trained to ensure they understand the culture where they will be working. Religious beliefs may affect how workdays are structured. Educational levels are very important to understand for hiring purposes. If the educational level is not appropriate, then the organization should not be located in that country.

2. Economic: wage levels, per capita income, and monetary policies. In particular, wage levels and per capita income are important for the organization to know so that it can pay host country nationals appropriately.

3. Politico-legal: tax laws, government policies, stability of government. The stability of the government and the relationship the host government has with the United States is very important. In addition, how the government views the healthcare organization is also vital to establishing a quality workforce and a quality environment for employees.

All of these factors influence the operations of organizations, including healthcare organizations. It is important to recognize and respect the differences in cultures. For example, organizations may hire host country nationals(HCNs), which are citizens of the country where the organization will be located. HCNs can provide insight into how to hire local employees and how to manage the organization within the cultural realm of the country. A healthcare organization may collaborate with a local healthcare organization. This may encourage acceptance of the foreign healthcare system.

The Cleveland Clinic is an example of a global healthcare system. Originally established in Cleveland, Ohio, its strategic plan targeted its services to the surrounding suburbs. The Cleveland Clinic currently operates 15 family health centers, which also contain pharmacies, and outpatient surgery centers in those areas. However, recognizing the need to increase its exposure nationally and internationally, the Cleveland Clinic established healthcare facilities in Weston, Florida; West Palm Beach, Florida; and Toronto, Canada, in 1988 and is scheduled to open a healthcare facility in Abu Dhabi, United Arab Emirates, in 2012. Cleveland Clinic Toronto has a facility for secondary and tertiary care and a wellness center. This was the result of a drop in treating overseas patients. The newest facility, Cleveland Clinic Abu Dhabi, will be a 360-bed multispecialty facility. The Cleveland Clinic negotiated a 15-year contract to construct, staff, and manage this hospital in the United Arab Emirates. The Cleveland Clinic also negotiated a similar arrangement in Vienna, Austria, and will be building a cardiac hospital in Shanghai, China. In these instances, the Cleveland Clinic will not own the hospitals but will manage them. To maintain the integrity of Cleveland Clinic’s quality patient care, all of the facilities will be staffed by Cleveland Clinic physicians. The Cleveland Clinic is currently recruiting for U.S. citizens to work at the United Arab Emirates site (Staff Qualifications, 2011). Recently, Duke University Health Systems signed a 7-year agreement with Peking University to improve the healthcare systems in China. Duke University Health Systems will develop joint research, specialty clinical care programs, and management training (Ellis & Shanley, 2011).

 Technology

The Institute of Medicine (IOM) has published reports over the past several years that focus on improving the quality of health care in the United States. In 2001, it published the report Crossing the Quality Chasm: A New Health System for the 21st Century, which stresses the importance of improving the Information Technology (IT) infrastructure. IOM emphasized the importance of an electronic health record (EHR), an electronic record of a patient’s medical history. The report also described the importance of patient safety through establishment of data standards for collection of patient information (Institute of Medicine, 2001).

Because of these IOM reports, in 2004 President Bush established the Office of the National Coordinator for Information Technology within the U.S. Department of Health and Human Services. In 2005, the American Health Information Community (AHIC) was chartered to develop recommendations on how to increase health information technology (HIT) use in our healthcare system. AHIC focused on surveillance, consumer awareness, chronic health care, and EHRs. This federal advisory board concluded its work in 2008, and in the same year, this initiative was renamed the National eHealth Collaborative. This organization has already met with President Obama regarding HIT. During his tenure, President Bush indicated that most U.S. citizens should have an electronic patient record by 2014. President Obama has also supported this issue and has budgeted $19 billion to accelerate the use of computerized medical records in physicians’ offices by creating regional HIT extension centers (Department of Health and Human Services, 2011). The American Recovery and Reinvestment Act of 2009 has allocated $20 billion for meaningful use of EHRs under the Health Information Technology for Economic and Clinical Health Act of 2009. Meaningful use has been identified by the federal government as using certified EHR technology for e-prescribing, exchanging electronic information for improving care, and submitting information to the federal government on clinical quality measures (Lamont, 2010). Incentive payments are made to providers that have at least 30 patients who are Medicare and Medicaid eligible.

Electronic Medical and Health Records

History

In 1991 and 1997, the IOM issued reports that focused on the impact of computer-based patients’ records as an important technology for improving health care (Vreeman, Taggard, Rhine & Worrell, 2006). There are two concepts in electronic patient records that are used interchangeably but are different—the electronic medical record(EMR/EHR) and the electronic health record (EHR). The National Alliance for Health Information Technology(NAHIT) defines the EHR as the electronic record of health-related information on an individual that is accumulated from one health system and is used by the health organization that is providing patient care. The EMR accumulates patient medical information from the healthcare organizations that have been involved in the patient’s care. Simply, the EHR is an EMR that can be integrated with other systems (National Alliance for Health Information Technology, 2008). The IOM has been urging the healthcare industry to adopt the electronic patient record, but initially costs were too high, and the health community did not embrace the recommendation. This discussion will focus on the EHR.

As software costs have declined, more healthcare providers have adopted the EHR system. In 2003, the U.S. Department of Health and Human Services began to promote the use of HIT including the use of the EHR. The IOM was asked to identify essential elements for the establishment of an EHR. The IOM broadly defined the definition of an EHR to include:

• The collection of longitudinal data on a person’s health.

• Immediate electronic access to this information.

• Establishment of a system that provides decision support to ensure the quality, safety, and efficiency of patient care (Institute of Medicine, 2011).

Benefits of Electronic Medical Record/Electronic Health Record

Several studies have been performed to assess the impact of the EHR on healthcare delivery. Administrators of several healthcare delivery systems reported many benefits to the implementation of an EHR. Many administrators cited the capability of more comprehensive reporting that integrated both clinical and administrative data. The EHR also provided an opportunity to analyze and review patient outcomes because of the standardization of the clinical assessments. Also noted was the development of electronic automated reports that improved the discharge of patients. The reports also provided an opportunity for the administrator to assess the workload of a department. The EHR also improved operational efficiency. The EHR had excellent capabilities for processing and storage of data. Administrators also reported that the computerized documentation required 30% less time to complete than the previous handwritten notes (Shields et al., 2007). However, it is difficult to develop an electronic record that can integrate with other medical systems. It is important that standards be developed for the EHR to ensure standard data elements are collected and to ensure that the software will be integrated into other systems.

Several studies indicated that the EHR led to an improvement in interdepartmental communication. The EHR was used to provide aggregate data in patient records to various departments, and the information about the patients was legible. The actual design and implementation of an EHR system contributed to the development of a more interdisciplinary approach to patient care (Ventres & Shah, 2007; Whitman & David, 2007). The implementation of an EHR system led to improved data accuracy because it reduced the need to replicate data. The EHR system also provided a platform for routine data quality assessments, which was important to maintain the accuracy of the EHR data. The EHR system provides an opportunity for future research. The data captured in the database could be used to analyze outcomes and to develop baseline data for future research.

According to Valerius (2007), migration from a hard-copy system to an electronic system requires several components, including a physician order communication/results retrieval, electronic document/control management, point-of-care charting, electronic physician order entry and prescribing, clinical decision support system, provider patient portals, personal health records, and population health. When an organization implements an electronic system, there are changes in the workflow because much of the process was previously manual. Training is required for both healthcare professionals and staff to use the system.

When purchasing a system for patient electronic records, it had been found that there could be equipment or software inadequacies that caused slower processing of the data. If the system failed, it created frustration for healthcare professionals and administrators. Both of these problems emphasized the need for adequate training for both the providers and the staff. Much of the initial training required overtime for the staff. Most of the training lasted approximately 4 months. Continued training was also required for maintenance of a system (Valerius, 2007).

In October 2008, Microsoft announced its Health Vault website (Health Vault, 2012), which enables patients to develop EHRs free of charge. The individual chooses how much medical information to store online with this website. The website also has links to several health websites that provide information about exercise programs, heart issues, and drug reactions; provide software that allows users to share their medical information with their providers; and so forth. In November 2008, the Cleveland Clinic agreed to pilot data exchanges between Health Vault and the Cleveland Clinic’s personal health record system. The clinic enrolled 250 patients in the areas of diabetes, hypertension, and heart disease to test the system. The patients tested their health status at home using blood pressure monitors, weight scales, heart rate monitors, and glucometers. These reports were uploaded to the Cleveland Clinic using Health Vault. The patients were able to access health education material on Health Vault regarding their diseases. This was the first pilot study in the country to assess this tool. The results of the pilot study indicated that there was a significant time difference between doctor visits by diabetic patients because patients had gained better control of their conditions. However, heart patients visited their physicians more often because of their self-testing, indicating more timely visiting. The patients felt more in control of their personal health and felt they were partners with their physicians regarding their care (Cleveland Clinic/Microsoft Pilot Promising, 2011).

Although these initiatives have been touted as progress in managing patients’ care, the IOM recently issued a 2011 report indicating that these initiatives, although progressive, need to be closely monitored. The IOM recommended the establishment of a new governmental oversight agency for HIT efforts to ensure patient confidentiality.

In addition to the implementation of the EHR system itself, the new HIT agency must carefully monitor the EHR vendors that have developed software for healthcare organizations. Vendors have routinely hidden software errors that may have increased user error, such as a clinician misplacing decimal points for dosages because the keys on the keyboard are too close together, resulting in a patient hazard (Hirsch, 2011).

E-prescribing

Technology has greatly influenced how providers are ordering prescriptions. E-prescribing is electronic prescription ordering by a provider for a patient and improves patient safety. Medication ordering and the administration of medication can be faulty because of similar-sounding drug names, similar dosages, or similar labeling. E-prescribing can be performed on a desktop computer, laptop, or handheld device that will record a physician’s prescription order, eliminating the need for an individual to read an illegible handwritten prescription. In January 2009, Medicare and some private healthcare plans began paying bonuses to physicians who e-prescribe medications for their Medicare patients. Medicare will penalize physicians who do not e-prescribe by 2012 by reducing their reimbursement rates by 1%. IT companies are providing free software to physicians to encourage them to electronically prescribe. The number of physicians who are e-prescribing has risen over the past year. It is estimated that between 12% and 16% of all office-based physicians are e-prescribing. E-prescribing encourages patients to fill their prescriptions because it reduces waiting times at the drugstore. A limitation with e-prescribing is that federal laws prohibit electronic prescribing of any type of controlled substance, which could include sleeping pills or antidepressant drugs (Landro, 2009). An e-prescribing system can be used alone, but it is best used with the EHR system because it integrates the information from the patient’s EHR into its decision-making logic, further assisting healthcare providers with their patient care decisions.

The Clinical Decision Support Expert Review Panel recommended that an e-prescribing system contain the following database elements: patient payer and plan data, patient medications and their status, patient demographic information, patient allergies to drugs, diagnoses, laboratory tests, and pharmacy information. The panel also recommended that users should (1) be able to select dosage, strength, and duration; (2) be made aware of any drug alerts regarding drug interactions; (3) be able to view patient instructions; (4) be able to view weight-based dosing; (5) be able to view food interactions with drugs; (6) be notified when the prescription is due for renewal; and (7) be notified if the patient does not refill the prescription (Teich et al., 2005).

Telemedicine

Technology has improved how providers communicate with their patients. Telemedicine refers to the use of IT to enable healthcare providers to communicate with rural care providers regarding patient care or to communicate directly with patients regarding treatment. The basic form of telemedicine is a telephone consultation. Telemedicine is frequently used in pathology and radiology because images can be transmitted to a distant location where a specialist will read the results. Telemedicine is becoming more common because it increases healthcare access to remote locations such as rural areas. It also is a cost-effective mode of treatment. As EMRs/EHRs are used more frequently, it will be possible to provide services that are more comprehensive. A limitation may be how to reimburse a provider for providing an electronic consultation. Another limitation may also be if there are issues with reimbursement across state lines (Anderson, Rice & Kominski, 2007).

Robotic Surgery

Robots were first introduced as a surgical tool in 1987. Robotic surgery is a type of minimally invasive surgery (MIS). MIS differs from traditional surgery in that it is less invasive, meaning smaller incisions are made, which reduces the risk of infection; also, hospital stays are shorter, and recuperation time is reduced. Surgeons manipulate robotic arms to perform surgeries usually performed by humans. Although surgeons have to be trained in robotic surgery, use of a machine will reduce the effect of tremors in a surgeon’s hands, which reduces any errors.

As robotic surgery became more popular, the National Aeronautics and Space Administration (NASA) developed the concept of telesurgery, which combines virtual reality, robots, and medicine. The U.S. Army also became involved in robotic surgery because it was interested in bringing surgery to soldiers who were on the battlefield and needed surgery immediately. The U.S. Army hoped robotic surgery would reduce war mortality rates (Robotic Surgery, 2012). Studies have indicated that some procedures such as an appendectomy demonstrate very little difference in outcome whether performed via the traditional method or the robotic method. However, robotic surgeries performed on the prostate have shown positive significant outcomes (The Next Generation, 2012). The robotic system that has dominated the current market is the da Vinci Surgical System, which was developed by Intuitive Surgical of Sunnyvale, California. It is used in cardiac, urologic, gynecologic, and general surgery. This tool was used in only 1,500 cases in 2000, which increased to 48,000 cases in 2006. The initial investment for a da Vinci Surgical System is $1.75 million, with an annual upkeep of $100,000. It has been approved by the Food and Drug Administration for several types of surgery (daVinci.Surgery, 2012). Despite the initial cost, experts feel that the actual procedure is cost effective because recuperation time is reduced for patients. Medical students will also have an opportunity to be trained in a robotic surgery fellowship once their initial education has been completed. Indications are that robotic surgery will continue to evolve as a surgical tool. As with any technological advances, the costs should decrease over time, and the tool will become more advanced and more efficient.

HRM Training in Technology

As the healthcare industry continues to use IT in its clinical and organization operations, and as IT departments, management, and HR departments continue to provide training for healthcare employees, the employees must be cognizant of the impact IT has on patients. Patients also require orientation to any IT care, and senior management must recognize the importance of IT to the success of its healthcare organization. According to Bernstein, McCreless, and Cote (2007), there are two conditions that are needed for success in IT integration in health care: a sufficient budget for IT upgrades to ensure it can support any needed clinical innovations, and recognition by senior leadership of the importance of IT in organization operations.

Role of the Chief Information Officer in Technology

As more healthcare services are delivered electronically, healthcare organizations have designated a chief information officer (CIO) to manage the organization’s information systems. Some organizations may refer to this position as chief technology officer (CTO) or they may have both positions. Normally, the CIO is a vice president of the organization, and the CTO reports to that position. The CIO also integrates HIT into the organization’s strategic plan. The CIO must have knowledge of current information technologies as they apply to the healthcare industry and of how new technology can apply to the organization. The CIO is also responsible for motivating employees whenever there is any technological change (Oz, 2006). C. Martin Harris, CIO of the Cleveland Clinic, believes that the challenge of the CIO is to move from implementing the EHR to continuing to provide quality patient care by developing an integrated system model. As more healthcare is being delivered by technology, it will be the responsibility of the CIO to develop a model that is patient oriented rather than operations oriented (Harris, 2008).

 Teamwork in Health Care

The IOM report To Err Is Human: Building a Safer Health System describes the issues of preventable medical errors, which, according to the report, are in part the result of poor teamwork implementation. The report further states that effective teamwork can increase effective patient care. The report recommends that a team-raining performance curriculum model should be developed that can be used in healthcare settings.

According to Lerner, Magrane, and Friedman (2009), there has been insufficient direction about how team training should be implemented. Healthcare teams can focus on quality improvement, delivery, and overall management. Both quality improvement and management teams are charged with improving organizational quality. These teams can be focused on one area of the organization or on the entire organization. Objectives are established to improve quality performance in designated areas. Care delivery teams are based on the type of population such as geriatrics or diabetics or on care settings such as an emergency room. Team protocols are developed based on the type of population. Simulations are a common practice in team training. Developed in 1987, the Anesthesia Crisis Resource Management program is one of the best team-training simulation programs. In this simulation, anesthesiologists manage a simulated patient during a surgical procedure in which medical crises are triggered so that the trainees can practice crisis management (Gaba, Howard, Fish, Smith & Sowb, 2001).

Rather than providing team training in the work environment, there have been suggestions that team training should be provided during medical education. Developed in the 1950s by medical faculty at Case Western University School of Medicine, problem-based learning consists of a structured education activity, performed in a small-group format, which uses case study analysis to solve medical problems in a collaborative setting. These are medical problems that medical students are likely to encounter during their professional careers. Larry Michaelson developed team-based learning, which is a tool that can be used for healthcare provider education. The instructor teaches several small groups in one classroom. Members take an examination independently and then as a group retake the examination to develop consensual answers. Each group shares its answers. Both the groups and the individuals are assessed on their performance (Lerner, Magrane & Friedman, 2009).

TeamSTEPPS

A recent government initiative that is team based is the U.S. Department of Defense and Agency for Healthcare Research and Quality collaborative effort resulting in Team Strategies and Tools to Enhance Patient Safety (TeamSTEPPS). This program promotes patient safety through team leadership, situational analysis, monitoring, collaboration, and communication. Communication is key in this program. It allows the opportunity for all involved, including the patient, to clarify any issues. There are three phases to this program: (1) assessment, (2) planning, training, and implementation, and (3) sustainment. The Agency for Healthcare Research and Quality and the U.S. Department of Defense have joined forces with the American Institutes for Research to develop a national implementation of this program. The purpose of this training is to develop master trainers who can train healthcare employees nationally in teamwork principles (About TeamSTEPPS, 2011).

Interprofessional Education

A form of teamwork is interprofessional education (IPE), which occurs when two or more professionals from different healthcare sectors engage in a dialogue so they can learn from each other—promoting interprofessional interaction. IPE promotes effective collaboration during patient care. It is an effective way of providing different perspectives of how to care for a patient within a team. According to Reeves, Goldman, and Oandasan (2007), an interprofessional interaction should have a balance of different healthcare professions and 5 to 10 members, with an expert facilitator playing a pivotal role in the learning process. IPE should provide learner-focused, faculty-focused, and organization-focused activities. Learner-focused activities include interactive learning such as problem-based activities with a clear clinical focus. The faculty-focused component should include a faculty training tool. The training should be organizationally focused to ensure that it is appropriate for the type of facility. The trainees must recognize the relevance of the training to their daily responsibilities.

Accountable Care Organization

Another form of teamwork in health care is the accountable care organization (ACO), which consists of a network of organizations and healthcare providers that offers coordinated care. ACOs coordinate both clinical and fiscal services. They are accountable to improve clinical outcomes for designated populations. If the outcomes are met or exceeded, the group of physicians receives a financial bonus. There may be excessive penalties for not reaching the targets (Gold, 2011). The model’s assumption is that a provider team achieves or exceeds its stated objectives because of peer pressure. Services offered by an ACO can be a coordination of services offered by a tertiary hospital, home healthcare and hospice, rehabilitation, financing, education, social services, and preventive care. For example, a hospital may integrate physician practices as part of its system. The purpose of an ACO is to reduce costs and improve patient services (Integrated Delivery Systems Governing Board Manual, 2011).

This is not a new concept: It was introduced in the 1930s but became more popular in the 1980s and 1990s. However, with the downturn in the economy and the continued outcries for reform, the concept of an ACO has become more popular. There are approximately 100 U.S. ACOs with an estimated 40 million enrolled in this type of structure. Mayo, Kaiser Permanente, Harvard Pilgrim Health Care, and Intermountain have developed successful ACO models (Enthoven, 2009). The disadvantages of these types of systems are the onerous reporting and excessive penalties if the target outcomes are not achieved, which are major drawbacks. As healthcare costs continue to increase, the ACOs may be a viable option, but more ACOs need to be implemented nationally to determine their effectiveness.

A type of ACO model is pay for performance (P4P) or value-based purchasing (VBP), which are terms that describe healthcare payment systems that reward healthcare providers for their efficiency, which is defined as providing higher quality care for less cost. From a healthcare consumer perspective, the stakeholders should hold healthcare providers accountable for both the cost and high quality of their care. Because most health care in the United States has been historically provided by employers, in VBP, employers select healthcare plans based on demonstrated performance of quality and cost-effective health care (Theory and Reality of Value Based Purchasing, 2012). For the past decade, the Centers for Medicare and Medicaid Services has been collaborating with the National Quality Forum, the Joint Commission, the National Committee for Quality Assurance, the Agency for Healthcare Research and Quality, and the American Medical Association to implement initiatives to assess P4P systems nationwide. Despite national recommendations and successful programs that have been implemented nationwide, these efforts remain experimental because of lack of empirical evidence (Damburg, Raube, Teleki & dela Cruz, 2009).

For example, California’s Integrated Health Care Association (IHA) operates the largest experimental P4P program nationally. The program, which began in 2003, targets 225 medical groups (representing 35,000 physicians) that contracted with the seven largest health maintenance organizations and point-of-service plans in the state, and it has 6.2 million enrollees. The IHA scored physician care based on the Healthcare Effectiveness Data and Information Set (HEDIS) measure and made performance-based payments. Results indicated that 25 of the physician organizations believed that the P4P positively affected behavior by focusing on quality accountability, 21 physician groups hired more staff to capture data to demonstrate their results, and 29 of the groups modified incentives to increase physician quality activities (Damberg, Raube, Teleki & dela Cruz, 2009). However, despite these positive results, there were no major breakthrough improvements in quality. Questions regarding the amount and type of incentives need to be reevaluated. In addition, the type of quality indicators may also need to be reevaluated. P4P is a valid concept for health care. As programs that are more experimental are evaluated, lessons that were learned from the first round of experimental programs must be taken into account. Despite these efforts, employers seldom use this type of information when selecting benefits for their workers. A recent telephone interview of 609 employers in 41 markets, which represented 78% of the urban U.S. population, indicated that premium rates and geographic coverage motivated their decisions. Despite these issues, the Futurescan: Healthcare Trends and Implications 2006–2011 survey indicates that P4P will become more commonplace (Rosenthal et al., 2007).

From a strategic standpoint, if a hospital decides to integrate other services into its operations, the first step is to assess what services are needed for continuum of care in the geographic area. This initiative should also be consistent with the mission, vision statement, and strategy of the organization.

 Nursing Home Trends

In 2001, the Robert Wood Johnson Foundation funded a pilot project developed by Dr. Bill Thomas, the Green House Project, which is a unique type of nursing home established as a residence that provides services—that is, a home to the residents rather than an institution at which to receive care. The concept alters the size of the facility, the physical environment, and the delivery of services (Fine, 2009). The home is managed by a team of workers who share the care of the residents, including the cooking and housekeeping. The daily staff members are certified nursing assistants. All mandated professional personnel such as physicians, nurses, social workers, and dieticians form visiting clinical support teams that assess the elders and supervise their care (Kane, Lum, Cutler, Degenholtz & Yu, 2007).

The residents can eat their meals when they choose. The word “patient” is not used—all residents are called “elders.” The Green House is designed for 6 to 10 elders. Each resident has a private room and private bathroom. The elder rooms have high levels of sunlight and are located near the kitchen and dining area. There are patios and gardens for elders and staff to enjoy. Although these new types of nursing homes look like a residential home, they adhere to all long-term housing requirements. A Green House looks like other homes in its designated neighborhood (Fine, 2009).

Residents can have their own pets, which are not allowed in traditional nursing homes. According to a recent study performed by the University of Minnesota, the residents of the Green House are able to perform their activities of daily living longer and are less depressed than residents of traditional nursing homes and are able to be self-sufficient longer than residents of traditional nursing homes. The staff also enjoys working at the Green House, and there is less staff turnover (Kane et al., 2007).

The first Green House was constructed in Tupelo, Mississippi. There are now 18 Green Houses nationwide. Dr. Thomas eventually partnered with NCB Capital Impact, which is a not-for-profit organization that provides financial assistance to underserved communities. NCB Capital Impact has a loan program that provides financial assistance up to $125,000 to support engineering and architectural and other expenses for a selected Green House site. The borrower must contribute 25% of the loan amount (The Green House Project, 2012). There are currently 18 Green Houses across the United States.

 Social Media Communication

There are several definitions of social media, but the prevailing concept of the definitions is that social media has an electronic platform and it is used as a tool for interaction between individuals or organizations. It can be used as a communication tool and as a marketing tool. Social media is being used by healthcare organizations as a recruiting tool. Social media has also become a communication tool for patient engagement and for employees and providers. According to a September 2011 employee survey of IT professionals, administrators, and physicians, 75% use social media for professional purposes within their employment. The Mayo Clinic and the U.S. Department of Veterans Affairs are exploring ways to use social media for patient engagement including education (Most Health IT Pros Use Social Media, 2011). Hospitals and academic medical centers are establishing more YouTube channels and Twitter accounts nationwide. Physicians use Twitter to communicate easily and quickly with other physicians. YouTube provides an opportunity for brief healthcare education videos.

Social media can be easily used as part of a health communications program. Because of the continued increase in social media use, the Centers for Disease Control and Prevention Health Communicator’s Social Media Toolkit (2010) contains recommendations for social media use in the healthcare industry:

1. Perform market research to determine key educational messages.

2. Review social media sites by user statistics and demographics.

3. Start a social media campaign by using low-risk tools such as podcasts and videos.

4. The educational messages must be based in science.

5. Develop a system of easy viral sharing by patients so everyone can benefit from the message.

6. Social media users should listen to each other. If patients are voicing concerns or questions, they need to be answered.

7. Leverage social networks to expand the message. An average Facebook user has 130 friends that they can easily share a health message with.

In addition to these recommendations, the federal government has established two websites for social media best practices and governance policies: http://govsocmed.pbworks.com/Web-2-0-Governance-Policies-and-Best-Practicesand http://socialmediagovernance.com/policies.php.

As with any trend, it is the responsibility of the organization to offer training in these types of tools to ensure responsible use. The HR department would collaborate with senior management and the IT department to ensure that these IT tools are used appropriately.

 Conclusion

Healthcare trends have been impacted by two major factors: technology and consumer preferences. Each factor has impacted on how healthcare delivery services are provided. This chapter discussed different technological trends and consumer preferences in healthcare. HR must provide ongoing training and development to their employees to ensure they are current with any new trends. Like other industries, healthcare organizations must maintain a competitive advantage by providing quality and innovative health care that satisfies their healthcare customer.

Chapter 11

Niles, N. J. (2013). Basic concepts of health care human resource management. Sudbury, MA: Jones and Bartlett.

Strategic Human Resource Management

Introduction: Quality and Strategy Concepts

Organizational Quality

A strategic goal of any healthcare organization is the quality performance of the employees. The Institute of Medicine (1998) created the most accepted definition of quality in the healthcare industry: patient services current with scientific knowledge that result in a desired health outcome. This definition targets the relationship between the provider and the patient or population. In addition to this relationship are the additional activities and the structure involved in the provision of care. This would include the facility itself and other personnel directly or indirectly involved in patient care. To maintain a high-quality organization, the human resources (HR) department provides policies and procedures for all organizational levels. This concept of quality is inherent in healthcare strategic planning to ensure that quality is a long-term strategic objective.

Strategic Concepts

A strategy is management’s plan for operating the organization over the long term. Management typically is committed to a set of long-term actions to operate an organization. The goal of a strategy is to achieve a competitive advantage. The process of crafting a strategy consists of:

1. Mission and vision statements.

2. Performance objectives.

3. A strategy to achieve the objectives.

4. Strategy execution.

5. Performance evaluations and development of corrective actions based on the evaluations (Thompson, Strickland & Gamble, 2010).

A mission statement describes an organization’s current activities and purpose. A vision statement provides guidance about the aspirations of an organization. With any mission and vision statements, the role of the HR department is to ensure there are employees in place that have the skills and knowledge to achieve the mission and vision of the organization.

Financial and strategic objectives measure the performance of an organization to ensure the organization is achieving its mission and working toward its vision. HR can contribute to performance measurement by developing human capital metrics. Once the objectives are developed, a strategy is developed and executed based on the capabilities of the organization and the influences of the external environment. A strengths, weaknesses, opportunities, and threats (SWOT) analysis is performed prior to strategy development. In addition to an SWOT analysis, a Porter’s Five Forces analysis is performed to assess the industry’s conditions to determine what strategy can be implemented to give an organization a competitive advantage. The Five Forces analysis examines forces in an industry: barriers to entry, competition, buyers, suppliers, and substitute products or services that are available to buyers. Once the strategy is executed, an evaluation of the company performance to assess its success is performed. A strategy may be changed based on the evaluation process.

Recruiting, training, developing, and retaining appropriate employees is a fundamental human resource management (HRM) process that contributes to the strategic planning process because the appropriate human capital is needed to achieve both short-term and long-term success. The HR department should align its policies with the strategic planning of the organization to ensure a sustained competitive advantage. The HR department can also contribute to the success of strategic management by developing metrics to assess human capital performance (Inyang, 2010). This chapter will focus on the five steps of strategy development and implementation introduced earlier in this section and the role of HRM in the strategic management process.

 Development of Mission and Vision Statements

Graham and Havlick (1994) state that a strong mission statement should include four elements: the purpose, the specific business, geographic location, and customer base. According to Hader (2006), a mission statement should be more than just a written exercise. It should be the foundation of a realistic and attainable goal. To develop a mission statement appropriate for the organization, senior management should ask for initial input from employees, review organizational documents, and, as the mission evolves, involve continued input from employees at all levels. An active agenda should be developed to educate staff on how to achieve the mission of the organization. In addition, there should be an evaluation process of activities of the organization to ensure that the mission statement is achieved by all employees. Table 11.1 lists examples of healthcare mission statements. Some organizations have only a one-sentence mission statement, and other organizations have a mission statement that comprises several sentences.

Once a mission statement is developed, a vision statement will also be crafted for the organization. Whereas a mission statement focuses on current operations, the vision statement focuses on where the organization is headed. It is a futuristic statement. It contains a long-term goal and often includes information about how the organization is going to achieve the goal. It often is an inspiring statement of the organization’s ultimate goal. Table 11.1 lists examples of healthcare mission statements from two federal government organizations—the Federal Emergency Management Agency and the Centers for Disease Control and Prevention—and one from the world-renowned healthcare organization, the Mayo Clinic. Each of these organizations have developed one powerful statement that clearly indicates the overall focus of their organizations. These statements reveal to both their employees and the world their organizational priority.

Once a mission statement is developed, a vision statement will also be crafted for the organization. Whereas a mission statement focuses on current operations, the vision statement focuses on where the organization is headed. It is a futuristic statement. It contains a long-term goal and often includes information about how the organization is going to achieve the goal. It often is an inspiring statement of the organization’s ultimate goal.

Table 11.1 Healthcare Organizations’ Mission Statements

Federal Emergency Management Agency

FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.

Centers for Disease Control and Prevention

Collaborating to create the expertise, information, and tools that people and communities need to protect their health—through health promotion, prevention of disease, injury and disability, and preparedness for new health threats.

Mayo Clinic

The Mayo Clinic will provide the best care to every patient, every day, through integrated clinical practice, education, and research.

Source: Federal Emergency Management Agency (2011), Centers for Disease Control and Prevention (2011), and Courtesy of the Mayo Foundation for Medical Education and Research.

Table 11.2 contains three vision statements of different healthcare organizations: Resurrection Health Care, a Chicago-based Catholic healthcare organization; a global pharmaceutical company, Pfizer, Inc.; and the world-renowned healthcare organization, the Dana-Farber Cancer Institute. Although the mission statement is important because it provides a framework for current operations of the organization, the vision statement is equally important because it tells everyone what is important to the organization over the long term. The Resurrection Health Care vision statement reflects the organization’s focus on expanding its Chicago base and becoming a national leader in healthcare delivery. Pfizer’s vision is to develop new drugs to eradicate diseases. The Dana-Farber Cancer Institute’s vision is to eradicate cancer and other major chronic diseases. Like the mission statements, these vision statements are formulated to inspire employees and the world about the future plans of their organization.

Once mission and vision statements are formulated, a separate mission and vision statement should be formulated by each department of the organization. The departments of each organization must develop a mission and vision statement that complements the corporate mission and vision statement. These lower-level statements will further strengthen the focus of the organization.

Table 11.2 Healthcare Organizations’ Vision Statements

Resurrection Health Care

Resurrection Health Care, the leading Catholic health care system in Chicagoland, will transform into a patient-centered integrated regional health system that is recognized as a national leader in delivering quality outcomes to the patients and communities it serves.

Pfizer Inc.

At Pfizer, we’re inspired by a single goal: your health. That’s why we’re dedicated to developing new, safe medicines to prevent and treat the world’s most serious diseases. And why we are making them available to the people who need them most. We believe that from progress comes hope and the promise of a healthier world.

Dana-Farber Cancer Institute

Dana-Farber Cancer Institute’s ultimate goal is the eradication of cancer, AIDS, and related diseases and the fear that they engender.

Courtesy of Resurrection Health Care Corporation, the Dana-Farber Cancer Institute, and Pfizer Inc.

 Development of Performance Objectives

Once the mission and vision statements are created, objectives are developed, which are quantifiable target statements to measure the performance of an organization. Objectives should be quantifiable and have a deadline for achievement. Typically, there are two types of objectives: financial and strategic. Financial objectives are lagging indicators of an organization’s performance. They measure what the organization has already accomplished. Strategic objectives are leading indicators of what the organization would like to achieve. Strategic objectives focus on market standing and improving competitive vitality (Thompson, Peteraf, Gamble & Strickland, 2012). Examples of financial objectives are (1) increase annual revenues by 18% or (2) increase annual profit margins by 3%. Financial objectives measure what the organization’s performance was in the past. Historical financial data are analyzed to assess if the objective was achieved. Examples of strategic objectives are (1) increase market presence 10% by 2013 and (2) acquire one healthcare agency by 2015. Strategic objectives measure what future action will be taken by the organization.

This type of objective setting is a balanced scorecard approach. Developed by Kaplan and Norton in the 1990s, the balanced approach is used to assess an organization’s performance by setting both financial and performance objectives. Financial data as well as business operations, customer management, and HR data are collected to provide a balanced view of performance (Balanced Scorecard Basics, 2011).

Table 11.3 The Duke Balanced Scorecard

Clinical Quality & Internal Business	Customer Service
Goal: Faster enhanced clinical care and new program development to improve quality, patient safety, and efficiency.	Goal: Continuously improve customer service for both internal and external customers.
Work Culture	Finances
Goal: Continuously improve the work culture consistent with the DUHS value proposition.	Goal: Generate sufficient resources to reinvest in people, technology, buildings, research, and education.
Source: Duke Human Resources (2011).

The balanced scorecard approach is becoming more common in the healthcare industry. Duke University Health System uses this approach. Table 11.3 outlines the Duke Balanced Scorecard. The Duke University Health System (DUHS) HR department assesses the performance of employees by evaluating them in the following key areas: customer service, finances, work culture, and clinical quality and internal business. If DUHS focuses on improving work culture and customer service, the clinical quality and financial objectives will improve also. Based on these four quadrants, employees are assessed on their behavior and their expected job result, their adherence to the DUHS cultural norms, and whether they have achieved goals in each of the quadrants. These quadrants are tied to the mission of DUHS. DUHS has an overall goal for each quadrant. Each department and individual employee would have a goal tied to the DUHS goal. For example, the DUHS goal of clinical quality and internal business is to foster enhanced clinical care and new program development for patient safety and efficiency. The personal goal of a DUHS nurse would be to demonstrate the provision of quality patient care. This nurse’s department goal would be the implementation of 100% error-free patient care for 6 months. By using the balanced scorecard approach, DUHS believes it will continue to be a high-performance organization (Duke Human Resources, 2011). That is the power of the balanced scorecard. Once these internal goals are developed, the next step is to assess the external environment of the organization.

 Macroenvironment Analysis

A macroenvironment analysis is influenced by two levels of the external environment: the macroenvironment and the immediate or industry environment. The macroenvironment is composed of the following influences: economic, technologic, sociocultural, demographic, governmental, and legal (Thompson et al., 2012). Each of these influences can impact a healthcare organization. As an example, consider the macroenvironmental influences on a hospital’s decision to expand its facility to increase potential revenues. The hospital’s options are to operate an elective surgery center or to start a home healthcare agency.

Economic Influences

Economic influences can occur at the national and local levels. During the past 3 to 5 years, the United States has experienced an economic downturn, resulting in a 10% unemployment rate (U.S. Unemployment Rate, 2011). Those unemployed individuals who lost their employee healthcare insurance would replace their health care by visiting a hospital emergency room or an emergency care facility, thereby placing more stress on these components of the healthcare system. These economic conditions may or may not be occurring at the local level, but most likely there will be an impact because of national conditions. Elective surgery would not be an option during difficult economic times because it is not a need. At this stage of analysis, elective surgery is eliminated from the expansion options for the hospital, and it appears that a home health agency is the choice.

Governmental and Legal Influences

The healthcare industry is one of the most heavily regulated industries in the United States, so federal, state, and local regulations for a health agency are examined. In addition, communication with different accrediting bodies for each option would also be necessary to assess accreditation costs. If the facility will serve both Medicare and Medicaid patients, there will be regulations from these agencies. A cost–benefit analysis will be performed to assess the cost of adhering to these regulations.

Technologic Influences

Advances in technology have led to new capabilities in patient care through improved medical procedures and equipment. Technologic advances in portable medical equipment have increased the number of home healthcare agencies. More care can be provided on an outpatient basis because of these advances. Another major technologic advance is the development of the electronic medical record, which allows rapid transfer of patient information electronically. This could have a positive impact on home health care, increasing the efficiency of its operations.

Sociocultural Influences

Sociocultural influences are consumer preferences based on lifestyles and values. They directly influence major decisions. This is the most important macroenvironmental factor in determining a strategy. Consumer preferences dictate profits. Research indicates that consumers prefer home health care during a prolonged illness rather than a hospital stay. In a recent survey of 1,000 U.S. adults, more than 80% preferred home health care (Tellez, 2011). More insurance plans, both private and public, are reimbursing home health agency care because the care is cost effective.

Demographic Influences

Demographic influences include age, race, income levels, ethnicity, geographic location, education, family size, and life expectancies. Statistics indicate the population is living and working longer, which results in chronic healthcare conditions. Therefore, development of a home healthcare agency may be an option for the hospital for these reasons. The impact of the Patient Protection and Affordability Care Act of 2010, which focuses on cost containment, may also be a reason for implementing a home health agency.

Before making a final decision on this option, the second portion of the environmental analysis is the industry analysis. Michael E. Porter (1979) developed the concept of a Five Forces analysis, which outlines the five forces that impact industry success: competition, suppliers, substitute products, new entrants into the industry, and buyers.

 Industry Environment, or Porter’s Five Forces Analysis

According to Michael E. Porter, the attractiveness of an industry, or how profitable an industry can be for a company, is the result of five competitive pressures in the market: rivalry or competition, suppliers of resources needed by the organization, substitute products or alternative services that a customer can choose, potential new organizations entering the industry, and buyers of the product or service. According to Porter, each force needs to be assessed by its level of power over the organization—low power, medium power, or high power of influencing the organization’s efforts to be profitable. If the analysis indicates these forces have high power, then it may be a poor decision to open a home health agency. If it is determined that the forces have low power, then this may be an opportunity for the hospital to increase revenues (Porter, 1979). The following is an analysis of the hospital’s industry using Porter’s Five Forces model to assess whether opening a home health agency is a viable option.

Rivalry/Competition Forces

Competition is the strongest force of the five forces. If there are several home healthcare agencies that would compete directly with the hospital’s new agency, then it may not be the best opportunity for the hospital to increase its revenues. Existing agencies may already have a dominant market share. The hospital may still have an opportunity to start a home health agency, but it may determine that it should be placed in a different geographic location. If it is determined that there are existing home health agencies that have dominated the market, then the power of the competition is high. If there are few competitors in this market, then the power of the competition is low, and therefore the opportunity is more attractive. Analysis: low to high power.

Suppliers Force

Suppliers provide materials or labor for an organization. The more specialized and unique a product or service is, the more power the supplier will have over an organization. In this instance, the suppliers for a home health agency would consist of the medical personnel and medical equipment. Medical equipment could be obtained from different suppliers; therefore the power the supplier would have over the organization would most likely be low. Depending on the types of services offered, supplier power could be low to high. Many home health agencies offer general assistance to homebound individuals, so these employees would be easy to hire. With continued nursing labor shortages, supplier power could be medium to high. Analysis: low to high power.

Substitute Products Force

Substitute products or services are any alternatives a consumer would have to select instead of a home healthcare agency service. A substitute product or service could be a family member caring for the individual. Another option could be placing the homebound individual in an institution. Both are options but have limitations. A family member often becomes exhausted from this type of care and eventually opts for home health care. Using an institution for health care may be expensive and require additional copayments from the family or individual. Analysis: low to medium power.

Barriers to Entry Force

Barriers to entry refers to the limitations that are imposed on a potential competitor to entering the home healthcare industry. Barriers to entry typically include high capital requirements, high level of regulation, specialized knowledge needed to enter the industry, or the power of existing competition already present in the market. Start-up costs for a home health agency are not high. There could be some issues with labor supply shortages, which could be one barrier. If there are many government regulations that an organization must adhere to, these would be a barrier to entry. Analysis: low to medium power.

Consumers/Buyers Force

Buyer forces’ power is linked to how many substitute products there are, how frequently the buyer purchases the service, how loyal the buyer is to an existing provider, and if there is a cost for a buyer to switch to another service provider. There would not be any costs involved in switching from one home health agency to another, provided the insurance covers the new agency. The main reason that consumer power would be high is because most consumers have strong loyalty to their healthcare providers and often form bonds with them. A well-developed marketing strategy would need to be developed to emphasize superior customer care. Analysis: high power.

The Porter’s Five Forces analysis indicates there is a mix of low to high power of the five forces. If the new agency is structured appropriately, the power of the five forces could be limited to low. Potentially, this industry could be attractive. However, to assess the success of this industry choice, a SWOT analysis must be performed in conjunction with Porter’s Five Forces analysis.

 SWOT Analysis

A SWOT analysis examines the strengths and weaknesses of a company and the opportunities of a company (what situations are available to the company that could be positive for their position), as well as threats (what issues exist that could negatively affect the company’s situation). An SWOT analysis is both an external and an internal analysis of a company’s current situation. Table 11.4 outlines an SWOT analysis of a hospital that is interested in opening a home healthcare agency.

This SWOT analysis is unique because of the role of HRM in the strategic planning. For example, there are seven typical strengths identified for a healthcare organization. Of the seven, two—award-winning services and employee satisfaction—are a direct result of the positive role HRM plays in an organization, as the HR department provides training for the employees. Of the six identified weaknesses, leadership turnover, no management succession plan, and weak strategic plan all are a result of weak HRM. The HR department can turn these weaknesses into strengths by improving the selection plan for hiring employees and by working with senior management to develop a succession plan and a strategic plan for the organization. There were four opportunities identified, of which HRM could assist with two: information technology training for employees to improve efficiency and assistance with counseling of employees during a merger with another facility. Finally, of the seven threats identified, the HR department could help the organization manage labor shortages by training employees for job rotation and could train senior management on how to deal with employee issues. HRM can play a positive and integral role in strategic planning.

Table 11.4 SWOT Analysis: Healthcare Organization

Strengths	Weaknesses
Reputation	Competitive market
Accreditation	Leadership turnover (HRM)
Employee satisfaction (HRM)	Medicare reimbursement issues
Patient satisfaction	No management succession plan
Location	(HRM)
Award-winning services (HRM)	Weak strategic plan (HRM)
High occupancy rate	New healthcare legislation
Opportunities	Threats
Merge with other healthcare facilities	Increased competition
(HRM)	New technology adaptation
Purchase another facility	Labor shortages (HRM)
Improve information technology	Economy
(HRM)	Financial issues
Expand patient services	Accreditation issues
	Employee issues (HRM)

Based on the macroenvironment analysis, Porter’s Five Forces analysis, and the SWOT analysis, it appears that starting a home healthcare agency could be beneficial to the hospital. Even if it is determined that the strengths and opportunities of the organization are positive, in order to ensure that this new venture is successful, the weaknesses of and threats to this hospital cannot be ignored and must be addressed in order to proceed.

 Strategy Execution

Based on the SWOT, macroenvironment, and Porter’s Five Forces analyses, the next step is to execute the strategy. Strategy execution is the most difficult step in the strategic management process because management is converting plans into actions. Executing the chosen strategy occurs at every level of the organization. To execute the strategy to achieve the desired objectives, the following must occur:

1. Employees must have the required skills and knowledge to implement the strategy.

2. There must be adequate financial resources allocated to strategy execution.

3. The infrastructure of the organization must support strategic implementation.

4. Employees must be motivated to execute the strategy. Tying incentives to productivity to achieve the strategy is an option.

5. The importance of strategy execution must be routinely communicated at all organizational levels (Thompson et al., 2012).

The Role of HRM in Strategy Execution: High-Performance Work System of a Healthcare Organization

From a strategic perspective, senior management should consider the formulation of a high-performance work system, which consists of the appropriate employees, technology, and structure that are put in place for strategy execution. Research has indicated this type of system recruits more job candidates, is more selective in its hiring process, and spends more hours providing employee training (Dessler, 2012).

According to Noe, Hollenbeck, Gerhart, and Wright (2011), high-performance work system characteristicsconsist of the following listed items. Any healthcare organization can use all of these system components. The role of HRM in the process is explained.

1. Employees work as a team: The concept of teamwork is common in the healthcare industry. Patients often require a team of providers for treatment. The HR department will provide training to employees on how to work well in teams.

2. Employees participate in selection of other employees: If nurses need to be hired, existing nurses should be included in the review of résumés and should participate in the interview process. They are familiar with the job responsibilities and can be intuitive about who would be successful in the organization. The HR department will develop a process for employee selection and will train employees on how to interview and how to select employees.

3. Formal performance feedback is an active process: A performance feedback system must be implemented in a timely manner, and feedback must be taken seriously by all parties. To improve employee performance, feedback must be considered. In conjunction with management, the HR department will develop a feedback system that is appropriate for the healthcare organization.

4. Employee rewards are linked to organizational performance: Healthcare organizations can link employee performance to healthcare quality indicators developed by the Agency for Healthcare Quality and Research such as prevention quality indicators, inpatient quality indicators, and patient safety quality indicators (Quality Indicators, 2011). The HR department will provide training to assess these types of metrics.

5. Technology is used to maximize processes: The organization must be scientifically current with any recent technologic advancement that can improve patient safety and care and that can improve organizational processes. For example, electronic health records are becoming a priority for health care. The HR department would coordinate training programs to ensure that this technology is used correctly by appropriate employees.

6. Ethical behavior is encouraged: The HR department will provide ethical training to all employees and will develop a code of conduct that is actively used with enforcement if unethical behavior occurs.

7. Employees must understand the importance of their jobs to the organization: The HR department will provide training to employees regarding their understanding of the importance of their roles in the organization. If employees feel empowered, their performance will be at a higher level.

8. Employees participate in any process or equipment changes: In conjunction with senior management, if there are changes that occur in an organization, the employees must be asked for input regarding any changes. If they believe their jobs are not challenging, then the HR department will change the job design or create different goals for the employees.

 Strategy Evaluation

Once the strategy is executed, the final phase of strategic management is strategy evaluation by reviewing financial and strategic objectives. Strategy evaluation is the appraisal of plans and their results. According to Rumelt (1999), the strategy must be consistent with the mission, demonstrate a competitive advantage, and emphasize the strengths of the organization. If these objectives are met, then the strategy should be monitored to ensure there is no change in the external environment or within the competitive landscape. If the objectives established are not met, then the strategy must be reviewed for changes. The process of changing a strategy is the responsibility of senior management. The time frame for corrective action varies from days to months.

 A Strategic Tool: Healthcare Workforce Planning

It is the responsibility of the HR department to review both existing and future labor needs of the organization. Workforce planning is the biannual or annual process of planning an organization’s future job openings at all levels (Dessler, 2012). Workforce planning can be difficult due to the continued healthcare workforce shortages. As part of workforce planning, it is also necessary that the HR department assess rates for workforce shortages and internal workforce organizational changes due to employee turnover, layoffs, and any strategic changes. According to Soberg and Bennington (2009), several HR metrics that are analyzed include the following:

1. Employee turnover rates: Turnover can be both internal and external to the organization. Employees not only leave the organization through quitting, firing, and retirements but also transfer within departments. Each case should be analyzed.

2. Leave of absence rates: This metric includes maternity leave, disability, injuries, or illness.

3. Productivity loss rate: This metric can result from employee dissatisfaction or family illness, for example.

4. Recruitment and selection rates: How successful is the HR department in recruiting and selecting qualified employees?

5. Organizational growth: If the organization expands, how many employees will be needed?

Determining Labor Supply

Part of strategic forecasting is the assessment of both internal and external labor supply. Externally, it is important that economic and labor market conditions be analyzed to assess supply. The Congressional Budget Office and the Bureau of Labor Statistics provide economic projections and estimates of the availability of candidates for specific occupations (Dessler, 2012). As part of this process, the HR department performs a 5-year historical trends analysisto assess positive or negative trends. The HR department must also compare these rates with industry rates. If the organizational rates are below industry rates, no action may be needed. However, if the rates are above industry rates, then action must be taken.

Turnover rates in the healthcare industry occur at all employee levels: physicians, nurses, senior management, and administrative staff. Voluntary turnover (quitting) occurs with physicians and nurses because of professional disillusionment. This level of turnover can be devastating to an organization because there is a disruption in patient care, which could influence quality of care. Replacement of nonclinical staff has less of an impact. However, in a recent study of turnover impact on a major medical center, the annual cost of turnover for the center was 3.4% to 5.8% ($17 million to $20 million of its annual operating budget of $500 million). The largest replacement costs were the nursing staff. Recruitment costs for physician replacement was also very expensive (Waldman, Kelly, Arora & Smith, 2004).

By analyzing these metrics, the HR department can develop both short-term and long-term strategies to offset the negative trends. One of the most important HR metrics is recruitment rates. Successful recruitment and selection processes are crucial to ensure that qualified and appropriate employees are hired. If these processes do not occur, turnover rates will negatively affect productivity rates. In addition to the analysis of recruitment and selection rates, productivity rates related to job dissatisfaction are analyzed. If employees are dissatisfied, their performance will suffer. The HR department develops strategies to address employee dissatisfaction. Strategy development occurs by surveying employees routinely to determine workplace issues.

If an organization decides to increase healthcare services, a ratio analysis is performed to assess the number of employees that will be needed to satisfy the increased services (Mathis & Jackson, 2006). For example, if a hospital decided to add two new pediatric care floors, it will need to determine the ratio of registered nurses (RNs) to patients and the support staff needed per floor. If there will be 24 patients per floor with a ratio of 1 RN per 8 patients, the organization will be required to hire 3 RNs per floor for a total of 6 RNs. In addition to the actual wages paid, payroll and unemployment taxes must also be calculated.

Dealing with Workforce Shortages

In 2010, the American Hospital Association issued a report, Workforce 2015: Strategy Trumps Shortages, with the following recommendations:

1. Redesign work processes and use technology to increase efficiency and employee satisfaction.

2. Attract a new generation of workers by introducing a flexible organizational culture.

3. Retain existing workers by offering different incentives.

4. Train employees to be successful in teams.

5. Collaborate with educational institutions regarding their traditional degree programs to meet new work models, new technology, and critical thinking skills (American Hospital Association, 2010).

Dealing with labor shortages is a challenge for healthcare organizations. The HR department and management must develop an organizational culture that offers flexibility for work–life balance, encourages employee empowerment, is a leader in change, offers professional development for employees’ careers and training to enhance their job performance, and encourages quality performance by offering incentives. These strategies will increase employee retention and performance, which will also lower employee turnover.

Budgeting

Labor expenses are the highest operating cost in an organization, particularly in health care, because of the high salaries of physicians and other healthcare providers. In addition, the healthcare industry is a service industry, which means that there will be high labor costs; therefore, the HR department must budget for labor costs. The salary budget typically consists of expenses associated with the salaries and wages of the employees. These expenses include benefits such as healthcare insurance, vacation, sick leave, and other benefits offered by the organization. A labor budget should predict the following: staffing levels, salaried versus wage employees, labor expenses such as overtime, benefits such as paid time off and health insurance, and taxes such as payroll taxes and unemployment taxes (Fried & Fottler, 2008). If an organization offers monetary incentives, this must also be included in the budget.

If an organization has determined that it does not have employees that can perform in an area of expertise, the organization will outsource the activity. Outsourcing, which consists of hiring an individual(s) external to the organization, is becoming more prevalent in healthcare information technology because of its rapid changes and its increased use in daily activities. If the organization determines that there are no employees who can provide a quality performance in a certain knowledge area, it will outsource the activity to an external individual. Outsourcing can be a cost-saving measure because the organization typically does not pay for the individual’s benefits, thus decreasing substantial labor costs. A disadvantage of outsourcing activities is the potential lack of loyalty between the parties, as the outsourced individual is not truly part of the organization. If an organization outsources activities, the HR department should provide an orientation about the organization to the individual so the person can develop loyalty to the organization.

Succession Planning

If the departure of a CEO from an organization is unplanned, it can create an organization without direction. As part of strategic planning, a succession plan needs to be developed to ensure there is leadership continuity in the organization. Succession planning consists of a strategic plan that identifies replacements for key employees such as a CEO. However, in a healthcare organization, it is just as important to identify key replacements for lower-level employees such as the information technology executive, laboratory technicians, physical therapists, or other knowledge workers (Mathis & Jackson, 2006). In conjunction with management, the HR department should develop a plan to address the replacement of these key workers.

 Conclusion

Strategic thinking is the ability to assess the organization’s operations with a long-term perspective (Moseley, 2009). HRM plays an integral role in strategic management of any organization, including healthcare organizations. In order for a healthcare organization to be competitive, it must provide quality care to its consumers, or patients. Quality care comes from quality employees. Quality employees come from quality HRM procedures, which include a recruitment and selection process that will find the appropriate employees for an organization. The HR department must provide appropriate training for employees as healthcare organizations evolve and change their strategic plans. Long-term planning also requires employees to remain up to date with the newest scientific information regarding health care.

Employee turnover in a healthcare organization is very costly. The HR department can play a role in developing an organizational culture that empowers employees and encourages their productivity. Another integral role that the HR department plays in strategic planning is forecasting the supply of labor and the future labor demands of the healthcare organization. In addition to finding qualified employees for the organization, budgeting for labor costs is necessary because labor costs are the greatest operating expense of a healthcare organization.