Organizational Design and Behavior Prepared for the American Academy of Orthopaedic Surgeons “Business, Policy, and Practice Management in Orthopaedics” Lecture Series By John P. Andrawis, MD, Thomas J. Grogan, MD

Objectives: 1. To acknowledge the different types of practice structures in orthopaedic practices and how they are governed 2. To learn about Human Resource Issues in the Health Care work place 3. To understand how conflicts arise within the healthcare environment 4. To review how to best approach conflict in the workplace

Table of Contents: 1. Common Practice Structures within Orthopaedics and How They are Managed 2. Human Resources Issues 3. Handling Conflict in the Healthcare workplace A. Importance of Conflict Education B. Conflict Styles C. How to Handle Conflict

Key takeaways: 1. The future challenges facing all structures of medical practice involve the ability to adapt to change, as well as react to the possibility of health care consolidation and changes secondary to mergers, acquisitions and retirement. 2. It is important to realize that health professionals work in teams to address patient’s concerns and needs. Surgeons can improve their quality of patient care and financial outcomes by implementing human resource practices that provide a work environment to make employees capitalize on their skills and abilities. 3. Motivating staff is not only about compensation and bonuses, but requires establishing a structure and environment that provides opportunity for employees to satisfy intrinsic and extrinsic needs. 4. Increased communication and positive interactions within the healthcare workplace translate into improved patient outcomes. As a result, when managing or working in a healthcare organization it is important to provide instruction on conflict-management to begin giving healthcare employees the understanding that there are strategies to help them manage conflict. 5. Physicians do not receive training in how to manage conflict and are likely to underestimate their ability to influence a conflict in the workplace. As a result, it is important for physicians to continue to take a diagnostic approach to evaluating conflict situations, improve their listening skills, and take time to understand conflict management principles and scenarios.

Chapter 1: Practice structures within Orthopaedics and how they are managed. Currently in the United States over 72% of orthopaedic surgeons work in a private practice setting[1]. One of the major issues facing surgeons in today’s changing and tumultuous health care environment is exactly how to position a practice in the community, to not only service the needs of the patients but also to prepare the practice for the ever shifting changes in the heath care environment. Surgeons will have to evolve with the U.S Healthcare system to meet these changes and challenges. If surgeons are able to embrace and understand organizational design and practice structures as well as individual and group dynamics within an organization, orthoapaedic surgeons will have the tools to achieve their organizational goals. In the most recent American Academy of Orthopaedic Surgeons census report there are essentially five types of practices, each of which require a different structure of governance: The first type is a solo practitioner (18%); second is an orthopaedic group practice of variable size (44%); third is a multi-specialty group (9%); fourth is an employed physician whose salary is paid by a hospital/medical center or a Health maintenance organization (HMO) (11%); and fifth is an academic practice whose salary is from an academic institution (9%)[1]. When thinking of these different types of practice settings it is important to acknowledge the different governance structures in which you will be working. There are three major models of governance used in practice. The first is the Athenian model. The Athenian model dates back to Ancient Greece where every member of the group has effectively the same responsibilities in terms of governing the ongoing day-to-day activities. This is a total collective approach to governance where each individual is uniquely responsible for every aspect of governance. The benefit of this type of model is that it truly provides for a democratic and almost impartial method of governance. The difficulty is that it requires that every member be involved in all levels of governance, including the minutia of hiring and firing, control of costs, and development of revenue streams. The second type of governance, which is most common in the solo practice world, is that of a Monarchy. The Monarchy model is very simple. One person, typically the practitioner, has total control of how the practice is formulated and total control of the daily operations. The challenge of the monarchy model lies in determining plans for succession. When the solo practitioner decides to retire or leave the solo practice of orthopaedic surgery, the question of what to do for the patient base in terms of maintaining continuity of care is most evident. The benefit of a monarchy is that the decision-making is essentially left up to one person, which would be quite easy to manage. The third type of governance is a corporate model. The corporate model involves development of a governance structure, typically defined with a board of decision makers, most commonly a board of directors. The board of directors’ decision making is then transferred operationally to an administrator such as a chief executive officer or CEO. The benefit of the corporate model is that efficiency of decision-making can be guaranteed; the negative is that it develops a whole system of democracy, which can be an added cost to the overall practice of medicine. In all models of governance the orthopaedic surgeon needs to make sure that the governance of the structure is consistent with the core values of the practice. These core values include a patient-based practice that focuses on sound business principles, yet adheres to the highest level of professional ethics. It is helpful in determining what type of governance structure to adopt in order to understand

and define the mission of the practice, and in today’s changing health care environment, it is critical that the practice structure be adaptable to the ever-changing health care world. In evaluating which type of governance model is most appropriate, it typically boils down to the monarchy model in the solo practice and the corporate model in the small group, large group and multi-specialty practice. The difference is that in the solo environment, the ongoing governance is typically performed by one person who individualizes decisions based upon immediate health care needs. Specifically, there is typically not any type of governance documentation such as bylaws that the shareholders create. Conversely, in the corporate model the trend has been away from professional medical corporations and towards limited liability corporations. Limited liability corporations operate essentially as a stand-alone corporate entity, usually adherent to an operating agreement that can be developed by all stakeholders involving the practice and reasonably managed by a board of directors who then direct the chief administrative officer or chief executive officer (CEO) to delegate applicable responsibilities to carry out the operating agreement. The future challenges facing all structures of medical practice involve the ability to adapt to change, as well as react to the possibility of health care consolidation and changes secondary to mergers, acquisitions and retirement. These individual challenges are best handled through either an operating agreement that has buy/sell agreements or is spelled out in specific bylaws or shareholder agreements for the corporation. The ability to adapt and respond in a prospective fashion to the changes in health care delivery are paramount for the survival of the private practice of orthopaedic surgery today.

Chapter 2: Human Resource Issues Human resource policies and practices within the healthcare field are believed to impact the quality of care patients receive[2, 3]. Surgeons can improve their quality of patient care and financial outcomes by participating in human resource practices that provide a work environment that motivates employees to capitalize on their skills and abilities. Employee motivation directly impacts a healthcare organizations performance. Therefore, it is important to understand what and how to motivate people. Managers are able to directly motivate individuals through extrinsic factors such as compensation, working conditions and interpersonal relationships; however intrinsic factor such as the need for recognition and achievement, can be influenced by creating a work environment that allows employees to satisfy their personal needs while accomplishing the organization’s goals. Motivating staff is not only about compensation and bonuses but also requires establishing a structure and environment that provides opportunity for employees to satisfy intrinsic and extrinsic needs. It is important to realize that health professionals work as a team to address patient’s concerns and needs. It has repeatedly been shown when healthcare professionals work well as a team they are able to lower error rates, improve patient satisfaction and deliver more effective patient care [4, 5]. Under the new Affordable Care Act, Medicare will tie hospital reimbursement with

patient satisfaction scores, emphasizing the importance of creating a cohesive team in the hospital environment. To create a successful team, individuals need to have clearly defined roles, cooperative relationships and a positive atmosphere. It is important to provide team members with clear roles and goals in their job functions. Staffs with clear roles are likely to perform these roles more effectively and reduce role conflict and ambiguity. With these tasks well defined, it also provides the opportunity to give timely and actionable feedback on staff performance and communicate to them their value and importance to an organization. For example, a receptionist who takes case histories from patients will have the opportunity to improve a history’s accuracy and comprehensiveness if the receptionist is given timely feedback and realizes how important a history is to the patient care process. Therefore, training employees with the skills they need to provide a higher quality of patient care and improve their performance over time will improve overall patient outcomes[3]. The healthcare environment can be stressful and emotionally draining; if employees are hostile or pessimistic when negative events occur, regardless of the type of intrinsic or extrinsic benefits that are created, motivation can be a problem. As a result, it is important to employ a workforce that is resilient and motivated. The difficulty in helping employees to be resilient in the face of hardship is that a person’s resilience is formed at a very early stage in life[6]. Unfortunately, this may be a skill that cannot be taught. Thus, it is important to screen employees when considering candidates through interview questions describing past hardships and candidates’ responses to these hardships as well as other standardized measures of resilience. Stress in the workplace is common and believed to result in accidents, absenteeism, employee turnover and loss of productivity. The National Institute for Occupational Safety and Health (NIOSH) found that 40% of workers found their job very or extremely stressful. It is acknowledged that everyone encounters stress in their daily lives, but how individuals cope with that stress and their reaction to stress are variable. One method to reduce work-related stress is to start a stress-prevention program that educates staff about job stress, creates policies to reduce organizational sources of stress and establishes employee assistance programs when employees feel overwhelmed. It has been shown that there was a 70% reduction in malpractice claims in hospitals that implemented stress-prevention activities[7]. Obviously, stress management programs are limited to their perception by staff and meeting the larger goals of the organization and the individuals. In addition, stress management program benefits need to outweigh their costs to make it worthwhile to the organization as a whole. However, it is noted that physically and mentally healthy employees create a stronger healthcare business and healthier profits. Creating a low stress and positive work environment involves giving employees a sense of job security. Employment security is associated with higher levels of employee job satisfaction, which translates into improved patient satisfaction and leads to higher retention and fewer problems with staff shortages. It may not be possible to guarantee job security, but employers can make it a policy to clearly communicate issues about job security to staff. Job security has been shown to enhance commitment and ensure the retention of skills that employees have

developed during their training. Workforce instability and layoffs have been shown to significantly affect morale, staff motivation and productivity[8].

Chapter 3: Handling Conflict in the Healthcare Workplace Section A: Importance of Conflict Education Conflict is an inevitable part of working in the Healthcare field. Conflict can be difficult, stressful and a distraction for people from their work, or it can be beneficial and a stimulus for needed change and problem solving in an organization. The challenge with managing conflict is figuring out how to create productive disagreements that improve effectiveness, communication and efficiency. The healthcare field is a high stress and emotional setting that has its own challenges of managing expectations, cultural issues and patient demands. As a result, the healthcare field is a highly conflictual environment[9]. It has been shown that healthcare conflict among healthcare professionals can affect patient care by increasing medical errors that result in increased mortality and morbidity[10]. The Joint Commission on the Accreditation of Health Care Organizations (JCAHO) found that poor communication is a major contributor to sentinel events occurring in hospitals. However, it was also found that increased communication and positive interactions improve patient outcomes. As a result, when managing or working in a healthcare organization it is important to provide instruction on conflict-management to begin giving healthcare employees the understanding that there are strategies to help them manage conflict. Section B: Conflict Styles Conflict management and resolution knowledge has become an important training tool as unmanaged conflict creates physical, psychological and behavioral stress in the workplace. Understanding how individuals cope with or handle conflict in different situations is important to addressing conflictual situations. Thomas and Kilman describe five types of conflict-handling modes within two dimensions to help us understand how individuals handle these situations. The five conflict-handling modes are (1) competition, (2) avoidance, (3) compromise, (4) accommodation and (5) collaboration. The two dimensions are (1) Assertiveness-attempting to satisfy one’s own concerns (2) Cooperativeness- attempting to satisfy others’ concerns.

Figure 1. Thomas and Kilmann’s Two-Dimensional Taxonomy of Conflict-Handling Modes[11] Style Definition Use Competing Pursuit of ones own concerns at the Use of competition might expense of others. Using a win-lose be appropriate when approach to conflict and using emergencies require quick whatever power seems appropriate action or unpopular to win. courses (i.e., cost cutting Assertive and uncooperative or dismissal for poor performance) are needed. Collaborating Working with others to find a Conflict is an opportunity solution that satisfies the concerns of for a more creative both parties. A win-win approach to solution, Involves digging conflict. into issues and identifying Assertive and Cooperative the underlying concerns of individuals to find an alternative that works for both parties. It requires extra time and energy. Compromising The object is to find an expedient Means splitting the and mutually acceptable solution difference and exchanging that satisfies the concerns for both concession to find a quick parties. Give and take approach to middle-ground. Does not conflict. maximize optimal Intermediate Assertive and outcomes for all parties, Intermediate Cooperative only partial satisfaction. Accommodating Neglecting one’s own concerns to Use is attempting to play satisfy concerns of the other party. down the differences and Unassertive and Cooperative emphasize commonalities to satisfy concerns of the other party. Seen with charity or yielding to another’s point of view. Avoiding One does not pursue their own Let the conflict work itself concerns or the concerns of the other out or postponing an issue party. Avoid the conflict until a better time. Best to Unassertive and Uncooperative use when winning is impossible. Data from Thomas and Kilmann, 1974[11] Surgeons, nurses, hospital business managers and other personnel must work independently and collaboratively to ensure high quality patient care. Having these different individuals work together can be difficult. The conflict-management strategy of choice among physicians and nurses tends to be either adversarial or avoidant. Leonard Marcus, one of the founding Directors of the Program for Health Care Negotiation and Conflict Resolution at the Harvard School of Public Health explains that many physicians believe the best way to resolve conflict is through adversarial methods, which is largely a function of their physician training. Conflicts are solved

through argument and an adversarial mindset to get things done when problems arise during their training and when decisions need to be made. Physicians’ training involves being presented objective data and making a decisive decision to the problem, while negotiating and conflict management require a different approach to solve a problem[12]. When looking into conflict management styles of other allied health professionals, the literature has been limited over the last twenty-five years[13]. One of the more recent studies asked nursing students about their conflict-management style and found a majority of nursing students used compromising as their preferred style[13]. However, when nurses interact with physicians, it was found that they tended to use avoidance and accommodation in those interactions[14]. Conflict-management choices among healthcare personnel vary, and it is important to realize that inappropriately managed conflict can cause significant problems in the workplace. Thus, it is important to consider conflict management as a valuable part of staff training. The healthcare employee who is skilled in conflict management and able to tailor the style to the situation will be invaluable to the organization. Section C: How to Handle Conflict Handling conflict in the healthcare setting is an essential skill for all physicians. It is cited that physician executives spend approximately 20% of their time dealing with conflict in the workplace[12]. All too often, busy physicians simply try to avoid conflict with the hope that it will go away, which may only worsen the conflict and not address the core issue at hand. The best way to handle conflict largely depends on the scenario and the power and position dynamic that are at play with the other party. It is clear that conflicts with peers, supervisees and authority figures will all have different “best guidelines” in how to approach those situations. Today there are multiple conflict models and negotiation tactics to employ when dealing with conflict. In general, when you are dealing with a conflict, regardless if they are your peers, supervisee or authority figures, you want to employ a few guidelines adapted from Carol Aschenbrener and Cathi Siders[15]. 1. Identify as much of the critical information as possible. 2. Deal with conflict early. Do not avoid the problem. 3. Treat the other with respect and avoid demeaning language. 4. Be aware of your body language and the body language of the other. 5. Use “I” statements, and avoid “you” statements, as “you” statements can be interpreted as blaming the other individual. 6. Clearly articulate your needs. 7. Acknowledge the other party’s needs. 8. Focus on the issues or the behavior; do not focus on the person. 9. Listen! And continue to LISTEN!! Physicians do not receive training in how to manage conflict and are likely to underestimate their ability to influence a conflict in the workplace. As a result, it is important for physicians to continue to take a diagnostic approach to evaluating conflictual situations, improve their listening skills, and take time to understand conflict management principles and scenarios.

Remember, conflict management is a skill that can be practiced and learned, which will make a physician a more effective member of the healthcare field. Section D: Case Studies - Applying the conflict management strategies Case 1 A PGY-5 is starting his new trauma rotation as the chief resident of the service. He has a large team with two non-orthopaedic interns who are managing the floor work. The chief resident went through all of the tasks and reviewed what needs to be completed for the patients on the floor. The interns are upset with the change as the new chief resident is placing more work for them because they believe he is not as familiar with the patients and is too demanding of them. As a result, the next day the chief resident discovers that much of the work is incomplete. He is visibly upset with the interns. Clearly both the chief residents and the interns are upset, and avoiding the conflict results in no declaration and escalation. Avoiding conflict is sometimes helpful when there is a lot of “heat/anger,” but rarely results in long term change. To work towards a positive outcome the two groups must discuss the background behind their frustration: in this scenario the chief resident needs to understand he is changing how things used to be, and the interns likely feel overwhelmed. The chief resident should take the interns (with no one else on the trauma team) and discuss the conflict at hand. When approaching the situation the chief resident needs to approach the conflict with a collaborative approach. The interns are still necessary members of the team, and their concerns need to be heard. The chief resident should first allow the interns to state why they were not able to complete the work they were given. This avoids an aggressive confrontation and instead invites the interns to share their thoughts in a more collaborative environment. A common source of conflict for physicians is feeling overloaded, and this will be an opportunity to explore that concern. Next, the chief resident should define the common ground that good patient care is their common goal then delineate the disagreement where there are unresolved differences and clarify why these disagreements arise. Make sure to avoid saying this is how I use to do it or any other personal comments or interjections. Lastly, make sure to follow up with the interns, highlighting points of progress and developing a work plan for other issues. While this may be time consuming, it is a management strategy that results in a more renewed commitment by the interns. Case 2 On Tuesday, a patient with a closed trimalleolar fracture-dislocation of the right ankle visited the emergency room. The emergency room physician that evening placed the patient in a splint and referred the patient to the local orthopaedist on call that evening. By the time the patient came to clinic he had severe blistering and ulcerations as the fracture was still malreduced. The orthopaedist expressed his dismay that the emergency room physician did not clearly communicate with him the severity of the injury and did not call him with a verbal report. Visibly upset, the emergency room physician raises his voice defending his treatment plan. The first step in managing a situation with conflict should be an assessment of the issues and

identifying all the critical information at play. The orthopaedist should seek additional information from the patient and the emergency room physician. The orthopaedist needs to consider the thought process and intentions of the ER physician and ensure to use appropriate body language and comments so the situation will not escalate. It would be important for both parties to understand if this situation was a deviation from current practice or a personal preference of the emergency room physician. The emergency physician should be accommodating, acknowledging that while policy does not require that he call the orthopaedist, he should be willing to ensure prompt verbal information on any patients that may be of concern. When approaching the situation the orthopaedist should consider a collaborative approach and remember that the emergency physician is part of the care team for this patient. The orthopaedist should also explore why the ER physician did not call. It is entirely possible that the orthopaedist has not been very receptive in the past. Both physicians should then view this situation as an opportunity to review the standards of care, physician preferences and areas for improvement moving forward. Case 3. Multiple partners in a mid-sized orthopaedic group have been informed by their clinic manager that one partner continues to up-code several procedures. The head of the group had met with the partner 1 year ago when the group was first informed of the issue and reviewed the coding policies and Medicare guidelines with this physician partner. The physician argued his viewpoint but agreed to change his behavior. There were no issues for several months, but now several codes have been submitted in violation. In many disputes we consider collaboration or compromise to be the most appropriate and effective conflict resolution style. However, given the importance of federal regulation and the concern for fraudulent behavior, this may not be the most appropriate tactic. The team has already attempted to educate the partner, who apparently has failed to comply or change his behavior. In this scenario, the group must insist on a competitive approach, potentially even employing some means of punishment if the partner refuses to comply. The group should describe the situation in writing and document all efforts toward remediation should they face any legal ramifications.

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