November 2010

Practice Tactics: Efforts to boost morale pay off in productivity

By Jason Kraus

With so many factors outside of the control of practitioners and practice managers, it’s becoming increasingly important to focus energy and resources on the areas that are well within your ability to influence. Managers who are able to create a positive work environment where the vast majority of team members are fully engaged in the success of the practice will be able to reduce their overall infrastructure costs and stress levels and improve productivity and profitability.

The healthcare sector is facing increasing stresses, and the ability to properly and consistently service patient populations is being taxed. The unpredictability of practice processes such as billing, administrative management, the vagaries of referral sources, and even the idiosyncratic behavior of patients can lead to feelings of helplessness. In many instances these facets of practice are outside of the controls of healthcare organizations. In spite of these difficulties, employee satisfaction and the general working conditions can, and should be, managed from within.

The current business climate suggests that we will have to be able to do more with less. This is as true for medical practices as it is for automobile manufacturers. Although there are a growing number of software and hardware tools that can aid in creating greater efficiencies, none may be greater than the impact of morale on any organization. Low morale or employee disengagement is always a concern for organizational managers. However, the current environment, characterized by both a poor economy and looming changes in healthcare, may create a breeding ground for this condition. Like other contagions, low morale tends to spread virally within an organization and should be treated aggressively.

Warning signs

Sometimes practice environments are so frenetic that practitioners don’t even realize their office may be plagued by low morale. Busy does not translate to happiness or job satisfaction. If you know what to look for, low morale is not terribly difficult to spot. Its victims usually are either apathetic or defensive. Apathetic staff members are characterized by low energy levels and a withdrawn demeanor. Defensiveness is often characterized by higher energy levels and an aggressive demeanor. No matter what low morale may look like in your practice, most of the time a sense of frustration and helplessness is manifest. Unplanned absences, workplace accidents, and poor work quality are also warning signs that a general malaise may exist in the practice.

The Gallup Organization did a survey of America’s workplace and categorized employees in three groups:

  • Engaged: employees work with passion and feel a profound connection to their company. They drive innovation and move the organization forward.
  • Not-Engaged: Employees are essentially “checked out”, apathetic. They’re sleepwalking through their workday putting time, but not energy or passion, into their work.
  • Actively Disengaged: Employees aren’t just unhappy at work; they’re busy acting out their unhappiness. Every day, these workers undermine what their engaged coworkers accomplish.

Gallup’s employee engagement study is based on more than 30 years of in-depth research involving more than 17 million employees. The published results of the data suggest that on average only 33% of the U.S. workforce is engaged, 49% are not engaged and 18% are actively disengaged. By contrast in the world class companies that have a focused employee engagement strategy show results of 67% engaged, 26% not engaged and only 7% actively disengaged. Gallup has created an engagement ratio that measures the proportion of engaged to actively disengaged employees. The average engagement ratio is roughly 2:1 whereas the best performing companies average about 9.5:1.

The cost of low morale

The research that Gallup did also identified the cost of low morale and the potential benefits of creating an environment of employee engagement. Nationally it has been estimated that there is approximately $300 billion dollars of lost productivity as a result of low morale. In a 2009 meta-analysis of studies including 152 companies, Gallup researchers compared companies in the bottom quartile of engagement scores to those in the top quartile and found that the more engaged companies were 18% more productive, 16% more profitable, and reported 3.9 times the earnings per share.

It is worth noting that most of the companies studied by Gallup included hundreds if not thousands of employees. In a small business environment like a medical practice, morale takes on even greater importance. Most practices have little employee overlap and each staff person has a specific set of assigned tasks. If several staff members are not fully engaged, the productivity impact may be felt in all other areas as engaged employees attempt to offset the marginalized staff. Over time, this can lead to mistakes and resentment.

Deterioration of morale doesn’t happen in a single day. It evolves over time. There frequently are warning signs that reveal that the practice is going through a negative change. Practices should develop operational metrics that allow them to measure the performance of each staff function and the overall rhythm of the practice. These may include:

  • Payroll ratio: the total cost of non-practitioner staff as a percentage of collections
  • Collections ratio: the percentage of outstanding receivables collected each month
  • Denial rates: a measure of the percentage of clean claims submitted
  • Appeal rates: a measure of the success of a practice’s claim appeals processes
  • Patient cycle times: a measure of the total time that the average patient visit takes (check in- check out)

In companies with low morale, reduced productivity may necessitate the hiring of additional employees to perform all of the practice tasks. Similarly, with disengaged staff, collections efforts may fall short of expectations and the quality of preparing clean claims may diminish. The results of these deficiencies can be measured by the metrics mentioned above.

Taking action

Managers should review of all the key metrics for their practices on a monthly basis. A sustained downward trend may be a leading indicator that the overall spirit within the organization is heading in the wrong direction. Some indicators have a natural volatility to them while others are virtually the same from month to month. If a review reveals statistical anomalies, a further look is warranted. For example, practice payroll ratios tend to be consistent when measured year over year. If the ratio goes up it suggests either a poor result in collections or a drop in employee productivity. Either may be a harbinger of low morale, or may be caused by something more benign, such as a new hire that has not completed her training. Practice managers need to sift through the data to understand the cause and severity of these conditions.

Ineffective or inconsistent leadership/management is the most common root cause of low morale. The work environment and culture of the team is often a reflection of the approach of the senior manager within an organization. Most employees function better in an environment where there is a clearly defined set of goals and expectations. This is true for their specific tasks and for the practice in more general terms. Each staff member should have a documented job description that outlines all of the responsibilities and expectations of the position. Furthermore, the practice manager should provide each team member an understanding of how their performance will be evaluated.

Other key elements of effective management include:

  • Empowerment
  • Appreciation
  • Consistency
  • Review
  • Responsiveness

People like to believe that they are part of something larger than the tasks that they perform. Effective leaders will make that connection for team members and make certain that everyone in the organization knows how the practice is performing against the goals that have been established. Occasionally, low morale infects an organization as a result of “one bad apple”. However, the conditions for spoilage are probably already in place before the “bad apple” is hired. If the environment is generally positive, a “negative Nelly” cannot gain enough traction to influence others and is usually isolated. Conversely, if there are many directionless or unmotivated employees, the one “bad apple” may be able to gain some negative momentum. However, if a manager can trace a change in culture or deficient performance to a hiring event, they should terminate the employment immediately. (As with all terminations, it is imperative to document the behaviors of disgruntled staff.) It takes much more effort and time to restore morale than it does to maintain it in the first place.

Motivation renovation

A team of highly motivated loyal staff people is always the most potent tool for any business. This type of work culture can help offset the effect of outside influences over which they have little or no control. It is imperative that the level of employee satisfaction and fulfillment be measured right along with all of the other aspects of practice management. The simple act of inquiring how your team feels conveys the sense that they matter and that their opinions are important. Continuous communication is the best defense against morale slippage.

There are a number of management tools that can be used to foster greater employee loyalty and morale. These can include:

  • Departmental or individual bonus plans
  • Employee newsletters
  • Team building events, both during and after work hours
  • Bonuses for utilized suggestions
  • Employee of the month recognition
  • Awards ceremonies commemorating important employee anniversaries or accomplishments

As you can see, most of these tools do not require a large financial investment, but do require an emotional one. If your staff has faith in your commitment to their well-being and your appreciation for their efforts, they will be more committed to achieving to common goal.

Jason Kraus is executive vice president of Langer Biomechanics and former partner in the practice consulting firm SOS Healthcare Management Solutions.

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One Response to Practice Tactics: Efforts to boost morale pay off in productivity

  1. Melody Kinnison says:

    I am very impressed with the article. It describes what to look for within a pratice. I have been an office manager for nearly 30 years and know this type of infection can have serious
    complications to the practice. Motivation is key to a productive office and to keep the morale up.

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