Reorganize management to cut costs, improve productivity
Be bold: Can you streamline your own job description?
Many hospital-based home care managers who have had success working to improve productivity among their nurses have found that improving productivity at the management level is more difficult.
"It's hard to look objectively at one's own organization and say, 'What and who can we go without?'" says Katheen Dodd, RN, MHA, president of Corridor Group consultants in Overland Park, KS.
But hospital-based home care companies can only streamline their businesses and improve their productivity if they are willing to reorganize their management, in addition to their field and support staff, home care executives say. This is a realization that the rest of the business sector has come to, and home care must follow suit, they say.
"If we're going to be fiscally responsible and still be here in the future, we have to change," says Toni McClay, BSN, administrator of home health and hospice at Memorial Hospital of Salem County Home Health and Hospice in Pennsville, NJ.
Hospital Home Health asked hospital-based home care managers who have reorganized the management of their companies how they approached this task. Here are their suggestions:
* Develop a strategic plan for your reorganization.
All of our sources for this article agreed that it is impossible to reorganize your company's management if you don't have a vision for the change you want to effect. This requires specific goals such as lowering your overhead through the next five years, beefing up your quality improvement department, or acquiring a certain number of managed care contracts next year, which should be part of a larger strategic plan for the whole company. (For details on how to write a strategic plan, see HHH, February 1995, pp. 16-20.)
* Appoint a team of visionaries who will effect change.
You will need a team of people who will help you identify your company's problems, goals, major functions, and options for change. You should choose people who have strong ideas about how the company should be run, whether you agree with them or not, says Faye Royale-Larkins, RN, MPH, executive director at BJC Home Care Services in St. Louis. For example, if someone, or several people, at your company have put together a well-developed continuous quality improvement (CQI) program, these would be the right people to serve on your change team, Royale-Larkins says.
Don't let change drag on
* Set a deadline for completion of the reorganization.
"Don't let it drag out. Uncertainty is rough on employees. If people know it's planned and it's a business decision, they won't take it personally," says Judith I. Storfjell, PhD, RN, the president of Storfjell Associates home care consulting in Berrien Springs, MI.
* Break down your management into chunks.
"Reorganizing your management is too large to do all at once. You can't just tackle it like that. You have to break it down first," Royale-Larkins says.
To do this, define your priorities. For example, improving financial and clinical outcomes to make your company more competitive in a managed care market might be two of your top goals for the reorganization you are planning, Royale-Larkins says. If certain positions or job responsibilities aren't related to your top priorities, then you can put them on your list of positions to be eliminated or absorbed by someone else.
* Analyze your employees' capabilities.
At Harris Home Health in Austin, TX, CEO Les Siter, RN, Med, MBA, met with and interviewed his employees to find out what their job descriptions were, how they performed their jobs and where they thought the system could be tightened up. Siter, who was hired last summer to reorganize the whole company, also observed people in their offices, visited branches, and went on home visits. Additionally, he did some time studies, such as one that tracked miles driven by employees, and another that recorded time spent on paperwork.
McClay also spent one week meeting all of her employees and learning about what they did in their jobs and how. "I just told them, 'Tell me what you do in this job,' and we wrote it all down. We did a flow chart with everyone's job, so we could see clearly where there were redundancies," McClay explains.
Also, ask yourself what skills your employees need and whether your employees have them, advises Dodd.
* Identify duplicated services.
Home care managers need to consolidate their management positions to bring their overhead down, Dodd says. "You don't want to hire more managers to manage more people,"she says. Almost every company can cut out some part of his management or at least streamline it, she says.
Siter originally had several home care directors reporting to him at Harris Home Health, but they all had disproportionate levels of responsibility. "I flattened that out to make it more equitable," Siter says.
In interviewing his employees about what they do, Siter found many areas of management where people's responsibilities were being duplicated elsewhere in the company, as well as "tons of clerical support" that was unnecessary. For example, there were quality improvement managers at each of the company's branches. Now Siter has just two QI managers who work at the corporate level. Also, the responsibilities of staff education and quality improvement (QI) were both under the nursing director's job description. Now both education and QI are under a position called "assessment."
"We created a corporate structure that allows the branches to focus on their clinical operations only," Siter explains.
Siter says he focused on top-level reorganizing because the company was "too fat" to handle managed care. Fifty percent of the company's business is managed care. Harris is a multi-branch operation, and a lot of the company's operations were in the largest branch. But some administrative and corporate functions were being handled individually by each branch, instead of by the corporate office.
Though Memorial Hospital of Salem County Hospital Home Health doesn't have multiple branches, its need for streamlined management was much the same as that of Harris Home Health. Before the company's new director, McClay, arrived, there was a director, an assistant director, two aide supervisors, and a nurse coordinator for therapies. Under that system the company was losing money, because the services performed by the aide supervisors and the therapy coordinator aren't reimbursed by Medicare.
Now McClay has just one full-time aide supervisor, who "telecommutes" from home. Not only did McClay save money by eliminating one aide supervisor position, she also saved money by not having to expand her offices, as she would have had to do if the aide supervisor didn't work out of her home. (See chart, p.16.)
BJC Home Care Services eliminated a layer of management when the company's nine hospital-based home care agencies, four hospices, and four private-duty home care companies reorganized to cut costs and improve efficiency.
Before the company reorganized, each home care agency had its own director. That layer of management was taken out, and now several managers oversee various aspects of all the home care companies, hospices, and private duty companies. (See chart, p. 15.)
There are endless possibilities for how your company's management can be reorganized. For example, you can fold your marketing and clinical management together, or your accounting and marketing functions could be joined under the same job title, Storfjell says. What's important is to keep your mind open to new possibilities and to remember that when you fold two jobs into one, that doesn't mean that one of the jobs gets lost, she says.
"What works for you is what you should use," Storfjell says.
Show employees the 'big picture'
* Include employees in the change process.
McClay recommends explaining to employees the "big picture" of reorganizing management, including the cost of doing business and what costs have to be cut to be able to remain profitable under managed care and under a prospective payment system.
McClay also suggests asking employees for their suggestions for how they think the management of their company could be improved.
"I'm not saying they should influence your changes. But they know their jobs, and they'll help change," McClay says.
But remember that when it comes to making the final decisions about what changes will be made, only a very small group should make these actual decisions, Storfjell says. This will help prevent the decision-making process from getting affected by people's emotions.
* Identify a process for letting people know if they're going to be displaced or at risk.
Top managers must agree on how they will let employees know whether their jobs are at risk. As management is usually the hardest hit by reorganization at home care companies, this can be especially tricky.
At BJC Home Care Services, employees who are likely to be let go or asked to apply for new positions within the system are referred to an internal recruiter. The recruiter helps the employees update or expand their skills, as well as find new positions within the company for which the employees are suited.
* Keep communication with employees open, to prevent ill feelings.
Managers have a responsibility to keep employees abreast of the changes that are being made in their companies, whether it is just management that is being reorganized or the whole company, McClay says. She says she got little or no paperwork done during the reorganization process because her nurses were constantly coming to her office asking whether the latest rumor they had heard was true. Every time a new rumor or question came up, McClay addressed it in a staff meeting or with staff members individually.
Siter held numerous general and supporting staff meetings in which he discussed change theory and corporate survival tactics so that employees would understand why the management of the company had to be reorganized.
"I told the staff we were in the forefront of the managed care business in our region and that we had to make these changes to staff at the forefront," Siter says.
No matter how hard you try to keep people from becoming fearful about the changes you are going to bring about at the company, you may still have employees who can't tolerate the change. A week after McClay arrived on the job and announced the reorganization, her assistant director resigned.
"She just couldn't handle the change," McClay says.
* Don't view reorganizing management as more work for yourself.
It is easy to think that shrinking your company's management will result in more work for you. But this shouldn't be the case, says Storfjell. You can decrease the number of management layers at your company and eliminate bureaucracy to save time, energy, and money, she explains.
"With fewer people in management, you get more done because there are fewer people to coordinate with and communicate with. You have to think of what you're cutting out," Storfjell says.
* Get over your fear of firing.
You should try to move people to areas where you need more staff, home care managers say, but if you can't do that, you have to have the courage to let people go.
"You need to have the corporate mindset -- no fear of laying people off," Dodd says. *
Source: BJC Home Care Services, St. Louis.
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