Hospital systems in the U.S. are at a crisis point. Among the many changes ushered in with the new health care law is the shift to value-based purchasing, which ties a system’s Medicare and Medicaid reimbursements to the quality of the services it provides. For many systems, the mandate will now be to improve clinical processes and ensure a high-quality patient experience — an outcome highly dependent on the commitment, dedication and skills of a hospital’s employees who have an enormous impact on the overall patient experience. In fact, with a potential 2% loss in reimbursements for hospitals that cannot meet specific patient satisfaction and quality of care outcomes, the link from employee actions to patient experience to financial results could not be more direct. Losses amounting to millions of dollars for many hospitals and systems that receive half or more of their funding from government reimbursement are possible. It is, quite literally, a make-or-break moment for financial sustainability.
In other industries, this service-profit chain (first articulated in a classic 1994 Harvard Business Review article and recently updated) has been recognized for decades. Now, hospitals have little choice — and much to gain — from embracing it themselves. As Towers Watson’s research with clients shows, when hospitals create an engaging and high-performance-oriented work experience, they not only improve patient satisfaction, but also quality of care outcomes. Both are core criteria in meeting incentive goals under value-based purchasing.
Currently, however, creating such an experience is a challenge for many hospitals. In Towers Watson’s most recent global workforce study, less than half (44%) of the U.S. hospital workforce overall was highly engaged. That leaves a large proportion of employees across all workforce segments feeling somewhat disconnected from their hospital system and its goals, and unsupported to some extent in doing their jobs well. The study also shows a strong relationship between employees’ level of engagement and their likelihood to remain with their employer, with just 17% of the highly engaged hospital workers interested in other employment options versus 43% of the disengaged group. Improving engagement therefore carries another important advantage for the many hospitals already competing to find and keep a dwindling supply of people with critical skills, especially in clinical areas.
So what can the industry do to raise employee engagement and lay the groundwork for its own service-value chain? First, hospitals need to accurately diagnose the issues through research techniques that measure levels of engagement and identify the specific drivers that affect those levels for different groups within the system. Second, they need to translate those drivers into a set of actions and behaviors that are realistic, meaningful and sustainable. As with medicine itself, diagnosis without corresponding “treatment” will not bring about lasting improvement.
The exhibit below outlines the drivers of an engaging work experience within the health care industry, as derived from Towers Watson’s global workforce study through regression analysis. These broad drivers are, in fact, common to most of our clients across the health care industry. Where critical differences arise is in the way in which each hospital has to institutionalize its own unique set of behaviors and actions across its functions, roles and departments.
A Case in Point
MedStar Health, the largest health care delivery system and one of the largest employers in Maryland and the Washington, D.C. region — with 10 hospitals and more than 100 outpatient clinics and physician offices — offers an excellent example of this process. It set out on a multi-year undertaking to understand and improve employee engagement. A key initial step was to conduct a system-wide engagement survey that collected data on topics from leadership and communication to elements of the patient experience. This latter focus was instrumental in understanding how employees viewed the patient experience and their own role in shaping it.
MedStar leaders also knew that improving employees’ engagement could not be a one-time or one-off activity — or, as one cynic referred to it, the human resources “flavor of the month.” Rather, the leaders had to make decisions that would make an engaging work experience part of the organizational fabric. The health system set a five-year stretch goal for engagement, which was embedded into leaders’ performance management goals at the hospital and department level, ensuring that everyone was pulling in the same direction and held accountable for the same critical behaviors.
One of MedStar’s areas of focus was to assure that the system had strong supervisors who could set clear goals and manage employees to them. To help managers improve their own skills in this area, MedStar launched a four-day training session for more than 2,000 managers. One focus of the session was to bring the entire organization onto a single performance management system. While the organization’s actual employee engagement levels remain confidential, through these two actions — integrating engagement measures into managers’ goals on a unified platform and providing training on how to achieve those goals — MedStar has seen continued improvement year over year and it is well on its way to achieving its five-year goal.
Many hospitals that hear stories like MedStar’s struggle to get approval for the soft-skill development needed to strengthen engagement amid tightening budgets and increased cost scrutiny. One effective approach we’ve found is to first measure engagement, then demonstrate the link between employee engagement and the patient experience, and then lastly tie it to financial returns. While there are dozens of examples of this relationship in industry research, it often doesn’t hit home with a hospital’s leaders until they view it with their own system’s data. We’ve worked with several systems to analyze patient and employee data and validate the link between higher engagement and a better patient experience, and we’ve seen firsthand how powerful that demonstration can be. For instance, by comparing employee attitude data with various organizational metrics from our clients’ systems, we’ve found that when employees believe their organization truly values quality care — and also get the support they need on the job — their patients are more satisfied, they take less sick time and have fewer on–the-job accidents, and health outcomes are better. Much the same dynamic can be seen around quality outcomes. At a large system with hundreds of health care facilities, for instance, we found that units scoring in the top percentiles on positive organizational culture had blood-stream infection rates and mortality rates significantly lower than in units scoring at the bottom percentiles on positive organizational culture.
While improving their technology, creating partnerships across the care continuum, and building Accountable Care Organizations are important pieces of the care-transformation puzzle, administrators can’t forget that patient care is delivered by their employees. Engaging those employees around the behaviors and skills that drive clinical excellence and a positive patient experience is going to be a key factor in determining whether a hospital thrives – or even survives – in this new environment.
From the Editors of Harvard Business Review and the New England Journal of Medicine