Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Chapter 3 Organization Design and Coordination

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Objectives After completing this chapter, you will be able to: –Describe the variants of organization structure found in healthcare organizations –Describe the facilitating and hindering effects of organization structure on coordination

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Objectives (cont’d.) –Provide a framework for determining what organization design is most appropriate for a given healthcare organization –Describe the mechanisms and processes of coordination at the micro-level and their effects on quality of care

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Purpose Functioning is affected by organizational structures and coordination Organization design: arrangement of responsibilities, authority, flow of information, result - organization structure Interrelated parts to organization design: –How to divide the work and responsibilities –How to coordinate work

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Why is Organization Design Important? Strong empirical evidence shows coordination is related to patient outcomes –Organization design and effect on coordination important for health care leaders At micro level, people grouped together into work units having common supervisor Organizations are complex Problems of any structure accompany its benefits

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Twin Structural Issues: Differentiation and Integration Every organization design has functional and dysfunctional characteristics Structural contingency theory: considers complex tradeoffs in organization design –Differentiation: each part of organization must be managed to meet unique requirements of specialty work –Integration: coordination of activities among units, including management of conflicts

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Coordination at the Macro-level Interdependence: –Interconnectedness of work –Task uncertainty –Size –Sharing resources –Types of interdependence

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Coordination at the Macro-level (cont’d.) Structural approaches to coordination: –Hierarchy of authority –Rules and procedures –Planning and goal-setting –Vertical information systems –Lateral relations

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved.

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Coordination at the Macro-level (cont’d.) Line and staff positions: –Line managers have authority for activities directly affecting goods/services Integrated delivery systems: –Organized into one or more regions, each containing all area healthcare organizations Service lines: –Programs organized around diseases or conditions, populations or technologies

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Coordination at the Macro-level (cont’d.) Centralization and decentralization: –Vertical decentralization: degree to which decisions are made lower in organization –Centralization: degree to which decisions are made at higher levels of organization Parallel organization: –Part of organization structure parallel to and distinct from main part of organization

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Coordination at the Macro-level (cont’d.) Hybrid structures: –Organizations maintain traditional functional structures and structures for few program(s) Organizations with multiple goals –Conflict among goals and organization design Governance and the three-legged stool of administration, medical staff and board –Hospitals differ from other organizations because of unique position of medical staff

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Micro-level Coordination Important considerations: –Can specific activities be assigned to different individuals/groups resulting in units’ efforts meshing together? –How familiar are the people involved with a particular action or decision? Research shows coordination affects organizational performance

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Programming Approaches to Coordination Standardization of work processes: –Use of rules, regulations, schedules, plans, procedures, policies, and protocols Standardization of skills: –Specification of training or skills required to perform work Standardization of output: –Specifies either form of or specifications for intermediate outcomes of work

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Feedback Approaches to Coordination Includes supervision, mutual adjustment, and group coordination More time consuming Require more effort than programming approaches Facilitation of coordination relies upon programming and feedback approaches –Types of coordinating approaches depend upon nature of work

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. Relational Coordination Captures aspects of both programming and feedback approaches to coordination Takes account of work itself and process of people working together Comprised of relationships and communication Consists of shared goals, shared knowledge, and mutual respect

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. In Practice: The Veterans Healthcare System Goal of Veterans Healthcare System redesign: to systematize quality management Redesign prompted by pressures from: –Market-based restructuring of health care –New scientific and biomedical knowledge, –General dissatisfaction with health care –Consumer expectations for quality, and many managerial and operational problems

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. In Practice: The Veterans Healthcare System (cont’d.) Structural changes: –Basic operating unit within system from individual hospitals and medical centers to 22 regional networks –Shift from former disease-oriented, hospital- based, professional discipline-based paradigms to patient-centered, prevention- oriented, community-based, premised on universal primary care

Copyright 2012 Delmar, a part of Cengage Learning. All Rights Reserved. In Practice: The Veterans Healthcare System (cont’d.) Results –Transformation contributed to remarkable level of achievement –VA patients were receiving appropriate care at 90 percent or greater for 9 of 17 quality indicators –Quality indicators exceeded those for not only average community hospital but also average academic health center