Behavioral Health Programs Losing Money Part 2

Organizational Culture

Previously we made our short list of reasons some psychiatric programs have a positive bottom line while others, in the same market, are in a financial crisis. At the top of our list is an organizational culture misaligned with financial profitability.

Behavioral health programs losing money may be captives of a larger inefficient organization; often a hospital or healthcare system, or they may be free standing. In our experience there is often a lack of an appropriately engaged leadership.

Several leadership styles work against a productive workforce, billable service volume and a positive net income. Here are our top two “least effective” management styles:

The Disengaged Leader: In poorly performing organizations these leaders tend to be stuck in the administrative suite — or close to it – or in many, almost endless, important meetings. Staff on the inpatient psychiatric unit have not seen these managers in the nursing station for over a year. Staff tell us they are “names on memos”.

So why does this matter? First, because they can’t directly and personally listen and see how things are going and second because staff don’t benefit from these leaders often substantial experience.

These distant executives can’t directly share their knowledge or “tell the stories” about what they’ve learned and what they did in similar situations. The loss of connection is striking and relevant. There are the “upstairs people” and the “downstairs people”. Critical information and knowledge does not get communicated in a palpable, immediate way so it is lost or overlooked.

When the average daily census is falling, the outpatient productivity is low or serious incidents occur too often, first hand communication and knowledge is crucial. It is hard to rebuild those important person-to-person networks in order to make changes when the organization is in a crisis.

What works: Escape from the office, hang out in the ED, the nurses’ station, the psychiatric inpatient unit, the residential treatment cottage, on each shift several times every quarter. This is an informal rounding. Ask open-ended questions, listen to the answer, take notes, and look around. Model the interaction so staff and supervisors see how to do this. In some of the stronger financially performing psychiatric hospitals, informal huddles occur each day and on all shifts.

The Distant Leader: These executives are the opposite of the Disengaged Leader. They are into everything and are everywhere all the time. They seem to believe they are the indispensable source and necessary executor of all the operating machinery. Without them, they seem to think, the lights won’t get turned on, no one will get their medications, and the hand soap dispensers will go empty – all at once. Unfortunately no one else can do it right enough or soon enough!

This matters because staff fail to gain critical capabilities; ownership for improved operations doesn’t occur at every level in the organization, and work flow bottlenecks around this leader. And, with all the attention so focused in the engine room, no one is driving the bus – so the organization can easily miss new opportunities or fall behind the changing market and reimbursement landscape.

What works: back away, disentangle without disappearing and look down the road, see where the enterprise is headed and, with a team, work on a strategy to keep the bus headed in the best direction. Having the right management metrics can also help this leader drive positive change (another topic to come.)

The Indecisive Leader: Sometimes it’s better to make a decision and be wrong than to make no decision at all. Whether overly engaged or disengaged, a leadership that waits too long to make a reasonably informed decision stalls the enterprise and frustrates staff. The old “analysis paralysis” paradigm is easy to slip into especially with such a volatile regulatory, funding, and market environment.

What works: Break larger decisions down into smaller, sequenced ones. For example, before making the final big decision to open a new physically distinct psychiatric emergency department, test a smaller, organized psychiatric emergency service for the main Emergency Department.


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