Becker's Hospital Review

40 Sign up for the COMPLIMENTARY Becker's Hospital Review CEO Report & CFO Report E-Weeklies at www.BeckersHospitalReview.com or call (800) 417-2035 "A performance-based contract actually improved the relationship between the organization and the vendor," says Mr. Studer. "Why? Because the organization had objective data and the vendor knew it wouldn't be fired without cause. Generally, people are much happier with transparent agreements in which everyone knows the terms. Uncertainty only creates anxiety." 4. Don't underestimate the power of peers. Deindividuation, a psychological phenomenon in which people lose their sense of personal identity and just become part of a group, has traditionally been a problem in hospital management. Sometimes you just can't bring every metric down to the individual, and that can make it difficult to evaluate performance. Hospitalists are a good example of this. One solution is to include group goals on their evaluations, feedback systems or contracts. This way, the group ends up putting pressure on each other to deliver — which isn't a bad thing, says Mr. Studer. For hospitalists, typical overall goals might be based on costs per adjusted discharge, HCAHPS results for physician communication and satisfaction scores from referring physicians, explains Mr. Studer. Strong scores on these three items — costs, happy referrers and happy patients — indicate good overall performance. "This way, the hospitalists all win or lose together," he says. "That creates the peer pressure and accountability we're looking for. We've seen it happen: people start digging in and looking at group performance, and then they really own it." 5. Remove excuses. When introducing performance-based contracts to employees, it's important for hospital leaders to offer training and development opportunities. For instance, Mr. Studer has found that employees in registration benefit from formal training on the most effective keywords and phrasing to use when asking patients for payment. Tools and training can help align employees' behavior to their performance goals, and can also help remove the "underdeveloped skill set" excuse. Employees may also project blame on external factors or things out of their control. Leaders must be proactive in these instances. Mr. Studer recommends leaders and managers address any issues employees deem as potential roadblocks to their goals. "Ask employees what is getting in the way of their success and remove, what are at many times, rationalizations," says Mr. Studer. For example, say staff in the ED says patient satisfaction is low because the waiting room furniture is dated and uncomfortable. If the problem is not too expensive to remedy, hospital leaders can fix it. If patient satisfaction in the ED remains low — even with new furniture — staff will lose the ability to blame such external factors. They will have to dig to find the real culprit, which may require more work. One hospital Mr. Studer worked with was experiencing problems with noise on patient floors. Nurses said the largest source of noise was the hospital's overhead paging system, so management stopped using it and began paging staff individually. Still, patients' complaints about noise persisted. "We started digging deeper and the biggest source of noise was conversation from nursing units," he says. "Quieting conversation among nurses took more work than turning off the paging system, but it resolved the issue of noise and patient complaints." Conclusion Continuing to pay for poor performance, especially when it can have noticeable ramifications on a hospital's quality or patient satisfaction, is absurd. As hospitals face shrinking reimbursements and growing costs, they are well positioned to reexamine their contracts and identify areas where performance metrics can be put to use. Mr. Studer has one last tip for leaders pursuing more widespread use of performance-based contracts in their organizations. He often tells people that high-performers love objective measurements. ("It excites them," he says.) Middle-performers are a little more nervous about such contracts, but only to a point. They eventually become comfortable with the goals and can gauge their performance. Low-performers are a different story, however. "Low-performers hate objective measurements," says Mr. Studer. "But once I say that, nobody in the room wants to hate them. Nobody wants to be a low-performer." n Register Today! Becker's Hospital Review CEO Strategy Roundtable November 14, 2013 The Ritz-Carlton Chicago Co-chaired by Scott Becker, Publisher, Becker's Hospital Review, and Chuck Lauer, Former Publisher, Modern Healthcare To register, visit www.BeckersHospitalReview.com/novhospitalevent.html, email registration@beckershealthcare.com or call (800) 417-2035.

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