Healthcare Organizations and Organizational Structures

Objectives

1. Analyze the characteristics of different healthcare organizations.​

2. Classify healthcare organizations by major types.​

3. Analyze economic, social, and demographic forces that drive the development of healthcare organizations.​

4. Compare and contrast opportunities for nurse leaders and managers during the evolution of healthcare organizations.​

5. Analyze relationships among mission, vision, philosophy, statements, and organizational structure.​

6. Discuss factors that influence the design of organizational structures.​

7. Analyze the impact of organizational structure on communication and decision-making.

Intro

The following module will expound on the concepts of healthcare organizations, the supporting structure, and why these are important to understand as a nurse leader. To develop organizations and shape behavior, organizational structures should be arranged to support the workforce through shared decision-making and ease of communication. Additionally, this module will dive into types of organizations, organizational culture, and characteristics of organizations. A meaningful mission, vision, and philosophy can help shape nursing practice within an organization. An awareness of healthcare organizations and organizational structures can help nurse leaders adapt to the ongoing changes within healthcare and provide seamless care across the healthcare spectrum.

What is organizational theory

Organizational theory can be thought of as the study of the structures and operations of bureaucratic institutions. In studying these structures and organizational operations, one gains a better understanding of organizational behavior, organizational change, and organizational development. Additionally, Organizations can be shaped by their culture, technology, and structure. ​Organizational structure delineates how work is organized, where decisions are made, and what degree of authority/responsibility is allocated to workers. Organizations are comprised of groups of individuals structured to support specific objectives/goals.

How do Organizations evolve? Two prevailing theories that help us understand how organizations evolve include Systems theory and Chaos theory. Systems theory explains how a collection of components, not necessarily related, interact to make up the united whole. It includes the idea of how organizational components such as organizational culture, structure, people, technology, and environment interact. Understanding this bigger picture point of view, occurring in an orderly or holistic fashion, is a major characteristic of systems theory. Chaos theory is slightly opposite in that it is not orderly. It is the idea that organizations must adjust continuously to the unpredictable nature of changes within health care and the organization.

What are organizational charts?

Organizational charts are an illustrative representation of workforce stratification, the distribution of authority, and the levels of decision-making. They become a useful tool in evaluating the organization’s complexity, hierarchy, chain of command, and span of control.

What does complexity mean in an organization

The complexity of an organization concerns the distribution of labor, including the number of hierarchical levels.

What is a hierarchy

The hierarchy refers to lines of authority, including these stratifications (How distant or many levels exist between the lowest level position in the organization to the highest).

What is a chain of command

The organizational chart also exhibits the Chain of command. Chain of command refers to the vertical view of the organizational chart and to whom each position in the organization reports.

What is a span of control

Similarly, they span a control that concerns the number of personnel under a manager. If the spam control is too narrow, personnel costs are typically inflated and often seen in specialized labor. Too large a span of control can result in less supervision of subordinates and less effective management.

What is formalization

In terms of rules and policies, Formalization refers to the amount and degree of restriction of policies and procedures utilized within an organization. A point to note is that specialized labor often requires highly trained professionals. There is an inverse relationship between formalization and specialization in that highly specialized operations tend to have less formalization.

What is centralization

Various degrees of decisions are made within an organization. Certain decisions can't be made by the lowest positions within an organization, and some are made only at the highest. Centralization represents a consolidated point of decision-making. Increased centralization refers to our decisions being made at a single point, which is usually further up the hierarchical tree in the organizational chart. The more decisions are made by each employee, the more decentralized the organization is said to be. Centralization of decisions can be helpful with managers who need to control consistency, but it often leads to frustration and inefficiencies.  Additionally, the greater the stratification between where the decisions are made and the position affected, the greater the decrease in communication. Therefore, workers have a harder time adapting or changing to problems that arise, as it takes longer to make a decision. This can lead to feelings of not being heard, frustration, feelings of being undervalued, and overall worker dissatisfaction.

What is bureaucracy?

A term many use for the centralization of authority coupled with inflexible approaches to decision-making and inefficiencies in adapting to change is known as Bureaucracy. Another word for Bureaucracy is “red tape,” and it arose as a type of micromanagement in the need to control workers through the division of processes into discrete tasks. In a knowledgeable and specialized workforce, increased bureaucracy tends to lead to job dissatisfaction and poor outcomes. Bureaucracy can be helpful to control consistency and inefficiencies caused by a lack of direction or less specialized/less knowledgeable workers.  

What are the Types of Organizational Structure: Shared Governance

• Shared governance goes beyond participatory management through the creation of organizational structures that facilitate nursing staff having more autonomy to govern their practice. It also provides nurses with an organizational framework to take on greater ownership and accountability for decisions. The more someone comes up with a plan/solution, the more they are committed to making it happen. Increased engagement.

• As far as the organizational structure of shared governance is concerned, it is a flat structure with less stratification of the workforce. Decision-making is delegated to the professionals doing the work. Challenges to this structure include inconsistencies in decision-making, requiring a higher education or knowledge base, strong leadership skills, and increased communication.

• Magnet hospitals recognize decentralized decision-making and its positive impact on nurse satisfaction and patient outcomes. Shared governance is opposite the spectrum from the traditional organizational structure of centralized decision-making, coupled with those who implement the decisions.

• Shared governance also requires nurses to have more ownership of their decisions if they are to have more autonomy and Input into their professional practice. In the shared governance model, management serves to coordinate and facilitate the work rather than dictate the work. This support comes in the way of competencies, continuing education, conflict management, and quality assurance.

What is the difference between a Mission, Vision, and Philosophy

• The mission is the reason for the organization’s existence or purpose for being. It helps define the services being offered.

• The Vision is slightly different, relating more to a compass or direction, indicating the desired future of the organization. Division tends to be inspirational and brief.

• The philosophy refers to the culture desired in that it articulates the values and beliefs held about the nature and work required to accomplish the mission, as well as the nature of the people being served. The mission, vision, and philosophy should support or be reflected in the Organization's structure. 

What is an organizational culture

Organizational Culture refers to the norms or traditions of the organization as exemplified through behaviors that illustrate the values and beliefs of the organization. When actual behaviors or culture in the organization do not match the mission, vision, and philosophy of the organization, Job satisfaction and patient outcomes are affected negatively.

What is a primary organization

Healthcare Organizations generally provide two types of services, restorative (illness care) and preventive(wellness care). Healthcare Organizations play different roles in the continuum of healthcare delivery.

Primary- first access care. Entry into system, chronic management example… Primary healthcare provider, school nurse

What is a secondary organization

Secondary- disease-restorative care, Prevention of disease complications- Hospital, free-standing ER.

What is a tertiary organization

Tertiary- Rehab, long-term care.  Long-term care facilities, skilled, assistive, rehab centers.

What are institutional providers

Institutional Providers

Secondary and tertiary types of care have traditionally been classified as the institutional providers. These are some of the characteristics that differentiate institutional providers. Institutional Providers include: Acute care hospitals, long-term care facilities, and rehabilitation facilities.  They all three offer different types of services for the acutely ill.

Types of services provided: cardiac care, burn care, etc.

Length of stay- The length of stay is different for all three; all have to work together. Usually, the acute care will have a shorter LOS.  Chronic care is in excess of 30 days.

What is a non profit organization

• Ownership- Can be profit or for-profit.

• Non-profit (voluntary organizations) must still make a profit because they have the same liabilities as for-profit hospitals. Excess profits are generally put back into the organization or community for maintenance and growth. Nonprofit healthcare organizations are generally controlled by voluntary boards or trustees.

• They have a mixture of paying and charitable customers. They are often tax-exempt and tend to be owned by communities, churches, the state or the government.

WHat is a for profit

• For-profit (proprietary or investor-owned) Business with the specific intent to make money. They may or may not have stockholders. For-profit hospitals tend not to be teaching hospitals, suburban facilities with small to medium bed capacity, and can access group purchasing cooperatives, which lowers non-salary expenses. 

• For-profit hospitals tend to have higher hospital charges and lower wage and salary costs because they want to maximize their return on investment and run lean.

What is an accreditation status

• Accreditation status: Another characteristic of healthcare organizations is their accreditation status. Accreditation refers to an organization meeting a certain set of standards set forth by the accrediting body. Examples of the accrediting body…  The Joint Commission, American Nurses Credentialing Center, and National Committee for Quality Assurance.

• These organizations have what is known as deeming authority. This means they can evaluate an organization and judge whether it meets the Center for Medicare and Medicaid Services (CMS). An organization that meets these standards can bill Medicare and Medicaid, and therefore, the organization needs to be accredited to be able to bill for services rendered for CMS.

• Insurance companies set their standards to CMS, as CMS is the largest payer source for healthcare in the United States. Some accrediting bodies, such as the Joint Commission,  establish additional safety standards to which healthcare organizations need to comply.

What are Academic Health Centers

• Teaching Status of the Organization

• Is the facility associated with a medical school and other health professions?

• Academic Health Centers- directly affiliated with the school of medicine, and at least one other health professions school. They provide only the clinical portion of a medical school teaching program. Care is usually more costly in a teaching hospital. They generally have greater access to a state of the art technology and current research. These facilities often receive government reimbursement to cover additional costs associated with teaching. Academic health centers, unfortunately, are plagued with inefficiencies, duplication of tests, high salaries, and delays due to the teaching process.

WHat are consolidated systmes and networks

Consolidated systems and networks: The system or healthcare network refers to interconnected units that are owned by the institution or have cooperative agreements with other institutions to provide a full spectrum of wellness and Health Services.

What are community services

Community services would include the city’s public health department. Lufkin has one, Nacogdoches does not. The health department tracks infectious agents, offers preventive services, AIDS monitoring, TB monitoring, etc., within the community

What are types of healthcare organizations

Subacute facilities help patients who still need high-complexity equipment necessary.

Home health organizations help patients monitor chronic illness from home and evaluate the patient’s progression.

Long-term care and residential facilities include skilled nursing facilities and provide long-term rehabilitation.

Hospice and palliative care- Offers patients continuing care, symptom control for serious illnesses concurrently with other treatments, physicians, nurses, social workers, chaplain all help the patient meet needs when coping with a serious illness.

Nurse-owned and nurse-organized services, such as infusion clinics and home health services

Self-help, peer assistance, and voluntary organizations also provide support for patients in the community.

Conclusion

• Awareness of the changing status of healthcare organizations and the ability to play a leading role in creating and evaluating adaptation in response to changing forces will be central functions of nurse leaders and managers in healthcare organizations.

• Organizations need a mission, vision,  and philosophy that are meaningful to the practice of nursing to be practiced to support a healthy working environment.  Multiple options for organizational structure exist, but nurses need to be involved in the design of the structure that supports positive patient outcomes.

• Finally, organizational culture is derived from the embedded parts of an organization, which include its traditions, norms, and values.