Today's economy is giving the thesaurus a workout.
It's hard for reporters and politicians to find more dramatic words to describe the extraordinary events on Wall Street and its threat to Main Street. Here's a sampling from the last 24 hours: Disastrous. Crisis. Damaging. Shattering. Dangerous. Helter-skelter. Chaos. Dire. Scary. Uncertain. Recession. Foreclosure. Depression. Panic. Failure.
You hear these words as a health leader. You may ask yourself: Do we move forward with that medical office building expansion? Should we buy that physician group now? Can our investments still cover our indigent care losses?
But now imagine that you hear these words as a medical/surgical nurse, or a lab tech, or a radiology manager. Now you may ask: Am I ok? Will I have a job tomorrow? Can I keep my house? Does the CEO here have a clue? Am I safe?
The most recent comments by health finance experts are that our industry will be relatively unharmed by this financial mess. (So far, at least.) But these experts are talking about the math of "access to capital" and "triple A ratings." They are not talking about the culture of your organization or the psyche of your employees.
Your nurses and techs and housekeeping staff—the backbone of your organization—are being battered by a Katrina-sized storm of news reports swollen with the most catastrophic language reporters can Google. They are vulnerable. They need an umbrella.
That's your job.
This is your rare opportunity to strengthen relationships inside your organization. Conversely, it's a time you ignore at your peril.
Here's what we know:
People protect themselves (and their families) first, the organization second. Before your employees will focus on the success of your organization, they must know that their jobs are secure. If you don't offer them a sense of security or a sense of belonging to a team and to a cause, they may find it someplace else—at your competition across the street, for example. Or they may finally decide to give a call to that union organizer who has been selling it, too.
The best leave first. In uncertain times, your best staffers—the ones who make the place tick—are the ones who can find the best jobs somewhere else. Health leaders face this risk today, well before any financial impact from Wall Street arrives.
Nature abhors a vacuum. In work environments, when leadership provides no information or corporate-speak rah-rah on a hot topic, that vacuum is filled by inaccuracies or wild misinformation. None of these are good and are always worse than what leadership could share with them—even if your news is "I don't know yet."Want people to panic? Don't talk to them.
Your competition is happy to talk to your staff, and is probably doing it already.
The act of communicating is a message. Handled correctly, the act of leaders reaching out to employees is a sign of confidence and trustworthiness, even if your message today is not precisely what everyone would like to hear. Building a reservoir of trust with your staff can get you and your team through the toughest times. Don't write them a letter for your newsletter. (Who reads that, anyway?) Walk the halls. Show them you are in the game with them. Bring pizza to the night shift tonight. Serve it yourself.
Today, the mistake is to wait it out—to wait for the answers to become clear and for all the Wall Street fallout to be known—before you engage with your people. They do not expect you to have all the answers or to promise them that everything is going to be alright.
But what do you say when you don't have all the answers? There are sure to be many details, but the overall theme should be simple and strong. Tell them that:
You have confidence in the organization
You have confidence in them
You have confidence in what you can accomplish together, whatever storm may come
It may take weeks and months before we can begin to know the impact of today's economic crisis on the healthcare industry. You may not feel it—if you ever do—until your next fiscal year.
But the impact on your people is happening right now. It's as current as CNN. Break out your own thesaurus, if need be, and begin your own conversation with your team today.
David Jarrard is president of Jarrard Phillips Cate & Hancock, Inc., a national healthcare public affairs firm focused on helping leaders of healthcare organizations successfully navigate communications challenges.
The nation may be split on whether Congress should pass the $700 billion bailout plan for the financial industry. But one thing that people—both Republicans and Democrats—seemed to agree on this week was that legislators displayed a profound lack of leadership.
Legislators have been criticized by both advocates and opponents of the rescue plan as being more concerned about people's opinion and getting reelected than doing what is in the best financial interest of the nation.
The public view is that leaders need to be able to make tough decisions regardless of public sentiment—and healthcare is no exception. If the reimbursement climate and financial crisis is any indicator, hospital CEOs will be forced to make even more difficult choices in the years ahead—many of which will be unpopular with members of the community, employees, and clinicians.
Hospital leaders cannot be reactive, either, according to the hospital CEOs I have spoken with recently. They must be able to quickly assess the situation, make a decision, and follow through on the plan. Healthcare executives also need to be creative, because old solutions, operating models, and business practices will not solve new problems.
I heard a CEO at a conference recently say that being a leader can be "lonely and uncomfortable." For instance, no executive wants to lay off employees. But if headlines are any indication, we'll see many hospitals doing just that. Some of these layoffs are not the result of poor financial health of an organization, either. A healthcare system may simply want to restructure and centralize its organization as a way to improve efficiency. Still, layoffs will put people out of work and the remaining staff will be sad to see colleagues leave, and let's face it, maybe a little bitter about some of the cuts that were made.
Recently, I spoke with Jim Sanger, CEO for SSM Healthcare-St. Louis Network, about the organization's decision to cut roughly 120 positions. His advice is that organizations need to ask themselves, "If we make these changes, will we be a better organization when it is over." If the answer is yes, then it is the right decision. That doesn't lessen the turmoil or make the process any easier, Sanger adds.
Similarly, people don't want their hospital to abandon a service line. But hospitals can no longer be all things to all people. Healthcare executives will need to carefully evaluate what services their hospital can and should provide. For some hospitals that may mean cutting the OB/GYN department, long-term care unit, rehabilitation units, or community outreach programs.
When tasked with making these types of controversial decisions, hospital CEOs need to ensure that the choice is clearly explained to employees and community stakeholders. Explain why this plan is in the best interest of the organization. They may not agree, but communicating your message may be the best tool to keep the trust of your employees and community at large.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
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Sen. Pete Domenici, R-NM, is still pushing for legislation that would require insurance plans to treat mental health patients on par with those who have physical ailments. In the past, employers and insurers were concerned that legislation would have required plans to cover a "telephone book" of conditions, raising costs beyond what companies and their workers could afford and potentially negating companies' ability to offer any health coverage at all. The legislation now before the House does not mandate that group health plans cover mental health or addiction treatment, only that when plans do so, the coverage must be equitable to other medical coverage. The insurance industry is also now a strong supporter of the parity legislation.
Westlake, OH-based St. John West Shore Hospital has laid off 22 staff members, citing the overall changes in the hospital business and a desire to increase efficiency. The cuts at the 248-bed hospital were made in full and part-time positions, and include management, clinical, and non-clinical staff, according to a statement by the hospital.
The cost of workplace health insurance plans for Michigan families rose much faster than wages, giving the state the worst rating in the nation, according to a report from Families USA. Also, Michigan workers paid proportionately more than employers, often for less comprehensive coverage, according to the report. The statistics show that "the whole system is being stretched" and "another cause to look at the impending collapse of the whole healthcare system," said Rep. John Dingell, D-MI.
Shares of Florida-based healthcare services company Pediatrix Medical Group continued sliding on fallout from its move to cut third-quarter profit guidance because of lower reimbursements. Shares fell 4.4%, to $45.56 on October 2. Earlier in the week, Pediatrix said a shift in reimbursement for patient care from commercial payers to government payers will affect revenue, along with a decline in patient volume.