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Healthcare: Why Human Resource Practices Are Flat-lining Published : February 14, 2011 in Knowledge@Australian School of Business

Healthcare: Why Human Resource Practices Are Flat-lining As providers of essential services and places where people's lives are literally on the line, hospitals are commonly expected to be best practice workplaces, set apart by good management, effective leadership, and engaged and motivated workforces. But the management of hospital workers has not been rigorously researched.

Australia has probably one of the better healthcare systems in the world, if not the best, notes Patrick Bolton, the director of Clinical Services (Medical) at Sydney's Prince of Wales Hospital. Australian government spending on health is around the average of other developed countries, according to a comparative league table. "Yet when you talk to people who work in the healthcare system, they say it stinks," says Bolton. He believes the federal government has caught up with the fact there is dissatisfaction within the ranks, but not the actuality of what is happening inside hospitals.

That's about to change due to a collaboration that joins business school thinking with health management and clinical practice. Julie Cogin, a management professor at the Australian School of Business leads a research team with Ian Williamson, a Melbourne Business School professor, and Bolton. They are investigating how healthcare workers experience management and how that affects productivity and patient care. The research will shed light on what can be done to improve health workers' satisfaction and boost health outcomes for patients.

Cogin and Williamson have both previously investigated human resource management in the commercial and not-for-profit sectors, and have been spurred on by a lack of empirical research outside of the business world, particularly in relation to hospitals. "It struck us as odd that we have all this information on how, for example, accountancy firms or law firms can be best managed, yet we hadn't looked in a systematic way at how effective management could influence healthcare outcomes," says Williamson. The project is timely due to the federal government's new plan to create a nationally funded but locally staffed single hospital network to replace eight separate state and territory systems. And previous indicators suggest there's significant room for improvement.

On the Brink

In 2008, the Australian Commission on Safety and Quality in Health Care published a report that exposed problems with patient safety in hospitals. Subsequently, commissioner Peter Garling's report into acute care services in New South Wales (NSW) public hospitals made 139 recommendations for change, portraying a health system on the brink with many hospitals in deficit, and recruitment often frozen or delayed, putting existing clinicians under additional stress.

The NSW government's response was to commit an immediate A$485 million to implement Garling's recommendations. But the commissioner also identified problems that didn't require funding solutions. Garling's report was highly critical of the culture in hospitals, highlighting a lack of good communication between clinicians and management, a hierarchical top-down structure that often led to bullying and an administrative workload that left doctors feeling bogged down.

NSW wasn't alone in revelations about demoralised healthcare staff. In 2009, Cogin's research revealed increases nationwide in workplace conflict and bullying. Adding to this picture has been the ongoing, chronic shortages of nurses, doctors and other healthcare professionals that are behind the current nurses dispute over nurse-patient ratios and their impact on patient safety.

Various research papers have linked understaffing to patient mortality and illness, accidents and near misses, all of which can cost the healthcare system up to A$2 billion a year, according to the National Health & Hospitals Reform Commission (NHHRC). This figure does not take into account the impact on staff morale, high turnover and the increased cost of hiring and training new staff, using temporary workers and paying overtime costs. "There's a tremendous amount of pressure to use money well and you can't waste it on bad bets," says Williamson. As a hospital's largest expenditure is staff-related, the research can point where best to use funds to generate the greatest return such as the types of training opportunities, and who to hire. The way that workers are organised in a hospital has an impact on how an employee experiences the work and also on the effectiveness of patient care, Williamson says. "For example, when you have a patient with multiple complaints, it requires collaboration across experts," he says. "Doctors are knowledge workers and their training rarely provides opportunities to collaborate with other experts. It's not just a healthcare problem, it happens a lot in research and development (in other organisations) and in law firms. It's a management problem and has a big impact on the effectiveness of the organisation. Managers need to be more savvy about the social capital they have in their units."

Key questions to be scrutinised by the researchers include: Are human resource management systems working to the extent that healthcare workers feel supported, have trust and feel commitment to their job? Second, how does good – and bad – human resource management (HRM) influence the quality of healthcare provided for individuals and at an organisational level? A benefit of this study is that one of the partners, Queensland Health (QH), has provided unprecedented access to proprietary data on sensitive measures of hospital performance, including mortality rates, bed waiting times, errors, re-admissions, patient satisfaction and engagement. For this reason, Queensland will be the initial focus of the research and, says Cogin, "we should be able to say with some certainty what's working and what's not working." Queensland Health centrally manages its data, measuring performance in all its hospitals across the state. Data is collected quarterly. Not all states have such comprehensive and coordinated data collection of hospital performance.

Factoring in Variables

There are a lot of variables between hospitals, so how does the research team approach such a multi-faceted problem head on?

Cogin agrees the size and location of a hospital is relevant to its people management practices. "A small rural hospital in northern Queensland will have a completely different context to a hospital in urban Sydney," she says. "The resources and talent available are very important to consider." Williamson says one of the major problems hospitals face is the ability to attract and retain talent – and retaining staff so that they're not burning out is an extremely difficult job. Rural hospitals in particular struggle with this.

The study will begin by meeting executives who have to cope with such problems in three different types of hospital: a metropolitan or large teaching hospital, a medium-sized facility on the fringes of a city and a rural or regional hospital. "We want to look at the types of strategies they employ," says Cogin, "and the demands they face such as funding, patient issues, talent available and their strategic orientation."

The next stage will be interviews with a sample of department heads and managers – they may be from oncology, cardiology, physiotherapy or the nursing unit. Cogin says the idea is to look at how they work, identify successful practices that achieve the best results from their staff and also the opposite – what they don't do well. "In this way we will find out what strategies work in developing trust and motivation with clinicians such as nurses, doctors, physios and pharmacists." In the third part of the study, the researchers will work closely with the professional healthcare staff to find out the elements of their job that have positive and negative effects on them. Whether, for example, they feel valued, whether there are reward systems in place, and how rostering occurs.

It isn't just a one-way process, Williamson says. While the researchers will be conducting qualitative investigation by talking with physicians and managers to discover new insights, they also hope to use prior research to address some of the problems they find. "We definitely come into this with some clear theory that works," Williamson says. "There are proven leadership behaviours that are effective at leading staffs of knowledge workers. But we anticipate seeing a lot of variance across hospitals: some managers will be doing them, some will not."

Where Cogin and Williamson find successful people management practices, they will be tested for efficacy. "Let's say we have a manager who says, 'This is the way I like to lead and the behaviours that I engage in with my staff and that's why my patient satisfaction and staff retention is so high,'" Williamson says. "We'll measure those behaviours and see if another manager engaging in those same behaviours realizes similar patient satisfaction levels and employee satisfaction levels."

Bolton believes the relationship hospital healthcare workers have with their managers is different to other industries, and the role of a healthcare manager is to be invisible; to make it possible to get out of the way and let the professionals get on with the job. "What a doctor really wants to do is the doctoring," he says. Williamson agrees that hospital managers don't come in and mandate like in other industries. "A hospital unit head has to be able to influence [productivity] in other ways by shaping the way in which people engage," he says. "It's not unique to hospitals but it's quite critical in them."

The research results are keenly anticipated by the industry partners – Queensland Health, the Australian Healthcare & Hospitals Association (AHHA) and the South Eastern Sydney and Illawarra Area Health Service (SESIAHS). Cogin says it will help them "to achieve their strategic objectives of recruiting and retaining qualified healthcare professionals and providing an organisational work environment that promotes wellbeing of staff and enhances overall hospital performance."

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