Organizational Structure in Healthcare in the City North Community Hospital - Case Study Example

Critical Analysis on Organizational Structure in Health Care Introduction Harris (2006) rightfully observes that the health industry is one of the most dynamic industries. This industry faces immense pressure since the communities’ demands for quality health care keeps on increasing day after day while the cost of offering these services keeps increasing. There is an increase in chronic illnesses which are increasingly hard to manage and a change in the morbidity patterns as people age. This notwithstanding, they operate with scarce resources and pressures from owners, insurers and governments demanding value for money. In addition, with the rapid technological advancement in the medical field, the healthcare professionals and consumers have heightened their expectations. Therefore, for health structures to keep with these pressures, they need to change their structures and the way they offer services. Mckenna (1999) says that organizational change occur when the organization wants to respond to organizational pressures from people, structure, and technology or people can initiate the change in order to solve a problem. There are many structures that health organization can use to attain their goals. Most organization have used the traditional bureaucratic functional structures but modern times have necessitated the adoption of more inclusive structures like the service line and matrix structures. According to Miller (2002), the success of an organization depends on how well it chooses the correct organizational structure which ensures support from the management down, includes the preferences of the consumers and harmonises the relationships between service lines. This paper critically appraises the situation in the City North Community Hospital which has been in operation for 50years. The hospital has been operating under the traditional functional structure but pressures have necessitated a restructuring in order to better serve the community. This paper looks at the advantages and limitations of its current structures, proposes a new structure that could be adopted and the different key lines of authority and responsibilities that would come with the new structure. This is in the view of fulfilling the new mission as well as achieving the strategic organizational goal. Advantages and limitations of the current structure The Existing Organizational Structure The functional structure is task-oriented and serves more people because the course of service is well set out. The line of authority is hierarchical and this makes it easy to follow. The traditional bureaucratic structure could have been efficient when City North Community Hospital was being set up. However, with time, clients have been demanding that their voice is heard in their processing. The traditional organizational structure which is majorly bureaucratic and functional in nature made the delivery system more of symptom oriented rather than client oriented. This in Gray (1974 words, means that, “focus has been upon short-term surface indications of organizational effectiveness rather than satisfying the needs of the clients” (Gray, 1974, p. 74). The major needs that a hospital serves are the community needs. Therefore it should be structured in a way that serves customer preferences, stakeholder interests while striving to create value and achieve a competitive advantage. Managers work through and with people in order to achieve the goals of the organization. Longshore (1998) states that with the many changes in healthcare, it is important for hospitals to adopt a management model that will aid maximization on the strengths, control of costs and managing the overall delivery of outcomes. According to Wolper (2004), the service line model allows for the giving of required attention for patients in selected population, majorly according to the clinical categories. In addition, the patient care sequences and planning are premeditated to meet the special needs of those patient populations throughout the time of care across different settings. Matrix Organizational Structure City North Community Hospital has the mission of providing highest quality, specialist health care in partnership with patients, carers, the community at large and other healthcare providers. The new restructured hospital has set the strategic goal of developing high performing, multidisciplinary teams within the specialist services in order to provide high quality, patient-centred care that is effective, efficient and able to respond to the changing health needs of the population. Therefore, a matrix organizational structure would best work to the realization of the goal as well as fulfilling its mission. According to Miller (2002) “this is a combination of the functional structure and the service line management…managers have explicit dual accountability. Reporting is usually developed around any pair of the potential conflict points: geography, time, skill, profession, task or patient” (p.5). One of the characteristic of a matrix model is the overlay form in which the traditional vertical hierarchy is overlaid by lateral authority, communication or influence. In addition, the matrix model has dual lines of authority, accountability and responsibility. The matrix structure assigns priority to functional activities and product/service lines simultaneously. According to Westphal (2005) “the unique characteristic of the matrix organization is that both product and functional structures are implemented simultaneously in each department” (p. 146). Therefore the matrix organizational structure will best fit City North Community Hospital. Basically the matrix model relies on the open systems theory whereby, all elements or departments are interrelated. Therefore a decision in one area affects other areas. This, on the positive side, means that a matrix model allows for the assembling of different resources to attain a common objective. Gray (1974) describes the Matrix model as “the cross-hatch of structural elements, with discipline or functional units forming the vertical dimensions and programmatic or project units providing the horizontal dimensions” (p. 76). Rather than the hospital being concerned with the functions and hierarchical positions as is the case of bureaucracies, the matrix model will allow it to focus on the problems to address and the people who will be able to handle those problems. The systems theory holds that problems have multiple sources and therefore addressing the problem means a pluralistic approach must be employed. However, it is apparent that the traditional functional models have operated as closed systems and therefore inadequate in the modern setting. The traditional bureaucratic structure is designed in a way to eliminate conflict between the different functions of an organization. On the other hand, in a matrix structure, there is conflict between the different functional units and therefore, the success of a matrix structure relies heavily on the professionalism of the members of different functional units in the hospital. Adopting a matrix structure, the hospital will be able to meet its objectives since the structure will allow for the channelling of the resources towards those objectives without the traditional hierarchical constraints. In addition, the matrix structure is not only flexible, but it is also fluid. The matrix structure appreciates the fact that social problems need a multi-disciplinary approach to solve. Lines of Authority and Responsibilities The lines of authority in the new matrix organizational structure would include; the Chief Executive Officer (CEO) whom the entire department heads would report to. Under him would be an operations manager who will oversee all the other operations teams. Authority will flow both vertically and horizontally given that a matrix structure incorporates both the functional structure and service line structures. The departments will include the patient care, auxiliary and support services, finance, medical affairs, managed care and human resources. There will be department heads who will oversee operations in different lines of services. In addition, there would be teams horizontal drawn from every department to oversee operations. The restructuring of the organization would benefit from forming what Westphal (2005) calls a ‘reengineering’ team. This team is has a representation from all departments and oversees relationships and communication through all the other teams in the hospital. They report to the CEO. Some of the teams would include: Patient care team: this department will shoulder the responsibility of the patient care delivery system. It will be responsible for revising the delivery system on quality, efficiency and speed. In addition it will be responsible for cost control and ensuring customer satisfaction. This implies that the team will have the responsibility of assessing the delivery system and identifying new opportunities to explore (Westphal, 2005). Operations improvement team: this team will have the responsibility of assessing the internal operations of all departments and discover ways to improve overall operations within the hospital. Operations such as the business operations, utilizations and maintenance services affect the way other services like patient care. Therefore for a holistic transformation, these operations have to be at their best. Employee relations team: This team will be concerned with people. Their main duty is to ensure communication flows in the organization. The team will also have the responsibility of handling the labour relations issues as well as come up with performance evaluation system. This way they will identify recognition and reward system which ensures that the employees have a commitment to the goals of the organization. Public relations team: This team will be tasked in ensuring that all the stakeholders in the hospital are apprised on the strategy and the goals of the organization. This will ensure the participation of every person in the organization. Limitations One of the major limitations to changing the organizational structure of the City North Community Hospital is resistance to change especially from the health care professionals. Harris (2006) says that “when organizational restructuring threatens to change career pathways, individuals sensing uncertainty about their future job prospects and potential loss of security, familiarity, status or relationships, will respond in ways designed to minimise their vulnerability” (p. 167). Resistance to change can either be personal, due to insecurity, or it can be motivated externally to block a change that is perceived as problematic. In addition, the matrix structure lacks a formal structure and it depends on expertise rather than formal administration. This means that conflicts may be inevitable; however, the structure rides on the assumption that professional conflict may be productive and creative. References Gray, J. L. (1974). Matrix organizational design as a vehicle for effective delivery of public health care and social services. Management International Review, Vol. 14. No. 6, pp. 73-82. Harris, M. G. (2006). Managing health services: Concepts and practice (2nd ed.). Marrickville, Australia: Elsevier. Longshore, G. F. (1998) Service-line management/ bottom-line management. Journal of Health Care Finance, Vol. 24, No.4, pp.72-79. Miller, K. A. (2002). Service line management as a health care management model, American Academy of Medical Administration. Retrieved from: Accessed on 10 April, 2013. Scott, T., Mannion, R., Davis, H., & Marshall, M. (2003). Implementing culture change in health care: Theory and practice. International Journal for Quality in Health Care, Vol. 15, No. 2, pp. 111-118. Wolper, L. F. (2004). Health Care Administration: Planning, implementing and managing organised delivery systems 4th ed. Jones and Bartllett Publishers, Sudbury. Read More