Much like the architectural blueprint of a house which reflects its functional layout depending on the wishes and needs of the client, the design of an organization is also indicative of its function as delineated by its founders. Design consists of people, the division of labor into different units and coordination between them (Jonker et al., 2012). This means getting people to assume roles and responsibilities, defining the relationships between various roles, setting up processes to get all tasks done, and establishing systems to facilitate these processes. External and internal factors influence organizational design at the onset and continually reshape it throughout its existence. Ultimately, it is the internal factors which have the greatest bearing. This is evident in the experience of an urgent care facility as described below.
The urgent care facility was started by three family physicians 15 years ago. Two of them practiced in the hospital then while one had his own private practice. At that time, there was no urgent care facility in the area and the idea was considerably new. The physician owners saw the need for such a facility based on their own experiences. However, the decision to set it up was based on their fellow doctors’ successful venture in another state. It was mainly envisioned to complement the health care services provided by the local hospital and private practices by catering to well patients and those with acute but not emergent conditions who cannot be accommodated there either because they do not have appointments, the physician is out of town, the need for care is beyond regular office hours, or the patients just prefer not to endure the long waiting times.
With this purpose in mind, they consulted with peers in another state who have successfully started an urgent care facility. Two of the three physician owners had managerial experience and these skills helped them in preparing for and actually establishing the facility. They composed the initial board of directors, while also working as physicians, and employed nurses and auxiliary staff as extensions to get all medical and nursing care done as well as administrative tasks. With a growth in consumer demand, additional physicians and nurses were added. The structure has been kept simple and thereby easy to manage. Top level management is performed by the BOD and middle level managerial capability is fulfilled by the medical director, the clinical director and the front office manager. Positions have been grouped together based on similarity in tasks giving rise to the nursing department, medical department and administrative department.
At the onset, the organizational principle adhered to was consistent with the machine metaphor which is a view that the organization is made up of different units which operate in defined, predictable ways as tools in order for the given function to be met (Hinrichs, 2009). In this model, control is the primary mechanism used to keep the organization going, as opposed to motivation and commitment, where control is achieved through hierarchical command (Hinrichs, 2009). This leadership and management principle, as an internal factor, has greatly influenced the organizational structure and processes. Decision making, and thereby power, is heavily concentrated at top level management regarding human resources, financial resources, policies and systems and implemented top-down. This brought about efficiency since every task gets done and patients’ expectations at the time were met. However, this leaves no room for flexibility, creativity and innovation.
Besides senior management’s organizational principle, another internal factor that affects organizational structure and processes are employee issues and demands. As the additional physicians came in and brought their patients with them, they worked on a per-contract basis. As contracts were renewed and they worked longer with the facility, however, their employment remained contractual despite having considerable contributions in sustaining facility services and expanding the consumer base. At the same time, the employee physicians had issues regarding quality of care. They then demanded to be represented in the BOD in order to influence the processes, systems and policies involved in providing medical care or they would leave. Since their leaving would mean that clients would certainly follow and this would without doubt decrease the facility’s revenues, top-level management made the decision to include three employee physicians in the BOD.
Finally, internal resources constitute yet another internal factor influencing organizational design. Limitations in capital funds have reduced the capacity to provide services for ancillary revenue which is defined as “money earned by an organization through an activity that lies outside its normal core activity and purpose” (Grogan & Soyer, 2011, p.16). While other urgent care centers sought to have a full-range of on-site screening and diagnostic services that meet local demands and increase income, such as drug and alcohol testing and occupational health screening, the facility limited its services to those basic to patient diagnosis. With increased patient demand, inadequate financial resources and managerial capability has also hindered the setting up of additional offices. Thus, productivity has steadied at full capacity treating an average of 80 patients per day.
Besides internal factors, there are external factors which determine or modify organizational structure, size and processes. Federal and state regulations, insurance company requirements and the requirements of accrediting institutions have shaped facility processes and policies and continue to do so. For example, compliance with HIPAA led to policies governing patient information documentation. The federal mandate to shift from a paper-based patient documentation system to electronic medical recording is also presently causing pressure to modify organizational workflow, communication systems and structure in order to accommodate information technology. The recent arrival of a strong, local competitor is also another external factor which is another source of pressure to adopt an EMR system.
However, with a strong adherence to a mechanistic organization principle, the facility has had difficulty adapting meaningfully to changes in the health care environment. Because power is concentrated at the top of the hierarchy, it has become largely inflexible. Where employees could have had a significant contribution in anticipating and preparing for changes had decision making been shared in a more democratic organizational culture, the facility has become reactive to both internal and external pressures, including health reforms addressing the demand for greater accountability in health care. Since the past year, facility productivity has decreased significantly due to competition in a situation where the quality of care is being redefined and the competitor has effectively adapted to the changing consumer demands.
The demand for health care accountability represents a serious shift from a culture of entitlement. Evidence of the latter is the fact that health care professionals are given full clinical autonomy and are substantially compensated without due consideration if patient care rendered does yield quality outcomes (Kaufman, 2011). For instance, financial incentives create a situation where diagnostic services are recommended even if they are not needed contrary to existing clinical guidelines or standards of care. This practice drives the costs of health care up without actually creating value in terms of outcome.
Shifting to a culture of accountability requires seriously assessing organizational purpose, structure, processes and systems and realigning them towards achieving quality health care.
Accountability cannot be integrated into the organization using a mechanistic management strategy but rather through adherence to the biological metaphor wherein an organization is viewed as a whole and is progressive, continuously growing with highly interrelated units and able to adapt to a dynamic environment (Hinrichs, 2009). This model underscores commitment from all stakeholders, openness and empowerment, distribution of authority which fosters innovation, connectedness, diversity and change which are the values and conditions compatible with accountability. Unless a drastic change in management paradigm occurs to incorporate a biological model, the urgent care center cannot effectively ride the wave of the current and impending reforms in health care.
In conclusion, organizational design includes the aspects of structure, process and size. It describes the distribution of functions needed to achieve organizational goals. It is shaped by internal and external factors. Internal factors include organizational management principles, the availability of resources and changes driven by employee demands. External factors are regulations and market competition among others. Although a mechanistic organizational model works to provide efficiency and stability, it is not practical to use in the face of continuous changes in the environment which requires effective adaption. The biological model of the organization best fits the present health care situation allowing effective coping with constant change.
Groger, T. & Soyer, A. (2011). Enhancing your practice’s revenue: Pearls and pitfalls. Retrieved from http://www3.aaos.org/member/prac_manag/enhancing_revenue_primer.pdf
Jonker, C.M., Popova, V. Sharpanskykh, A., Treur, J., & Yolum, P. (2012). Formal framework to support organizational design. Knowledge-Based Systems, 31, 81-105.
Kaufman, N.S. (2011). A practical roadmap for the perilous journey from a culture of entitlement to a culture of accountability. Journal of Healthcare Management, 56(5), 299-304.