When Were Feeling Better, Theyre Feeling Better

How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes

This Perspectives focuses on the hospital industry. It examines the relationship between employee attitudes and aspects of patient care, highlighting actions that hospital leaders can take to inuence the employee behaviors that help drive better results for the organization. Amid the complex business challenges facing hospitals today from intensifying financial pressures, to new competitors, to a changing care delivery model workforce issues can all too easily drop in importance on managements agenda. Yet Towers Watson research and practical experience indicate this is precisely the wrong time to take your eye off creating the right employee experience. The fact is, employees attitudes and behavior have a direct and material impact on key patient and clinical results, and can be an essential element in effectively adapting to change. As our research shows, the right environment leads to behaviors that make an appreciable difference in hospital performance, particularly in terms of patient satisfaction, clinical unit performance and better patient health outcomes all of which can ultimately lead to better financial results and a stronger competitive position.

Examining Key Behavior Linkages

Drawing on our work with clients in the health care industry, Towers Watson has studied the connections between employee opinion measures and business performance using data from over 600 health care units within several U.S. hospital systems. Through these analyses, we found that the link between positive work attitudes and better clinical performance is most likely to occur when two critical pillars are in place: Leadership focus on core organizational values. Senior leadership plays a prominent role in driving culture in any organization. The goals and values leaders emphasize through their communications and actions become the principles that guide employee behavior. When those values stress the importance of satisfying patients and delivering highquality care, employees respond accordingly, and performance is enhanced. Consistent on-the-job support. In addition to the tone set by leaders, local support provided to employees is a key driver of on-the-job performance. When employees perceive they have strong support in the form of readily available resources, training in new skills and processes, performance feedback from their managers, and the ability to balance work and personal life their performance lifts as well. What follows is a closer look at the set of linkage analyses (see Understanding Linkage, page 5) weve conducted from work weve done with these systems, which illustrate the strength of these connections in practical terms. One organization is a system of 21 acute care centers. The second operates 23 in-home medical provider units. The third is a large network of 536 health care facilities. All three are U.S.-based and spread out geographically across the country. By comparing employee attitude data with various organizational metrics from these systems, we studied how aspects of the workplace experience influence patient satisfaction, safety and sick leave rates, and quality of care. Across the board, we found that when employees believe their organization truly values quality care and also get the support they need on the job their patients are more satisfied; they take less sick time, have fewer on-the-job accidents, and health outcomes are better.

The fact is, employees attitudes and behavior have a direct and material impact on key patient and clinical results, and can be an essential element in effectively adapting to change.

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 2

The First Link: Patient Satisfaction

For this set of analyses, we studied patient satisfaction in the three organizations using the popular Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS), which is an industry standard. We measured employee opinion in the same facilities using employee engagement surveys. In all cases, our data show that when employees have more favorable attitudes about their place of work, patients are more satisfied. In the case of the 21 acute care centers, we found that patients were more likely to recommend those centers that also had above-median employee opinion scores regarding on-the-job support and organizational commitment to quality (Figure 1). Note, for example, that 95% of patients would recommend those facilities where employees had favorable views of the availability of tools and equipment to do their jobs, compared with 88% of patients at facilities where employee views about support were less favorable. Put another way, facilities with favorable employee scores had a sevenpoint advantage in securing patient recommendations. That advantage widened to 11 percentage points in facilities where, for instance, employees believed their organization consistently focused on patient safety and set high standards for integrity and compliance. A similar analysis for the system with 536 health care facilities also showed a strong correlation between an effective culture and satisfied patients. For this group, the employee survey included an organizational culture index with questions related to confidence in leaders long-term business strategy, trust in senior leaders, and adequacy of leaders communication of company goals and objectives. What we found was the more favorable the employee opinions on these items, the greater the level of patient satisfaction. As Figure 2 shows, HCAHPS measures of overall hospital rating and nurse communication were higher in facilities where employees had a more positive opinion of organizational culture.

Figure 1. Employee opinion and likelihood to recommend the facility

Patient likelihood to recommend 0% 20% 40% 60% 80% 100%

On-the-Job Support
I have the equipment and supplies I need to perform my job 95 88 I have the opportunity to enhance my skills and abilities 96 87 Communication here is a priority, and I have access to the information I need 97 86

Commitment to Quality
My facility always demonstrates a commitment to patient safety 97 86 My organization is committed to deliver quality in every aspect of the work 97 86 The organization sets high standards for integrity and compliance 97 86

Higher employee favorability facilities

Lower employee favorability facilities

Figure 2. Employee opinion and patient satisfaction ratings

0% 20% 40% 60% 80% 100%

Overall hospital ratings 70 63 Ratings of nurse communication 73 68

Top quartile

Bottom quartile

In all cases, our data show that when employees have more favorable attitudes about their place of work, patients are more satised.

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 3

As part of our work at this organization, we also tracked both patient satisfaction levels and employee opinion at each location over two years to gauge change. At those facilities where employees believed the culture was improving, patient satisfaction increased as well, at a faster rate than was the case at those facilities where employees did not feel the culture was improving (Figure 3). Finally, for the organization with 23 in-home medical care provider units, we found that support in the form of greater ability to balance work and personal life correlated with greater patient satisfaction (Figure 4). In units where work/life balance was perceived more favorably (i.e., above the median score for the organization), patients were more satisfied with providers friendliness and technical skills, and were more likely to recommend the organizations in-home care to others.

Figure 3. Organizational culture and patient satisfaction over time

Percent of patients rating the hospital a 9 or 10 69% Facilities where organizational culture scores improved 67

66%

63 63%

60% 59 58 57% Time 1

Facilities where organizational culture scores did not improve

Time 2

Figure 4. Perceived work/life balance and patient satisfaction

Patient satisfaction 0% 20% Friendliness of providers 92 89 Technical skill of providers 89 87 Likelihood to recommend 87 83 40% 60% 80% 100%

Higher employee favorability units

Lower employee favorability units

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 4

Understanding Linkage
Towers Watsons linkage model (shown below) is a powerful analytic tool for understanding how employeerelated measures impact other measures of organizational performance. By identifying correlations across data sets in the four categories shown below, it helps identify the specific variables that affect customer behavior (patients, in the case of the hospital industry) and determines what employees need to do, or focus on, to help achieve those desired outcomes. The illustration indicates the types of metrics typically used in each category. The hospital industry has the opportunity to gain important insights from this tool, specifically in terms of analyzing staff survey results, risk management data, safety incident rates, employee turnover and absenteeism, and comparing these metrics against time-tested measures of patient satisfaction, quality-of-care outcomes and financial performance. The resulting correlations can point the way toward changes in internal processes and practices that can lead to a more engaged and productive workforce, and ultimately better patient and financial outcomes.

People Systems and Programs Rewards Retention programs Leadership Communication Change management Talent management Cultural integration Onboarding

Employee Behavior Engagement Safety Customer service Turnover Absenteeism Industry-specific productivity/ operational measures

Customer Behavior Internal/external customer satisfaction Customer loyalty Market share

Financial Performance Revenue growth Net earnings EBITDA ROA Stock performance

The Second Link: Safety and Absenteeism

The highly pressured nature of the hospital environment creates enormous stress for employees, especially those working directly with patients. In fact, absenteeism and illness rates are generally higher among health care employees than they are in other industries. Safety concerns are a very significant issue as well, impacting both those providing care and patients. Finding ways to improve employee wellness (and reduce absenteeism) and achieve better workplace safety are key priorities for all health care organizations, given the impact of these factors on an organizations cost of care, reputation and overall performance.

At the large system in our study, we examined correlations among employee attitudes, safety and absenteeism. We found that on-the-job support affected safety, just as it did patient satisfaction. Across the systems 536 facilities, units where employees said they had good on-the-job support had far better safety records than other units. But support in this context took a slightly different turn than it did for patient satisfaction, involving regular performance feedback and recognition from supervisors for good work. Locations scoring in the top percentile for positive employee scores in these areas had a 48% lower rate of workplace safety incidents than did hospitals with bottom-quartile scores on employee support.

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 5

The top-quartile facilities also had lower absence rates. Across the systems five major regions, facilities that scored in the top 25% for local support had consistently lower rates of sick leave than those scoring in the bottom quartile giving the top-quartile group an advantage, on average, of 20% fewer sick days overall relative to the bottom-quartile group (Figure 5).

Figure 5. On-the-job support and sick leave

Percent fewer sick days per year per employee: Top vs. bottom quartiles 40% 37.6 30% 26.7 25.7

The Third Link: Quality

Our final set of analyses focused on identifying the elements of the work environment that could influence quality of care. There is no other single measure more critical to overall health care performance, particularly given its prominence as a core goal of health care reform and the new models of care delivery that are developing in the market. So what helps create a climate of high-quality care delivery? As with patient satisfaction, commitment to quality has a lot to do with the right organizational culture and leadership communications. At the large system with 536 health care facilities, we found that units with stronger perceived organizational culture had better quality-of-care outcomes. Specifically, both bloodstream infection rates and mortality rates were significantly lower in those institutions that scored in the top 25% on employee opinions of organizational culture. In fact, in top-quartile facilities bloodstream infection rates were 150% lower than bottom-quartile facilities, and hospital mortality rates were 26% lower.

23.8 20% 18.5 10% 21.7

0%

Region A

Region B

Region C

Region D

Region E

All regions

Across the systems ve major regions, facilities that scored in the top 25% for local support had consistently lower rates of sick leave than those scoring in the bottom quartile.
Insights into this broad employee base can be a key element in creating an environment that not only supports organizational objectives, but actually shapes behavior to deliver on those objectives. Figure 6 summarizes the essence of our research results at the three health care systems weve looked at. It underscores the impact of two aspects of the work experience. One is support giving employees adequate resources, skill-building opportunities, effective and helpful supervisors, and programs that enable work/life balance. The second is the tone set by leaders and their ability to put quality of care first, make long-range goals and strategies understandable,

Summing Up: From Employees, to Patients, to Performance

Health care environments present unique challenges for effectively managing people. They are busy, fastpaced workplaces that present multiple and often competing demands for overwhelmed staff. They have distinctly different workforce segments, from highly skilled and educated clinical staff to lower-skilled support staff, all of whom must work effectively together to meet critical quality, cost and care delivery goals.

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 6

and earn employees trust and confidence. When a hospital makes a commitment to these things in tandem, patients are more likely to be satisfied; quality of care is enhanced, and employees take less sick time and work more carefully. The illustration also highlights the indirect link to financial performance. While our research confirms that employee opinion and behavior do not, in themselves, affect financial performance, they do form the beginning of the linkage chain (see Understanding Linkage, page 5) that leads to better patient outcomes. And better patient outcomes do correlate strongly with financial results. For example, findings from the study of the 21 acute care facilities showed that the HCAHPS overall hospital rating of satisfaction predicts financial success. In particular, those with above-median scores on patient satisfaction reported a 35% higher operating margin and a 37% higher operating income than those facilities with belowmedian scores.

These linkages are consistent with a body of research on the more general service-profit-chain model, popularized by a seminal article in the late 1990s that connected employee influence on customer opinion and behavior to bottom-line business performance.* Given the close contact that health care workers have with patients, its not surprising to see this same model emerging from our research. Employees with direct patient contact help shape not only patients opinions but also their decisions on future care. And where patients decide to spend their health care dollars has a direct impact on the bottomline performance of health care organizations. Put another way, investments in resourcing and employee development, as well as compelling communication and leadership visibility, will pay off over time in better business performance.

Figure 6. Linkage analysis Summary of our study of three health care systems
People Systems and Programs On-the-Job Support Investments in resourcing and employee development Helpful supervisors and programs that enable work/ life balance Organization Values and Culture Tone set by leaders Leaders ability to put quality of care first Leaders ability to make long-range goals and strategies understandable Leaders ability to earn employee trust Employee Behavior Increased employee safety and reduced absenteeism Enhanced delivery of quality of care Patient Behavior Increased HCAHPS overall hospital rating of satisfaction Financial Performance Higher operating margin Higher operating income

*The Service Prot Chain How Leading Companies Link Prot and Growth to Loyalty, Satisfaction and Value, by James L. Heskett, W. Earl Sasser, and Leonard A. Schlesinger

towerswatson.com

When Were Feeling Better, Theyre Feeling Better: How Hospitals Can Impact Employee Behavior to Drive Better Care Outcomes 7

Getting Practical: Six Basics for Building Critical Linkages

Devote time to understanding what your employees think and feel, and how that influences their behavior. Recognize that employee attitudes differ significantly across the workforce, influenced by demographics, role, function and personal factors. Having the broadest perspective helps in creating an environment that forges bonds across groups that must work effectively together. Revisit your mission statement and values to be sure they remain clear, relevant and meaningful to employees. Demonstrate the values that your culture supports in both communications and interactions with people. Let leadership set the agenda and communicate it consistently and frequently via multiple channels. Train managers in core people management skills, and give them the latitude and tools they need to engage employees at the local level. Build goals such as providing recognition and performance feedback into their performance plans, and hold them accountable. Celebrate improvements in patient satisfaction scores, safety improvements and other organizational successes.

About Towers Watson

Towers Watson is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of employee benefits, talent management, rewards, and risk and capital management.

Copyright 2012 Towers Watson. All rights reserved. NA-2012-24093

towerswatson.com