The reimbursement cuts for outpatient imaging centers imposed by the Deficit Reduction Act (DRA) of 2005 pose a serious challenge to the radiology community. For most centers, the cut in reimbursement per case, and subsequent fall in revenue, means that worker productivity must be increased if the center is to remain profitable. While the need for change is a cold, hard reality for the industry, how can an imaging center implement the needed operational changes without triggering other organizational problems? In other words, how do you demand increased production from your staff without having them all quit? The answer lies in the discipline called Organizational Behavior, which suggests a systematic approach to changing the expectations of employees, and in turn, making them amenable to calls for the increased effort needed. If management demands sacrifices from employees without laying the proper groundwork for culture change in the organization, resistance by employees is likely. But, by applying the principles of Organizational Behavior, managers can slowly change the culture of an imaging center while improving employee morale and increasing overall productivity.

Defining Organizational Behavior

Organizational Behavior is the study of human behavior, culture, team interaction, and change management in business. These factors all influence quality of work life (QWL), defined as the favorableness or unfavorableness of a work environment. Consultants in Organizational Behavior strive to maximize QWL, for both the employees of an organization and for the organization itself. By increasing QWL, a business can increase employee satisfaction, and decrease employee turnover and related expenses, all while helping the business reach its short- and long-term goals. Organizational Behavioralists advocate methods such as motivating employees through individual goal setting and empowerment, and rewarding employees when goals are achieved (pay for performance). In the current environment of declining reimbursements due to the DRA, applying the basic principles of Organizational Behavior can help imaging centers survive, and even thrive.

Changing Culture in the DRA World

The need for increased production in an imaging center affects all employees, from the clerical staff to the technologists, managers, and physicians. Many employees, particularly those who do not participate in the profits of the business, will resist the necessary increase in workload mandated by falling reimbursement. The organizational culture change needed to persuade employees to accept demands of increased productivity doesn’t come easily. Many employees will resist the needed change and become resentful, or feel “overworked” and “underappreciated.” Therefore, management’s method of handling the call for increased employee production can make or break an imaging center.

John P. Kotter of the Harvard Business School outlines the steps in changing the culture of an organization in his book, Leading Change. He describes a multiphase process for introducing changes within a business, such as a call for increased productivity. The steps of the process build one upon the next, and no step can be given short shrift or the attempt at culture change will fail. Key steps in culture change, according to Kotter, are:

  • establishing a sense of urgency;
  • developing a vision and strategy;
  • clearly and effectively communicating the vision and strategy;
  • empowering employees for broad-based action;
  • generating short-term wins; and
  • consolidating gains and producing more change.

Creating a Sense of Urgency

According to Kotter, many organizations, especially successful ones, suffer from complacency. Things have been going well, as the insiders see it, so why the need for change? It is incumbent on the leaders of the organization to shake up the complacent masses by creating a sense of urgency in the staff. That isn’t to say that the goal is to create panic in the employee ranks. Rather, the staff needs to fully understand the change in the radiology environment that has occurred with the DRA and how it is a threat to the organization. To many radiology workers, the concept of reimbursement cuts may seem irrelevant or removed from their daily function. In a way, that’s true—the average employee sees that their paycheck still arrives every 2 weeks, as it has in the past. So, they think, “DRA—what’s the problem? Nothing has changed here.” But the staff must be made to understand, in clear terms, the impact that the decrease in payment per case will have on the bottom line for the center. They also must understand how this may affect individual employees in the near future—areas such as staffing levels, salary structure, and employee benefits will all be affected if changes aren’t made. By making the staff understand the potential impact of “business as usual,” complacency will disappear and an appropriate sense of urgency will develop.

Developing a Vision

While all organizations should have a well-developed vision, and a strategy to achieve the vision, these items are especially important for organizations facing major changes. Vision, in this case, is more than just a concrete short-term goal, such as “to be profitable” or “to increase our volumes by 10% next quarter.” A vision should reflect a higher calling—for example, “to be one of the leading outpatient imaging centers in the region.” In addition, a specific strategy should be in place to achieve the vision, or as close to the vision as possible. Applying Kotter’s model to an imaging center facing falling reimbursement, a coherent vision and strategy lets all stakeholder groups know what the organization stands for. This is more important than most managers realize—when you are asking employees to “go to war” with you, they need to know what ideal they are fighting for. Telling your staff, for example, that you are increasing throughput in the center to boost the owner’s profits will only engender re-sentment. In order to get the staff on board with the necessary sacrifices involved in increasing productivity, the staff needs to understand and believe in the cause. They must be made to understand that the survival of the business (and their jobs) hangs in the balance of the change effort. Management must effectively communicate and “sell” the vision, to get the needed cooperation.

Clearly Communicating

While this may seem obvious, management often fails, according to Kotter, to clearly communicate the goals of the organization to employees when change is attempted. After all, the owners and key managers know all about DRA and its effects on the organization—don’t the technologists and the clerical staff know? Well, no, they don’t, unless they are informed. Does this mean that managers need to “open the books” to everyone in the organization? Of course not. It does mean that the potential effects of DRA, along with all other clinical and management issues, must be directly discussed with the staff in meetings. The potential long-term impact of the DRA should be stressed, in the context of the vision and strategy of the organization. Repetition is important, according to Kotter—the changes should be discussed in every monthly meeting, and also should be discussed, when appropriate, among individuals on an ongoing basis. Also, management must reinforce the changes by example. Demanding more effort from the staff, without a visibly increased effort on the part of management, sends a mixed message and dooms the change effort to failure.

Empowering Employees

According to Kotter, this may be one of the most difficult steps in changing the operation and culture of any operation. Generally speaking, many small to medium-size companies (including imaging centers) take a top-down approach to their operations. This is, in some ways, a natural outgrowth of the American medical system. Ultimately, the physician is held responsible for the activities in an imaging center. As a result, most procedures and policies are initiated from the physician and their primary agent. However, if change is needed in an organization, the employees must be allowed to participate, at least to a limited degree. Suggestions from employees should be considered, and those deemed compatible with the new company vision should be instituted, and the individuals responsible for the suggestion credited (and rewarded). This visible participation is empowering, and encourages ownership of the organization’s processes by the employees. If the employees feel personally invested in their jobs, they are more likely to make the sacrifices required for the imaging center to be successful.

Short-term Wins

According to Kotter, short-term wins (near-term victories) are necessary to keep the organization on track toward its long-term goals. In order for a short-term win to be effective in this regard, it must contain three elements: it must be highly visible to most members of the organization, it must be unambiguous, and it must be seen as a direct result of new procedures and/or policies. Often, management may ignore the idea of short-term wins, believing in-stead that there must be only pain in the short term, in order to be stronger in the long term. This attitude ignores the reality that in order to keep the members of the organization engaged in the change process, they must have some short-term positive reinforcement. For example, as new processes to increase productivity are introduced, short-term productivity goals should be set in tandem. Meeting those goals is a win, and praise and possibly a small reward should be given. For example, if the overall productivity goal for the year is a 30% increase in case volume, then a 1-month goal of a 3% increase could be set. If the goal is met, the staff will have tangible evidence that the new procedures are indeed effective, and will become more committed to the changes being made.

Gains and Change

Change takes time—lots of time. Often, management makes the mistake of taking a few short-term wins and misinterpreting them as the end of change. Rather than continuing on the path of realization of the company’s vision, management and employees rest on their laurels and recent achievements, and the pace of change slows or reverses. It is incumbent on the leaders of the organization to keep the new goals in mind for the long term, and keep the momentum generated by short-term successes going. Failure to continue to move forward will result in failure of the change effort. Only with persistent effort by management will the necessary changes become permanent, enabling the imaging center to continue to grow in the brave new DRA world.

Steven M. Cohen, MD, MBA, is director of medical imaging for the San Fernando Valley Interventional and Imaging Center, Encino, Calif. He also studied Organizational Behavior as part of his MBA program. For more information, contact .