Culture shifts in healthcare organizations

Culture shifts in healthcare organizations

Healthcare is a heavily regulated industry.  However, until the passing of the Patient Protection and Affordable Care Act in 2010 (also known as “Obamacare”), there had been no significant changes to the laws since the passing of the Social Security Amendments of 1965.  Medicare and Medicaid programs were created from the 1965 amendments.  Due to the changes in payment structures for Medicaid and Medicare because of the Patient Protection and Affordable Healthcare Act (PPACA), healthcare organizations have faced a multitude of challenges and changes, not only in the way they must provide treatment and seek reimbursements for the care of patients, but also fundamental changes to the way they do business (Centers for Medicaid and Medicare Services, 2017).

Smaller hospitals, medical practices and long-term care facilities such as nursing homes have had to join larger health systems to maintain financial solvency and have adequate manpower and resources available to help them comply with the government’s “meaningful use” guidelines.  Meaningful use is a regulatory requirement of the Patient Protection and Affordable Care Aact which mandated the use of technology in medical care, such as implementation of electronic medical record (transferring patient records from paper to electronic formats) and telemedicine (the use of technology to provide care from a distance) platforms.  In order to be eligible for reimbursement for services from government payers such as Medicare, Medicaid, and private insurers such as Blue Cross and Blue Shield, clinicians and providers have had to move away from a “fee for service” patient care model to one that demonstrates overall better health, better care and lower cost practices.

For-profit and not-for-profit health systems alike have experienced significant impacts because of healthcare law and regulation changes (Advisory Board, 2017).  Due to constant merger, acquisitions and divestiture activity within health systems, there exists vast variations in protocols, practices and procedures, as well as an array of people, personalities and work place competencies which must all be aligned in order for the health system to function as a unified efficient whole.

Faced with the new regulations of the Patient Protection and Affordable Care Act – and now its potential repeal and replacement by President Trump’s administration – the business climate and culture of healthcare organizations will continue to evolve at a rapid pace. These organizations must continually look at ways to assess their organization’s behavior, culture and growth, and must have effective leaders with the necessary style, drive, vision and emotional intelligence.  These leaders must be in tune with the nuances of change and be able to lead their organizations through them.  Leaders have a direct impact on whether the organizations underlying behavior and culture will breed success, contention or failure, which may ultimately lead to the survival or decimation of the healthcare organization.

In their 2014 article “Success factors for strategic change initiatives:  A qualitative study of healthcare administrators’ perspectives,” authors Kash, Spaulding and Johnson state “Strategic change capabilities have become a primary focus as hospitals and healthcare systems attempt to perpetually improve and position themselves in a competitive market characterized by continuous regulatory changes and opportunities for reorganization and growth” (p. 66).  Healthcare leaders must use their flexible leadership style and emotional intelligence to employ specific strategies which contribute to the success of change initiatives.  A change model will be reviewed.

Organizational culture

An organization is defined by its culture.  Culture shapes an organization’s ability to implement and accept change. In his book “Organizational Culture and Leadership,” Edgar Schein (2016) had defined organizational culture as follows:

“The culture of a group can be defined as the accumulated shared learning of that group as it solves its problems of external adaptation and internal integration; which has worked well enough to be considered valid and, therefore, to be taught to new members as the correct way to perceive, think, feel and behave in relation to those problems.  This accumulated learning is a pattern or system of beliefs, values, and behavioral norms that come to be taken for granted as basic assumptions and eventually drop out of awareness (p. 6).”

Healthcare is said to have both visible and invisible architectures.  The visible architecture is what everyone sees – the way people speak to one another, their posture, and even the cleanliness of the environment.  The invisible architecture is the culture that’s observed with the behaviors, attitudes and overall response of all staff in the organization.  The culture of the organization, combined with the leader’s style, can predict the organization’s outcome.  Leaders have a direct impact on organizational outcomes based on the leadership behaviors and styles demonstrated.  Leaders with high emotional intelligence can affect positive organizational outcomes (Smith, 2015).

A subset of organizational behavior, organizational culture reflects the values and behaviors that are commonly observed in an organization.  Schein (2016) identified three levels of organizational culture: (a) artifacts and behaviors, (b) espoused values, and (c) shared basic assumptions. Perceptions of definition and the impact of an organization’s culture differ; however it has been determined that an organization’s specific culture is related to organizational performance (Kotbra et al., 2012).  An organization’s culture will either isolate individuals or make them feel as if they belong.  If individuals are invested in the organization’s culture, and support its mission and values, individuals are more likely to support change and success.  Implementation of important changes to health care methods, processes and procedures must be managed in such a way that employees remain invested and must minimize adverse impacts to the organization’s culture.

Leaders in healthcare organizations, faced with shrinking budgets and growing systems often overlook the impacts and implications of changing cultural dynamics.  A leader’s level of emotional intelligence is key to the leader’s ability to recognize culture shifts.  A leader’s style will determine whether a leader has the appropriate skills required to manage a culture shift to the organization’s benefit and insure positive organizational outcomes.  A model for strategic change management in healthcare organizational culture includes (a) organizational analysis, (b) identification of leadership and leadership support, (c) creation of an implementation plan, (d) communication of the change process, (e) implementation of the change, (f) monitoring and adjustment of plan as needed and (g) providing training and education.


Strategic change management

Organization culture shifts are identified as the top indicator of successful implementation of change in healthcare systems.  The alignment of culture and values between individuals and departments, risk taking and the organization’s mission, vision and values contribute to achieving positive outcomes in healthcare (Kash et. al, p. 73).  To achieve positive outcomes related to culture shifts, healthcare organizations must employ a change model with defined strategies for success.  Kash et. al defined the top ten success factor themes for strategic change management in healthcare organizations – culture and values, business processes, people and engagement, service quality and client satisfaction, coherent planning, financial resources and accountability, leadership, market forces and external demands, and access to information and communication (p. 74).  The top ten success factors correlate to the change model components.  Table 1 below shows the alignment of the model components and success factors.

Table 1

Healthcare systems today are often viewed as open systems, which are defined as “those facing uncertainty in both their internal and external environment” (Kash et. al, p. 73).  This certainly defines the current nature of a typical healthcare system, as it faces internal uncertainty due to merger and acquisition activity, and the external uncertainty of current healthcare regulation based upon the Patient Protection and Affordable Care Act (PPACA).  In order to stay viable, healthcare systems must continually improve and position themselves in an increasingly shrinking, competitive market. Author Yafang Tsai asserts that in order to be competitive, healthcare organizations must establish a culture of learning and foster organizational commitment (2014).  Healthcare organizations are knowledge-intensive organizations and require continual improvement to increase their capabilities.  An implication of the Patient Protection and Affordable Care Act, which promotes patient-centered healthcare and the advancement of healthcare technology with its Meaningful Use regulation, is that there must be an upgrade of competencies among staff through ongoing learning.  Healthcare systems as learning organizations define an ideal organizational vision which can help organizations cope with cultural change by reinforcing learning activities (Tsai, 2014).

Leadership is also considered an indicator of success for change initiatives in healthcare systems.  The theme of leadership relates successful implementation of change initiatives to effective leadership characteristics (Kash et. al, 2014).  Leaders in various fields have been studied to determine whether there are certain traits or characteristics that they exhibit that make them great leaders.  Those traits include physical or personality traits as well as their intelligence quotients.  In addition to the leader’s characteristics, the level of emotional intelligence also allows him or her to react to people and situations with the appropriate level of emotion, exhibiting empathy and sympathy as needed.  In healthcare organizations, a great deal of empathy and sympathy is expected from not only clinical caregivers, but from non-clinical leaders and employees alike.  To positively impact and influence culture shifts in healthcare organizations, leaders must exhibit a high level of emotional intelligence and be able to read and respond to situations as the situation dictates.

Leaders decide on a vision and then align the followers’ mindsets with goals that are consistent with the vision by creating shared meaning. Shared meaning is vital to positive culture shifts which lead to positive organizational outcomes; however, organizations struggle to create shared meanings.  Tourish (2014) states that “leadership is not a discrete phenomenon with easily observable causal relationship, inherently powerful and charismatic leaders, measurable outcomes and clear demarcations between categories of meaning and behavior” (p. 84).  The appropriate leadership style encourages an on-going process of impactful change.

Planning is identified as a success factor for positive organizational outcomes and assists with identification of the scope of the change initiative and the organization’s direction (Kash et. al, 2014).  The plan must also address market forces and external demands by considering competitors, the implementation of evidence-based practices, and bench marking and performance assessment.  Implementation strategies vary, and change is adopted with differing degrees across an organization and can have an adverse effect on an organization’s culture.  The amount and disparity within change initiatives in an organization can also cause fragmentation within an organization’s culture.  Organizational challenges, such as competing priorities and misaligned strategies, make the need for adoption of an implementation plan critical to success. Therefore management and adjustment of the plan as needed is also integral to the success of the planned change.   Kash et. al state “the emergent approach to change assumes that change is not linear or sequentially planned and implemented over time but rather is an open-ended process requiring adaptation and some planned changes and initiatives” (p. 67).  A flexible plan encourages alignment of goals and resources with the organization’s vision.  To understand the cultural implications of the plan, the following questions should be addressed: 1) Is there potential to coordinate the efforts of change across the organization? 2) Is the change initiative perceived as opposed or congruent to the organization’s mission, vision or values?  3)  Will the initiative achieve its stated objective?  If those questions can be answered affirmatively, then the cultural impacts of change may be negligible (Nystrom, 2014).

Communication as a success factor and component to successful implementation of strategic change addresses the need to communicate both existing and upcoming strategies and change initiatives, relates to the need for leadership to explain expectations and defines how areas of improvement can be identified (Kash et. al 2014).  Tourish also expresses leadership as a “communicative process that produces leader-follower categories, identities and relationships (p. 80).  Communication leads to shared experiences between leader and follower and produces a shared sense of community which contributes to shared culture experiences.  Communication also ensures that there is appropriate access to information, such as reports and reporting and contains aspects of accountability and transparency throughout the organization. Communication and transparency both have positive impacts to an organization’s culture.

Implementation of the plan touches several of the factors critical to success of strategic change in healthcare organizations, namely business processes, people and engagement, service quality and client satisfaction, financial resources and accountability.  Business processes define how operational activities should work.  The success factor of people and engagement involve hiring, training and education, rewards for performance and reducing turnover; it relates closely to the change model component of providing training and education.  The most important aspect of strategic change management is how the people react to the change; people directly influence organizational outcomes. Engaged people with the appropriate training directly impact service quality and client satisfaction.  Healthcare systems rely on clients’ willingness to recommend their services as a means of growth, therefore the satisfaction of employees and clients alike is integral to positive organizational outcomes.  If strategically planned change shows fiscal responsibility, cost is managed, but there will also be an increase in income, impacting the healthcare system’s financial solvency.


An organized step-by-step approach to strategic change will impact those factors deemed to contribute to the successful implementation and adoption of change.  Successful adoption of change correlates with affirmative culture shifts that influence positive organizational outcomes.  When change is planned, organizational analysis, identification of leadership and leadership support, creation of an implementation plan and monitoring and adjustments to the plan as needed, communicating and implementing the plan and providing training and education are all necessary steps to ensure achievement.  Each step in its own way contributes to the success factors identified as follows: culture and values, business and processes, people and engagement, service quality and client satisfaction, coherent planning, financial resources and accountability, leadership, market forces and external demands, access to information and communication.

Appendix A – Definition of terms

Electronic Medical Record (EMR) – An electronic medical record (EMR) is a digital version of a paper chart that contains all of a patient’s medical history from one practice. An EMR is mostly used by providers for diagnosis and treatment.

Meaningful Use – a mandate of the PPACA which mandated the use of technology in medical care to improve quality, safety, efficiency, and reduce health disparities; engage patients and family; improve care coordination, and population and public health; and maintain privacy and security of patient health information.

Patient Protection and Affordable Care Act (PPACA) – Passed in March 2010, the PPACA is the Obama administration’s signature healthcare reform which mandates changes to health insurance and government insurance programs such as Medicaid and Medicaid. The PPACA is also commonly referred to as “Obamacare.”

Telemedicine – the remote diagnosis and treatment of patients by means of telecommunications technology.


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