Cost-Effective HR at Physician-Owned Hospitals is Possible: 5 Things to Know

Stuck in size between large hospitals and small ambulatory surgery centers, physician-owned surgical hospitals face a breadth of challenges in today's healthcare environment, including in the human resources department. Large hospitals can afford to hire a several-member HR department while smaller ASCs either outsource these responsibilities completely or add them to the job description of other employees.

Physician-owned surgical hospitals, like Medical Center of Elizabeth Place in Dayton, Ohio, where Alex Rintoul is CEO, employ enough staff to require professional HR services but don't have the extra revenue to spend on several HR employees. In this situation, hospital leaders can hire a single HR employee, enlist the services of an outsourcing company or a combination of the two.

Mr. Rintoul has worked with MedHQ, a human resources outsourcing company, to find the best situation for his surgical hospital as it evolved through the years and continually adapts to the healthcare environment.

Initially, Mr. Rintoul completely outsourced HR to MedHQ, but as the volume of his staff grew, he wanted to bring an employee onsite to work with the staff members on their everyday issues. Having limited funds, he could only afford to hire one entry-level HR employee, who was helpful in managing payroll issues but ill-equipped to solve more complex problems. After a while, Mr. Rintoul decided to completely outsource his HR needs again, but this time with a twist. He contracted with MedHQ for an HR professional to spend one day per week at the hospital and be available on the peripheral days when complex issues arose while the routine payroll and benefits issues were managed at the MedHQ central office.

Mr. Rintoul discusses some of the HR challenges he faced at his surgical hospital and how outsourcing the expertise was beneficial for the facility.

1. Adaptability to change.
Healthcare is an ever-evolving field, and in the next few years the changes could be more rapid than ever. Managers of physician-owned hospitals must be especially keen and remain resourceful when working within their budget. A human resources department is a necessary component of the business, but managers sometimes need to brainstorm creative ways to meet these needs while still working within the hospital's budget.

"Usually managers who are working in organizations like mine are fairly resourceful and good at working on a budget, which means thinking outside the box," says Mr. Rintoul. "The MedHQ people have been good at listening to us and were willing to brainstorm with us to solve our problems. They listened to our ideas, and gave their opinions on how to move forward."

2. High staff turnover. Best practices across the board say that high staff turnover is bad for business because it takes time and energy to train employees, and losing their expertise is a drain on hospital resources. There are several reasons why a surgical hospital might have high turnover rates, including low employee satisfaction and higher wages at competing facilities. To meet these challenges head-on, hospital CEOs must have a sophisticated HR professional who is able to work with employees and executives to keep the turnover rate low.

The HR professional from MedHQ that visits Mr. Rintoul's hospital every week is able to deal with these types of issues because he doesn't have to deal with the day-to-day payroll and benefits issues. "I had my services increased out of MedHQ's central office so that I could contract with MedHQ to have the seasoned HR professional that I couldn't afford every day to visit once per week and handle the challenging HR issues," says Mr. Rintoul. "As my needs changed and new problems developed, MedHQ worked with me to solve my immediate problems and then looked at how to plan going forward to meet potential new HR complications."

3. Dealing with conflict between management and employees.
There are times when hospital executives might need to make a decision that upsets employees in the short run, but is better for the hospital in the long run. For instance, if the hospital experiences an influx of patient volume, employees and surgical staff will be working longer hours at a busier pace than before. Some employees may not appreciate the overtime and want additional staff members hired to cover the extra time. However, hospital CEOs know hiring more staff members just for a potentially short period of patient influx is a bad idea.

"Increased surgical volume is good for me, but my OR nurses and technical staff might be stressed because they are working longer hours," says Mr. Rintoul. "I don't want to hire more staff right away because next quarter there might not be such an influx. There needs to be someone here who can listen to the employees and discuss with them where I'm coming from, and vice versa. We needed someone who can help us work out a solution together."

The professional HR person visiting the hospital every week was able to tackle this issue as an impartial party and explain to employees why new staff couldn't be hired.

4. Keeping employees engaged.
Employee engagement is an important aspect of employee satisfaction and low turnover rates. In the surgical hospital, several factors can spark malcontent among the employees that require delicate HR handling. In some cases, as was mentioned in the previous point, the central administration can cause stressors on the employees that need fixing. In other cases, department heads or managers may lack the necessary leadership skills to keep their employees happy, even if they are brilliant medical professionals.

"When appointing our department heads, we look at individuals who have outstanding clinical skills and patient satisfaction, but these people aren't always good managers," says Mr. Rintoul. "When I see a manager who has rusty leadership skills, I ask our HR professional to speak with the manager about meeting employee needs and keeping their department engaged."

5. Maintaining impartiality in the workplace.
It's important that an HR department in any company maintains an impartial stance when it comes to conflict between the management and employees. In large hospitals, HR departments can hire a few professionals who are strong advocates for the employees and others who are advocates for the management, but in a small specialty hospital the single HR entity must appear impartial to both sides. The impartiality helps gain the trust and respect of both sides in a conflict.

"The hospital needs someone to bring wisdom to the table and bridge the gap between employees and management to achieve what we want to achieve for the organization," says Mr. Rintoul. For example, when Mr. Rintoul decided to automate several services that were once provided by the entry-level HR professional, there were some employees who didn't appreciate the change. With the new automated system, employees are able to see their health benefits and W4 deductions online and make changes when the need arises, instead of visiting the HR department.

"It was more efficient for us to implement the automated computer-based system, which also made the employee information more accessible to them," says Mr. Rintoul. "Some people didn't want to learn the new computer program and preferred working though the HR person. We understood that this would be a change for our employees and some of them were not savvy with technology, but we told them that doing things online is the trend now because it is more efficient. You may not be comfortable with it, but it will work out better because we can save money and put it back into the organization."

Mr. Rintoul says this approach worked, for the most part, and employees were able to adapt to the new system. The transition was made smoother by MedHQ personnel who were able to deliver additional training to the employees to make sure they were comfortable with the system.

Related Articles on MedHQ:

8 Key Human Relations Challenges for a Surgery Center

Forming a New Surgery Center: 3 Solutions to Common Mistakes

Are You an Excellent Employer?: Professional Employer Organizations for Your Healthcare Human Resource Functions

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