About this series: Best Practices commissioned Jay Fitch to write a 12-part series on how EMS agencies and fire departments can adapt to the extreme pressures to operate more efficiently while exploring entirely new paradigms of how prehospital care can be delivered. He uses the concepts of organizational agility to provide a blueprint for the “strategic management of uncertainty.” The graphic above shows the four dimensions of organizational agility and the 11 factors that impact agility; each installment of this column will examine a different factor through the prisms of the four dimensions.
Fitch serves on the Best Practices editorial board of advisers and is a founding partner of Fitch & Associates, which has provided strategic and operational consulting services to EMS and the fire service for nearly three decades. To see the previous installments of this series, along with an agility self-assessment tool, visit fitchassoc.com/agility. — Keith Griffiths, editor in chief
With entire economies shifting almost overnight, the ability to adjust quickly and well can mean the difference between an EMS organization that is thriving and one that is dying. But EMS has been talking about sustainability for so long, and so much, that it has become a Chicken Little “The sky is falling!” issue. (That is, unless your service actually has been hit by falling objects, such as layoffs, severe capital cutbacks or other significant reductions; then it is indeed a real issue.)
In this economic environment, fragile organizations tend to take a wait-and-see approach. Agile organizations, on the other hand, are proactive, investing energy in multiple strategies so that they are able to take strategic advantage when the time is right. They understand that preparing for change means being good stewards of all resources, including people, money, capital and other organizational assets.
Now let’s take a look at financial stewardship as it relates to the four dimensions of organizational agility.
Awareness and alertness
There are diverse opinions as to whether EMS is alert to proposed changes in funding mechanisms. In a recent survey that we conducted at Fitch, almost two-thirds of the chiefs responded that they highly agreed with the statement, “Changes in funding mechanisms are recognized at all levels as a factor likely to impact future fiscal sustainability.” Among caregivers, less than one-third rated the same statement highly.
This demonstrates that EMS leaders think there is broader understanding of the impact of health care reform and awareness of other financial issues than may actually exist. The survey results underscore the point that we must communicate financial matters to our staff and teach fiscal stewardship. Leaders must be alert to how decisions made by individuals at all levels will affect the financial health of the organization.
Leadership orientation
Several months ago, we were charged with developing future options for a major department. When reviewing the draft plan, one chief officer complained, “You didn’t present an option that involves significantly expanding our subsidy.” This leader obviously is not in touch with the community’s financial situation.
Being truly alert to our changing financial reality can be likened to the story of how one boils a frog. It’s said that if you toss a frog into boiling water, it will hop out and keep going; but if you place it in a pot of cool water and gradually raise the temperature, it won’t. Agile organizations keep going; fragile organizations get financially boiled when they don’t pay attention.
Leaders of fragile organizations rely primarily on key performance indicators and spreadsheets to constantly prune expenses when under pressure. Agile organizations take a more strategic, long view to ensure that they remain good stewards by increasing revenue sources or radically rethinking how the work gets done to decrease costs without negatively impacting patient outcomes—or, in the case of fire departments, dollar losses from suppression.
High-value processes and structures
What are the performance-based processes and structures that facilitate good fiscal stewardship? They involve strategic planning, developing financial rigor long before the crisis and using zero-based budgeting concepts to constantly question, What evidence supports the way we are doing business? What are the opportunities to rethink the way we do our work, and how do we employ them to our stakeholders’ financial advantage?
The Regional EMS Authority (REMSA) in Reno, Nev., is one organization that does this. Constantly thinking about how it could function more effectively, it is consistently recognized for its clinical outcomes, response time performance and high customer satisfaction—all without the benefit of local tax subsidies. “We have to be good financial stewards and constantly innovate,” says CEO Patrick Smith. “If we don’t, we simply won’t survive.”
Well, not only are they surviving—they’re getting some big recognition for their efforts. REMSA recently was awarded one of the coveted Center for Medicare/Medicaid Services innovation grants to create a community health early intervention team (CHIT). The $10 million, three-year grant will be used to develop the team, which will respond to lower-acuity and chronic disease situations in urban, suburban and rural areas of Washoe County. CHIT is designed to reduce unnecessary ambulance responses, as well as hospital admissions and readmissions, while improving patients’ health care. A central component of the program will be the adoption of a new, non-emergency phone number to provide an alternative pathway to care for patients with lower-acuity problems.
Over a three-year period, REMSA’s program will train an estimated 22 workers and create an estimated 22 jobs. The new workforce will include community paramedics, communications specialists, an educator, continuous quality improvement coordinators, an outreach coordinator, an information technology specialist, a statistician, an administrative support specialist and a project director.
Savings from the program are expected to exceed the expenses associated with the demonstration grant and, if successful, will yield a significant return to the community.
But it takes more than executives thinking outside the box for organizations to be good financial stewards. Accountability processes need to be in place to ensure that all runs are correctly accounted for and billed, validating that outside vendors are not overcharging for services or supplies and that crews are not calling off and then taking overtime in a way that maximizes costs. These routine processes are part of practicing fiscal stewardship.
It also involves making good, thoughtful decisions on a daily basis. Do we really need the additional unit this week to achieve response times? If not, can it be used to accomplish other important projects that the supervisors don’t have time to get to, such as catching up on QI processes or supporting community/marketing efforts? Agile organizations flex to constantly use all available resources to support the organization’s mission. When fiscal stewardship is part of the organization’s culture, it’s part of everybody’s job to seek out these opportunities.
Development of a performance-based culture
Culture is important to an organization’s agility because it is the shared values and beliefs that help individuals understand how the organization functions and that provide them with guides for their behavior. And in the event that strategy and culture are not interconnected, culture wins.
I remember, when I was a basic EMT, using gauze pads as note pads and then discarding them. One of my partners, who had recently completed a light duty assignment in purchasing, grabbed my arm one morning and said, “Hey, do you know how much that waste is costing us? You’re spending our raise.” This system had a culture of stewardship where individuals recognized that little things could have a big impact.
Agile organizations begin teaching stewardship by including it in the organization’s vision and values statements. They might include a statement such as, “We take responsibility for our operational and financial performance, both the results achieved and the resources consumed to achieve them.” In new employee orientation and ongoing management briefings, the importance of how both operational and financial processes work together should be addressed.
Other strategies to weave stewardship into the culture include providing timely feedback on costs and budgetary performance, particularly those items that caregivers can have an effect on. Reinforcing those actions with meaningful incentives also underscores the importance. For example, funding a significant gain-sharing program tied to extending the useful life of vehicles is one way to anchor positive behaviors. Performance can be tied to particular shifts or to individuals by using devices such as Road Safety to develop individual performance metrics.
The opportunities to teach and model stewardship are endless for EMS. These efforts can become a strong positive focus for organizations that link strategy and culture and help move your system toward higher levels of agility.
