Number of Employees
Health Care and Social Assistance
Providence Health & Services Holds Its Values
The ongoing economic situation in the United States has had a negative impact on the mental and physical health of US and world citizens. Since the recession began in 2007, there have been a record number of American workers seeking disability benefits. The level increased to “a record high of 2.94 million in 2010 and has remained above 18 per 1,000 workers in the past three years — a far higher rate than in previous recessions” (Ciancio, 2012). While only 35% of these requests were approved, the Employer Measure of Productivity, Absence and Quality (EMPAQ) annual survey also reported an increase in the median annual incidence of leave under the Family and Medical Leave Act (Ciancio, 2012; PR Newswire, 2011).
It comes as no surprise, given the financial situation and slower than hoped for recovery, that many companies have taken measures to increase efficiency and reduce costs through outsourcing functions that are not related to the primary services of their business. For instance, a manufacturing company might outsource some functions of the human resources team. Even in the face of these challenges and changes, organizations can maintain their values and continue to demonstrate how they value their employees. Providence Health & Services (Providence) showed particular care in ensuring the organization’s values followed its employees into services received in partnership with outside vendors. The vision and values are foundational in Providence’s history as a nonprofit Catholic health system and shaped their leadership’s approach to this process. Akbar Sultan, Providence’s Director of Compensation, Absence and Disability Management (ADM), Human Resource Information Systems, and Human Resource Service Center in the state of Oregon, was selected to manage the review and change management related to the organization’s absence and leave management process. He brought his operational expertise to Providence’s aim to deliver an exceptional leave management experience for its employees and managers by “easing their way.”
The following is an interpretation of how Providence’s vision and core values played out in the change process that Sultan led with the enlisted expertise of Mercer consultancy and Sedgwick, which became Providence’s absence and leave management co-source provider. The initial stages of the resulting plan will be reviewed, along with examples of the ongoing influence of these values.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset — their people. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC).
Sedgwick is the leading North American provider of innovative, technology-enabled claims and productivity management solutions, delivering a world of expert resources to a diverse client base through more than 10,000 colleagues across the U.S. and Canada.
Stewardship and Excellence
At Providence, stewardship implies the best use of resources, and excellence implies high standards in contributing to the transformation for a better tomorrow. These values create the organization’s corporate culture of continual improvement. The economic downturn gave the additional impetus to review processes and make judgments about the organization’s efficiency and cost-effectiveness.
Business case for a change: Providence began with an assessment of its existing ADM process from this view of stewardship and excellence. The assessment included reviews of operations, policies, financial status, and leave and absence data, as well as a file audit. The assessment found a lack in some controls in relation to ADM best practices. For example, while Providence’s leave policy required employees to follow timely reporting standards, actual practice resulted in longer than expected leaves. These overly generous leaves were in part due to lack of technology or staff to track the duration of leave and note when employees on leave should be returning. Also revealed were the overtime and agency staffing costs of covering for staff who were absent from work. In Oregon, where the ADM was first reviewed, Providence found the following costs: direct pay of more than $10 million, other indirect costs of more than $14 million, and supervisor time costing more than $12 million. The data collected created a clear picture of the business case for change.
The Providence Vision
Together, we answer the call of every person we serve:
Know me, care for me, ease my way.®
For more details, click here.
Respect, Compassion, and Justice
For Providence, respect implies recognizing the uniqueness and dignity of every person and communicating with integrity; compassion implies nurturing the spiritual, physical, and emotional well-being of one another; and justice implies upholding the right of everyone to the basic goods of the earth and working for the common good. These values also undergirded the needs assessment and were evident in the approach through the involvement and input of a variety of stakeholders.
Listening to noise in the system: Sultan and Providence’s leadership not only looked at the bottom line, but they also used a lens reflective of respect, compassion, and justice to respond to the “noise in the system” through stakeholder interviews. Multiple challenges were discovered from frustrated managers who voiced that they could not manage their teams effectively and fulfill their intention of providing excellent service to patients when several members of the team were out on leave. The requirements to manage the work of individuals on leave put additional pressure on supervisors and team members. Finally, the administrative requirements in processing the leaves themselves were burdensome and at the same time unclear, leading to additional frustration for staff and managers.
Providence’s New Framework
These assessments led Providence’s leaders to recognize that ADM was a strategic business priority. Further, they recognized that taking a long view of the process would provide the most meaningful contribution to their community of managers, employees, and patients. Providence’s new framework included the following steps for planning and expectations:
Leading change management (one to three years)
Stakeholder education, support, and means to raise issues to leadership
- Quality of the customer experience
Organization-wide reporting strategy
Providence-specific, meaningful, actionable metrics
Vendor partnership, management
Continuous process improvement
Building a proactive return-to-work culture
Developing integration with health care management
How to co-source effectively: Sultan understood that it was crucial to show the same level of care for Providence employees as the organization provides to patients. After the in-depth assessments, various models for change were reviewed, which resulted in a best practice philosophy and approach in a “co-sourced” solution with a vendor partner. Sultan shared that traditional outsourcing would be a misnomer or the wrong approach, as there has to be a fluid end-to-end experience to truly “ease the way” for anyone. In a fully outsourced ADM process, the customers, in this case employees, who go on leave, find themselves in a confusing and fragmented experience. Sultan selected Sedgwick as Providence’s external vendor partner and intended for Sedgwick to act as an extension of Providence. To maintain the connection with Providence, an internal team was put in place to facilitate the process. Providence, as a customer of Sedgwick, would only move forward with the expectation of excellence and adaptability of their services. This reflected a commitment to the Providence employee experience. The Providence vendor team selected specific Sedgwick representatives who would reflect the culture and values of Providence that were core to “easing the way” of Providence employees in the ADM process.
The Providence vendor team was instrumental in asking potential Sedgwick representatives questions such as, “If you were to choose between being right and being kind, what would you choose and why?” as a part of the selection process. The Providence vendor team also spent time training the Sedgwick representatives in the culture and values of Providence, so there could be a seamless experience for Providence employees who were asking questions about or applying for leave. This was a new kind of client partnership experience for Sedgwick. The participation and cooperation of Sedgwick, as a crucial stakeholder, was a part of the success of the process.
Creating a fluid employee experience: As the co-sourced solution was put in place, a great deal of care was spent in viewing the ADM process from managers’ and employees’ perspective. There was an emphasis on making the process compassionate and simple from a user’s perspective, as well as including measurable outcomes for the business perspective. Guides were produced to demystify the leave-of-absence process for employees as much as possible. Guides for managers helped clarify how to talk with employees, expressing concern for the employee while protecting privacy and communicating the employee’s responsibilities and need for accountability. In essence this was an effort to translate the legal jargon so that the process could be understood by all. Responsibilities for all parties — human resources, manager/supervisors, and employees — were made clear so the process could run smoothly. Some initial feedback indicated that employees had concerns because they did not feel the change was entirely compassionate, as the new process resulted in a closer review and, where warranted, a reduction in the numbers of days to be taken as leave. Space for dialogue was provided to voice this opinion through team meetings. In response, Sultan and Providence’s leadership reminded the group that compassion had to be balanced with the core value of stewardship, which required judicious fiscal management. As the saying goes, “No Margin, No Mission.” In other words, Sultan’s team needed to better manage the ADM process to reflect the values of justice and stewardship in the best use of resources, as well as caring both for employees on leave and for those still working, who for a time would carry a heavier load. Without the responsible use of resources — both financial and human — there could be no service to each other or to patients.
“No Margin, No Mission” is a phrase credited as being applied to healthcare by Sister Irene Kraus, who believed that strong fiscal management, not just charity, is what modern healthcare organizations need to fulfill their mission.
Sister Irene Krause of Daughters of Charity National Health Care System is a Healthcare Hall of Fame inductee.
Continuous improvement and future program development: The first year of the ADM change management focused on tactical changes. Moving forward in the new framework, Providence began continuous improvement through surveying the internal vendor team to see what could be done better.
Similarly the expectation of quarterly review was put in place for the vendor team in the ongoing partnership with Sedgwick. The review would highlight needs to refine the process or provide additional training or refresher sessions, which would allow the seamless representation of values to continue.
What factors contributed most to success?
Shared commitment between the vendor team and Sedgwick
What were the most challenging aspects?
Providing clarity of expectations
What have you learned that you would do differently in the future?
What would you recommend to similar teams?
Communicate, communicate, communicate!
Two other areas for improvement that were revealed in the various stakeholder assessments were to establish a vigorous return-to-work culture and to develop integration with the larger healthcare management process across other Providence regions. Through taking these steps and monitoring progress, Providence will continue to hold to its values to ease the way of employees when they are in greatest need.
What Might Your Organization Adopt?
The ADM process that Providence put in place highlights the organizational possibility to manage your absence and disability in a way that can be substantially tied to your organizational core values and to caring for employees.
Dependent on your organization’s entry stage to this dialogue, you might adopt:
A review of whether a similar assessment of your ADM strategy is needed
A collaboration with your co-source vendor partners to ensure that a similar seamless approach reflecting your culture and values is in place to care for your employees
A focus of your efforts on creating a robust and collaborative approach to “return-to-work/stay-at-work” initiatives
Adopting these practices also has broader implications for the economy. Chris Low, chief economist at FTN Financial, said that over time, disability will constitute roughly $250 billion — or 1.6 percent — from total output each year once the economy returns to full employment, probably within the next five to seven years which will widen the budget deficit (Ciancio, 2012). As we began, we close with the cyclical nature of this challenge that reinforces the need for businesses to focus on their people — their precious human capital and resources. Focusing on the health and return to work of employees can help avert some of the challenges faced by the world’s economies.
About Providence Health & Services
Providence Health & Services is a not-for-profit Catholic healthcare ministry committed to providing for the needs of the communities it serves—especially for those who are poor and vulnerable. Providence Health & Services continues a tradition of caring that the Sisters of Providence began more than 155 years ago.
In 2012, Providence affiliated with Swedish Health Services, expanding both organizations’ ability to carry out their individual missions. With this affiliation, the combined scope of services includes 32 hospitals, 350 physician clinics, senior services, supportive housing, and many other health and educational services.
The health system employs more than 64,000 people across five states — Alaska, California, Montana, Oregon, and Washington.
By Kate A. Burke
Last Updated: January 2013
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Colleen Wadden, Director, External Communication
Ciancio, A. (2012, May 7). Job disability rolls rise during recession. Insurance Journal.
Recession fueled decline in short and long-term disability claims in 2009, National Business Group on Health’s EMPAQ report finds: Short-term disability costs also declined, but long-term disability costs surged. (2011, January 18). PR Newswire: United Business Media.