IU Health brass pledges to boost morale after survey cites problems

Amid a tumultuous time in health care, employees at Indiana University Health “lack confidence in senior leadership” and don’t think they are consistently provided adequate resources to serve patients.

That’s what IU Health’s annual employee engagement survey concluded, prompting IU Health’s top brass to send out a companywide mea culpa earlier this month.

“Your feedback also told us we have not created the workplace we desire,” wrote IU Health CEO Dan Evans and Chief Operating Officer Dennis Murphy in the Aug. 7 memo, which was obtained by IBJ. They added, “We sincerely regret this, and we are committed to restoring your confidence in senior leadership.”

The frustrations among employees have not translated into markedly fewer patients. IU Health reported Aug. 10 that its number of ER visits and surgeries rose 0.8 percent and 1.6 percent, respectively, during the second quarter, while radiology exams surged 10.9 percent. The days that patients stayed at IU Health’s hospitals slipped 0.8 percent, part of a long-running trend of less inpatient care.

Those growth rates were less than IU Health enjoyed in its first quarter, when patient volumes in all those categories surged.

The employee engagement survey is conducted annually by Massachusetts-based Press Ganey, which can benchmark each hospital system’s scores against the roughly 1,500 other hospitals also surveyed.

On Press Ganey’s 5-point scale, IU Health scores “about a 4,” Murphy said in an interview. That placed IU Health below average among health care institutions, whose average score in 2014 was 4.1, according to Press Ganey. Some of its facilities were in the 95th percentile, Murphy said, and some were very low.

Overall scores on the survey among hospitals nationally were tightly clustered between 3.5 and 5.

IU Health’s scores on confidence in leadership were higher than a 3.5 out of 5, according to Murphy.

He noted that IU Health’s scores were only slightly worse than in previous years, but that IU Health’s executives decided now was the time to act—which sparked their memo.

“The biggest concern is that it is not improving,” Murphy said in an Aug. 14 phone interview. He added, “I don’t know how any good business remains viable without a committed and engaged workforce.”

Murphy stressed that IU Health’s experience is hardly unusual, noting that benchmark scores for employee engagement at health care systems has been trending down.

Hospitals have faced huge changes in recent years. Patient visits dropped off in 2013, causing IU Health, St. Vincent Health, Franciscan Alliance and Community Health Network collectively to lay off nearly 3,000 workers.

IU Health cut 935 workers that year, and kept cutting in 2014. Hospitals worried that reimbursement levels from the federal Medicare program were going down and set to grow more slowly in the future. In addition, Indiana waited more than one year—until February 2015—to expand health insurance coverage to low-income Hoosiers by using funding approved by Obamacare.

That decision, which launched the Healthy Indiana Plan 2.0 program, has boosted hospitals’ finances.

IU Health reported nearly $40 million less in uncollectible bills during the first six months of the year, compared with 2014.

“This decrease is due to a shift from self-pay to government payors, mainly HIP 2.0,” IU Health officials wrote in their second-quarter report to bondholders.

The latest numbers continue strong results that began last summer, when patient visits started surging again. Since then, IU Health has been hiring rapidly.

IU Health’s second-quarter profit from operations slipped a bit, primarily because it hired more workers. After adjusting for extraordinary items, IU Health’s operating profit was $151.2 million in the second quarter this year, down 3 percent from the same quarter last year.

At its downtown Indianapolis hospitals, where the biggest cuts were made, IU Health has hired 1,100 direct care and support staff this year, according to the memo from Evans and Murphy.

“A central and common concern you identified is staffing adequacy,” Evans and Murphy wrote about the employee survey results. “As a system, we will focus on this area of concern and address it.”

Working short-staffed has been one of the major complaints among nurses who have been trying this year to form a union at IU Health’s downtown hospitals. And early his year, a patient complaint sparked an Indiana State Department of Health investigation of IU Health's Methodist Hospital, which found staffing levels were low.

But IU Health leaders remain concerned about reimbursement challenges—including the megamergers among large health insurers—and is still trying to chop $1 billion in operating expenses. Those outside forces aren’t going to change, Evans and Murphy noted.

“We know the pace of change at IU Health as been hard on everyone,” Evans and Murphy wrote. “We cannot slow the pace of change that our patients and society demand.”

Therefore, hiring can’t be the only answer to IU Health’s employee morale issues, wrote Evans and Murphy. They lauded the three-year-old effort to use lean tools to improve the process of work in IU Health’s facilities. Those efforts so far have involved 6,000 of IU Health’s more than 30,000 employees.

“We cannot solve this problem by only adding staff,” they wrote. “We know many of our work processes are inefficient, difficult and wasteful of your talent and effort.”

Murphy said that one way IU Health will try to address low employee engagement is through frequent communication.

“Regular, direct communication from senior leaders, so that people know who we are, what we’re doing, in order for the strategy to be effective,” Murphy said. “Our goal is to have every employee working in a place that is above the 90th percentile.”