Instilling a mediation-based conflict resolution culture. (Conflict Management).

HOW WOULD THE employees and managers in your integrated delivery system answer these questions:

1. How do your rate your organization 's responsiveness to employees with disputes?

2. Cooperation between employees, departments, and work teams is?

How do you think providers and members would assess your health plan if asked:

1. Rate your health plan's responsiveness to disputes?

2. Were you personally satisfied when you had a dispute with the plan?

The health care industry is in the throes of unprecedented change. Conflict thrives and grows in the increasingly competitive and uncertain operating environment. Conflict impacts health care organizations' performance in three arenas: (I) patient grievances and health plan member disputes; (2) internal employee and management disputes; and (3) payer, provider, and vendor, disputes.

In all these areas, "Grief Budgets" detract from an organization's health mission and erode its bottom line much more than is commonly recognized. A Grief Budget is the dollar impact of (1) hard, quantifiable costs, such as appeals, arbitration, and litigation, and increased medical cost ratios that are relatively easy to quantify; and (2) soft costs due to employee anger and turnover, lack of provider cooperation and patient hostility, negative public and government relations, decreased vendor compliance from poorly handled disputes, and conflicts that are ignored.

This article offers a strategy to solve conflict at an early stage, with measurable results that strengthen profits and improve customer service. In addition, it proactively counters government and consumer pressure for greater regulation and instills a mediation-based conflict resolution culture throughout your organization. The strategy evolved from our observation that, although managers. supervisors, unions, human resources personnel, health services and utilization staff, and risk managers deal with conflict every day, they face two hurdles that typically prevent them from achieving early collaborative problem-solving and (win-win) settlements. As a result, the conflict grows.

First, they are not perceived as neutral by the conflicted parties. Second, the formal and informal venues for conflict resolution, such as union grievance procedures, member appeals, arbitration, and litigation, are based on adversarial (win-lose) relations in which one side usually must 'lose.' Moreover, the conflict and its results often are a matter of public record. That is, the process itself tends to detract from the solution. Mediation, on the other hand, is non-adversarial, neutral, pro-active, and collaborative. It is confidential and protects the future relationship between the parties whether the dispute involves employees, patients/health plan members, providers, or vendors. The challenge, therefore, is to strategically implant mediation into the health care organization's structure, to intercept and solve conflict early on.

Stakeholders' underlying needs in dispute resolution systems

Conceptually, dispute resolution systems are an organization's attempt to balance respect for the individual consistent with meeting the organization's business needs and goals. To this end, it is important to incorporate employees', managers', providers, patients/members', and vendors' needs when a dispute resolution system is designed.

Our experience is that the needs of these stakeholders in a health care dtspute resolution system consist of four basic themes:

1. They need to be heard

2. They need to understand the system

3. The system should help them identify and clarify their issues

4. It should provide them with a sense of satisfaction

What is mediation?

As opposed to other dispute resolution approaches, mediation best meets this balance of organizational goals and Individual needs, Mediation is a process in which disputing parties meet with a trained, impartial, third party mediator. The mediator hears all sides of the problem and helps the disputing parties achieve a satisfactory resolution, The primary function is to create constructive communication between the parties in a controlled forum, where they can explore their needs and build a mutually satisfactory agreement.

Unlike an arbitrator or judge, the mediator has no power to impose a decision on the parties. Instead, the mediator helps them explore their concerns, construct their own solutions, and create a mutually acceptable agreement. Using internal mediators, a health care organization can address disputes before they escalate. As with arbitration and litigation, the mediation process can devise legally enforceable remedies to disputes if the parties desire it.

Perhaps most important, mediation offers a cooperative forum for resolving disputes that preserves ongoing relationships, is confidential, and often empowers the disputants. One side need not necessarily lose; there can be a win-win' result. Mediation is faster than arbitration or litigation, costs less, and can be applied at an earlier stage in disputes.

Within health care settings, mediation translates into tangible results (please see Figure 1), including:

a) Keeping care in the network and decreasing benefit exceptions

b) Improving patient/member retention and provider satisfaction

c) Reducing employee turnover

d) Enhancing communication between departments, management teams, family members, and providers

The mediation process

A mediation process that works well for health care organizations employs six distinct stages. They are: (1) the mediator's opening monologue, (2) the parties' opening statements, (3) setting the agenda, (4) brainstorming negotiations, (5) writing the agreement, and (6) closure.

Each party fully states what is at issue, for them. An agenda is set, and proactive but controlled discussions, under certain ground rules, are encouraged toward resolving the issues. These continue until each party receives full satisfaction. At that point, their decisions are then documented in a written agreement that may be enforceable as law, as with any other settlement or contractual agreement.

A unique and beneficial attribute of agreements reached through mediation is their high compliance rates. When parties create their own terms, rather than have a decision made for them, they become emotionally responsible or vested to that agreement. It is that vesting and ownership of the agreement that results in voluntary long-term compliance, although legal enforcement is available. For example, a series of 41 mediation agreements that we tracked through the California court system for two years has a compliance rate of greater than 95 percent.

Parties in a dispute typically cannot. or will not, try to understand the opposing parties' position. It could be that whenever they are together and they try to communicate their differences, their discussions erupt into arguments that leave them frustrated and angry, and the dispute continues. Their hostilities often escalate, money is spent in an effort to win rather than resolve, valuable time is lost, frustration and anger mount, and, in the end, everyone loses.

Litigation and arbitration formalize that adversarial relationship. The mediation process, on the other hand, is based on cooperative problem-solving and focuses on each party's needs, not a narrow set of legal remedies. By expanding the range of remedies available, both parties can often find a way to win.

Finally, there is no risk to trying mediation. Since all agreements are entered into voluntarily, if a party does not like the outcome, they need not sign the agreement. The court system is always available, The parties' voluntary consent means that the agreement was fair, and met their needs. Each feels satisfied and that they have "won"--that is, they have had their needs met in an agreement they can live with and consider fair-and they are often empowered by the process itself. It is often a "win-win" outcome.

Steps for installing a dispute resolution program

The Conflict Avoidance and Excellence (C.A.R.E.) Program is a dispute resolution system that we have worked with health care organizations to implement. The steps required to install C.A.R.E. provide a good template for what is typically needed (please see Figures 2 and 3). The system incorporates three features: (1) assessment, (2) mediation skills training, and (3) designing and implementing an in-house conflict resolution program.

A health care organization's decision to use mediation skills training and/or implement a dispute resolution program must be developed in stages. As mediation is itself a collaborative approach to problem-solving, the same approach is needed when an organization and its employees adopt a mediation program. Employee buy-in is necessary, especially where a collective bargaining agreement exists. Every organization has a different baseline culture and has unique dispute resolution needs. A program should be tailored, on a modular basis, to design a program that fulfills your needs and avoids duplication of your existing strengths and resources.

Stage 1: Assessment process

An assessment is required to: (1) review existing programs, if any; (2) determine if there is a need for a conflict resolution program; (3) become familiar with the organizational culture; and (4) determine where the organization desires to implement conflict resolution.

The assessment process contains several components, including directed confidential interviews with selected managers and employees. In addition to determining the organization's needs and gaining the individuals' insights, these encounters set the foundation for mediation and explore possible program alternatives. Assessing an organization's Grief Budget is also required, the hard costs and soft costs due to disputes that are poorly handled and conflicts that are ignored, through software-based programs and more traditional survey instruments. Focus groups, confidential questionnaires, or a combination of both, can also be conducted. While focus groups allow a chance to validate expressed opinions and comments, employees tend to be more comfortable with the confidentiality provided by anonymous questionnaires.

At this point, the senior management team is apprised of the results and recommendations for further action. In a collaborative fashion, action plans for the next stages of implementing a dispute resolution system are developed.

Stage 2: Customer service and mediation skills training

The dispute resolution training needs of a given health care organization vary. Whether your organization establishes a formal mediation program, or simply desires employees to be better equipped to manage conflict, training is the next stage (please see Figure 4).

For some, simply having selected employees, such as the human resources staff, patient/member/health services contacts, risk managers, line managers, supervisors, union stewards, or others, receive customer service and mediation skills training as it applies to conflict management, is enough. These individuals would not be expected to serve as formal in-house mediators. Typically, between four and 12 hours of training is sufficient. To establish formal in-house mediation capabilities, selected personnel will undergo more extensive training. In our experience, an adequate level of expertise can be gained through a 25-hour basic training curriculum.

Objectives should include learning: the mediation process for dispute resolution: conflict management skills; how mediation improves employee and customer relations; skills for fostering proactive (collaborative) problem-solving and team building throughout the organization; and how to achieve "win-win" solutions rather than compromise settlements.

Selected participants need to be introduced to the administrative structure and details of implementing the proposed dispute resolution program. For environments with collective bargaining agreements, union members and stewards should learn that mediation does not threaten any union prerogatives, and can enhance their own effectiveness, and stature.

In-house mediators should have an opportunity for mentoring with experienced mediators once the training is completed to preserve the integrity of, as well as demystify, the mediation process. In particular, the trainee should co-mediate and observe a professional mediator in action. Mentoring can be ongoing to account for unique experiences and the addition of new in-house mediators.

Stage 3: Program implementation

The process of "going live" involves three sets of activities: (1) formalizing the procedures, (2) Initiation and process flow, and (3) orienting stakeholders.

Formalizing the procedures:

1. Draft procedures and create a formal structure for the program. How a dispute will be processed into mediation must be understood and accepted by all stakeholders, especially managers and supervisors.

2. Depending on your organization's needs, forms such as the following may be required:

a) Agreement to mediate 

b) Limitations waiver

c) Confidentiality agreement (includes waivers to confidentiality)

d) Written agreement

3. Update employee and patient/member handbooks to explain mediation and the program.

4. Revise employee contracts to include provisions concerning mediation and the program.

5. Agree on what data needs to be collected internally for the dispute resolution program.

Initiation and process flow:

1. A centralized system should be developed to coordinate mediators with cases. A program coordinator/employee must be assigned, someone well regarded for his or her integrity and ability to maintain confidentiality. This person will be responsible for data collection and dissemination and general administrative oversight. Due to multiple existing responsibilities, a member of the senior management team shouldn't be assigned this task.

2. Assigning disputes to in-house mediators will begin.

3. If the in-house mediation is successful, the matter is closed.

4. A written agreement is forwarded to the human resources and health services departments, and others as agreed. Although mediation is by law confidential, the parties can agree to waive confidentiality. The primary reason is that human resources, health services, or others will need to know the terms of the agreement.

5. If the matter is unresolved at this first stage level, there are several options such as using a professional mediator, upper management review, or reverting to other existing/mandated remedies.

6. Union issues should be processed through the in-house mediation program. This does not affect an employees right to file a grievance if an agreement is not reached through mediation, or even in tandem with the mediation. In the latter case, the grievance can be withdrawn after a successful mediation.

7. There will be certain disputes that will automatically go to outside mediators. Reasons for this include confidentiality and neutrality concerns and the magnitude of the conflict. In some instances, it may be necessary to assign two mediators (for example, a male and female in certain sexual harassment conflicts to avoid the appearance of bias.)

Orienting stakeholders:

The program must be properly introduced to employees and selected providers. Conducting brief presentations on-site will educate stakeholders about mediation and apprise them of the new program. An orientation will defuse potential resistance to perceived change, educate, raise awareness, and produce employee (including union employees) and provider acceptance of mediation. In certain circumstances, it may be necessary to provide certain key union representatives with personal presentations.

Conclusion

Rapid change in the health care industry breeds more conflict that feeds an organization's Grief Budget. The new millennium heralds a paradigm shift in the way health care organizations resolve disputes, both Internally and externally. Increasingly, competitiveness demands leaner, quicker, yet more humanistic solutions to conflict. Traditional adversarial methods are inefficient, expensive, lengthy, and too often leave both parties dissatisfied. Strategically applied mediation systems offer a better remedy.

FIGURE 1

MEDIATION IN HEALTH CARE

Mediation provides a cooperative, humanistic approach to solving all types of disputes that arise. Its many advantages over traditional, adversarial, dispute resolution include:

Cost and time saving

Mediation is an efficient short-term process. With less time spent, and without the usual costs associated with appeals, grievances, arbitration and litigation, mediation makes sense as a cost and time saving dispute resolution method.

No risk

Because the disputants do not surrender control of the proceedings or outcome, they risk nothing by trying it.

Preserved relationships

Traditional dispute resolution, especially arbitration and litigation, tends to destroy trust and ongoing relationships. Where it is important to preserve relationships and where people must continue to work together (for example, members, providers, and health plans), cooperative problem-solving provided by mediation is better.

Mediation allows organized and regulated confrontation between the parties. Once issues are discussed and energies are dissipated, reason can prevail. Oftentimes, an understanding and appreciation of the other parties' circumstances is gained.

Confidentiality

Confidentiality is the cornerstone of mediation, Parties can agree that everything said will remain confidential. In litigation, the statements, documents, and outcomes are, with rare exceptions, a matter of public record.

Creative solutions

Mediation expands the pie: it provides the opportunity for creative alternatives and options that address disputants' real needs, It is not limited to the narrow remedies afforded by legal precedent. People in conflict become fixated on winning, and focus only on getting what they want. That posture usually blocks creative processes and limits their exploration of alternatives. The mediation process moves people beyond that self-imposed impasse so that all appropriate remedies can be explored.

--Marc Miller, MD, MBA, & Daniel Wax, Esq.

FIGURE 2

STEPS FOR INSTALLING A DISPUTE RESOLUTION PROGRAM

1. Assessment:

* Grief Budget (financial impact of conflict)

* Anonymous survey questionnaire (management and employees' confidential assessment of the organization's approach to handling and resolving conflict)

2. Training:

* Customer relations skills

* Conflict resolution skills for management

* Mediation skills

* Selected in-house mediators

3. Implementation:

* Design Systems

* Provide forms and draft language for handbooks and contracts

* Orient employees and other stakeholders

* Mentor in-house mediators

* Provide professional mediators for in-house disputes when needed

* Collect data and follow-up

--Marc Miller, MD, MBA, & Daniel Wax, Esq.

FIGURE 4

In-hour Mediator Course Outline

* Navigating through conflict

* Active listening 

* Interest-based negotiations (win-win)

* Structuring the environment

* Mediator's opening monologue

* Parties' opening statements

* Setting the agenda

* Use of caucuses

* Brainstorming negotiations

* Writing the agreement

* Team-building

* Confidentiality

--Marc Miller, MD, MBA, & Daniel Wax, Esq

RELATED ARTICLE: SOLVING A SENIOR MANAGEMENT TEAM'S FOUR-YEAR CONFLICT

A health plan had recently experienced rapid growth, with a medical cost ratio in excess of 100 percent. A Grief Budget assessment revealed that unresolved conflicts were causing employee, marketing and broker relations, as well as vendor and outsourcing related costs. By far, the greatest financial hit was from problems with the benefit coverage decisions and provider relations,

One member of the senior management team reported that an estimated 20 percent of staff time was spent on issues resulting from an inability to clearly agree upon and define member, provider, and health plan responsibilities for keeping care in the network. Several managers noted that issues that seemed to be resolved were continually revisited because of dissatisfaction with the consensus decision. They reported that this problem had been going on for close to four years. As a result, a large percentage of utilization management decisions were being made on an exception basis and at an appeal level.

The resulting decrease in trust and communication between departments hurt morale. Line staff in various departments felt they were not being supported consistently by other departments on their coverage decisions and interactions with outside customers (members and providers).

Working with a dozen members of the senior management team, we applied the six-stage mediation process: (1) the mediator's opening monologue. (2) the parties' opening statements, (3) setting the agenda, (4) brainstorming negotiations. (5) writing the agreement, and (6) closure. Participants included the CEO and managers with responsibility for health services, medical management. provider relations, operations, member relations, finance, government relations, and marketing.

We focused on the management team's inability to agree on the extent to which health plan members were financially responsible for services they received outside of the network.

A key to making progress was understanding the different perspectives of individual managers and departments about what constituted adequate notification and education of plan members about their responsibility to stay in network. Deciding how much member outreach was needed was important because of: (1) the high percentage of members relatively new to managed care, (2) the health plan's desire to be seen as the "caring and member friendly H MO." and (3) the perception that the provider network (compensated on a contracted fee schedule basis) was not being helpful in keeping referrals and hospitalizations in the network.

The written agreement had several components. First, a provider and member education plan was drafted that met each management team members' requirements. This consisted of specific action items, including those responsible and deadlines, such as educational update mailings to members and providers, targeted training to providers, and rewording of 'Explanation of Benefits' documents.

A comprehensive set of grids was developed and agreed upon for handling authorizations and payment of services in a variety of situations, These included variables such as whether prior authorization was obtained, whether the case was urgent/emergent or non-urgent, whether the primary care provider or specialist involved was contracted, whether the hospital was contracted, and whether the member or provider had notified the health plan in a timely manner. In addition, a complementary action plan was agreed upon for providing consistent communication within and between the departments. Steps to monitor compliance were included in the written agreement.

As the elements of the written agreement are being implemented, positive results are already being reported. These include more productive meetings and working relationships. clearer direction to line staff on how to proceed with coverage decisions, fewer decisions being made on an exception basis or having to be made in appeals meetings, decreased out of network utilization, and greater confidence that the health plan can move its provider network into capitation agreements.

Marc Miller, MD, MBA, is the Chief Medical Officer and Vice President of Development of Solutions Mediation Systems, LLC in Laguna Niguel, California and is an Appointed Mediator for the Los Angeles County Superior Court. He can be reached by calling 888/562-4000 or via email at [e-mail].

Daniel Wax, Esq, is the Senior Vice President and General Counsel of Solutions Mediation Systems, LLC in Laguna Niguel, California and is a registered mediator with the Los Angeles County Bar Dispute Resolution Section. He can be reached by calling 888/562-4000 or via email at [e-mail].