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Your Key to Certified Professional In Healthcare Quality Test Success

Copyright © 2005 by Morrison Media. You have been licensed one copy of this document for personal use only. Any other reproduction or redistribution is strictly prohibited. All rights reserved.

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From the Director of Test-Taking Strategy-

Dear future CPHQ Success Story:

Congratulations on your purchase of the most advanced test-taking manual

for the CPHQ certification test. Notice I did not say study guide- there are

plenty of decent study guides on the market, but that was not our objective in

writing this manual. Our goal is to seek and exploit specific weaknesses in

the CPHQ assessment, and then share those secrets with our customers.

Let’s be perfectly honest here- you’ve worked hard enough in college, and if

you want to spend hours in a study guide to boost your score, that’s a great

thing to do. In fact, we recommend at least a brief review of some of the

better study guides on the market. But that’s simply not enough to do well in

the high-pressure high-stakes environment of the test day. How well you do

on this test will have a significant impact on your future- and we have the

research and practical advice to help you execute on test day.

The product you’re reading now is much more than a study guide- it is a

tactical weapon designed to exploit weaknesses in the test itself, and help

you avoid the most common errors test takers make when taking the CPHQ

test.

How to use this manual

We don’t want to waste your time. This manual is fast-paced and fluff-free.

We suggest going through it a number of times, trying out its methods on a

number of practice tests.

First, read through the manual completely to get a feel for the content and

organization. Read the general success strategies first, and then proceed to


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the individual test sections. Each tip has been carefully selected for its

effectiveness.

Second, read through the manual again, and take notes in the margins and

highlight those sections where you may have a particular weakness (we

strongly suggest printing the manual out on a high-quality printer).

Finally, bring the manual with you on test day and study it before the exam

begins.

Your success is our success

We would be delighted to hear your CPHQ Success Story. Send us an email

and tell us your story. Thanks for your business and we wish you continued

success-

Sincerely,

The CPHQ Certification Secrets Team


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Table of Contents Table of Contents..................................................................................................4

Secret Key #1 – Time is Your Greatest Enemy ....................................................8

Pace Yourself ................................................................................................8

Secret Key #2 – Guessing is not Guesswork......................................................10

Monkeys Take the CPHQ................................................................................10

Success Strategy #2 .......................................................................................11

Secret Key #3 – Practice Smarter, Not Harder ...................................................13


Secret Key #4 – Prepare, Don’t Procrastinate ....................................................14

Secret Key #5 – Test Yourself ............................................................................15


Top 20 Test Taking Tips .....................................................................................16

General Strategies ..............................................................................................17

Make Predictions .........................................................................................17

Answer the Question ...................................................................................17

Benchmark...................................................................................................18

Valid Information..........................................................................................18

Avoid “Fact Traps” .......................................................................................18

Milk the Question .........................................................................................19

The Trap of Familiarity.................................................................................19

Eliminate Answers .......................................................................................20

Tough Questions .........................................................................................20

Brainstorm ...................................................................................................20

Read Carefully .............................................................................................21

Face Value...................................................................................................21

Prefixes........................................................................................................21

Hedge Phrases ............................................................................................22

Switchback Words .......................................................................................22

New Information...........................................................................................22

Time Management.......................................................................................22


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Contextual Clues .........................................................................................23

Don’t Panic ..................................................................................................23

Pace Yourself ..............................................................................................23

Answer Selection .........................................................................................23

Check Your Work.........................................................................................24

Beware of Directly Quoted Answers ............................................................24

Slang ...........................................................................................................24

Extreme Statements ....................................................................................25

Answer Choice Families ..............................................................................25

Why Certify? .......................................................................................................26

Score...............................................................................................................26

Seven Pillars of Quality.......................................................................................28

Emphasis on Outcomes......................................................................................31

Managed Care ....................................................................................................35

Medical Management Terms...........................................................................37

Organizational Effectiveness ..............................................................................42

What are Ethics?.................................................................................................47

What is Organizational Structure? ......................................................................49

Healthcare Organizations and Data Banks .........................................................51

HQCB/NAHQ...................................................................................................51

Health Care Quality Improvement Program ....................................................53

National Practitioner Data Bank (NPDB) .........................................................54

Healthcare Integrity and Protection Data Bank ...............................................56

Key Thinkers and Management Tools ................................................................58

Dr. Kaoru Ishikawa ..........................................................................................58

Dr. Joseph Juran .............................................................................................59

Affinity Diagram...............................................................................................62

Brainstorming ..................................................................................................63

Prioritization Matrix..........................................................................................64

Gantt charts.....................................................................................................65

Delphi Technique ............................................................................................67


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Other Tools .....................................................................................................71

Quality Management Principles ..........................................................................73

Uniform Hospital Discharge Data Set (UHDDS) .................................................79

Individual Differences in Organizations - Personality ..........................................84

Attitudes & Behaviors..........................................................................................87

The Perceptual Process......................................................................................90

Training & Development .....................................................................................92

Managing Work Motivation .................................................................................95

Business and Its Environment ............................................................................97

Accounting/Budgets ..........................................................................................102

Budgets .........................................................................................................104

Communication in Organizations ......................................................................108

Leadership ........................................................................................................111

Stress Management..........................................................................................113

What is Decision Making?.................................................................................115

Compensation & Benefits .................................................................................119

Managing Teams ..............................................................................................126

Occupational Safety and Health .......................................................................129

Emergency Preparedness.............................................................................133

Key Legal Acts ..................................................................................................134

Safe Medical Device Act of 1990...................................................................134

Clinical Laboratory Improvement Amendments Act of 1988..........................136

Americans with Disabilities Act......................................................................136

Medicare changes from the Balanced Budget Refinement Act (BBRA) of 1999

......................................................................................................................138

Distribution of Increased Payments to Medicare + Choice Organizations under

the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act

of 2000 ..........................................................................................................140

COBRA .........................................................................................................145

Medicare Conditions of Participation For Hospitals .......................................151


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The Malcolm Baldrige National Quality Improvement Act of 1987 - Public Law

100-107 .........................................................................................................156

Organizational Exit............................................................................................159

Statistics ...........................................................................................................162

Special Report: Which Study Guides and Practice Tests Are Worth Your Time

..........................................................................................................................166

Practice Tests................................................................................................166

Study Guides.................................................................................................166

Special Report: Retaking the Test: What Are Your Chances at Improving Your

Score? ..............................................................................................................167

Special Report: Ethics Research and Websites................................................170

Special Report: Key Formulas ..........................................................................171

Special Report: What is Test Anxiety and How to Overcome It? ......................175

Lack of Preparation .......................................................................................175

Physical Signals ............................................................................................176

Nervousness .................................................................................................177

Study Steps...................................................................................................180

Helpful Techniques........................................................................................182

Special Report: Additional Bonus Material........................................................190


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Secret Key #1 – Time is Your Greatest Enemy

Content Category % of exam # of questions1. Management and Leadership 19.2% 24 2. Information Management 28.8% 36 3. Education, Training and Communication 18.4% 23 4. Performance Measurement and Improvement

33.6% 42

Total 100% 125 % of Total 100%

A maximum of three hours is allocated for candidates to take the examination.

125 questions are offered on the scored test.

Success Strategy #1

Pace Yourself

Wear a watch to the CPHQ Test. At the beginning of the test, check the time (or

start a chronometer on your watch to count the minutes), and check the time

after each passage or every few questions to make sure you are “on schedule.”

For the computerized test an onscreen clock display will keep track of your

remaining time, but it may be easier for you to monitor your pace based on how

many minutes have been used, rather than how many minutes remain.

If you are forced to speed up, do it efficiently. Usually one or more answer

choices can be eliminated without too much difficulty. Above all, don’t panic.

Don’t speed up and just begin guessing at random choices. By pacing yourself,

and continually monitoring your progress against the clock or your watch, you will

always know exactly how far ahead or behind you are with your available time. If

you find that you are one minute behind on the test, don’t skip one question

without spending any time on it, just to catch back up. Once you catch back up,

you can continue working each problem at your normal pace.


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Furthermore, don’t dwell on the problems that you were rushed on. If a problem

was taking up too much time and you made a hurried guess, it must be difficult.

The difficult questions are the ones you are most likely to miss anyway, so it isn’t

a big loss. It is better to end with more time than you need than to run out of

time. You can always go back and work the problems that you skipped. If you

have time left over, as you review the skipped questions, start at the earliest

skipped question, spend at most another minute, and then move on to the next

skipped question.

Lastly, sometimes it is beneficial to slow down if you are constantly getting ahead

of time. You are always more likely to catch a careless mistake by working more

slowly than quickly, and among very high-scoring test takers (those who are

likely to have lots of time left over), careless errors affect the score more than

mastery of material.


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Secret Key #2 – Guessing is not Guesswork

You probably know that guessing is a good idea on the CPHQ test- unlike other

standardized tests, there is no penalty for getting a wrong answer. Even if you

have no idea about a question, you still have a 20-25% chance of getting it right.

Most test takers do not understand the impact that proper guessing can have on

their score. Unless you score extremely high, guessing will significantly

contribute to your final score.

KEY POINT: THERE IS NO PENALTY FOR GUESSING ON THE CPHQ.

Monkeys Take the CPHQ

What most test takers don’t realize is that to insure that 20-25% chance, you

have to guess randomly. If you put 20 monkeys in a room to take this test,

assuming they answered once per question and behaved themselves, on

average they would get 20-25% of the questions correct. Put 20 test takers in

the room, and the average will be much lower among guessed questions. Why?

1. This test intentionally writes deceptive answer choices that “look” right. A test

taker has no idea about a question, so picks the “best looking” answer, which

is often wrong. The monkey has no idea what looks good and what doesn’t,

so will consistently be lucky about 20-25% of the time.

2. Test takers will eliminate answer choices from the guessing pool based on a

hunch or intuition. Simple but correct answers often get excluded, leaving a

0% chance of being correct. The monkey has no clue, and often gets lucky

with the best choice.

This is why the process of elimination endorsed by most test courses is flawed

and detrimental to your performance- test takers don’t guess, they make an

ignorant stab in the dark that is usually worse than random.


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Success Strategy #2

Let me introduce one of the most valuable ideas of this course- the $5 challenge:

You only mark your “best guess” if you are willing to bet $5 on it.

You only eliminate choices from guessing if you are willing to bet $5 on it.

Why $5? Five dollars is an amount of money that is small yet not insignificant,

and can really add up fast (20 questions could cost you $100). Likewise, each

answer choice on one question of the CPHQ will have a small impact on your

overall score, but it can really add up to a lot of points in the end.

The process of elimination IS valuable. The following shows your chance of

guessing it right:

If you eliminate this many choices: 0 1 2 3 4

Chance of getting it correct 20% 25% 33% 50% 100%

However, if you accidentally eliminate the right answer or go on a hunch for an

incorrect answer, your chances drop dramatically: to 0%. By guessing among all

the answer choices, you are GUARANTEED to have a shot at the right answer.

That’s why the $5 test is so valuable- if you give up the advantage and safety of

a pure guess, it had better be worth the risk.

What we still haven’t covered is how to be sure that whatever guess you make is

truly random. Here’s the easiest way:

Always pick the first answer choice among those remaining.

Such a technique means that you have decided, before you see a single test question, exactly how you are going to guess- and since the order of choices


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tells you nothing about which one is correct, this guessing technique is perfectly

random.


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Secret Key #3 – Practice Smarter, Not Harder

Many test takers delay the test preparation process because they dread the

awful amounts of practice time they think necessary to succeed on the test. We

have refined an effective method that will take you only a fraction of the time.

There are a number of “obstacles” in your way on the CPHQ test. Among these

are answering questions, finishing in time, and mastering test-taking strategies.

All must be executed on the day of the test at peak performance, or your score

will suffer. The CPHQ is a mental marathon that has a large impact on your

future.

Just like a marathon runner, it is important to work your way up to the full

challenge. So first you just worry about questions, and then time, and finally

strategy:

Success Strategy #3

1. Find a good source for practice tests.

2. If you are willing to make a larger time investment, consider using more

than one study guide- often the different approaches of multiple authors

will help you “get” difficult concepts.

3. Take a practice test with no time constraints, with all study helps “open

book.” Take your time with questions and focus on applying strategies.

4. Take a practice test with time constraints, with all guides "open book."

5. Take a final practice test with no open material and time limits

If you have time to take more practice tests, just repeat step 5. By gradually

exposing yourself to the full rigors of the test environment, you will condition

your mind to the stress of test day and maximize your success.


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Secret Key #4 – Prepare, Don’t Procrastinate

Let me state an obvious fact: if you take the CPHQ exam three times, you will get

three different scores. This is due to the way you feel on test day, the level of

preparedness you have, and, despite CPHQ exam’s claims to the contrary, some

tests WILL be easier for you than others.

Since your future depends so much on your score, you should maximize your

chances of success. In order to maximize the likelihood of success, you’ve got to

prepare in advance. This means taking practice tests and spending time learning

the information and test taking strategies you will need to succeed.

Since you have to pay a registration fee each time you take the CPHQ exam,

don’t take it as a “practice” test. Feel free to take sample tests on your own, but

when you go to take the CPHQ exam, be prepared, be focused, and do your best

the first time!


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Secret Key #5 – Test Yourself

Everyone knows that time is money. There is no need to spend too much of your

time or too little of your time preparing for the CPHQ exam. You should only

spend as much of your precious time preparing as is necessary for you to pass it.

Success Strategy #5

Once you have taken a practice test under real conditions of time constraints,

then you will know if you are ready for the test or not.

If you have scored extremely high the first time that you take the practice test,

then there is not much point in spending countless hours studying. You are

already there.

Benchmark your abilities by retaking practice tests and seeing how much you

have improved. Once you score high enough to guarantee success, then you

are ready.

If you have scored well below where you need, then knuckle down and begin

studying in earnest. Check your improvement regularly through the use of

practice tests under real conditions. Above all, don’t worry, panic, or give up.

The key is perseverance!

Then, when you go to take the CPHQ exam, remain confident and remember

how well you did on the practice tests. If you can score high enough on a

practice test, then you can do the same on the real thing.


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Top 20 Test Taking Tips

1. Carefully follow all the test registration procedures

2. Know the test directions, duration, topics, question types, how many

questions

3. Setup a flexible study schedule at least 3-4 weeks before test day

4. Study during the time of day you are most alert, relaxed, and stress free

5. Maximize your learning style; visual learner use visual study aids, auditory

learner use auditory study aids

6. Focus on your weakest knowledge base

7. Find a study partner to review with and help clarify questions

8. Practice, practice, practice

9. Get a good night’s sleep; don’t try to cram the night before the test

10. Eat a well balanced meal

11. Know the exact physical location of the testing site; drive the route to the

site prior to test day

12. Bring a set of ear plugs; the testing center could be noisy

13. Wear comfortable, loose fitting, layered clothing to the testing center;

prepare for it to be either cold or hot during the test

14. Bring at least 2 current forms of ID to the testing center

15. Arrive to the test early; be prepared to wait and be patient

16. Eliminate the obviously wrong answer choices, then guess the first

remaining choice

17. Pace yourself; don’t rush, but keep working and move on if you get stuck

18. Maintain a positive attitude even if the test is going poorly

19. Keep your first answer unless you are positive it is wrong

20. Check your work, don’t make a careless mistake


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General Strategies

The most important thing you can do is to ignore your fears and jump into the test

immediately- do not be overwhelmed by any strange-sounding terms. You have

to jump into the test like jumping into a pool- all at once is the easiest way.

Make Predictions

As you read and understand the question, try to guess what the answer will be.

Remember that several of the answer choices are wrong, and once you begin

reading them, your mind will immediately become cluttered with answer choices

designed to throw you off. Your mind is typically the most focused immediately

after you have read the question and digested its contents. If you can, try to

predict what the correct answer will be. You may be surprised at what you can

predict.

Quickly scan the choices and see if your prediction is in the listed answer

choices. If it is, then you can be quite confident that you have the right answer.

It still won’t hurt to check the other answer choices, but most of the time, you’ve

got it!

Answer the Question

It may seem obvious to only pick answer choices that answer the question, but

the test writers can create some excellent answer choices that are wrong. Don’t

pick an answer just because it sounds right, or you believe it to be true. It MUST

answer the question. Once you’ve made your selection, always go back and

check it against the question and make sure that you didn’t misread the question,

and the answer choice does answer the question posed.


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Benchmark

After you read the first answer choice, decide if you think it sounds correct or not.

If it doesn’t, move on to the next answer choice. If it does, mentally mark that

answer choice. This doesn’t mean that you’ve definitely selected it as your

answer choice, it just means that it’s the best you’ve seen thus far. Go ahead

and read the next choice. If the next choice is worse than the one you’ve already

selected, keep going to the next answer choice. If the next choice is better than

the choice you’ve already selected, mentally mark the new answer choice as

your best guess.

The first answer choice that you select becomes your standard. Every other

answer choice must be benchmarked against that standard. That choice is

correct until proven otherwise by another answer choice beating it out. Once

you’ve decided that no other answer choice seems as good, do one final check

to ensure that your answer choice answers the question posed.

Valid Information

Don’t discount any of the information provided in the question. Every piece of

information may be necessary to determine the correct answer. None of the

information in the question is there to throw you off (while the answer choices will

certainly have information to throw you off). If two seemingly unrelated topics are

discussed, don’t ignore either. You can be confident there is a relationship, or it

wouldn’t be included in the question, and you are probably going to have to

determine what is that relationship to find the answer.

Avoid “Fact Traps”

Don’t get distracted by a choice that is factually true. Your search is for the

answer that answers the question. Stay focused and don’t fall for an answer that

is true but incorrect. Always go back to the question and make sure you’re

choosing an answer that actually answers the question and is not just a true


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statement. An answer can be factually correct, but it MUST answer the question

asked. Additionally, two answers can both be seemingly correct, so be sure to

read all of the answer choices, and make sure that you get the one that BEST

answers the question.

Milk the Question

Some of the questions may throw you completely off. They might deal with a

subject you have not been exposed to, or one that you haven’t reviewed in years.

While your lack of knowledge about the subject will be a hindrance, the question

itself can give you many clues that will help you find the correct answer. Read

the question carefully and look for clues. Watch particularly for adjectives and

nouns describing difficult terms or words that you don’t recognize. Regardless of

if you completely understand a word or not, replacing it with a synonym either

provided or one you more familiar with may help you to understand what the

questions are asking. Rather than wracking your mind about specific detailed

information concerning a difficult term or word, try to use mental substitutes that

are easier to understand.

The Trap of Familiarity

Don’t just choose a word because you recognize it. On difficult questions, you

may not recognize a number of words in the answer choices. The test writers

don’t put “make-believe” words on the test; so don’t think that just because you

only recognize all the words in one answer choice means that answer choice

must be correct. If you only recognize words in one answer choice, then focus

on that one. Is it correct? Try your best to determine if it is correct. If it is, that is

great, but if it doesn’t, eliminate it. Each word and answer choice you eliminate

increases your chances of getting the question correct, even if you then have to

guess among the unfamiliar choices.


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Eliminate Answers

Eliminate choices as soon as you realize they are wrong. But be careful! Make

sure you consider all of the possible answer choices. Just because one appears

right, doesn’t mean that the next one won’t be even better! The test writers will

usually put more than one good answer choice for every question, so read all of

them. Don’t worry if you are stuck between two that seem right. By getting down

to just two remaining possible choices, your odds are now 50/50. Rather than

wasting too much time, play the odds. You are guessing, but guessing wisely,

because you’ve been able to knock out some of the answer choices that you

know are wrong. If you are eliminating choices and realize that the last answer

choice you are left with is also obviously wrong, don’t panic. Start over and

consider each choice again. There may easily be something that you missed the

first time and will realize on the second pass.

Tough Questions

If you are stumped on a problem or it appears too hard or too difficult, don’t

waste time. Move on! Remember though, if you can quickly check for obviously

incorrect answer choices, your chances of guessing correctly are greatly

improved. Before you completely give up, at least try to knock out a couple of

possible answers. Eliminate what you can and then guess at the remaining

answer choices before moving on.

Brainstorm

If you get stuck on a difficult question, spend a few seconds quickly

brainstorming. Run through the complete list of possible answer choices. Look

at each choice and ask yourself, "Could this answer the question satisfactorily?"

Go through each answer choice and consider it independently of the other. By

systematically going through all possibilities, you may find something that you

would otherwise overlook. Remember that when you get stuck, it’s important to

try to keep moving.


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Read Carefully

Understand the problem. Read the question and answer choices carefully. Don’t

miss the question because you misread the terms. You have plenty of time to

read each question thoroughly and make sure you understand what is being

asked. Yet a happy medium must be attained, so don’t waste too much time.

You must read carefully, but efficiently.

Face Value

When in doubt, use common sense. Always accept the situation in the problem

at face value. Don’t read too much into it. These problems will not require you to

make huge leaps of logic. The test writers aren’t trying to throw you off with a

cheap trick. If you have to go beyond creativity and make a leap of logic in order

to have an answer choice answer the question, then you should look at the other

answer choices. Don’t overcomplicate the problem by creating theoretical

relationships or explanations that will warp time or space. These are normal

problems rooted in reality. It’s just that the applicable relationship or explanation

may not be readily apparent and you have to figure things out. Use your common

sense to interpret anything that isn’t clear.

Prefixes

If you're having trouble with a word in the question or answer choices, try

dissecting it. Take advantage of every clue that the word might include. Prefixes

and suffixes can be a huge help. Usually they allow you to determine a basic

meaning. Pre- means before, post- means after, pro - is positive, de- is negative.

From these prefixes and suffixes, you can get an idea of the general meaning of

the word and try to put it into context. Beware though of any traps. Just because

con is the opposite of pro, doesn’t necessarily mean congress is the opposite of

progress!


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Hedge Phrases

Watch out for critical “hedge” phrases, such as likely, may, can, will often,

sometimes, often, almost, mostly, usually, generally, rarely, sometimes.

Question writers insert these hedge phrases to cover every possibility. Often an

answer choice will be wrong simply because it leaves no room for exception.

Avoid answer choices that have definitive words like “exactly,” and “always”.

Switchback Words

Stay alert for “switchbacks”. These are the words and phrases frequently used to

alert you to shifts in thought. The most common switchback word is “but”.

Others include although, however, nevertheless, on the other hand, even though,

while, in spite of, despite, regardless of.

New Information

Correct answer choices will rarely have completely new information included.

Answer choices typically are straightforward reflections of the material asked

about and will directly relate to the question. If a new piece of information is

included in an answer choice that doesn't even seem to relate to the topic being

asked about, then that answer choice is likely incorrect. All of the information

needed to answer the question is usually provided for you, and so you should not

have to make guesses that are unsupported or choose answer choices that

require unknown information that cannot be reasoned on its own.

Time Management

On technical questions, don’t get lost on the technical terms. Don’t spend too

much time on any one question. If you don’t know what a term means, then

since you don’t have a dictionary, odds are you aren’t going to get much further.


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You should immediately recognize terms as whether or not you know them. If

you don’t, work with the other clues that you have, the other answer choices and

terms provided, but don’t waste too much time trying to figure out a difficult term.

Contextual Clues

Look for contextual clues. An answer can be right but not correct. The

contextual clues will help you find the answer that is most right and is correct.

Understand the context in which a phrase or statement is made. This will help

you make important distinctions.

Don’t Panic

Panicking will not answer any questions for you. Therefore, it isn’t helpful. When

you first see the question, if your mind goes blank, take a deep breath. Force

yourself to mechanically go through the steps of solving the problem and using

the strategies you've learned.

Pace Yourself

Don’t get clock fever. It’s easy to be overwhelmed when you’re looking at a page

full of questions, your mind is full of random thoughts and feeling confused, and

the clock is ticking down faster than you would like. Calm down and maintain the

pace that you have set for yourself. As long as you are on track by monitoring

your pace, you are guaranteed to have enough time for yourself. When you get

to the last few minutes of the test, it may seem like you won’t have enough time

left, but if you only have as many questions as you should have left at that point,

then you’re right on track!

Answer Selection

The best way to pick an answer choice is to eliminate all of those that are wrong,


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until only one is left and confirm that is the correct answer. Sometimes though,

an answer choice may immediately look right. Be careful! Take a second to

make sure that the other choices are not equally obvious. Don’t make a hasty

mistake. There are only two times that you should stop before checking other

answers. First is when you are positive that the answer choice you have

selected is correct. Second is when time is almost out and you have to make a

quick guess!

Check Your Work

Since you will probably not know every term listed and the answer to every

question, it is important that you get credit for the ones that you do know. Don’t

miss any questions through careless mistakes. If at all possible, try to take a

second to look back over your answer selection and make sure you’ve selected

the correct answer choice and haven’t made a costly careless mistake (such as

marking an answer choice that you didn’t mean to mark). This quick double

check should more than pay for itself in caught mistakes for the time it costs.

Beware of Directly Quoted Answers

Sometimes an answer choice will repeat word for word a portion of the question

or reference section. However, beware of such exact duplication – it may be a

trap! More than likely, the correct choice will paraphrase or summarize a point,

rather than being exactly the same wording.

Slang

Scientific sounding answers are better than slang ones. An answer choice that

begins “To compare the outcomes…” is much more likely to be correct than one

that begins “Because some people insisted…”


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Extreme Statements

Avoid wild answers that throw out highly controversial ideas that are proclaimed

as established fact. An answer choice that states the “process should used in

certain situations, if…” is much more likely to be correct than one that states the

“process should be discontinued completely.” The first is a calm rational

statement and doesn’t even make a definitive, uncompromising stance, using a

hedge word “if” to provide wiggle room, whereas the second choice is a radical

idea and far more extreme.

Answer Choice Families

When you have two or more answer choices that are direct opposites or

parallels, one of them is usually the correct answer. For instance, if one answer

choice states “x increases” and another answer choice states “x decreases” or “y

increases,” then those two or three answer choices are very similar in

construction and fall into the same family of answer choices. A family of answer

choices is when two or three answer choices are very similar in construction, and

yet often have a directly opposite meaning. Usually the correct answer choice

will be in that family of answer choices. The “odd man out” or answer choice that

doesn’t seem to fit the parallel construction of the other answer choices is more

likely to be incorrect.


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Why Certify?

CPHQ: Certified Professional In Healthcare Quality

• Raise the standards in your field and distinguish your experience.

• Use your credentials to further your career.

• Improve your skills and abilities to manage workers

Candidate Handbook

http://www.cphq.org/examin.html

Score

In addition to the 125 scored questions, CPHQ examinations also include an

additional 15 pretest questions. You will be asked to answer these questions,

however, they will not be included in the scored examination result.

The CPHQ uses the following percentage guidelines in selecting the three types

of questions that appear on each examination: 32% recall, 53% application, and

15% analysis. Recall questions test the candidate’s knowledge of specific facts

and concepts. Application questions require the candidate to interpret or apply

information to a situation. Analysis questions test the candidate’s ability to

evaluate, problem solve or integrate a variety of information and/or judgment

into a meaningful whole.

Scores are reported in written form only, in person or by U.S. mail. The score

report will reflect either “pass” or “fail,” followed by a raw score indicating the

number of questions you answered correctly. Additional detail is provided in the

form of raw scores by each of the four major content categories. This


27

information is provided as feedback to help you understand your performance

within the major content categories. Your pass/fail status is determined by your

overall raw score for the entire examination.


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Seven Pillars of Quality

1. Efficacy

This deals with a controlled environment and examines what is possible. It sets

an upper boundary for quality and establishes the ideal to which all should aspire.

However, as we know, the real world is very different to the laboratory. It is likely

that the less control that is exerted over the environment, the less probable it is

that practitioners are able to meet these standards.

2. Effectiveness

The second pillar of quality is "effectiveness" i.e. to what extent does the service

achieve its intended outcomes in a real world environment? Social, economic

and individual factors influence the selection of quality indicators. Various

indicators have been developed such as cost effective, socially effective and

individually effective although the way in which they are measured is not always

universally agreed.

3. Efficiency

The third pillar of quality is "efficiency". This examines the extent to which scarce

resources are used to derive the greatest benefits with the least waste. This is

usually measured by examining the ratio between the costs and benefits of a


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service and comparing these with others who are providing the same or similar

services. This measure is typically used by socio-economic forces seeking to

select a service which will result in reduced costs. The assumption is made that

the benefit stays the same, an assumption that is frequently not tested.

4. Acceptability

The fourth pillar is acceptability. This concentrates on the usefulness of the

service to the patient and its perceived impact on his/ her quality of life. It takes

into consideration patient preferences regarding access to the service (eg.

advice), relationship with health service providers (eg trust, confidentiality), the

amenities in which the service is provided and the cost utility relationship.

5. Optimality

The fifth pillar is optimality. From the point of view of society and the economic

system, it is necessary to ensure that the optimum allocation of resources is

achieved relative to the benefits derived from the services provided. Techniques

such as cost benefit analysis and marginal costing are used to identify the

optimum point of resource allocation: benefits. Quality indicators are usually of a

global socio-economic nature. Neither the individual service provider nor patient

are concerned with these indicators. However, data collection starts at the

interface between the two and these desire for maximal rather than optimal

benefits may adversely influence the selection of appropriate indicators.

6. Equity

The sixth pillar is equity. Society is concerned that every person should receive

equal treatment, or at best fair treatment. Equity is compromised when the quality

of service or even the range of services is determined by the patient's ability to

pay for the service. Since third party payers play a significant role in the health

care system, equity would be affected by the extent to which a third party payer

includes a fee for the service in the benefits that it offers it members.


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7. Legitimacy

The seventh and final pillar is legitimacy. This is similar to the concept of

acceptability except that "the preferences and values for legitimacy are

expressed through a societal rather than an individual perspective". Clearly,

society requires evidence upon which to make these judgements.


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Emphasis on Outcomes

1. Accountability for Outcomes

Amongst all this disruption, there has been an increase in focus on the

accountability of health professionals. They are being challenged to improve

quality with the major emphasis on outcomes based medicine. Social and

economic institutions are demanding that standards be set and quality measured

as a condition of professional recognition. As Holdford and Smith (1997) state

"Outcome measures have emerged as a primary research focus for medical

disciplines as a result of demand by health care payers and the public for

justification of the rising costs of care. Health care consumers demand that

providers report the outcomes achieved for the health care dollars spent, whilst

providers realize that they must demonstrate the value of their services and

products".

2. Outcome models

Health outcomes have been variously defined and classified. Lohr (1988) defined

health outcomes in terms of the result of medical care. She characterized these

as one or more of the five D's: death, disease, disability, discomfort, and

dissatisfaction.

Kozma et al ( 1993) described three outcomes in terms of their ECHO model.

Economic outcomes are based on a comparison between the costs of what was

received and the benefit derived from alternatives. Clinical outcomes are

changes to morbidity and mortality rates which result from health care

interventions. Humanistic outcomes are the psychological consequences of

health care which include patient measures of functional status, quality of life and

satisfaction with care. This model is useful because it incorporates measures of

value, not merely costs, and it urges health care providers to take all three


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outcome measures into account when considering alternative intervention

strategies.

3. RELATIONSHIP BETWEEN OUTCOMES AND QUALITY

In 1994 Mount wrote:

"If the past four years are typical of the next six, the 1990's may come to be

called the "quality" decade. Whether one looks at health care specifically or

society generally, no concept has received more attention than quality has.

Quality assurance, quality improvement ... these terms and the processes they

entail signal the quality revolution in health care organizations."

1. Some Quality basics

Quality refers to characteristics which are associated with excellence, and these

characteristics form the criteria for assessing the quality of a specific service.

Assurance implies a guarantee that a product or service meets certain standards.

Quality assurance (QA) is therefore a formal system that assures that products or

services meet the characteristics associated with excellence.

In other words, it is a deliberate process of identifying and evaluating the quality

of patient care services to ensure that a predetermined standard is being met.

Audits identify deficiencies and deficiencies are rectified - this remedial step is a

key feature of QA.

On the other hand quality improvement (QI) is based on the assumption that

quality can never be completely assured and a sustained programme for

identifying opportunities to improve quality is necessary. Coltin and Aronow

(1993) define QI as "the application of scientific methods to understand and

continuously improve the ability of all processes to meet the needs of

customers." The QI approach is a process of improving the whole system as


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opposed to the QA approach of identifying and overcoming defects. QI focuses on the positive whilst QA highlights the negative.

2. Measuring quality

Donabedian (1980) introduced the well known structure, process, outcomes

(SPO) model of quality assessment. Although he believed outcomes to be the

ultimate measure of quality, he argued that in addition to outcomes, measures

should be made of structure and process. Structure refers to the systems and

facilities deemed to be essential for quality care. Processes are those actions

which occur in order to deliver health care products and services.

Thus the quality of outcomes can be inferred if structural and process variables

are in accordance with standards and/or guidelines. Similarly, if the structural

variables and processes do not conform with norms, standards and protocols, it

is unlikely that outcomes of acceptable quality would be achieved.

3. Structural and process measures and their limitations

Structural and process indicators are much easier to measure than outcomes

and for this reasons they are usually selected ahead of outcome indicators.

4. Outcome measures and their limitations

The outcome of an intervention must be the most reliable way of measuring its

quality. However, from the point of health care, it makes good sense to assess

structure and process since a fixation with outcomes is not always in the best

interests of the patient.

Outcomes measures have other limitations. It is difficult to show a causal link

between the health care intervention and an outcome since many environmental

influences exist which are difficult to control (eg. diet, lifestyle). Meaningful

outcomes are often difficult to define and measure, and require large samples to

ensure that valid results are obtained - eg. quality of life studies.


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In conclusion, any measure of quality should take into consideration appropriate

structural, process and outcome indicators.

4. QUALITY INDICATORS

The United States Office of Technology Assessment defined quality health care

as "the degree to which the process of care increases the probability of outcomes

desired by patients and reduces the probability of undesired outcomes give the

current state of knowledge" (Holdford and Smith: 1997). Whilst the emphasis is

on outcomes, this is closely linked with processes.

1. The existence of a health care service on its own does not provide a reliable

indicator of quality unless there are appropriate process indicators linked to that

service.

2. Process indicators on their own are not acceptable measures of quality health

care unless there is a clear link between the process and the outcome and the

causal relationship between the two has been validated.


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Managed Care

What is Managed Care?

• Managed care is a complex system that involves the active coordination of, and the arrangement for, the provision of health services and coverage of health benefits.

• The most common types of Managed Care Organizations (MCOs) include Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs) and Exclusive Provider Organizations (EPOs.)

• Managed care usually involves three key components: oversight of the medical care given; contractual relationships and organization of the providers giving care; and the covered benefits tied to managed care rules.

In contrast, what is traditional health care?

• Traditional health care is most identified with freedom of choice for patients and physicians. Patients can choose whatever physician they want to see, physicians can choose to order whatever services they feel are necessary.

• Health Plans are mostly passive third parties, paying for all the services a physician orders, at the provider’s usual charges.

• A Health Plan’s costs and premiums are based on prior experience and covered benefits of the population insured. There is no way to fix medical costs or know exactly what they’ll be in the future.

• After medical services are rendered by providers, the health plan is billed, and patients must pay the difference between provider’s charges and what their health plan pays.

What is Defined Care?

• Defined Care is the model that describes the health care system with employer sponsored Defined Contribution health plans.

• Defined Contribution health plans involve employers and other traditional purchasers of care providing an allowance, that empowers consumers to purchase and select from a wide menu of benefit options that are arranged by the employer or a purchasing administrator.

• Under Defined Care, the consumer is more empowered, informed and enabled, and consumer, provider, plan and employer roles and requirements change accordingly.


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In managed care each patient with insurance coverage under a health plan is

called a member. Other terms used include enrollees and covered lives.

Each person who has the health plan policy in his/her name, whether the policy

is bought just for the individual or for the whole family, is called the subscriber or

the insured.

If the subscriber has coverage for other family members, they are called

dependents. Subscribers and dependents are all members. A subscriber with a

covered spouse and three children would equal five members.

Purchasers, providers and others often refer to how many members (how much

enrollment) a health plan has or a provider serves.

Membership is typically classified by type of MCO, such as HMO, PPO or EPO

(Exclusive Provider Organization). Membership is also broken down by

Purchaser category, including Medicare, Medicaid and Commercial. Commercial

means non-government program members. Commercial members with

employment-based coverage are called Group members (because they have

group coverage).

Per Member Per Month is the relative measure, the ratio, by which most

expense and revenue, and many utilization comparisons are made.

Member Months: Some people do get hung up on member months. But there

isn't any magic to it: whatever period of time you wish to measure (let's take three

months for example) you add up the members for each month for the total period

of time (so if you have 1,000 members in month one; 1,500 members in month

two; and 2,000 members in month three, you get 4,500 member months for the

period.) Divide the member months (4,500 in our example) by the elapsed

months in the period (three in our example) and you get the average members

for the period (1,500 in our example.)


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Medical Management Terms

Quality Management Quality Management (also referred to as Quality Assurance) involves ensuring

members are getting accessible & available care, delivered within community

standards; and ensuring a system exists to identify and correct problems, and to

monitor ongoing performance. Tools include: profiling of data, audits of health

plan and provider records and facilities, surveys of providers and members and

recording of problem incidents as they occur.

Utilization Management Utilization Management involves coordinating how much or how long care is

given for each patient, as well as the level of care. The goal is to ensure care is

delivered cost-effectively, at the right level, and doesn't use unnecessary

resources. Tools include authorization requirements to approve services before

they occur, concurrent review for continuing cases, and profiling of cases after

they occur for analysis.

Outcomes Management A program used to determine the clinical end-results according to defined various

categories (by provider, by procedure, by clinical guideline, etc.) and then

promote use of those categories which yield improved outcomes.

Demand Management A program administered provider organizations to monitor and process many

types of initial member requests for clinical information and services. The

program may involve operating an extended hours nursing telephone triage

service for members, or patient education materials and resources.


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Disease Management Disease management involves aspects of case and outcomes management, but

the approach focuses on specific diseases, looking at what creates the costs,

what treatment plan works, educating patients and providers, and coordinating

care at all levels: hospital, pharmacy, physician, etc.

Sharing Financial Risk

In Managed Care Organization (MCO) provider contracts, providers often bear

some level of financial risk. In paying providers, capitation and salaries involve

the highest levels of provider risk, and are usually just allowed under HMOs. Per

Case payments also involve some risk, as costs could exceed the case payment.

Capitation: Capitation means paying a fixed amount of money per person (per

capita). Capitation puts a lid on payments per person that otherwise might

change under a fee-for-service system. Providers are at full financial risk for the

services capitated. The provider is paid a fixed amount per member enrolled,

regardless of the number of services delivered to that member.

Contact capitation is a relatively newer capitation methodology based on

experience. Under a contact capitation arrangement, the managed care

organization typically pays a provider a capitated amount per qualifying patient,

as opposed to an entire member population. There are a number of alternative

structures for contact capitation. Payments can be a global fee for entire episode

of care, or it may be a monthly payment for the period of time that the patient is

referred or has been diagnosed with a specific condition. With contact capitation,

the provider is only at risk for the cost per referral. The MCO retains the risk for

the number of referrals, as opposed to conventional capitation, which places

providers at risk for both the number of referrals and the cost per referral.

Other types of risk sharing include withholds, when a portion of the provider

payment is held back and only paid later if certain criteria are met. Also, there are


39

shared risk funds, where physician groups share in a portion of the financial risk

and potential profit of hospital or prescription costs.

How shared risk funds work: Typically, in a shared risk arrangement, a fund gets

"paid" the capitation rate. Medical expenses are paid from this fund, and

periodically, profits or losses are distributed to the participants.

Shared risk funds often allocate the risk between physicians and institutional

providers, or between physicians and health plans. Occasionally, there are three

or more parties involved (Health Plan, Physicians, Hospital and a management

company could all be involved). Hospital and Pharmacy services are the most

prevalent examples of shared risk funds. However, there are many other types of

services that involve shared risk arrangements as well.

Incurred but not reported claims or encounters involve covered services that

have been rendered, but have not been received or captured by you to process.

You to need to consider this issue

when:

You pay claims from sub-contracted or outside providers. You capitate sub-contracted providers and collect encounter data from

them. You provide internal services and capture your encounter data, or even

pay yourself from a shared risk fund.

Premium Pricing Cycle

Premiums drive profits: medical management is critical, but: too low of a premium

will not fund even the best managed plan, while a very high premium might fund

a poorly managed plan. The cycle is a 40 year old phenomenon.

How the cycle works- during profitable periods:

1. plans want to expand market share- 2. start to lower price to do so- 3. other plans match lower prices to keep pace and not lose share


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4. price wars similar to airline fare war erupts and multi year contracts develop

Downswing results:

1. due to insulation of capitating risk to providers and time lag on fee for service claims, considerable time elapses before financial pressures are known from lowered premium

2. due to multi-year contracts and price pressures nothing much can be done about the problem as it becomes apparent

Significant Losses: finally enough of the market is losing money so that several

major players break rank and begin increasing rates and everyone else follows

suite

Return to Profits: the increases continue until profits are being generated, and

the cycle begins anew.

National Managed Care Enrollment 2004

HMO (1) 68.8 million

PPO (2) 109.0 million

Total 177.8 million

Managed Care Penetration

(#'s in millions)

Segment TotalU.S.

PercentU.S.

Managed Care #

ManagedCare %

Medicare (3) 42.9 14.5% 5.35 12.47%

Medicaid (4) 43.6 14.8% 26.30 60.3%

Commercial 163.3 55.4% 148.90 91.2%

Uninsured (5) 45.0 15.3% 0.00 0.00%

TOTAL (6) 294.8 100.0% 177.85 60.3%


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Key HMO Performance Measures

Commercial Medicare

Inpatient Days Per 1,000 Per Year (7) 240.9 N/A

Physician Encounters Per Member Per

Year (8) 3.1 8.0

Rx's Utilization Per Member Per Month

(7) 0.7 N/A

Plan Medical Loss Ratio (9) 87.50%

Average PMPM Rates - Physician (10) $53.35 $209.43

Average PMPM Rates - Hospital (10) $53.15 $252.43

Health Plan Total Managed Care Enrollment*

Anthem/WellPoint 28.0 million

Aetna U.S. Healthcare 13.6 million

United Health Group 10.8 million

Cigna HealthCare 9.9 million

Kaiser Foundation Health Plans 8.4 million

HealthNet 7.3 million

Humana 7.0 million

Coventry Health Care 3.1 million

PacifiCare Health Systems 3.0 million


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Organizational Effectiveness


Collins’s Profile of Great Organizations (“Good to Great”)

Disciplined People

Level 5 Leadership (professional will and humility)

First Who Then What (the “right” people are your most important asset”)


Disciplined Thought

Confront the Brutal Facts (dialogue and debate, conducting autopsies,

creating red flag mechanisms)

Hedgehog Concept (what you are deeply passionate about, what you can

be the best in the world at, and what drives your economic engine)



Disciplined Action

Culture of Discipline (Adherence to the Hedgehog Concept)

Technology Accelerators (accelerate momentum)



The Flywheel and the Doom Loop

Consistency and sustaining positive changes.

Total Quality Management (TQM)

• TQM refers to a set of methods and tools that are used to help

organizations better manage business processes in order to enhance

quality, productivity, customer satisfaction.


43

“McDonald’s”

How does an Egg McMuffin demonstrate fundamental

elements of TQM?

Typical Elements of an Effective TQM Program

1. Process Orientation

• Cross-Functional Teams

• Customer Focus

• Benchmarking

• Investment in Employee Training

• Data-Based Decision Making

2. Employee Empowerment

• Continuous Improvement

• Open Communication

• Quality-Driven Culture

Outcomes of Total Quality Management

• Reduced costs • Increased productivity • Higher customer satisfaction and retention • Fewer defects in products and services • Shorter product development cycles • Greater profitability

What is Strategy? Why is it Important?

Strategy is a broad plan of action (“roadmap”) for pursuing and achieving the

firm’s objectives and satisfying its mission.

Strategy is important because it aligns an organization with its external

environment.

Questions:


44

• Purpose of the organization? • Who are the customers or stakeholders? • Which products or services? • What are the core values of the organization?

The Strategic Planning Process

Examples of Organizational Mission Statements

“To solve unsolved problems innovatively” (3M)

“Empowering people through great software” (Microsoft)

“To give ordinary folks the chance to buy the same thing as rich people.”

(Wal-Mart)

“Crush Reebok” (Nike)


Perform an External Environmental Scan.

• Competitors • Customers • Technology • Economic Conditions • Laws and Regulations

Outcome: ID Opportunities and Threats


Perform an Internal Environmental Scan.

• Processes • Structure • People • Culture • Product/Service Portfolio • Past Performance

Outcome: ID Organizational Strengths and Weaknesses.


• Develop strategic objectives to support the mission.


45

• “Critical Measures of Success” (e.g., revenue growth, profits, customer satisfaction, customer retention, cost reduction, product quality, service quality, employee satisfaction.

• Develop strategies to support strategic objectives. • Develop operational goals and strategies. • Implement the strategic plan.

Execution:

• Bossidy and Charan’s Key Points About Execution • Execution is a discipline. • Execution is the job of the business leader. • Execution has to be in the culture.


Evaluate results and modify as needed.

• Bossidy and Charan’s Diagnostic Questions for Conducting a Strategy Review

• How well versed is each business unit team about the competition? • How strong is the organizational capability to execute the strategy? • Is the plan scattered or sharply focused? • Are we choosing the right ideas? • Are the linkages with people and operations clear?

The Four Perspectives of the Balanced Scorecard

• Financial (e.g., operating income, return on capital employed) • Customer (e.g., customer satisfaction, new customer acquisition) • Internal Business Process (e.g., defects, efficiency) • Learning and Growth (e.g., new individual or organizational competencies)

Practical Guidelines for Effective

Strategic Planning

1. Involve everyone you need to carry out your plan.

2. Work collaboratively with those whose help you need.

3. Schedule a full-day retreat.

4. Document your plan.


46

5. Make it as simple as possible.

6. Develop an action plan for each strategic objective.

7. Keep the process alive by updating it continuously.

8. Make sure that your plan fits senior management’s goals.

9. Don’t undertake too much – prioritize your objectives.

10. Keep your plan visual.

11. Communicate the plan down the line.

12. Create an accountability document.


47

What are Ethics?

Ethics are principles of morality or rules of conduct.

Business ethics are rules about how businesses and their employees

ought to behave.

Key Point: What is ethical or unethical may vary widely across cultures.

Benefits of Managing Ethics in the Workplace

1. Attention to business ethics has improved society.

2. Ethics programs help maintain a moral cause in turbulent times.

3. Ethics programs integrate ethical guidelines in to decision making.

4. Ethics programs help manage values associated with other initiatives such

asa TQM, strategic planning, and diversity.

5. Ethics programs promote a strong public image.

6. Ethics programs show employees that management truly supports

attention to ethics.

7. Ethics programs are an insurance policy that help ensure that policies are

legal.

8. Ethics programs align organizational behaviors with operating values.

9. Ethics programs develop an awareness and sensitivity to ethical issues.

Causes of Unethical Employee Behavior

A. Organizational Reward Systems

B. A Bottom-Line Mentality

C. Lack of Operational Controls

D. Machiavellian Personality Type

E. Darwinian Organizational Culture

F. Weak Leadership


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Strategies for Enhancing Ethical Behavior in Organizations

A. Obtain support of top management.

B. Develop a code of ethics.

Example: Policy

The Company is committed to the highest ethical standards and to

compliance with all applicable laws and regulations. It is the obligation of

our employees to:

• Conduct themselves honestly and ethically; • Avoid conflicts of interest, and disclose to their immediate superiors any

relationship that appears to constitute a conflict of interest; and • Comply with applicable governmental laws, rules and regulations.

C. Accomplish preferred behaviors in the workplace.

D. Provide ethics training for all managers and employees.

E. Integrate ethics into other management practices.

F. Implement a whistle-blowing process.

G. Consider establishing an ethics management committee.

H. Assign a high-ranking member of management to become an “ethics

officer.”


49

What is Organizational Structure?

Organizational structure refers to the formal definition and relationships among

tasks, jobs, work units, people, and resources in a firm. It addresses questions

regarding the formation of jobs, processes, systems, work units, divisions, etc.

and the relationships between them that are created to support the overall

objectives of the organization.

Structure is important because it must support the strategic plan of the

organization. Structure shapes the effectiveness of an organization in terms of

inter-departmental working relationships, product and service development lead

times, quality, efficiency, and responsiveness to customer demands.

Structure greatly influences individual and group morale, motivation,

commitment, and satisfaction.

Characteristics of Functional Structures

1. Advantages

Efficiency

Specialization

2. Disadvantages

Narrow Perspectives (i.e., a “functional mindset”)

Lack of Innovation

Characteristics of Divisional Structures

1. Advantages

Autonomy

Customization of strategies

2. Disadvantages

Lower efficiency


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Coordination

Characteristics of Matrix Structures

1. Advantages

Flexibility

Responsiveness to environment

Enhanced communication

2. Disadvantages

Frustration/stress from two boss system

Risk of one system overwhelming the other

Need for high levels of cooperation

Characteristics of Decentralized Structures

1. Advantages of High Decentralization (Flat Organizations)

Eliminates layers of management

Decisions can be made by people closer to the problem

2. Advantages of Low Decentralization (Tall Organizations)

Eliminates additional responsibility not desired by some people

performing routine jobs

Permits crucial decisions to be made by individuals with the big

picture

Contemporary Organizational Forms

A. Virtual Organizations – Temporary organization composed of multiple

organizations formed for a specific purpose.

B. Boundary less Organizations – Open system approach where jobs and

formalization are de-emphasized.

C. Modular Organizations – Organizations where non-core functions are

outsourced.


51

Healthcare Organizations and Data Banks

The National Committee for Quality Assurance (NCQA) http://www.ncqa.org/

HQCB/NAHQ

The Healthcare Quality Certification Board (HQCB) of the National Association

for Healthcare Quality (NAHQ) was formed in 1976 to advance the profession of

healthcare quality management through the development of a certification

program. The HQCB is the certifying arm of NAHQ. The HQCB establishes

policies, procedures, and standards for certification and recertification in the field

of healthcare quality management. The granting of Certified Professional in Healthcare Quality (CPHQ) status recognizes professionals and academic

achievement through the individual’s participation in this international voluntary

certification program. The commitment by the HQCB to advance the profession is

reflected in its five-year vision statement:

The HQCB adopted a name change in 1992 consistent with terminology changes

in the field. Prior to 1992, the HQCB was known as the Quality Assurance

Certification Board (CPQA). This designation also changed. All current certified

professionals and new successful candidates are identified by the designation

Certified Professional in Healthcare Quality (CPHQ).

National Association for Healthcare Quality: The National Association for

Healthcare Quality (NAHQ), HQCB’s parent association, is a leading organization

for healthcare quality management professionals. NAHQ comprises more than

5,000 individual members and numerous institutional members. Its goal is to

promote the continuous improvement of quality in healthcare by providing

educational and development opportunities for professionals at all management

levels and within numerous healthcare settings.


52

NAHQ maintains formal affiliation with quality associations in almost every state,

along with numerous affiliate societies from countries outside of the United

States.

Accreditation: The HQCB was granted full accreditation by NCCA during the

first initial review and has undergone the required reaccreditation process in

1993, 1998 and 2003. HQCB received a full five-year accreditation on each

occasion.

NCCA accredits certification entities that are national in scope using standards

developed originally in early 1978 with funding provided by the U.S. Department

of Health and Human Services.


53

Health Care Quality Improvement Program

For more than two decades, HSAG has served as the Center for Medicare and

Medicaid Services (CMS) contracted Quality Improvement Organization (QIO) in

various states. As the QIO, HSAG works with providers to review and improve

the quality of health care for Medicare beneficiaries statewide.

In 1992, CMS launched Medicare’s first multi-state quality improvement pilot

project. The project demonstrated that QIOs working with providers improved

hospital-based AMI care. CMS subsequently expanded the QIO program to

include national quality improvement projects in the hospital and physician office

settings.

New National Initiatives CMS has augmented these quality improvement activities with major new

national initiatives to widely disseminate select quality measures for Medicare-

certified nursing homes, home health agencies, hospitals, and physicians offices.

In November 2001, DHHS Secretary Tommy G. Thompson announced the

Quality Initiative – the Department’s commitment to assure quality health care for

all Americans through accountability and public disclosure.

The Initiative aims to:

• empower consumers with quality of care information to make more informed decisions about their healthcare; and

• stimulate and support providers and clinicians to improve the quality of care.

HSAG promotes awareness, understanding and use of this information by

working directly with beneficiaries and providers, and with intermediaries such as

discharge planners, community organizations, and the media.


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National Practitioner Data Bank (NPDB)

Why the NPDB Was Created

The legislation that led to the creation of the NPDB was enacted because the

U.S. Congress believed that the increasing occurrence of medical malpractice

litigation and the need to improve the quality of medical care had become

nationwide problems that warranted greater efforts than any individual State

could undertake. The intent is to improve the quality of health care by

encouraging State licensing boards, hospitals and other health care entities, and

professional societies to identify and discipline those who engage in

unprofessional behavior; and to restrict the ability of incompetent physicians,

dentists, and other health care practitioners to move from State to State without

disclosure or discovery of previous medical malpractice payment and adverse

action history. Adverse actions can involve licensure, clinical privileges,

professional society membership, and exclusions from Medicare and Medicaid.

The NPDB is primarily an alert or flagging system intended to facilitate a

comprehensive review of health care practitioners' professional credentials. The

information contained in the NPDB is intended to direct discrete inquiry into, and

scrutiny of, specific areas of a practitioner's licensure, professional society

memberships, medical malpractice payment history, and record of clinical

privileges. The information contained in the NPDB should be considered together

with other relevant data in evaluating a practitioner's credentials; it is intended to

augment, not replace, traditional forms of credentials review.

Access to Information

Access to information in the NPDB is available to entities that meet the eligibility

requirements defined in the provisions of P.L. 99-660 and the NPDB regulations.

In order to access information, entities must first register with the Data Bank.

NPDB information is not available to the general public. However, information in

a form that does not identify any particular entity or practitioner is available.


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Confidentiality

Information reported to the NPDB is considered confidential and shall not be

disclosed except as specified in the NPDB regulations. The Privacy Act of 1974,

protects the contents of Federal systems of records such as those contained in

the NPDB from disclosure, unless the disclosure is for a routine use of the

system of records as published annually in the Federal Register. The published

routine uses of NPDB information do not allow for disclosure of information to the

general public.

The Office of Inspector General (OIG), Health and Human Services (HHS), has

the authority to impose civil money penalties on those who violate the

confidentiality provisions of Title IV. Persons, organizations, or entities that

receive information either directly or indirectly are subject to the confidentiality

provisions and the imposition of a civil money penalty of up to $11,000 for each

offense if they violate those provisions.


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Healthcare Integrity and Protection Data Bank

Why the HIPDB Was Created

The Secretary of the U.S. Department of Health and Human Services, acting

through the Office of Inspector General (OIG), was directed by the Health

Insurance Portability and Accountability Act of 1996 to create the Healthcare

Integrity and Protection Data Bank (HIPDB) to combat fraud and abuse in health

insurance and health care delivery. Health care fraud burdens the nation with

enormous financial costs and threatens the quality of health care and patient

safety. Estimates of annual losses due to health care fraud range from 3 to

10 percent of all health care expenditures--between $30 billion and $100 billion

based on estimated 1997 expenditures of over $1 trillion.

The HIPDB is primarily a flagging system that may serve to alert users that a

comprehensive review of a practitioner's, provider's, or supplier's past actions

may be prudent. The HIPDB is intended to augment, not replace, traditional

forms of review and investigation, serving as an important supplement to a

careful review of a practitioner's, provider's, or supplier's past actions.

Access to Information

Access to information in the HIPDB is available to entities that meet the eligibility

requirements defined in Section 1128E of the Social Security Act and the HIPDB

regulations. In order to access information, eligible entities must first register with

the Data Bank.

HIPDB information is not available to the general public. However, information in

a form that does not identify any particular entity or practitioner is available.

Confidentiality

Information reported to the HIPDB is considered confidential and shall not be

disclosed except as specified in the HIPDB regulations. The Privacy Act of 1974,


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protects the contents of Federal systems of records such as those contained in

the NPDB from disclosure, unless the disclosure is for a routine use of the

system of records as published annually in the Federal Register.


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Key Thinkers and Management Tools

Dr. Kaoru Ishikawa

Amongst Dr Kaoru Ishikawa's many contributions to the quality movement his

most noteworthy is his viewpoint on total quality. He placed the emphasis on

company wide quality control and on the human side of quality through the use of

the "seven basic tools of quality":

• Pareto analysis - finds the big problems. • Cause and effect diagrams - why do these problems happen? • Stratification - the composition of the data. • Check sheets - how often does the problem occur? • Histograms - highlights overall trends. • Scatter charts - shows the relationships between factors. • Process control charts - shows the variations which need to be controlled

and how to do it.

Dr Kaoru Ishikawa believed these seven tools, when used together, form a very

powerful tool kit. They should be known widely throughout the organization and

used regularly to analyze problems and develop improvements.

One of the most widely known of these tools is the Ishikawa diagram (also known

as a fishbone or cause and effect diagram):

This tool, like the others, is used to assist groups in identifying quality

improvements. The diagram systematically represents and analyses the real

causes behind a problem or effect. Groups can use this tool to define the

problem, identify possible and probable causes, and organize these causes to

highlight the major ones. It also helps groups to be systematic in the generation

of ideas and to check that it has stated the direction of causation correctly.


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The diagrammatic format is immensely useful when the findings need to be

presented to others.

Dr. Joseph Juran

Dr.Joseph Juran born Romania 24 Dec 1904, emigrated to America 1912 and

began as an engineer in 1924 publishing "Quality Control Handbook" in 1951 and

a professor at New York University. Like Demning, traveled to Japan in the mid

50's to conduct top and middle level executive seminars on planning,

organizational issues, management responsibilities for quality and the need to

set and monitor improvement target goals.

His concepts of "Breakthrough", "The internal customer" and the "Quality Trilogy"

did much to build on the foundation of business improvement established by the

other quality gurus. Expanded on the use of Pareto analysis for effective problem

targeting, "cost of quality" and the concept of company "quality councils".

Juran maintained that quality was intrinsically linked to product satisfaction and

dissatisfaction. Satisfaction in this context was the superior performance or

features, where as the dissatisfaction was the deficiencies or defects in the

product or service. These two distinct areas were concerned with matching

customer requirements (the external dimension) and building the product or

service correctly (the internal dimension).

Juran's well known definition, "Fit for purpose" needs further clarification. For

whose purpose and what's the real purpose. As there are many customers both

internal and external to the business, Juran maintained that quality begins with

who, how and why these customers will use it, without this information any

improvement will be guesswork. Illustrating this point by stating a dangerous

product could meet all specifications and still not be fit for use. More recently, his

"Big Q" concept of quality not being just about manufacturing but extends across

organizational links and onto the customers.


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Internal customer

Juran realized that the customer was not just the end customer and that each

person along the chain has an internal customer, and as such is supplier to the

next in the chain. Therefore Juran maintained that at each stage was a "Three

role model": supplier, process and customer. The "three role model" represents a

breaking down of the complete cycle into numerous opportunities for ongoing

process and business improvement. Emphasizing that quality improvements can

be identified and achieved throughout the complete cycle from the original

customer need through to the receiving external customer.

By exploring the complete lifecycle, Juran points out that the "big picture" must

include suppliers and in so doing brings into the equation Purchasing and Sub-

contract as prime elements to maintaining product quality (essential when prime

contractor ships are involved). Expanding this argument, he rightly states that, "a

single source can more easily neglect to sharpen its competitive edge, cost and

service", but goes on to temper it with a hands-on team approach to vendors

being more productive than a adversarial one.

Cost of quality

The cost of quality, or not getting it right first time, Juran maintained should be

recorded and analyzed and classified into failure costs, appraisal costs and

prevention costs.

Failure costs

Scrap, rework, corrective actions, warranty claims, customer complaints and loss of custom

Appraisal costs

Inspection, compliance auditing and investigations


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Prevention costs

Training, preventive auditing and process improvement implementation

Quality trilogy

Juran's view is that, "Quality does not happen by accident it must be

planned". Seeing quality planning as the three elements of Quality Planning,

Quality Control and Quality Improvement running parallel to budgeting, cost

control and cost reduction. Stating that planning's key elements required to

implement a company-wide strategy were to identify customer needs, define

quality goals, identify and implement quality metrics, planning process capability,

and continually monitor results to reduced manufacturing and non-manufacturing

errors. All this supports his theory that quality is not free and there is a point

where conformance is more costly than the value of the quality obtained.

Quality Planning Road Map

1. Identify customers.

2. Determine customer needs.

3. Translate customer needs into specifications.

4. Develop product or service to meet customer needs.

5. Optimize product or service features and characteristics.

6. Develop process capabilities to produce product or service.

7. Prove process.

8. Production process.

Quality Council

A body typically comprising senior management with the responsibility for project

managing the quality improvements. The council would set targets, run needs

analysis for training and equipment, cost of quality measurement, co-ordination


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and liaise between groups and management levels. Essentially become the focal

point of the quality improvement culture within the business organization as they

improve communication and breakdown interdepartmental or functional

boundaries.

The breakthrough concept

Like the Deming cycle, Juran's breakthrough concerns itself with the

product/service life cycle. In essence this splits it up into two areas: the "journey

from symptom to cause" and the "journey from cause to remedy".

However, Juran's message is not always well received. The view that training

should start at the top often provokes a senior management reaction that training

is for others as they either know it all or should do. Logically, and speaking from

experience, this belief needs to be reassessed. It is often seen that good quality

initiatives and improvements are dead before they have got off the ground due to

lack of understanding, poor launch, bad presentation, inadequate buy-in and

more often restrictions on the time to adequately assess them. "Fire fighting" is a

poor excuse for improvement and indicative of the lack of planning and risk

management. In his view less than 20% of quality problems are due to

operators, the remainder lies a little higher up the salary structures.

Affinity Diagram

The affinity diagram, or KJ method (after its author, Kawakita Jiro), wasn't

originally intended for quality management. Nonetheless, it has become one of

the most widely used of the Japanese management and planning tools. The

affinity diagram was developed to discovering meaningful groups of ideas within

a raw list. In doing so, it is important to let the groupings emerge naturally, using

the right side of the brain, rather than according to preordained categories.


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Usually, an affinity diagram is used to refine a brainstorm into something that

makes sense and can be dealt with more easily. In Seven New QC Tools,

Ishikawa recommends using the affinity diagram when facts or thoughts are

uncertain and need to be organized, when preexisting ideas or paradigms need

to be overcome, when ideas need to be clarified, and when unity within a team

needs to be created.

A sample affinity diagram is show below. On the left side of the window is a

brainstormed list of ideas. On the right side is the affinity diagram, in which ideas

have been grouped into affinity sets. In this case, the sorting is in an advanced

state, and affinity sets have already been given titles. It's important not to add the

titles early in the sorting process.

Brainstorming

Creative thinking requires tools such as the brainstorm and the affinity diagram.

Brainstorming is simply listing all ideas put forth by a group in response to a

given problem or question. In 1939, a team led by advertising executive Alex

Osborn coined the term "brainstorm." According to Osborn, " Brainstorm means

using the brain to storm a creative problem and to do so "in commando fashion,

each stormer audaciously attacking the same objective." Creativity is encouraged

by not allowing ideas to be evaluated or discussed until everyone has run dry.

Any and all ideas are considered legitimate and often the most far-fetched are

the most fertile. Structured brainstorming produces numerous creative ideas

about any given "central question". Done right, it taps the human brain's capacity

for lateral thinking and free association.

Brainstorms help answer specific questions such as:

• What opportunities face us this year? • What factors are constraining performance in Department X? • What could be causing problem Y? • What can we do to solve problem Z?


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However, a brainstorm cannot help you positively identify causes of problems, rank ideas in a meaningful order, select important ideas, or check solutions.

To conduct a successful brainstorm:

1. Make sure everyone understands and is satisfied with the central question before you open up for ideas.

2. You may want to give everyone a few seconds to jot down a few ideas before getting started.

3. Begin by going around the table or room, giving everyone a chance to voice their ideas or pass. After a few rounds, open the floor.

4. More ideas are better. Encourage radical ideas and piggybacking. 5. Suspend judgment of all ideas. 6. Record exactly what is said. Clarify only after everyone is out of ideas. 7. Don't stop until ideas become sparse. Allow for late-coming ideas. 8. Eliminate duplicates and ideas that aren't relevant to the topic.

A brainstorm starts with a clear question, and ends with a raw list of ideas. That's

what it does well - give you a raw list of ideas. Some will be good, and some

won't. But, if you try to analyze ideas in the brainstorming session, you will ruin

the session. Wait. Later, you can analyze the results of a brainstorm with other

quality improvement tools. In particular, affinity diagramming is designed to sort a

raw list, using "gut feel" to begin to categorize the raw ideas. It is most often the

next step beyond brainstorming.

Prioritization Matrix

What is it?

A Prioritization Matrix is a useful technique you can use with your team members

or with your users to achieve consensus about an issue. The Matrix helps you

rank problems or issues (usually generated through brainstorming) by a

particular criterion that is important to your organization. Then you can more

clearly see which problems are the most important to work on solving first.

When to use it?

When you need to prioritize problems, or to achieve consensus about an issue.


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How to use it:

1. Brainstorm--Conduct a brainstorming session on problems users or team members have with your program or service.

2. Fill out the Prioritization Matrix chart with the group:

Problem Frequency Importance Feasibility Total Points

3. In the first column, write down the problems that were mentioned in the brainstorming session.

4. In the second to fourth columns, define your criteria. Examples of some typical criteria are:

o Frequency: How frequent is the problem? Does it occur often or only on rare occasions?

o Importance: From the point of view of the users, what are the most important problems? What are the problems that you want to resolve?

o Feasibility: How realistic is it that we can resolve the problem? Will it be easy or difficult?

You can choose other criteria if they better fit the situation you are discussing. For example, for a more quantitative comparison, you could use cost, amount of time, or other numerical indicators as the criteria.

5. Rank/Vote--Each participant now votes three times for each criteria. Each participant votes nine times in total.

6. Total all the votes together. The totals help you see clearly how to prioritize the problems.

Gantt charts

Developed by Harry Gantt in 1916, these charts give a timeline for each activity.

They are used for planning, scheduling and then recording progress against

these schedules.


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Basically there are two basic types of Gantt Charts: Load Charts and Project

Planning Charts.

* Load Charts:

This type of chart is useful for manufacturing projects during peak or heavy load

periods. The format of the Gantt Load Chart is very similar to the Gantt Project

Planning Chart but, in this case, uses time as well as departments, machines or

employees that have been scheduled.

* Project Planning Chart

It addresses the time of individual work elements giving a time line for each

activity of a project. This type of chart is the predecessor of the following tool:

PERT. As it can be seen in the figure, it is really easy to understand the graph,

but in developing it you need to take into consideration certain precedence

relationships between the different activities of the project. On the chart,

everyone is able to see when each activity starts and finishes but there is no

possibility to determine when each activity may start or if we can start a particular

activity before finishing the immediate predecessor activity. Therefore, we need

somehow know the precedence relationships between activities. This is the main

reason for using the following tools instead of using exclusively Gantt Charts.

PERT/CPM (Critical path Method)

Both methods show precedence relationships explicitly. Although the two

methods were developed independently during the fifties, they are surprisingly

similar. Both methods, PERT and CPM, use a graphic representation of a project

that it is called "Project Network" or "CPM diagram", and it is used to portray

graphically the interrelatioships of the elements of a project and to show the

order in which the activities must be performed.

PERT


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We have a high degree of uncertainty in regard to the completion time of many

activities. It makes sense in the real world that you do not really know how long a

particular activity will take, specially talking about certain activities such as

research and development. In this case, we can look at the project completion

time in a probabilistic fashion and for each activity we can define:

a. Optimistic time estimate: an estimate of the minimum time an activity will require.

b. Most likely time estimate: an estimate of the normal time an activity will require.

c. Pessimistic time estimate: an estimate of the maximum time an activity will require.

Delphi Technique

The Delphi technique was developed by the RAND Corporation in the late 1960's

as a forecasting methodology. Later, the U.S. government enhanced it as a

group decision-making tool with the results of Project HINDSIGHT, which

established a factual basis for the workability of Delphi. That project produced a

tool in which a group of experts could come to some consensus of opinion when

the decisive factors were subjective, and not knowledge-based.

Delphi is particularly appropriate when decision-making is required in a political

or emotional environment, or when the decisions affect strong factions with

opposing preferences. The tool works formally or informally, in large or small

contexts, and reaps the benefits of group decision making while insulating the

process from the limitations of group decision-making; e.g., over-dominant group

members, political lobbying, or "bandwagonism".

Delphi has worked well when trying to prioritize national funding for projects

among different states with conflicting goals, or if the scale of the decision-

making problem is very large:


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"The size of the budget for ASSIST, and the large number of proposals

submitted, generated a complex decision problem. For example, the number of

possible ways of funding is far more than could be considered individually. In

view of this, and the need to identify secondary criteria and allow them to

influence the funding decision, decision makers at [National Cancer Institute]

decided that a formal modeling approach should be used."

Delphi has the added advantage that it works as an informal, subjective model

when the decisions are based on opinion, and can be directly converted to a

formal model, when the data is more knowledge-based.

Delphi Prioritization Procedure

The prioritization process enumerated below will allow the stakeholders and

subject matter experts to produce a list of project rankings, or several lists, from

which the decision-makers in upper management may apply other criteria to

make a decision. The process can be completed in a few short meetings by a

panel of experts, by the corporate associates at large in a series of

questionnaires, or by a hybrid of the two. The description below is vague when

company policy or facilitator discretion may be used to invoke a variation.

1. Pick a facilitation leader. Select a person that can facilitate, is an expert in research data collection,

and is not a stakeholder. An outsider is often the common choice.

2. Select a panel of experts. The panelists should have an intimate knowledge of the projects, or be

familiar with experiential criteria that would allow them to prioritize the

projects effectively. In this case, the department managers or project

leaders, even though stakeholders, are appropriate.

3. Identify a strawman criteria list from the panel. In a brainstorming session, build a list of criteria that all think appropriate

to the projects at hand. Input from non-panelists are welcome. At this


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point, there is no "correct" criteria. However, technical merit and cost are

two primary criteria; secondary criteria may be project-specific.

4. The panel ranks the criteria. For each criterion, the panel ranks it as 1 (very important), 2 (somewhat

important), or 3 (not important). Each panelist ranks the list individually,

and anonymously if the environment is charged politically or emotionally.

5. Calculate the mean and deviation. For each item in the list, find the mean value and remove all items with a

mean greater than or equal to 2.0. Place the criteria in rank order and

show the (anonymous) results to the panel. Discuss reasons for items with

high standard deviations. The panel may insert removed items back into

the list after discussion.

6. Rerank the criteria. Repeat the ranking process among the panelists until the results stabilize.

The ranking results do not have to have complete agreement, but a

consensus such that the all can live with the outcome. Two passes are

often enough, but four are frequently performed for maximum benefit. In

one variation, general input is allowed after the second ranking in hopes

that more information from outsiders will introduce new ideas or new

criteria, or improve the list.

7. Identify project constraints and preferences. Projects as a whole are often constrained by total corporate budget, or

mandatory requirements like regulatory impositions. These "hard

constraints" are used to set boundaries on the project ranking. More

flexible, "soft constraints" are introduced as preferences. Typically, hard

constraints apply to all projects; preferences usually apply to only some

projects. Each panelist is given a supply of preference points, about 70%

of the total number of projects. (For example, give each panelist 21

preference points if 30 projects have been defined.)

8. Rank projects by constraint and preference.


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a. Each panelist ranks the projects first by the hard constraints. Which

project is most important to that panelist? Some projects may be

ignored. For example, if the total corporate budget is 100 million,

the panelist allocates each project a budget, up to the maximum

requested for that particular project, and such that the total of all

budgets does not exceed the $100 million. Some projects may not

be allocated any funding.

b. Next each panelist spreads their preference points among the

project list as desired. Some projects may get 10 points, others

may get none, but the total may not exceed the predefined

maximum (21 in our example above).

9. Analyze the results and feedback to panel. Find the median ranking for each project and distribute the projects into

quartiles of 25, 50, and 75-percentiles (50-percentile being the median).

Produce a table of ranked projects, with preference points, and show to

the panel. Projects between the 25th and 75th quartile may be considered

to have consensus (depending on the degree of agreement desired);

projects in the outer-quartiles should be discussed. Once the reason for

the large difference in ranking is announced, repeat the ranking process.

10. Rerank the projects until it stabilizes. After discussing why some people (minority opinion) ranked their projects

as they did, repeat the rankings. Eventually the results will stabilize:

projects will come to a consensus, or some will remain in the outlier range.

Not everyone may be persuaded to rank the same way, but discussion is

unnecessary when the opinions stay fixed. Present the ranking table to the

decision makers, with the various preferences as options, for their final

decision.


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Other Tools

Check sheet

The function of a check sheet is to present information in an efficient, graphical

format. This may be accomplished with a simple listing of items. However, the

utility of the check sheet may be significantly enhanced, in some instances, by

incorporating a depiction of the system under analysis into the form.

Pareto Chart

Pareto charts are extremely useful because they can be used to identify those

factors that have the greatest cumulative effect on the system, and thus screen

out the less significant factors in an analysis. Ideally, this allows the user to focus

attention on a few important factors in a process.

They are created by plotting the cumulative frequencies of the relative frequency

data (event count data), in descending order. When this is done, the most

essential factors for the analysis are graphically apparent, and in an orderly

format.

Flowchart

Flowcharts are pictorial representations of a process. By breaking the process

down into its constituent steps, flowcharts can be useful in identifying where

errors are likely to be found in the system.

Cause and Effect Diagram

This diagram, also called an Ishikawa diagram (or fish bone diagram), is used to

associate multiple possible causes with a single effect. Thus, given a particular

effect, the diagram is constructed to identify and organize possible causes for it.

The primary branch represents the effect (the quality characteristic that is

intended to be improved and controlled) and is typically labeled on the right side

of the diagram. Each major branch of the diagram corresponds to a major cause


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(or class of causes) that directly relates to the effect. Minor branches correspond

to more detailed causal factors. This type of diagram is useful in any analysis, as

it illustrates the relationship between cause and effect in a rational manner.

Histogram

Histograms provide a simple, graphical view of accumulated data, including its

dispersion and central tendency. In addition to the ease with which they can be

constructed, histograms provide the easiest way to evaluate the distribution of

data.

Scatter Diagram

Scatter diagrams are graphical tools that attempt to depict the influence that one

variable has on another. A common diagram of this type usually displays points

representing the observed value of one variable corresponding to the value of

another variable.

Control Chart

The control chart is the fundamental tool of statistical process control, as it

indicates the range of variability that is built into a system (known as common

cause variation). Thus, it helps determine whether or not a process is operating

consistently or if a special cause has occurred to change the process mean or

variance.

The bounds of the control chart are marked by upper and lower control limits that

are calculated by applying statistical formulas to data from the process. Data

points that fall outside these bounds represent variations due to special causes,

which can typically be found and eliminated. On the other hand, improvements in

common cause variation require fundamental changes in the process.


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Quality Management Principles

Introduction

This document introduces the eight quality management principles on which the

quality management system standards of the revised ISO 9000:2000 series are

based. These principles can be used by senior management as a framework to

guide their organizations towards improved performance.

Principle 1 Customer focus

Organizations depend on their customers and therefore should understand

current and future customer needs, should meet customer requirements and

strive to exceed customer expectations.

Key benefits:

• Increased revenue and market share obtained through flexible and fast responses to market opportunities.

• Increased effectiveness in the use of the organization's resources to enhance customer satisfaction.

• Improved customer loyalty leading to repeat business.

Applying the principle of customer focus typically leads to:

• Researching and understanding customer needs and expectations. • Ensuring that the objectives of the organization are linked to customer

needs and expectations. • Communicating customer needs and expectations throughout the

organization. • Measuring customer satisfaction and acting on the results. • Systematically managing customer relationships. • Ensuring a balanced approach between satisfying customers and other

interested parties (such as owners, employees, suppliers, financiers, local communities and society as a whole).

Principle 2 Leadership

Leaders establish unity of purpose and direction of the organization. They should


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create and maintain the internal environment in which people can become fully

involved in achieving the organization's objectives.

Key benefits:

• People will understand and be motivated towards the organization's goals and objectives.

• Activities are evaluated, aligned and implemented in a unified way. • Miscommunication between levels of an organization will be minimized.

Applying the principle of leadership typically leads to:

• Considering the needs of all interested parties including customers, owners, employees, suppliers, financiers, local communities and society as a whole.

• Establishing a clear vision of the organization's future. • Setting challenging goals and targets. • Creating and sustaining shared values, fairness and ethical role models at

all levels of the organization. • Establishing trust and eliminating fear. • Providing people with the required resources, training and freedom to act

with responsibility and accountability. • Inspiring, encouraging and recognizing people's contributions.

Principle 3 Involvement of people

People at all levels are the essence of an organization and their full involvement

enables their abilities to be used for the organization's benefit.

Key benefits:

• Motivated, committed and involved people within the organization. • Innovation and creativity in furthering the organization's objectives. • People being accountable for their own performance. • People eager to participate in and contribute to continual improvement.

Applying the principle of involvement of people typically leads to:

• People understanding the importance of their contribution and role in the organization.

• People identifying constraints to their performance.


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• People accepting ownership of problems and their responsibility for solving them.

• People evaluating their performance against their personal goals and objectives.

• People actively seeking opportunities to enhance their competence, knowledge and experience.

• People freely sharing knowledge and experience. • People openly discussing problems and issues.

Principle 4 Process approach

A desired result is achieved more efficiently when activities and related resources

are managed as a process.

Key benefits:

• Lower costs and shorter cycle times through effective use of resources. • Improved, consistent and predictable results. • Focused and prioritized improvement opportunities.

Applying the principle of process approach typically leads to:

• Systematically defining the activities necessary to obtain a desired result. • Establishing clear responsibility and accountability for managing key

activities. • Analyzing and measuring of the capability of key activities. • Identifying the interfaces of key activities within and between the functions

of the organization. • Focusing on the factors such as resources, methods, and materials that

will improve key activities of the organization. • Evaluating risks, consequences and impacts of activities on customers,

suppliers and other interested parties.

Principle 5 System approach to management

Identifying, understanding and managing interrelated processes as a system

contributes to the organization's effectiveness and efficiency in achieving its

objectives.

Key benefits:


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• Integration and alignment of the processes that will best achieve the desired results.

• Ability to focus effort on the key processes. • Providing confidence to interested parties as to the consistency,

effectiveness and efficiency of the organization.

Applying the principle of system approach to management typically leads to:

• Structuring a system to achieve the organization's objectives in the most effective and efficient way.

• Understanding the interdependencies between the processes of the system.

• Structured approaches that harmonize and integrate processes. • Providing a better understanding of the roles and responsibilities

necessary for achieving common objectives and thereby reducing cross-functional barriers.

• Understanding organizational capabilities and establishing resource constraints prior to action.

• Targeting and defining how specific activities within a system should operate.

• Continually improving the system through measurement and evaluation.

Principle 6 Continual improvement

Continual improvement of the organization's overall performance should be a

permanent objective of the organization.

Key benefits:

• Performance advantage through improved organizational capabilities. • Alignment of improvement activities at all levels to an organization's

strategic intent. • Flexibility to react quickly to opportunities.

Applying the principle of continual improvement typically leads to:

• Employing a consistent organization-wide approach to continual improvement of the organization's performance.

• Providing people with training in the methods and tools of continual improvement.

• Making continual improvement of products, processes and systems an objective for every individual in the organization.


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• Establishing goals to guide, and measures to track, continual improvement.

• Recognizing and acknowledging improvements.

Principle 7 Factual approach to decision making

Effective decisions are based on the analysis of data and information

Key benefits:

• Informed decisions. • An increased ability to demonstrate the effectiveness of past decisions

through reference to factual records. • Increased ability to review, challenge and change opinions and decisions.

Applying the principle of factual approach to decision making typically leads to:

• Ensuring that data and information are sufficiently accurate and reliable. • Making data accessible to those who need it. • Analysing data and information using valid methods. • Making decisions and taking action based on factual analysis, balanced

with experience and intuition.

Principle 8 Mutually beneficial supplier relationships

An organization and its suppliers are interdependent and a mutually beneficial

relationship enhances the ability of both to create value

Key benefits:

• Increased ability to create value for both parties. • Flexibility and speed of joint responses to changing market or customer

needs and expectations. • Optimization of costs and resources.

Applying the principles of mutually beneficial supplier relationships typically leads

to:

• Establishing relationships that balance short-term gains with long-term considerations.


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• Pooling of expertise and resources with partners. • Identifying and selecting key suppliers. • Clear and open communication. • Sharing information and future plans. • Establishing joint development and improvement activities. • Inspiring, encouraging and recognizing improvements and achievements

by suppliers.


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Uniform Hospital Discharge Data Set (UHDDS)

The uniform hospital discharge data set (UHDDS) is a minimum, common core of

data on individual hospital discharges. The current UHDDS was revised in 1984

and implemented in 1986. The minimum data collection set consists of the

following:

Number Item Description 1 Personal Identification

2 Date of Birth

3 Sex

4 Race and Ethnicity

5 Residence

6 Hospital Identification

7-8 Admission and Discharge Dates

9-10 Physician Identification: Attending and Operating 11 Diagnoses

12 Procedures and Dates

13 Disposition of Patient

14 Expected Payer for Most of this Bill (Anticipated

Financial Guarantor for Services)

Personal Identification This is a unique number that is assigned to each patient that is unique to that

individual and allows the facility to distinguish one patient’s record from any other

patient seen within that same facility.

Date of Birth This information must include the month, day and year of birth. Facilities are

encouraged to keep the year of birth in a four-digit format to avoid inaccuracies

for that patient’s over 100 years of age.


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Sex The two options for this field are “Male” or “Female”

Race and Ethnicity The UHDDS provides facilities with five options for the selection of Race:

• White • Black • Asian or Pacific Islander • American Indian/Eskimo/Alcut • Other

In addition there are two additional options for the selection of Ethnicity:

• Spanish origin/Hispanic • Non-Spanish origin/Non-Hispanic

Residence The needed information here includes the zip code or the code for foreign

residence.

Hospital Identification Each facility must have a unique institutional number for identification purposes.

Admission and Discharge Date The month, day and year of both the date of admission and date of discharge

must be included in the UHDDS. To be considered an inpatient, the patient must

be receiving services from a physician, dentist, or allied service and be provided

a room and meals and receiving continuous nursing services. The discharge

occurs when the room and meals have been terminated and the patient is no

longer receiving nursing services.

Physician Identification


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In addition to the patient and facility requiring a unique identification, every

physician must also have a number unique to him/her within the facility. In

addition, for each case, the attending physician and the operating physician (if

there is one) must be identified.

Attending Physician The attending physician is defined as the clinician primarily responsible for the

patient from the beginning of the hospital stay.

Operating Physician The operating physician is defined as the physician who performed the principal

procedure.

Diagnoses All diagnoses that affect the hospital stay must be reported. The principal

diagnosis, the first listed, is defined as “the condition established after study to be

chiefly responsible for occasioning the admission of the patient to the hospital for

care.” In addition, other diagnoses are defined as “all conditions that coexist at

the time of admission, the develop subsequently, or that affect the treatment

received and/or the length of stay.” Those diagnoses that relate to an earlier

episode and have no affect on current treatment are not to be coded.

Procedures and Date All significant procedures are to be reported. A significant procedure is described

by UHDDS guidelines as:

1. One that is surgical in nature, or 2. One that carries a procedural risk, or 3. One that carries an anesthetic risk, or 4. One that requires specialized training.

The procedure must be identified by a unique number (ICD-9-CM) and both the

procedure number and the date the procedure was performed must be reported.


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When more than one procedure is performed, one procedure must be designated

as the principal procedure defined by UHDDS as: “is one that was performed for

definitive treatment rather than one performed for diagnostic or exploratory

purposes, or was necessary to take care of a complication. If there appear to be

two procedures that are principal, then the one most related to the principal

diagnosis should be selected as the principal procedure.”

Procedural risk is also defined by UHDDS and is as stated: “a professionally

recognized risk that a given procedure may induce some functional impairment,

injury, morbidity, or even death. This risk may arise from direct trauma,

physiologic disturbances, interference with natural defense mechanisms, or

exposure of the body to infection or other harmful agents.”

An anesthetic risk is defined as “Any procedure that either requires or is

regularly performed under general anesthesia carries anesthetic risk, as do

procedures under local, regional, or other forms of anesthesia that induce

sufficient functional impairment necessitating special precautions to protect the

patient from harm.”

And specialized training refers to procedures that can only be performed by

specialized professional, qualified technicians or clinical team that are specifically

trained to carry out the procedure, or whose main purpose is to perform the

procedure.

Disposition of Patient The disposition of a patient must be reported to include any of the following:

1. Discharged to home (routine discharge) 2. Left against medical advice 3. Discharged to another short-term hospital 4. Discharged to a long-term care institution 5. Died 6. Other (allows “disposition of patient” to be all inclusive)


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Expected Payer for Most of this Bill (Anticipated financial Guarantor for Services) The following is a list of options for reporting:

1. Blue Cross 2. Other insurance companies 3. Medicare 4. Medicaid 5. Workers’ Compensation 6. Other government payers 7. Self-pay 8. No charge (free, charity, special research, or teaching) 9. Other


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Individual Differences in Organizations - Personality

What is Personality? Why is it Important?

Personality refers to the relatively stable and unique combination of attitudes,

beliefs, values which each individual possesses.

Personality shapes how we work and manage others in organizations (i.e., our

management and work style).

Goleman’s Emotional Intelligence - Self-Awareness

Definition

Refers to the ability to recognize and understand your moods, emotions, drives

as well as their effect on others.

• Hallmarks • Self-confidence • Realistic self-Assessment • Self-deprecating sense of humor

Goleman’s Emotional Intelligence - Self-Regulation

Definition

The ability to control or redirect disruptive impulses and moods.

The propensity to suspend judgment - to think before acting.

• Hallmarks • Trustworthiness and integrity • Comfort with ambiguity • Openness to change

Goleman’s Emotional Intelligence – Motivation

Definition

A passion to work for reasons that go beyond money or status.

A propensity to pursue goals with energy and persistence.

• Hallmarks • Strong drive to achieve • Optimism even in the face of failure


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• Organizational commitment

Goleman’s Emotional Intelligence – Empathy

Definition

The ability to understand the emotional makeup of other people.

Skill in treating people according to their emotional reactions.

• Hallmarks • Expertise in building and retaining talent • Cross-cultural sensitivity

• Service to clients and customers

Goleman’s Emotional Intelligence - Social Skill

Definition

Proficiency in managing relationships and building networks.

An ability to find common ground and build rapport.

• Hallmarks • Effectiveness in leading change • Persuasiveness • Expertise in building and leading teams

Techniques for Boosting Emotional Intelligence

1. Manage emotions instead of suppressing them.

2. Recognize your “hot buttons.”

3. Become an optimist.

4. Read the emotions of others.

5. Use your EI to help others boost theirs.

The Abrasive Personality Type

1. Extremely Intelligent 2. Impatient 3. Intimidates Others 4. Perfectionist 5. Highly Analytical 6. Domineering


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7. Inability to Delegate 8. Competitive 9. Lacks Tact

Techniques for Handling Abrasive Individuals

1. Understand the causes of the person’s behavior.

2. Report your observations to the person.

3. Recognize the person’s desire to achieve but manage his/her

expectations and goals.

4. Refuse to argue.

5. Expect to repeat the process.

Covey’s Seven Habits of Highly Effective People

1. Be proactive

2. Begin with the end in mind

3. Put first things first

4. Think win/win

5. Seek first to understand and then to be understood

6. Synergize

7. Sharpen the sword


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Attitudes & Behaviors

What are Attitudes?

Attitudes refer to stable clusters of feelings, beliefs and behavioral intentions

toward specific objects, people or institutions.

Why are Attitudes Important?

1. Attitudes have important managerial implications because they are related

to subsequent employee behaviors.

2. Many companies hire for attitude and train for skills.

The General Attitude Model

Theories of Job Satisfaction-Locke’s Value Theory of Satisfaction

1. Determinants of Facet Satisfaction

a. Have-Want Discrepancy for a Facet

b. Importance of the Facet

2. Overall job satisfaction depends in the degree to which a person’s

MOST IMPORTANT job facets are being satisfied.

Managerial Implications: Locke’s Value Theory

1. Identify which facets are most important to your employees.

2. Assess the extent to which a have-want discrepancy exists for the most

important facets.

3. Identify and implement steps to reduce or eliminate have-want

discrepancies for the most important facets.

Mobley’s Satisfaction-Turnover Model

Key Components of the Model

1. Perceived Desirability of Movement


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a. Job Satisfaction

b. Opportunities for Internal Organizational Transfer

2. Perceived Ease of Movement

a. Level of Business Activity

b. Visible Organizations

c. Personal Characteristics

Managerial Implications

1. If your objective is to retain employees within a specific work unit, seek to

achieve high employee job satisfaction and few perceived opportunities for

internal and external organizational transfer.

2. If your objective is to retain employees within an overall organization, seek

to achieve high job satisfaction, many opportunities for internal

organizational transfer and few opportunities for external organizational

transfer.

Steers and Rhodes Satisfaction-Attendance Model

Key Components of the Model

1. Job Satisfaction

2. Pressure to Attend

3. Ability to Attend

Steers and Rhodes Satisfaction-Attendance Model

Managerial Implications

1. Achieve and maintain high employee job satisfaction.

2. Enhance pressure to attend through organizational policies and practices.

3. Eliminate barriers that inhibits employees’ ability to come to work.


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Emerging Trend and Challenge – “Presenteeism”

• Presenteeism refers to employees who go to work despite the fact that they are sick or injured.

• Presenteeism can include migraines, colds/flu, back pain, hypertension, and allergies.

• Based on recent surveys, more 40% of employers reported that presenteeism is a major problem.

• Presenteeism costs U.S. companies more than $150 billion.


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The Perceptual Process

Perception: What is it and why is it important?

1. Perception is critical because it can vary widely by person.

2. Perception is the “reality” that individuals respond to in terms of

organizational behavior.

3. Differences in perception can erect barriers between people and work

units, cause conflict, undermine teamwork, and create resistance to

organizational change.

Fundamental Attribution Error

The tendency to attribute the causes of others’ behavior to internal rather than

external causes.

Example: District Manager at a Retailer

Perceptual Factors

• Halo Effect The tendency to create an overall negative or positive impression of someone

based on one dominant characteristic of that person.

• Similar-to-Me Effect The tendency to view others who are similar to us more favorably than those who

are not similar to us.

• Primacy/Recency Effects The tendency to place a disproportionate weight on what happens at the very

beginning and very end of an event or interaction.

Example: “Business Presentations, Performance Appraisals”

• Selective Perception The tendency to focus on certain information related to a person or issue.

Example: “The Good News Culture”


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• Stereotypes The tendency to place people or issues into categories and to assume that every

person or issue in that category possesses certain attributes.

Examples: Perceptions of Americans, Professions

Perceptual Readiness

The tendency to perceive people or issues in a way which confirms our

expectations.

Example: Teamwork Experiences, Task Performance

Perceptual Defense

The tendency to maintain our perceptions of people or issues despite

disconfirming evidence.

Example: “Analog vs. Digital Phones at Motorola”

Guidelines for Reducing Perceptual Factors

1. Recognize external causes of behavior.

2. Be aware of stereotypes, biases and assumptions.

3. Reality test your understanding of a situation.

4. Emphasize objective information.

5. Avoid making rash judgments.

6. Seek information from a variety of sources.

7. Be empathetic (“Walk in the shoes of another for a mile”).

8. Actively manage the perceptions of others.


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Training & Development

What are Training and Development?

Training refers to the process of providing employees with specific skills or

helping them correct deficiencies in their performance.

Development refers to an effort to provide employees with the abilities the

organization will need in the future.

The Needs Assessment Phase

1. The primary activity in this phase is conducting a training needs analysis.

2. The key outcome of this phase is the identification of training objectives.

3. Levels of Training Needs Analysis

• Organizational Level • Task Level • Person Level

Guidelines for Effective Training Needs Analysis

• Use multiple-choice or yes/no question formats (survey) to make it easier for employees to respond.

• Use a 360 degree approach to collecting data. • Obtain information about the ideal conditions for delivering the training. • Use a 1-3 rating scale to elicit specific responses. • Leave room for respondents to write comments. • Ask employees about barriers to training and how to overcome them. • Limit questions to 25 or less. • Interview a cross-section of managers to obtain input into the process.

The Training Phase

1. The objective of this phase is to develop appropriate training content and

methods given the training objectives.

Audience Characteristics – Adult Learners


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• Need to be involved and consulted. • Need feedback regarding how they are doing. • Learn in a variety of ways. • Want to be able to challenge the content and the process. • Enjoy being able to answer questions. • Are interested in obtaining practical solutions to their problems. • Like to be treated as equals. • Need to be challenged. • Want to be able to practice in a risk-free environment. • Need to build on their own knowledge and experience.

Guidelines for Effective Presentation of Training

• Stick to your agenda. • Listen to your trainees. • Deal with dysfunctional behavior. • Focus on your training objectives. • Provide a safe and appropriate learning environment. • Ensure equal participation. • Vary your training methods and delivery to maintain interest. • Have fun. • Review your agenda.

Guidelines for On-the-Job Training

• Decide on the best method for providing on-the-job training. • Provide developmental feedback for trainees on a regular basis. • Clearly define training objectives. • Formally evaluate the training program. • Develop appropriate training materials to support the process. • Train the trainer. • Block out specific time for training.

Guidelines for Effective Training Evaluation

• Base the training evaluation on the training objectives. • Assess trainee perceptions of the value of the training. • Assess trainee mastery of the training content. • Conduct a follow-up evaluation to assess the impact of the training on

employee performance and organizational effectiveness. • Obtain specific, quantifiable results that demonstrate the value of the

training.


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Common Reasons for the Failure of Training

• The reason for the training has not been identified. • The training tries to be everything to all people. • The needs of trainees were ignored or not taken into account. • The training is impractical. • Examples are unrealistic or unrelated. • The training is concentrated. • The supervisor is not involved. • The training is not reinforced back on the job.

Creating a Learning Organization that Supports Training

• Design hiring systems to assess capacity to learn and commitment to ongoing learning.

• Promotion criteria should include contributions to personal and team learning.

• Compensation systems should reward new skill acquisition. • Formal managerial responsibilities should include coaching and

mentoring. • Performance appraisal systems should include learning-related activities

and results as a criterion of performance. • Business plans and organizational goals should emphasize continuous

learning as a key source of competitive advantage.

Measures of Training Effectiveness

• Knowledge Change = Ka/Kb • Skill Change = Sa/Sb • Attitude Change = Aa/Ab • Performance Change = Pa/Pb • Training Hours Per Employee • Percentage of Employees Completing a Training Program • Training Investment Factor = Total Training Cost/Total Number of

Employees


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Managing Work Motivation

What is Motivation?

Motivation is composed of two basic components:

1. Intensity - The amount of desire generated.

2. Direction - How intensity is channeled.

The FISH! Philosophy

Element #1 – Play!

Element #2 – Make Their Day

Element #3 – Choose Your Attitude

Element #4 – Be There

Practical Implications – Content Theories of Motivation

• Assess employee needs and identify those that are most active. • Develop and implement appropriate strategies to enable employees to

satisfy their active needs. • Use a variety of strategies to satisfy employee needs. • Conduct regular evaluations of your strategies for satisfying active

employee needs.

The Operant Conditioning Process

1. Stimulus (S) or Antecedent (A) – A signal, cue or specific context.

2. Response (R) or Behavior (B) - The target behavior that you want to

change.

3. Consequences (C) - Outcomes which occur based on a behavior.

Guidelines for Increasing Desired Employee Behaviors

• Make sure that you understand the S-R-C linkage. • Make sure that the consequence is positively valued by the employee. • Link positive consequences with the desired behavior more frequently to

facilitate acquisition of behavior. • Vary the frequency of using positive consequences to maintain the desired

behavior.


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• Vary the type of positive consequences used. • Watch the costs associated with administering positive consequences.

Guidelines for Eliminating Undesired Employee Behaviors

• Make sure that you understand the S-R-C. • Make sure that the consequence is negatively valued by the employee. • Make sure to explain the desired behavior to the employee. • Be aware of other negative consequences that may result from the use of

punishment. • Use punishment only when there is a real need to do so.

Locke and Latham’s

Goal-Setting Theory

• Goal-Directed Effort • Goal Difficulty • Goal Specificity • Goal Acceptance • Goal Commitment

Goal-Setting Theory: Managerial Implications

1. Set good goals.

2. Provide support.

3. Link appropriate outcomes to goal achievement.

Adams’s Equity Theory

Motivation Resulting From Equity Comparisons

a. Equitable Payment

b. Underpayment Inequity

c. Overpayment Inequity

Managerial Implications of Equity Theory

Monitor and manage employee perceptions of equity with the objective of

achieving perceived payment equity.


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Business and Its Environment

Statute of Frauds- Deception deliberately practiced with a view to gaining an

unlawful or unfair advantage; artifice by which the right or interest of another is

injured; injurious stratagem; deceit; trick

Duress-

a. Coercion illegally applied.

b. Forcible confinement

In law an agent is a person authorized to do some act or acts in the name of

another, who is called his principal.

Be familiar with different types of insurance and laws pertaining to consigned

goods.

Torts In the common law, a tort is a wrong for which the law provides a remedy. The

term comes from Law French and means, literally, 'a wrong'. The "law of torts" is

a body of civil law or private law that covers the various legal (money damages

and equity remedy) which the law provides for civil wrongs arising from extra-

contractual liability, i.e., other than those wrongs which arise from a breach of

contractual obligations.

Under United States law, torts are generally divided into two categories:

intentional torts and non-intentional torts. Intentional torts include those actions

that are intentional and voluntary and that are made with knowledge by the

tortfeasor (i.e. the person who committed the tort) upon the plaintiff (the one who

brings the complaint seeking relief). Intentional torts include: battery, assault

(apprehension of harmful or offensive contact), false imprisonment, intentional


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infliction of emotional distress, the real property tort of trespass to land, and the

personal property torts of conversion and trespass to chattels.

Amongst unintentional torts one finds negligence as being the most common

source of litigation in most American courts. It is a form of extracontractual

liability that is based upon a duty of care of a reasonable person, who, being the

proximate cause of damages, and but for the tortfeasor's act, is the cause of

damages to the plaintiff. Other non-intentional torts include negligent infliction of

emotional harm.

There is some overlap between tort law and criminal law -- some acts may at

once constitute both a tort and a crime -- and many crimes may be viewed as

particularly egregious torts. A cause of action in tort can also be distinguished

from a criminal prosecution which may arise from the alleged violation of a

criminal statute. The former is typically prosecuted by a private citizen, whereas

the latter is prosecuted by the state, and one or both may be brought forth

independently. Moreover, remedies for torts can take the form of compensation

for damages or injunctive relief. A criminal prosecution usually results in the

imposition of a sentence, such as a fine and/or incarceration

Res ipsa loquitur

[Latin: the thing speaks for itself]. An expression used in tort to refer to situations

where negligence is presumed on the defendant since the object causing injury

was in his or her control. This is a presumption that can be rebutted by showing

that the event was an inevitable accident and had nothing to do with the

defendant's responsibility of control or supervision.

Contributory negligence

The negligence of the claimant which, while not being the primary cause of a tort,

nevertheless combined with the act or omission of the defendant to cause the

tort, and without which the tort would not have occurred


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Employment Laws

• Civil Rights Act of 1991 • Put burden of proof on employers. • Quotas are illegal. • Permitted trials by jury where punitive and compensatory damages are

sought. • Expanded the right to bring actions challenging discriminatory seniority

systems. • Limited the extent to which reverse discrimination lawsuits could be

brought.

Major Employment Laws and Regulations

• Sexual Harassment • Quid Pro Quo Sexual Harassment - A manager who gives an employee

preferential treatment in exchange for “sexual favors.” • Hostile Work Environment Sexual Harassment - When the behavior of

someone in the work setting is sexual in nature and is perceived by an employee to be offensive and undesirable.

Behaviors that May Constitute Sexual Harassment

• Touching • Telling sexually-oriented jokes • “Elevator Eyes” • Allowing pin-up calendars, sexually-oriented images in the workplace • Making sexually-oriented comments. • Repeatedly making unwanted sexual advances toward another employee • Making conditions of employment based on “sexual favors” • Physical assaults (e.g., grabbing)

Sexual Harassment – Practical Guidelines

• Create a zero tolerance policy. • Provide training. • Provide support for the person who filed the complaint (e.g., EAP). • Conduct periodic employee attitude surveys to gauge the effectiveness of

the policy. • Implement a grievance procedure. • Follow the company policy. • Conduct a thorough investigation and document the timeline of events. • Evaluate managers based on their effectiveness in implementing the

policy.


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• Work with your HR representative. • Treat every complaint seriously. • Do not transfer or fire anyone based on a sexual harassment complaint

alone. • Obtain support of top management.

Major Employment Laws and Regulations

Pregnancy Discrimination Act of 1978

• Protects pregnant employees from discrimination in employment. • Employers must allow pregnant employees to work until it affects their

performance and the disability is at a level that is comparable to other conditions where workers could not continue.

• Employers must allow women to return to work after childbirth on the same basis as for other disabilities.

Employers may not do the following:

• Refuse to hire a pregnant employee. • Terminate an employee after discovering the employee’s pregnancy. • Fail to permit the employee to be part of the normal cycle of office culture. • Refuse to provide lighter duty, if the employee needs it.

Religious Discrimination

• Employers cannot question the acceptability of an employee’s religion. • The employer should be conscious of potential religious conflicts in

developing and implementing workplace policies. • The employer must make a good faith effort to make reasonable

accommodations for employees based on religion so long as they do not constitute an “undue hardship” to the employer.

Age Discrimination in Employment Act of 1967

• Prohibits discrimination against individuals who are 40 years-old or older. • Guidelines for overcoming or preventing age discrimination include: • Audit organizational culture. • Rethink and change attitudes about older workers. • Assess and modify HR practices that may discriminate against older

workers. • Include older workers in diversity task forces.


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Major Employment Laws

The Americans with Disabilities Act (ADA) prohibits discrimination in employment

practices against an individual with a physical or mental disability who is

otherwise qualified.

1. Key issue is whether a disabled person can perform the "essential functions of a job." 2. The employer is obligated to make "reasonable accommodations“ for

employees who are otherwise qualified. 3. Accommodations may not present an "undue hardship” to the employer.

Examples of Reasonable Accommodations

• Lap boards • Voice responsive computers • Robotic devices • Telephone amplifiers • Flexible work arrangements • Walking canes • Computer screen magnifiers • Delivered lunches • Automatic page turners • Affirmative Action • Purpose


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Accounting/Budgets

Asset-

a. The entries on a balance sheet showing all properties, both tangible

and intangible, and claims against others that may be applied to

cover the liabilities of a person or business. Assets can include

cash, stock, inventories, property rights, and goodwill.

b. The entire property owned by a person, especially a bankrupt, that

can be used to settle debts.

Liability- A financial obligation, debt, claim, or potential loss

Income- The amount of money or its equivalent received during a period of time

in exchange for labor or services, from the sale of goods or property, or as profit

from financial investments.

Cost- An amount paid or required in payment for a purchase; a price

Expense- An expenditure of money; a cost

Debit-

a. An item of debt as recorded in an account.

b. The left-hand side of an account or accounting ledger where

bookkeeping entries are made.

c. An entry of a sum in the left-hand side of an account.

d. The sum of such entries

Credit-

a. The deduction of a payment made by a debtor from an amount due.

b. The right-hand side of an account on which such amounts are

entered.


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c. An entry or the sum of the entries on this side.

d. The positive balance or amount remaining in a person's account.

e. A credit line

Net Income- the excess of revenues over outlays in a given period of time

Balance Sheet- A statement of a business or institution that lists the assets,

debts, and owners' investment as of a specified date

Income Statement- a financial statement that gives operating results for a

specific period

Depreciation- An allowance made for a loss in value of property

Know the basic accounting cycle and the components of a journal entry that uses

double-entry accounting methods. Know how to prepare a end of fiscal period

statement accounts.

Inventory methods: Average cost LIFO- Last in first out FIFO- First in first out

Know the types of depreciation:

Declining Balance Straight Line Sum of the year’s digits


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Budgets

The budget is one of the manager's most important tools. Carefully crafting a

budget can be key to obtaining additional resources. There are three ways to

improve the budgeting process to ensure sufficient control over expenditure of

resources.

1. Develop clear formal budget organization. Know who is responsible for the budget in each department.

2. Set up financial accounts for each department. (Expenses and income that are traceable to specific staff members for more efficient control.)

3. Plan well in advance and anticipate unexpected windfalls; or on the downside, emergencies that require reallocation of funds.

Because gaining resources is a very competitive process, the manager needs to

be high in the administrative hierarchy, eloquent in articulating budget needs, and

persistent in following thorough with questions or concerns from the budget

granting agency.

As a planning document, the budget is a presentation of the organization's

objectives in terms of specific programs to be carried out during a specified

period of time -- usually one year. Following is a simple overview of major kinds

of budgets.

I. Line Item Budget

Line item budgets are the most common type of budget and are often called

incremental budgets, because typically just a small amount of funding is added

each year. The advantages of a line item budget are:

• Easy to prepare • Easy to understand • Easy to justify.

People understand that costs always go up! The big disadvantage is that there is

no relationship between the budget request and objectives and priorities, and it is


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different to transfer from one line item to another. Finally, the line item budget

negates change. It tends to project the past into the future.

II. Formula Budget

The formula budget is sometimes used in large library systems, and state or

federal agencies. It uses predetermined standards for allocation of resources.

Budget criteria are established and then applied across the board to all units

within the system. This type of budget is focused on input rather than activities.

III. Program Budget

Program budget is concerned with the organization's activities, as opposed to

expenditures - goes hand-in-hand with strategic planning. Based on establishing

costs of individual programs, so one can look at the total costs of a program and

decide whether to continue, modify and delete.

The advantages of a program budget are:

• easier to evaluate programs since costs are tied to results • priorities can be changed quickly • smaller more manageable budget units

IV. Performance Budgets

Performance budgets are similar to program budgets, but here the emphases are

on costing out functions. All fixed costs are added in. Emphasis is on quantity

not quality.

V. Planning, Programming, Budgeting Systems (PPBS)

PPBS is a form of planning a combination of program budgeting and

performance budgeting. First, goals and measurable objectives are established.

Then develop costs of achieving each of the objectives including alternate ways

to achieve the objectives with cost benefit rations presented for each.

VI. Zero Based Budgeting


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Focus on two basic questions

1. Are current activities efficient and effective? 2. Should current activities be eliminated or reduced to fund higher-priority

new programs or to reduce the current budget?

With ZBB each unit of the budget must be justified, and placed in a hierarchy.

Activities are broken into packages and funds are allocated by priority until all

funds have been expended, and the cut off point is reached.

This process requires the identification of goals and objectives, the reason for the

activity, consequences of not implementing the package, detailed measurement

of performance and costs of the activity. Ranking decision packages focuses

decisions about the most important activities in each unit of the organization.

After each unit identifies its priorities, the priorities of all units are amalgamated

into one pool in light of the decision package's importance to the total

organization.

Basically, ZBB is not concerned with the past, but with what should be done in

the future. By forcing staff to identify areas of greater and lesser importance, it

emphasizes standing among all units of the organization. ZBB can be threatening

to staff - the fact that each program starts in the lineup at zero base every year.

The advantages of ZBB are:

• combines planning, budgeting, and decision making into one process; • more involvement by staff can be good for morale; • may save money; • conducive to change; • easier to justify budget.

The disadvantages of ZBB are:

• threatening • time consuming • requires more paperwork • requires extensive training in the techniques • prioritizing process can be highly political.


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VII. Allocation Revision Accountability Systems (ADAP)

ADAP combines aspects of PPBS and ZBB. Normally, the organization or unit submits three budgets

1. Budget increase 2. Modest increase 3. Budget below which organization cannot function.


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Communication in Organizations

What is Communication?

Communication is the process through which messages are transmitted and

interpreted by two or more individuals.

Why is Communication Important?

1. It’s not just WHAT you say, but also HOW you say it that matters!!

2. If you can’t communicate, don’t expect others to do what you want them to

do.

3. Communication skills are one of the best predictors of “success” in the

business world.

The Basic Communication Process

The Sender

IDEA – ENCODING OF IDEA – Taking an idea and translating it into an

appropriate message. The Basic Communication Process

The Receiver

DECODING – IDEA RECEIVED – Interpreting a message and receiving it.

The Roles of Noise and Feedback

There are many barriers to communication. Feedback is the reply or return

message from the receiver.

“Gender Differences in Communication”

MALES

Emphasize status Nonverbals (less eye contact)


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Use “I” Ritual opposition Offer advice or solutions Direct style of giving orders

FEMALES

Downplay their status Nonverbals (more direct eye contact) Focus on social connections (“we”) Ritual apology Offer social support Indirect style of giving orders

General Guidelines for Managing the Grapevine

• Take the attitude that it is better to give too much information than not enough.

• Never deny or lie about the truth – your credibility will suffer and mistrust will increase.

• Hold regular meetings to provide updates and to answer questions. • Go to the source of the rumor, collect information about the “truth” and

share the facts with employees. • Anticipate issues that might provoke gossip and deal with them right away.

General Guidelines for Effective Upward Communication

• Always keep your boss informed of the situation. • Focus on solutions not problems. • Follow the chain of command. • If you have a pressing issue, make an appointment with your boss. Be

sure to state your objective and the amount of time needed. • Play close attention to how you frame your message. • If you are unsure how your boss will respond to an issue, run it by him/her

in writing first. • When presenting information, be sure to provide written documentation. • Be as concise as possible.

General Guidelines for Effective Employee Communication

• Encourage communication from your people (e.g., open door policy, walking around).

• Don’t just tell employees what to do – tell them why. • Ask for employee opinions (e.g., suggestion systems, brown bag lunches).


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• Maintain a positive approach (look, smile, and act interested). • Demonstrate respect for your associates by listening to them and showing

interest in their ideas. • Don’t voice disagreement with your boss’s instructions to your employees.

Voice them to your boss.


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Leadership

House's Path-Goal Theory Practical Implications

• Change the situation. • Train the leader to match the situation. • Replace the leader.

Hersey-Blanchard's Situational Leadership Theory Practical Implications

• Train the leader to match the situation • Replace the leader • Change the situation

Ciampa and Watkins Leadership Theory Practical Implications

• A new leader has 2-3 years to make measurable progress in changing the culture and improving financial performance.

• A new leader should understand the organization's current strategy and goals.

• During the first six months, the leader must develop and test hypotheses about operating priorities.

• New leaders must balance an intense, single-minded focus on a few priorities with flexibility about when and how they are implemented.

• New leaders must make key decisions about the organizational architecture of the firm. The leader must decide whether the composition of the inherited team is appropriate.

• After six months, the leader must have some personal credibility and momentum for sustained improvements in performance.

• The new leader must earn the right to transform the • organization. It is critical to build coalitions supportive of change. • TThere is no best way to manage a leadership transition.

Charney’s Guidelines for Effective Leadership

• Have a clear vision of what you are working towards. • Give credit to those who have earned it. • Be flexible. • Be consistent in terms of your principles and values. • Confront issues as they arise.


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• Reflect on and learn from mistakes – admit when you are wrong. • Walk the talk – be willing to do what you expect of others. • Let people know how they are doing. • Treat staff as individuals.


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Stress Management

What is Stress?

Stress refers to the pattern of emotional states, cognitions, and physiological

reactions occurring in response to stressors.

The PRIMARY attribute of stress is that it is physiological in nature.

Why is Stress Important?

• 43% of all adults suffer adverse effects from stress. • 75-90% of all physician office visits are for stress-related ailments. • Stress costs U.S. industry more than $300 billion dollars per year, or

$7,500 per worker. • U.S. workers put in an average of 47 hrs./week. On an annual basis, U.S.

workers work one month more than Japanese and three months more than German workers.

• Incidents of “going postal,” “desk rage,” and “office rage” continue to increase in the workplace.

The Stress Process Model

The Major Components

1. Stressors 2. Stress 3. Stress Reactions 4. Personality Characteristics

Stressors - Causes of Stress

Types of Stressors

1. Role Conflict 2. Role Ambiguity 3. Underload Stressors

a. Qualitative Underload b. Quantitative Underload

4. Overload Stressors

a. Qualitative Overload b. Quantitative Overload


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5. Responsibility for Others 6. Lack of Social Support 7. Sexual Harassment 8. Unpleasant Physical Working Conditions 9. Causes of Stress Outside Work

Stress Management Techniques

1. Reduce or eliminate stressors. • Job Redesign • Flexible Work Arrangements • Work-Life Balance Programs • “Fighting Stress on the Job” and • “Pets to Work”

2. Treat the person’s reactions to stress. • Employee Wellness Programs

3. Modify the person’s ability to cope with stress. • Stress Management Workshops • Employee Assistance Programs • Wellness Programs


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What is Decision Making?

Why is Decision Making Important?

1. Managers make many decisions each day.

2. Managerial decisions have a real and significant impact on work unit and

organizational effectiveness.

3. A systematic and thorough decision making process will enhance the

likelihood of managerial and organizational effectiveness (i.e., “your

batting average”).

Why is Decision Making NOT Just an Issue of Common Sense?

1. Real world problems are often highly complex and dynamic.

2. The information available to support decision making is often unavailable

or unreliable and invalid.

3. Time and resource constraints make it extremely difficult to effectively

identify and evaluate decision alternatives.

4. Political factors constrain the ability of a decision maker to “do the right

thing.”

5. The “bias for action” and concern for efficiency as primary criteria of

success short circuit the decision making process.

6. Making the right decision is linked with weak implementation or execution.

Decision Making Models

The Rational-Economic Model of Decision Making

1. Identify the problem.

A discrepancy between a current condition and a desired end.

2. Define objectives.

Identify evaluation criteria for decision.

3. Make a pre-decision.

Amount of participation

How to decide


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4. Generate alternatives.

Think “outside the box”

5. Evaluate alternatives.

Evaluate each alternative using the same criteria.

6. Make a choice.

7. Implement choice.

8. Follow-up.

Evaluate outcome against evaluation criteria.

Assumptions of the

Rational-Economic Model

1. Perfect information

2. Ability to generate all alternatives

3. Objective criteria for ranking alternatives

4. Unlimited time to make the decision

5. Choice of alternatives will maximize outcomes

Decision Making Styles

The Directive Style

Prefers simple, clear solutions

Makes decisions rapidly

Does not consider many alternatives

Relies on existing rules

The Analytical Style

Prefers complex problems

Carefully analyzes alternatives

Enjoys solving problems

Willing to use innovative methods


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The Conceptual Style

Socially-oriented

Humanistic and artistic approach

Solves problems creatively

Enjoys new ideas

The Behavioral Style

Concern for their organization

Interest in helping others

Open to suggestions

Relies on meetings

Practical Guidelines for Preventing or Overcoming Groupthink

• Do a critical evaluation of group ideas “openly.” • Have key members take a neutral stance on solutions. • Hold discussions with outsiders to obtain reactions. • Assign the role of devil’s advocate to a group member. • Form subgroups to develop alternative solutions. • Hold second chance meetings to reconsider major decisions.

Barriers to Making Effective Decisions

• Reliance on Heuristics Availability (convenience)

Example: Making scholarship or admissions decisions based on GPA.

• Representative ness (stereotype) -1 Example: Medical diagnosis

Barriers to Making Effective Decisions

Bias Toward Implicit Favorites

Example: Creating a committee, run a focus group, throwing more money

at an initiative


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Escalation of Commitment

Example: NBA basketball players,

Organizational Barriers to Decision Making

• Time Constraints • Political “Face Saving” • Bounded Discretion

Strategies for Improving Decision Making

• Recognize your personal decision making biases. • Vary the decision making style (degree of participation) depending on the

situation. • Involve colleagues who see the world differently from you. • Fight the temptation to solve today’s problem with yesterday’s solution. • Make sure that you are solving the right problem. • Consider as many solutions as possible. • Analyze the “worst case scenario” associated with implementing your

solution and what to do about it. • When making a decision that affects others, share the reasoning behind

the decision.

Strategies for Improving Decision Making

• Ask lots of questions. • Learn from prior decisions. • Prioritize decisions into short-term and long-term priorities. • Use a “Plan-Do-Check-Act Cycle” of decision making. • Focus on decision effectiveness and not just decision efficiency.


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Compensation & Benefits

What is Compensation?

1. Compensation refers to the total value of outcomes given to employees in

exchange for their membership in the organization and for performing the

tasks, duties and responsibilities associated with their jobs.

2. Total compensation = Base Pay + Performance-Based Pay + Indirect

Compensation

Objectives of an Effective Compensation System

1. Employee attraction, motivation and retention

2. Externally competitive

3. Equitable, fair and rewarding

4. Legal compliance

5. Cost-effective

6. Compatible with mission and culture

Steps in the Development of a Compensation System

1. Conduct a job analysis.

2. Write job descriptions.

3. Determine job specifications.

4. Rate worth of jobs. (job evaluation)

5. Create a job hierarchy.

6. Classify jobs by grade levels.

7. Price jobs. (market-based salary)

8. Develop pay structures (salary ranges)

What is Job Evaluation?


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Job evaluation is the process through which the relative worth of jobs in an

organization is determined. Job evaluation provides the foundation for

determining the salary ranges for jobs.

External Equity - Examples

Battle of Network News Magazines

Tom Brokaw - $7 million per year with NBC

Diane Sawyer - Above $7 million per year with ABC

Barbara Walters - More than all peers with ABC

Steps in Conducting a Market/Salary Survey

1. Identify benchmark or key jobs.

2. Collect salary data based on market surveys for key jobs.

3. Complete the structure for non-benchmark jobs.

4. Establish a pay policy.

a. Lead Strategy

b. Match Strategy

c. Lag Strategy

Key Considerations in Formulating a Total Compensation Strategy

• What is the organization’s vision/mission? • What are the organization’s objectives and strategic priorities? • What are the demographics of the work force? What benefits do they need

and want? • Who are the organization’s competitors for labor? Does it want to lead,

match, or lag? • Is compensation an entitlement or based on merit? • How cost effective is the administration of the system? • How much flexibility can be included in the system? • What are the legal requirements and how can they be met? • What is the best way to communicate options to employees and

management?

Purposes of Broadbanding

• To provide wider salary ranges.


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• To reduce the number of distinctions made based on job value. • To provide more autonomy to managers. • To enhance employee mobility.

Special Cases in Compensation

• Red Circle Rate – A situation in which an employee’s pay is above the maximum salary for the salary range associated with his/her job.

• Green Circle Rate – A situation in which an employee’s pay is below the minimum salary for the salary range associated with his/her job.

Types of Base Pay Systems

1. Flat or Single-Rate System

2. Time-Based Step Rate System

3. Combination Step-Rate and Performance System

What is Performance-Based Compensation? Why is it Important?

Performance-based pay refers to that part of an employee’s total compensation

which is based on job performance.

Performance-based pay is important because it has a significant impact on key

HR outcomes such as attraction, motivation, and retention of employees.

Types of Performance-Based Pay Systems

Merit Pay Systems

Salary Ranges

Maximum $60,000 Midpoint $50,000 Minimum $40,000

Guidelines for Making Merit Pay Systems Effective

• Develop accurate performance appraisal systems. • Train supervisors in performance appraisal.


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• Tie rewards closely to performance ratings. • Use a wide range of increases to differentiate between performance levels


Individual Incentive Pay Systems

1. Piece Rate Systems

2. Commissions

3. Bonuses

a. Discretionary

b. Performance-Based


Group Incentive Pay Plans - Gainsharing

• Teamwork is enhanced and coordinated within work groups. • Employees focus their attention on business operations and goals. • Employees become knowledgeable about the entire business. • Employees work harder and smarter. • Individuals and groups generate ideas for working more effectively. • Work assignments are more flexible.

Group Incentive Pay Plans – Scanlon Plans

• Participative Management • Joint Administration by Management and Employees • Formulas Used to Calculate Amount of the Bonus


Group Incentive Pay Plans – Improshare Plans

50/50 division of productivity gains between the organization and

employees.

Example: Improshare System


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Organization-Based Pay Systems

1. Cash Profit Sharing Plans 2. Deferred Profit-Sharing Plans 3. Stock Bonuses or Stock Options

Guidelines for an Effective Incentive System

• Tie the plan to the organization’s business strategies. • Relate pay increases to organizational performance, both bottom-line and

quality driven. • Involve employees as partners. • Transfer from the concept of pay as reward entitlement. • Transfer more risk to employees. • Award incentives on both individual and team bases. • Use the compensation professional as an internal consultant.

Challenges Associated with Performance-Based Pay Systems

1. Lack of control over drivers of performance 2. Difficulties in measuring performance 3. Rewards are too small 4. Managers who are unwilling to differentiate pay based on performance 5. Employees who think that they are "above average"

What is Indirect Compensation? Why is it Important?

Objectives

1. To reward continued employment. 2. To promote loyalty. 3. To enable employees to live healthier, less worrisome lives. 4. To create a “social contract” to protect the financial and physical well-

being of employees.

Types of Employee Benefits (1,2)

Statutory Benefits

A. Social Security/Medicare

1. Provides retirement, disability, death and survivor’s benefits.


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2. Medicare covers hospital insurance (Medicare A) and optional medical insurance (Medicare B) for people after age 65. 3. This is a matching program with employers and employees paying same

taxes (6.2% on first $62,700 for Social Security and 1.45% on all earnings for Medicare.

4. For individuals born 1960 or later, 67 is the age for eligibility to receive full benefits.

5. Disability benefits are paid to workers (and dependents) if they have a physical/psychiatric impairment that prevents them from working for at least 5 months and is expected to continue for 12 months or result in death.

6. Survivor’s benefits paid to eligible dependents including: surviving spouse 60 or older (50 if disabled), unmarried children under age 18, and dependent parents age 62 or older.

7. Challenges Facing Social Security • Boomers and younger generation are paying more than they receive. • People are living longer. • Retirement age will not shift from 65 to 67 until 2027. • Fewer workers to support each retiree. • The earnings test penalizes those that must work but not those who have

other non-wage sources. • Means testing results in some people receiving more than they need,

while others receive less than they need.

Statutory Benefits

B. Unemployment Insurance 1. This is a mandatory program that provides a subsistence payment to employees between jobs. 2. This program is funded primarily by employers. C. Worker’s Compensation 1. This is a state insurance program that protects workers in case of a work-

related injury or disease that results from employment. 2. It is funded by a payroll tax that is paid to an insurance company or state

fund based on experience. D. Family and Medical Leave 1. FMLA states that employers with 50 or more employees are required to

grant up to 12 weeks of unpaid leave in order to care for new children, to care for a sick family member, or for a serious health condition.

2. Employers are required to maintain health care benefits, to reinstate the employee, and to post appropriate notices.


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Work-Life and Work-Family Balance Programs

• Flextime • Alternative Work Schedules • Flexible Benefits • Telecommuting • Job Sharing • On-Site Child Care • Wellness Programs • Tuition Reimbursement • Leave Policies • EAPs • Elder Care Benefits

Characteristics of Effective Benefit Programs

1. Specific objectives 2. Employee involvement 3. Flexibility 4. Willingness to modify benefit mix 5. Communication of benefits information 6. Administrative cost controls 7. Promote wellness programs

Measures for Evaluating the Effectiveness of Compensation

and Benefits

• Job Evaluation Factor = JE/J • Salary Range Exception Factor = EX/E • Cost to Supervise = TSS/TS • Benefit to Payroll Ratio = TBC/TPC • Percentage of Sick Leave to Total Pay • Percent of Employees Who Use a Plan (Utilization)


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Managing Teams

What are Groups vs. Teams?

A group is a collection of two or more individuals who maintain stable patterns of

relationships, share common goals and perceive themselves as a group.

A team is a group whose members have complementary skills and are

committed to a common purpose to which they hold themselves mutually

accountable.

Why Managing Teams is NOT Common Sense

1. Some employees do not like having their job performance dependent

on others.

2. Each member of a team has a unique personality and work style that may

not be compatible with those of other team members.

3. Political factors create barriers to teamwork.

4. The team cannot obtain clarity regarding its primary objectives.

5. A lot of teams do not understand how to define teamwork given the task.

6. The roles of respective team members are not clearly defined.

7. The culture of the organization may not support teamwork.

8. Effective team management requires ongoing planning, coordination, and

communication that become very time consuming.

McCaskey Framework for Analyzing Teams

Examples of Analyzing Team Systems Using McCaskey

A team that is given the task of designing innovative new products (task

requirements) does not possess the right mix of individuals to get the job done

(people).


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A team given the responsibility for running one of a company’s business lines

(task) possesses extremely bright and competent individuals (people) but does

not have a value system and norms that encourage cooperation and teamwork

(culture).

The strategy and structure of the organization (context) do not support the

objectives, strategies and structures of a team (formal organization).

McCaskey Framework for Analyzing Teams

Practical Implications

1. Monitor each dimension of the model on an ongoing basis.

2. Evaluate the degree of fit or alignment between various dimensions of the

model.

3. Take action to modify specific dimensions of the model in order to achieve

better fit or alignment. This will enhance the effectiveness of the overall

team.

Characteristics of Hot Groups

1. Total preoccupation with task

2. Intellectual intensity, integrity and exchange

3. Emotional intensity

4. Fluid structure/small size

Practical Guidelines for Creating Hot Groups

• Make room for spontaneity. • Break down barriers. • Encourage intellectual exchange. • Select talented people and respect their self-motivation and ability. • Use information technology to build relationships. • Value truth and the speaking of it.

Maxwell’s 17 Indisputable Laws of Teamwork

1. “The Law of Significance” – One is too small to achieve greatness


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2. “The Law of the Big Picture” – The goal is more important than the role

3. “The Law of the Niche” – All players have a place where they add the

most value

4. “The Law of Mount Everest” – As the challenge escalates, the need for

teamwork elevates

5. “The Law of the Chain” – The strength of a team is impacted by its

weakest link

6. “The Law of the Catalyst” – Winning teams have players who make things

happen

7. “The Law of the Compass” – Vision gives team members direction and c

confidence

8. “The Law of the Bad Apple” – Rotten attitudes ruin a team.

9. “The Law of Accountability” – Team members must be able to count on

each other when it counts

10. “The Law of the Price Tag” – The team fails to reach its potential when it

fails to pay the price

11. “The Law of the Scoreboard” – The team can make adjustments when it

knows where it stands

12. “The Law of the Bench” – Great teams have great depth

13. “The Law of Identity” – Shared values define the team

14. “The Law of Communication” – Interaction fuels action

15. “The Law of the Edge” – The difference between two equally talented

teams is leadership

16. “The Law of High Morale” – When you are winning, nothing hurts

17. “The Law of Dividends” – Investing in the team compounds over time


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Occupational Safety and Health

What are Occupational Safety and Health?

1. Occupational Safety refers to a work environment which is free from

danger, risk and injury.

2. Occupational Health refers to a worker who experiences a state of well-

being, free from illness or disease.

3. Occupational Security refers to the protection of an organization’s assets.

The Occupational Safety and Health Act (1970) – Employee Rights

• The right to safety and health on the job. • The right to accompany an inspection. • The right to be informed of workplace hazards. • The right to request inspections. • The right to file a complaint.

The Occupational Safety and Health Act (1970) – Employer Responsibilities

• Meet the general duty responsibilities to provide a safe and healthful workplace.

• Notify employees of their rights under OSHA. • Provide training mandated under OSHA. • Comply with all industry-specific standards. • Maintain accurate records (e.g., OSHA no. 200 log) of work-related

injuries, accidents and deaths. • Abate cited violations within the period prescribed by OSHA. • Provide employees with protective equipment needed for a job. • Maintain records of employee exposures to workplace hazards.

Key OSHA Standards

• General Duty Clause • Emergency Exit Procedures • Occupational Noise Exposure • Machine Guarding • Hazard Communication • Personal Protective Equipment • Confined Space Entry


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• Bloodborne pathogens

Safety Committee Activities

• Investigate serious or dangerous accidents. • Conduct safety inspections. • Review and evaluate protective equipment need. • Review safety programs and recommend improvement. • Send information gained in training sessions to all employees. • Communicate safety information and results to management and

employees.

Characteristics of Effective Safety Programs

• Specific safety rules and procedures • Hazard recognition activities • Top management support • Safety Committees • Safety Training

Strategies for Management to Show Support for Safety and Health

• Appoint safety coordinators with high-level responsibility and authority • Regularly review safety activity results against predetermined objectives • Evaluate supervisors based on the safety performance of their employees • Include safety results in communications to corporate officers or board of

directors • Provide financial support for safety program

Contemporary Trends in Occupational Safety and Health

Substance Abuse

• Five times more medical claims • Three times more sick leave • Five times more compensation claims • Twice as many mistakes • Six times more absences

Symptoms

• Careless Work Habits • Absenteeism • Drop in Performance


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• Emotional Outbursts • Impaired memory and logical thinking • Difficulty getting along with co-workers

Strategies for Handling Substance

Abuse in the Workplace

1. Develop a zero tolerance substance abuse policy. 2. Be assertive in dealing with substance abusers. 3. Refer the employee to a professional to deal with related personal

problems. 4. Clarify performance standards and inform the employee of the

consequences of poor performance. 5. Consider implementing a drug testing program to identify substance

abuse. 6. Train managers to identify substance abusers.

Workplace Violence

Examples

• Columbine High School • Taxi Cab Drivers • Convenience Stores • U.S. Post Office • Universities • Delivery Drivers

Conditions Associated with Workplace Violence

• Widespread Layoffs • Rigid, authoritarian management styles • Insensitive terminations • Pressure for increased productivity • Working late at night • Working with the public • Increased workloads

Profile of a Workplace Killer

• Socially Isolated • Experiencing personal stressors • Low self-esteem and no outlet for anger • Difficulty dealing with frustration and criticism


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• Fascinated with weapons and the military • Temper-control problems • Drug and alcohol abuse • History of conflict • Paranoia • Making threats or intimidating others

Strategies for Reducing Workplace Violence

• Establish policy of zero tolerance. • Administer severe negative consequences for those who violate the

policy. • Encourage reporting of incidents. • Develop a plan for workplace security. • Provide training for handling workplace violence. • Ensure management commitment • Hold employee meetings to discuss workplace violence issues.

General Management Guidelines for Promoting Health and Safety

• Deal with unsafe work practices immediately. • Plan based on the assumption that what can happen will happen. • Post health and safety rules in a prominent place. • Beware of fatigue caused by excessive work demands. • Provide appropriate safety training. • Report and record all accidents. • Review safety results on a regular basis with your team. • Don’t let new employees start until they understand all health and safety

rules.

Measures of Effectiveness – Occupational Safety and Health

• Number of safety and health meetings • Number of internal safety meetings • Number of internal safety inspections conducted • Number of accidents • Accident severity rate • Number of lost time accidents • Number of near-misses • Number of violations found in safety • Total citations from OSHA • Average cost per accident • Cost of OSHA fines • Total lost time costs


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• Average time to correct a citation

Emergency Preparedness

Emergencies can range from unintentional natural disasters, such as floods or

snowstorms, to intentional events, such as bioterrorism. To ensure local public

health is prepared to respond to potential emergency situations in the

community, hospitals have an emergency preparedness program. As part of the

commitment to the health and safety of the community, the goal of the

Emergency Preparedness Program is to provide efficient, effective public health

response in emergency situations.

The Emergency Preparedness Program works to:

• Assess local public health's readiness to respond to emergencies. • Develop and maintain plans for responding to possible future

emergencies. • Create and maintain the infrastructure for responding to emergencies. • Ensure proper disaster-response equipment and resources are readily

available. • Develop and maintain a strong network with first responders in the

community.


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Key Legal Acts

Safe Medical Device Act of 1990

The Safe Medical Devices Act of 1990 (SMDA) imposed significant new reporting

requirements on the medical device industry and users of medical devices like

the VA. SMDA requires that user facilities report to the Food and Drug

Administration (FDA) and/or the manufacturer any deaths and serious injuries

which a device may have caused or contributed to. SMDA also requires user

facilities to establish and maintain adverse event files.

Definitions:

Device user facility: a hospital, ambulatory surgical facility, nursing home,

outpatient treatment facility, or an outpatient diagnostic facility which is not a

physician's office.

Medical device: any item that is used for the diagnosis, treatment, or prevention

of a disease, injury, or other condition and is not a drug or biologic. This is not

just equipment.

Serious injury: an injury or illness that is:

life threatening, results in permanent impairment of a body function or permanent damage

to a body structure, or necessitates medical or surgical intervention to preclude permanent

damage or impairment.

A device may have "caused or contributed to" a patient's death or serious injury,

if the death or serious injury was or may have been attributed to the device or the

device may have been a factor in the death or serious injury because of:


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device failure, malfunction, improper or inadequate device design, manufacture, labeling, or user error.

Summary of Reporting Requirements for User Facilities What To Report To Whom When

Death FDA & Manufacturer Within 10 work days

Serious injury Manufacturer, or FDA if manufacturer unknown

Within 10 work days

Semiannual reports of death & serious injury

FDA January 1 & July 1


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Clinical Laboratory Improvement Amendments Act of 1988

The Clinical Laboratory Improvement Amendments Act of 1988, or CLIA, sprang

to life following reports of problems with Pap smear testing that is performed

mostly in large independent laboratories. The goal of CLIA is to improve the

quality of testing in virtually all laboratories where tests on human specimens are

performed.

Americans with Disabilities Act

Title I of the Americans with Disabilities Act of 1990, which took effect July 26,

1992, prohibits private employers, state and local governments, employment

agencies and labor unions from discriminating against qualified individuals with

disabilities in job application procedures, hiring, firing, advancement,

compensation, job training, and other terms, conditions and privileges of

employment. An individual with a disability is a person who:

• Has a physical or mental impairment that substantially limits one or more major life activities;

• Has a record of such an impairment; or • Is regarded as having such an impairment.

A qualified employee or applicant with a disability is an individual who, with or

without reasonable accommodation, can perform the essential functions of the

job in question. Reasonable accommodation may include, but is not limited to:

• Making existing facilities used by employees readily accessible to and usable by persons with disabilities.

• Job restructuring, modifying work schedules, reassignment to a vacant position;

• Acquiring or modifying equipment or devices, adjusting modifying examinations, training materials, or policies, and providing qualified readers or interpreters.

An employer is required to make an accommodation to the known disability of a

qualified applicant or employee if it would not impose an "undue hardship" on the


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operation of the employer's business. Undue hardship is defined as an action

requiring significant difficulty or expense when considered in light of factors such

as an employer's size, financial resources and the nature and structure of its

operation.

An employer is not required to lower quality or production standards to make an

accommodation, nor is an employer obligated to provide personal use items such

as glasses or hearing aids.

Medical Examinations and Inquiries

Employers may not ask job applicants about the existence, nature or severity of a

disability. Applicants may be asked about their ability to perform specific job

functions. A job offer may be conditioned on the results of a medical examination,

but only if the examination is required for all entering employees in similar jobs.

Medical examinations of employees must be job related and consistent with the

employer's business needs.

Drug and Alcohol Abuse

Employees and applicants currently engaging in the illegal use of drugs are not

covered by the ADA, when an employer acts on the basis of such use. Tests for

illegal drugs are not subject to the ADA's restrictions on medical examinations.

Employers may hold illegal drug users and alcoholics to the same performance

standards as other employees.

EEOC Enforcement of the ADA

The U.S. Equal Employment Opportunity Commission issued regulations to

enforce the provisions of Title I of the ADA on July 26, 1991. The provisions

originally took effect on July 26, 1992, and covered employers with 25 or more

employees. On July 26, 1994, the threshold dropped to include employers with

15 or more employees.


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Medicare changes from the Balanced Budget Refinement Act (BBRA)

of 1999

Before the BBRA, beneficiaries were required to pay 20% of the entire amount

charged for an outpatient hospital service, with no limit. The new provision caps

this amount at the inpatient hospital deductible amount, currently $776. This

provision is effective as if included in the Balanced Budget Act of 1997(1997).

Moratorium on Therapy Caps Before the BBRA, there was a $1,500 annual limit on physical, occupational and

speech therapies. The new provision suspends these annual payments limits for

2 years, 2000 and 2001. This provision was effective for services furnished on or

after January 2, 2000.

Extension of Immunosuppressive Drug Benefit

Before the BBRA, immunosuppressive drug therapy for post-transplant

beneficiaries was limited to 36 months following organ transplant. The new

provision extends this coverage from 36 to 44 months, for the year 2000. This

coverage will not apply to those beneficiaries eligible for Medicare solely for end-

stage renal disease (ERSD), since those beneficiaries’ entire Medicare coverage

ends 36 months after kidney transplant. This provision was effective January 1,

2000.

Changes in Medicare+Choice (Medicare HMO) Enrollment Rules

Before the BBRA, a Medicare HMO could terminate its services in a particular

area, and enrollees’ "guaranteed issue" rights to Medigap policies did not apply

until their coverage terminated (generally January 1). The new provision gives

these enrollees the option of exercising their "guaranteed issue" rights either

within 63 days of when the coverage terminates or within 63 days of receiving

notice of their plan’s termination of services. This provision was effective with

enactment of the BBRA: 11/29/99.


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Before the BBRA, an enrollee could not continue to be enrolled in a Medicare

HMO if the HMO terminated services in the area in which the enrollee lived. The

new provision states that HMOs may choose to continue enrollment for those

enrollees who live in the plan’s terminated service area, as long as those

enrollees agree to receive services in the HMO’s continued service area. This

provision applies to service area reductions before, on, or after 11/29/99.

Changes in Effective Date of Enrollment/Disenrollment in Medicare+Choice

Plans

Before the BBRA, whenever a beneficiary enrolled or disenrolled with a

Medicare+Choice plan, the enrollment change would become effective the first

day of the next calendar month. The new provision states that any changes

made before or on the 10th of any month will be effective the first day of the first

calendar month after the change is requested. Any changes made after the 10th

of any month will be effective the first day of the second month after the change

is requested. This provision applies to any changes in elections of coverage

made on or after January 1, 2000.

Extending Medicare Coverage for Disabled Medicare Beneficiaries

Before the BBRA, when a Medicare beneficiary eligible due to disability returned

to work for 4 years at $700/month or more, they lost their premium-free Medicare

Part A. The new provision extends this time limit to 8 ½ years. This provision will

be effective October 1, 2000.

Option for Disabled Medicare Beneficiaries to Suspend Medigap Insurance

Before the BBRA, there was no current law regarding suspension of Medigap

insurance coverage when a disabled beneficiary was employed and covered

under that employer’s group health plan. The new provision allows those

Medicare beneficiaries eligible due to disability to suspend Medigap benefits and

premiums if they become employed and are covered under the employer’s group

health plan. This provision was effective on the date of enactment of the BBRA

(11/29/99).


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Distribution of Increased Payments to Medicare + Choice Organizations under the Medicare, Medicaid, and SCHIP Benefits Improvement and

Protection Act of 2000

Background: Of the 39 million people with Medicare, about 5.6 million are

enrolled in a Medicare+Choice organization. The Medicare+Choice program was

established under the Balanced Budget Act (BBA) of 1997 to permit contracts

between HCFA and a variety of different managed care and fee-for-service

entities. In addition, the program sets federal reimbursement rates for

Medicare+Choice organizations (including HMOs and other private health plans).

The BBA set the payment rate per enrollee per month. Payment is based on the

rate in the county in which an enrolled beneficiary lives, adjusted for factors

associated with health care costs, such as age. The county payment rate

established by the BBA is the highest of three amounts:

• A minimum two percent increase over the prior year's rate;

• A minimum dollar amount called a "floor". This was $402 in 2000;

• An amount derived from blending the local rate with a national rate

based on historic spending under the "fee-for-service" Medicare

program.

Floor payments and the blended rate were intended to reduce the variation in

Medicare+Choice payment rates by raising payments in low-payment counties.

With The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection

Act (BIPA), enacted in December, 2000, Congress increased both the minimum

percentage increase for 2001 (from 2 percent to 3 percent) and the floor amount.

In addition to the basic floor of $475, the legislation established another, new

floor of $525 for counties in urban areas with populations over 250,000. The

legislation also extended bonus payments set by the Balanced Budget

Refinement Act of 1999. The bonus is for Medicare+Choice organizations that

enter a county where no other plan has been offered since 1997, or where


141

coverage was terminated as of January 1, 2001. That bonus increases payments

by an additional 5 percent the first year a plan is offered, and by an additional 3

percent for the second year. The BIPA legislation invited Medicare+Choice

organizations, which had given notice of their intent to terminate coverage for

Medicare beneficiaries, to rescind that decision by January 18, 2000. Finally, the

BIPA legislation contains a provision that phases in risk adjustment payments

over the next seven years. Risk adjustment pays plans more for treating sicker,

and therefore more costly, beneficiaries.

These changes to payment rates are expected to increase aggregate payments

to Medicare+Choice organizations by about $11 billion over the next five years

(about $1 billion for 2001). The new rates are effective March 1, 2001.

Medicare+Choice organizations were required to submit new benefit information:

To qualify for the higher payments under BIPA, the legislation required

Medicare+Choice organizations to submit revised Adjusted Community Rate

Proposals (ACRPs) by January 18, 2001. These proposals detail

Medicare+Choice organizations’ premiums, benefit packages, and the costs and

payments associated with providing benefits. (The consumer oriented portions of

each Medicare+Choice organization's premiums and benefit packages can be

found on www. medicare.gov, under "Medicare Health Care Compare.")

Under BIPA, the new payments must be used by Medicare+Choice organizations

in only four ways:

• Reduce beneficiary premiums or cost sharing (e.g. co-pays);

• Enhance benefits;

• Enhance the network of health care providers available to

beneficiaries;

• Reserve funds to help offset premium increases or benefit reductions

in the future through contributions to a benefit stabilization fund.


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Because the BIPA was enacted late in the year -- it was signed December 21,

2000 -- the Health Care Financing Administration worked rapidly to implement its

new provisions. New payment rates were published on January 4, 2001. Since

Medicare+Choice organizations were required by BIPA to submit new ACRPs

within two weeks of that date, HCFA consulted extensively with representatives

of Medicare+Choice organizations to enable those organizations to understand

the new legislation and submit their new benefit plans.

650 proposals from 177 Medicare+Choice organizations

HCFA received about 650 revised ACRPs from 177 Medicare+Choice

organizations. HCFA staff worked to review and approve all of them, and the

many marketing and advertising materials that describe them, in time for any

Medicare+Choice plans that wished to market to beneficiaries to enroll them by

March 1, 2001, when the new payment rates begin.

The largest payment rate increases (based on BIPA) went to floor counties; plans

in these counties were less likely to use new funds exclusively for enhanced

provider networks.

The distribution of the new funds varies by whether or not the counties served by

the Medicare+Choice organization are floor counties, and which type of floor

applies (Chart 2).

• The highest increases in rates are in counties that receive the new $525

floor for urban areas of 250,000 or more. Medicare+Choice organizations

serving these counties will see, on average, increases of 9.7 percent

above pre-BIPA rates for 2001. Nearly one-quarter of all Medicare+Choice

enrollees live in these counties.

• The $475 floor raises rates in these counties by 8.3 percent above pre-

BIPA rates for 2001. A small proportion (less than 2 percent) of enrollees

live in these counties.


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• All other counties receive just 1 percent increases above pre-BIPA rates

for 2001—rates rise 3 percent above the 2000 rate. However, these

counties have had the highest payment rates historically. About 75

percent of Medicare+Choice organization enrollees live in these counties.

Medicare+Choice organizations' use of the new funds varies by the amount of

the payment increases under BIPA (Chart 3).

• In counties with the $525 and $475 floor, Medicare+Choice organizations

using all funds to enhance provider networks represent the largest share

of enrollees, 44 and 49 percent, respectively. About 8-9 percent of

enrollees in these counties will be in plans where the BIPA funds were

used only to reduce cost sharing or premiums.

• In non-floor counties, about 72 percent of enrollees are in

Medicare+Choice organizations that put all of the BIPA funds into

enhancing provider networks. (Non-floor counties had the smallest

percentage increase in their pre-BIPA 2001 rates, but have the highest

historical payments).

Premiums dropped about $2/month nationally as a result of the BIPA changes.

Looking at national average, premiums for basic plans will go down an average

of $2 per month relative to pre-BIPA 2001 premiums as a result of the choices

made by Medicare+Choice organizations in using the BIPA funds (Chart 4).

(Premiums have tended to be highest in counties where Medicare payment rates

have been historically lowest, i.e., the floor counties.)

• Relative to pre-BIPA 2001 premiums, post-BIPA premiums are reduced

more in the $525 floor counties. There, premiums will fall an average of

about $6.

• In the $475 floor counties, relative to pre-BIPA premiums, post-BIPA

premiums will drop an average of about $4, from about $52 to $48.

• Post-BIPA premiums will be about $1 less than pre-BIPA 2001 premiums

in non-floor counties.


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Without BIPA, almost 21 percent of Medicare+Choice enrollees would have had

premiums for basic plans greater than $50 in 2001, compared with just 7 percent

of Medicare+Choice enrollees the prior year (Chart 5). In counties with $525 floor

payments, premiums of more than $50 per month will be less common than

before BIPA--dropping from 40 percent of all enrollees to 24 percent. With BIPA,

almost 16 percent of enrollees will see premiums beginning in March of 2001

above $50 (a 5 percentage point decrease). There was almost no change in the

share of enrollees in Medicare+Choice organizations with $0 premium basic

plans in 2001 as a result of BIPA (about 45 percent).

Adding drug coverage was rare.

The proportion of enrollees with drug coverage in Medicare+Choice

organizations’ basic packages has declined over the past several years--from 84

percent in 1999 to 72 percent in 2000 (Chart 6). Drug coverage is most common

in counties with the highest payment rates.

Few Medicare+Choice organizations used the BIPA funds to add a drug benefit

(Chart 6). Without BIPA, about 69 percent of beneficiaries would have had drug

coverage in their basic plan in 2001. With BIPA, the percent of enrollees in

Medicare+Choice plans with drug coverage in the basic packages beginning in

March of 2001 rises one percentage point to 70 percent. That is, about 61,000

Medicare+Choice enrollees will have access to new drug coverage in basic

packages beginning in March of 2001 (Chart 7).

• About three-fourths of enrollees with a new drug benefit who lacked drug

coverage in 2001 pre-BIPA and will have drug coverage post-BIPA (i.e.,

effective March 1, 2001) live in counties with the $525 floor.

• The largest increase in the percentage of enrollees who lacked drug

coverage in 2001 pre-BIPA and will have drug coverage post-BIPA (i.e.,

effective March 1, 2001) is in counties with the $475 floor, from 31 percent

to 38 percent.


145

COBRA

COBRA is an acronym for the Consolidated Budget Reconciliation Act. Budget

reconciliation Acts used to be an accounting exercise by Congress -- with pages

and pages of columns and columns of numbers. One day in 1985, lawmakers

discovered that they could use a Budget Reconciliation Act to make law. Here's

what they came up with:

The COBRA law, first enacted in 1985, has been amended by subsequent tax

bills and other legislation, most importantly the Health Insurance Portability and

Accountability Act (HIPAA).

Most employers with group health plans are required to offer employees the

opportunity to temporarily continue their group health care coverage under their

employer's plan if their coverage otherwise would cease due to a termination,

layoff, or other change in employment status.

These "COBRA" health care continuation requirements -- were enacted as part

of the Consolidated Omnibus Budget Reconciliation Act of 1985 -- generally

entitle employees (as well as covered spouses and dependents) to extend (at

their own expense) their employer-provided health care coverage for a period of:

Up to 18 months for covered employees, as well as their spouses and

dependents, when employees otherwise would lose coverage because of a

termination or reduction of hours;

Up to 36 months for spouses and dependents facing a loss of employer-

provided coverage due to an employee's death, a divorce or legal separation,

or certain other "qualifying events.'

The range of employers affected by COBRA is very broad, with exemptions

available only for employers that normally employ fewer than 20 employees, and

church plans, and plans maintained by the U.S. government.


146

Although employers are permitted to charge COBRA beneficiaries a premium for

continuation coverage of up to 102 percent of the cost of the coverage to the plan

(150 percent in the case of certain disabled employees), the 2 percent "mark up'

usually does not cover the full cost of administering COBRA.

Employers that violate the COBRA requirements are subject to a penalty of $100

per affected employee for each day that the violation continues. And plan

administrators who fail to provide required COBRA notices to employees may be

personally liable for a civil penalty of up to $100 a day for each day the notice is

not provided.

COBRA is one of the more administratively complex pieces of legislation in the

employee benefits area. This complexity is underscored by the fact that COBRA

has been subject to numerous legislative changes in recent years, which have

outdated parts of the proposed regulations originally issued by IRS in 1987.

These modifications to COBRA's requirements are noted in this summary.

Basic Terms and Concepts

COBRA requires an employer to offer employees and their dependents the

opportunity to continue their group health coverage under the employer's plan

when certain events occur that otherwise would cause them to lose their job-

related health plan coverage. Important terms used for COBRA administration

purposes include:

* "Qualifying event", which refers to the specific events (an employee's

termination, layoff, or death) that would cause a loss of employer-provided

coverage and thus trigger the coverage-continuation option.

* "Qualified beneficiary", is the term used to refer to an employee or a employee's

spouse or dependent who is or was covered under the employer-provided health

plan and has experienced a qualifying event.


147

COBRA imposes a host of rules governing the obligations and duties of both

employers and qualified beneficiaries involved in coverage-continuation

situations.

Specific rules under COBRA deal with issues like: the length of the required

coverage period; notification requirements for employers and plan administrators;

procedures for electing continuation coverage; premiums the employer may

require beneficiaries to pay; and the circumstances under which an employer

may terminate COBRA coverage short of the full continuation period.

How COBRA Rights Are Triggered

An employer's obligation to offer COBRA coverage is triggered by the occurrence

of a qualifying event. Specifically, COBRA recognizes a qualifying event as a loss

of employer-provided health coverage due to one of the following reasons:

* The death of a covered employee.

* Divorce or legal separation of the employee.

* The employee's entitlement to Medicare.

* Dependent child's loss of eligibility under the plan.

* Bankruptcy of the employer.

* The employee's change in employment status, including termination or

reduction in working hours.

An employee called to military duty also has COBRA continuation rights. The

Internal Revenue Service has ruled that the termination of health coverage

arising from an employee's being called to active military duty triggers an

employer's obligation to offer health care continuation coverage, unless the

employer continues normal coverage while the employee is on military leave.

Coverage Periods: Basic Rules


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The normal COBRA coverage continuation period is either 18 or 36 months.

Special coverage periods are available to qualified beneficiaries who are

disabled at the time of a qualifying event or are retirees (or are a retiree's widow

or widower) and would lose their health plan coverage due to the bankruptcy of

the sponsoring employer.

An 18-month period of continuation coverage is available to covered employees

and their spouses and dependents in cases where coverage is lost due to the

employee's termination or reduction of hours. A special 29-month period of

coverage (the basic 18-month period of continuation coverage, plus an additional

11 months) is available for beneficiaries who are disabled at the time of the

qualifying event.

A 36-month period of continuation coverage is available for spouses and

dependents where coverage is lost due to circumstances such as the employee's

entitlement to Medicare, divorce or legal separation, or death. The 36-month

continuation period also applies to cases where dependent children reach the

maximum age for coverage under an employer's plan.

Special "multiple qualifying event" rules permit qualified beneficiaries who receive

COBRA continuation coverage upon a covered employee's termination or

reduction in hours to extend the length of their coverage if a second qualifying

event -- divorce or death of the covered employee -- occurs during the initial 18

month period. In general, the extension cannot exceed 36 months from the date

of the first qualifying event. When an employer files for bankruptcy and the

company's retirees -- or their widows or widowers -- lose health coverage under

the employer's health care plan within a year before or after the event, the

employer must make available the coverage-continuation option to these people

and any covered spouses or dependents until the retiree or widow/widower dies.

Upon the death of the covered retiree or widow/widower, spouses and

dependents may continue coverage for an additional 36 months.


149

Qualified Beneficiaries

A "qualified beneficiary" is as any person who, on the day before a qualifying

event, is covered under an employer's group health plan by virtue of being either

a covered employee, the spouse of a covered employee, or the dependent child

of a covered employee.

COBRA defines "covered employee" as a person who is or was covered under a

group health plan as a result of having performed services for one or more

persons maintaining the plan. Although COBRA continuation coverage rights

generally arise out of an employment relationship, COBRA's definition of

"covered employee" is designed to be sufficiently broad so that independent

contractors, partners, and other non-employees may have continuation coverage

rights if they are covered by a plan as a result of services performed for the plan

sponsor.

Dependents acquired by a COBRA beneficiary during a period of continuation

coverage (a spouse who marries a qualified beneficiary after they have already

started to receive continuation coverage), must be permitted to elect coverage for

the remaining period of the qualified beneficiary's coverage period, if this is

allowed for the "acquired" dependents of active employees. Dependents

acquired after a qualifying event do not gain status as a "qualified beneficiary.'

Military Duty

Employers are not obligated to continue benefits to employees who serve in the

National Guard or a military reserve unit when they are called to active duty.

Employers that terminate the health care coverage of Guard members or

reservists who are called to active duty must offer these employees and their

dependents the opportunity to elect COBRA continuation coverage and notify

them of their COBRA rights. Military benefit plans do not constitute group health

insurance plans within the meaning of COBRA. Therefore, employers may not


150

terminate COBRA coverage even though reservists or their dependents become

covered under military plans.

"Gross Misconduct" Exception

COBRA permits employers to deny continuation coverage to employees who are

terminated for gross misconduct. The problem for employers is: neither the law

nor the IRS regulations specifically define what constitutes "gross misconduct". In

view of COBRA's costly penalties and the absence of any legal definition or

guidelines on what constitutes "gross misconduct," employers should apply the

"gross-misconduct" exception only in very clear-cut cases of egregious or

outrageous misconduct.

The "gross misconduct" exception was intended for use in only extreme cases of

employee misconduct. Consult your attorney to see if they can defend a COBRA

denial on the basis of what YOU think is "gross misconduct". Assault and theft

are "gross misconduct" talking back to a supervisor is not.


151

Medicare Conditions of Participation For Hospitals

On December 19, 1997, the Health Care Financing Administration ("HCFA")

issued a proposed rule revising the "Conditions of Participation" ("COP") for

hospitals that participate in the Medicare and Medicaid programs. (62 Fed. Reg.

66726) As part of President Clinton’s Reinventing Government Initiative, the

proposed regulations attempt to focus on the outcome of patient care and

eliminate unnecessary procedural requirements for hospitals. HCFA is currently

seeking public comment on these proposed COP. Health care providers

participating in the Medicare/Medicaid programs should take this opportunity to

review the proposed standards accordingly.

HCFA noted that the current standards adopted in 1986, which stress structures

and process, no longer represent the best available method for assessing and

improving the quality of care in hospitals. According to HCFA, the "patient-

centered" proposed COP are intended to mirror its approach for all COP and

stimulate improvement in processes, outcomes and overall patient satisfaction.

Additionally, they are intended to foster an interdisciplinary approach to the

delivery of patient care.

While the proposed rule contains nineteen (19) separate COP, which revise or

eliminate many of the existing requirements, the proposed rule essentially adopts

the basic structure of the Joint Commission on Accreditation of Health Care

Organizations’ "Agenda for Change" and incorporates critical requirements into

the four core conditions discussed below.

I. Patient Rights

As part of a hospital’s obligation to protect and promote the rights of patients, the

proposed COP would require a hospital to inform patients of their rights before

furnishing care and to establish a grievance process which specifies the person a

patient should contact to express a grievance. Included within the delineated list

of patients rights are: (i) a patient’s right to participate in the development and


152

implementation of his/her plan of care; (ii) the right to formulate an advanced

directive and have hospital staff comply with the directive; (iii) the right to

personal privacy and safety, including the right to be free of verbal and physical

abuse; (iv) the right to confidentiality of patient clinical records and the right to

access such records within a reasonable time frame; and (v) the right to be free

from the use of seclusion or restraints as a means of coercion, convenience or

retaliation by staff.

In an attempt to allow a hospital flexibility in determining how it ensures that

restraints and seclusion are not inappropriately used, HCFA has not currently

included detailed requirements in the proposed rule regarding seclusion and

restraints. However, HCFA has indicated that it will consider whether further

requirements are necessary to ensure patient health and safety. Examples of

detailed requirements that HCFA is considering are whether written orders for

restraints and seclusion should be valid for a specific period of time and whether

patients in seclusion should be checked every fifteen (15) minutes.

II. Patient Admission, Assessment and Plan of Care

This proposed COP would require a hospital to conduct a comprehensive

assessment of the needs of each patient and establish a coordinated plan of care

to address how all relevant hospital disciplines would meet such needs. A

comprehensive assessment must identify not only the patient’s condition and

necessary care at the time of admission, but would also need to contain an initial

estimate of post-hospital needs. The plan of care addressing the needs identified

in the comprehensive assessment must specify the care to be delivered by all

relevant disciplines. It would further need to be modified to address the changing

requirements of the patient. The proposed standard calls for both the

comprehensive assessment and plan of care to be included in the medical record

within 24 hours of a patient’s admission. HCFA maintains that the proposed rule

creates more flexibility for hospitals than the current standards in determining


153

what disciplines should be involved in planning a patient’s care because such

plan shall be based on a patient’s clinical picture.

III. Patient Care

In an attempt to integrate the way a patient experiences care in a hospital, the

proposed rule establishes a single unified patient care condition which requires

that care and treatment for the patient be coordinated by all relevant disciplines

and conform to the plan of care. The proposed standard requires that not only

the plan of care be modified as needed, but also that the actual care provided be

modified as appropriate, establishing, according to HCFA, "the linkage between

evolution of treatment results and care plan modification." If the hospital provides

care to outpatients, the proposed standard requires that such care must meet the

same requirements that apply to inpatient care.

IV. Quality Assessment/Performance Improvement

Under the proposed rule, hospitals would be required to develop, implement,

maintain, and evaluate an effective data-driven quality assessment ("QA") and

performance improvement ("PI") program, which must reflect the complexity of

the hospital’s organization and services. The proposed rule has identified twelve

elements for inclusion in the assessment.

As part of the overhaul of the QA process, hospitals would be required to use

hospital specific data as well as Peer Review Organization ("PRO") data and

other available data as an integral part of the QA/PI strategy. As part of the QA

process, the proposed COP would require a hospital to set priorities for PI based

on prevalence and severity of identified problems. Actions taken by a hospital

would need to be measurable and tracking would need to demonstrate sustained

improvement.

According to HCFA, the new QA/PI COP focuses on a hospital’s performance in

improving patient outcomes and satisfaction instead of the current "problem

focus" approach to identifying and correcting problems in patient care. Although


154

the proposed COP do not currently set a specific number of QA studies that a

hospital must undertake, HCFA has indicated that it is considering developing

such a requirement which could possibly be tied to the number of patient

discharges or hospital beds.

Streamlining

As noted above, the proposed regulations attempt to focus on patient care

outcomes and to eliminate unnecessary procedural requirements for hospitals.

Most notably, the proposed COP eliminate specific requirements related to the

structure and organization of both the governing body and medical staff.

Additionally specific staffing requirements have been greatly reduced as well as

other narrowly focused standards, such as the requirement that post anesthesia

evaluations be done by the same individual who administered the anesthesia. Of

interest to medical staffs, will be the elimination of the ambiguous requirement

that prohibited a hospital from requiring specialty board certification as a

necessary condition for medical staff membership.

Considerations

Some hospitals may not consider the adoption of the proposed COP a significant

problem as they are, in part, consistent with recently revised JCAHO standards

and certain states’ regulations. However, with the adoption of new COP comes

unfamiliar surveyors who are likewise attempting to understand the new

requirements. Moreover hospitals still must comply with state regulations and

may have some difficulty integrating the requirements of the new COP with

existing policies and procedures drafted in accordance with the former COP and

state law.

Furthermore, despite HCFA’s attempts to use process oriented requirements

only where it believes such requirements remain highly predictive of specific

desired outcomes or where necessary to deter fraud and abuse, the proposed

rule still contains process oriented requirements which should be closely


155

scrutinized by hospitals. For example, the comments to the proposed rule

emphasize that the comprehensive assessment need be only done in a timely

manner. However, it also requires that the assessment be placed in the medical

record within twenty four (24) hours of admission. This time frame could pose a

problem to physicians who rely on dictation services, as frequently, such services

do not have a rapid turnaround.

Outlined below are the primary issues of the COPs that effect hospitals:

1. The hospital must incorporate an agreement with an organ/tissue and eye

bank.

2. The hospital must notify, in a timely manner, the Organ Procurement

Organization (OPO) of individuals whose death is imminent or who have

died in the hospital. The OPO determines medical suitability for organ

donation. The tissue bank and eye bank determine suitability for tissue

and eye donation.

3. The hospital must ensure, in collaboration with the designated OPO,

tissue bank or eye bank, that the family of each potential donor is informed

of their options for donation of organs, tissues or eyes.

4. The hospital must encourage discretion and sensitivity with respect to the

circumstances, views, and beliefs of the families of potential donors.

The hospital must have and implement written protocols that ensure that the

hospital works cooperatively with the designated OPO, tissue bank and eye bank

in educating staff on donation issues, reviewing death records to improve

identification of potential donors, and maintaining potential donors while

necessary testing and placement of potential donated organs, tissues and eyes

take place.


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The Malcolm Baldrige National Quality Improvement Act of 1987 - Public Law 100-107

The Malcolm Baldrige National Quality Award was created by Public Law 100-

107, signed into law on August 20, 1987. The Award Program, responsive to the

purposes of Public Law 100-107, led to the creation of a new public-private

partnership. Principal support for the program comes from the Foundation for the

Malcolm Baldrige National Quality Award, established in 1988.

The Award is named for Malcolm Baldrige, who served as Secretary of

Commerce from 1981 until his tragic death in a rodeo accident in 1987. His

managerial excellence contributed to long-term improvement in efficiency and

effectiveness of government. The Findings and Purposes Section of Public Law

100-107 states that:"

1. the leadership of the United States in product and process quality has been

challenged strongly (and sometimes successfully) by foreign competition, and

our Nation's productivity growth has improved less than our competitors' over

the last two decades.

2. American business and industry are beginning to understand that poor quality

costs companies as much as 20 percent of sales revenues nationally and that

improved quality of goods and services goes hand in hand with improved

productivity, lower costs, and increased profitability.

3. strategic planning for quality and quality improvement programs, through a

commitment to excellence in manufacturing and services, are becoming more

and more essential to the well-being of our Nation's economy and our ability to


157

compete effectively in the global marketplace.

4. improved management understanding of the factory floor, worker involvement

in quality, and greater emphasis on statistical process control can lead to

dramatic improvements in the cost and quality of manufactured products.

5. the concept of quality improvement is directly applicable to small companies as

well as large, to service industries as well as manufacturing, and to the public

sector as well as private enterprise.

6. in order to be successful, quality improvement programs must be

management-led and customer-oriented, and this may require fundamental

changes in the way companies and agencies do business.

7. several major industrial nations have successfully coupled rigorous private-

sector quality audits with national awards giving special recognition to those

enterprises the audits identify as the very best; and

8. a national quality award program of this kind in the United States would help

improve quality and productivity by:

a. helping to stimulate American companies to improve quality and

productivity for the pride of recognition while obtaining a competitive edge

through increased profits;

b. recognizing the achievements of those companies that improve the quality

of their goods and services and providing an example to others;

c. establishing guidelines and criteria that can be used by business,

industrial, governmental, and other organizations in evaluating their own

quality improvement efforts; and

d. providing specific guidance for other American organizations that wish to

learn how to manage for high quality by making available detailed


158

information on how winning organizations were able to change their

cultures and achieve eminence."


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Organizational Exit

What are the Goals of Downsizing and Layoffs?

1. Reducing costs

2. Increasing profitability

3. Increasing shareholder return

4. Increasing quality and productivity

Strategies for Downsizing

How Effective Have Downsizing and Layoffs Been?

1. Cost Reduction: <50% Success

2. Increased Profitability: <33% Success

3. Increased Shareholder Return: <25% Success

4. Increased Quality and Productivity: <50% Success

Biggest Mistakes Made in Downsizing/Layoffs

1. Lack of a strategic vision.

2. Lack of consideration for alternatives.

3. HR held completely responsible for the downsizing.

4. Lack of consideration for feelings of people affected.

5. Lack of training.

Approaches to Making Layoff Decisions - Seniority

Advantages

• Legally defensible • Easy to implement • Objective-Perceived as being fair

Disadvantages

• Loss of good employees • Loss of minorities and women


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Approaches to Making Layoff Decisions - Merit

Advantages

• Rewards performance. • Enables you to keep your best employees.

Disadvantages

• May be less legally defensible. • Alternatives to Layoffs • Hiring Freezes

Alternatives: Employee Transfers Job Sharing Pay Freezes Pay Cuts Retraining

Guidelines for Employee Layoffs

• Give as much advance warning as possible – have a clear vision of the “post-layoff” organization.

• Complete a termination in 15 minutes or less. • Give the employee a written statement of his/her severance benefits. • Express appreciation for what the employee has contributed to the

organization. • Don’t beat around the bush. • Don’t allow time for debate. • Do not make any personal comments – keep it at a professional level. • Don’t rush the employee off-site unless security is a concern. • Provide outplacement services (e.g., EAPs. career services). • Consider timing issues – don’t layoff an employee on a significant date. • Make sure that the employee receives the news directly from his/her boss. • Take care of morale and trust issues among survivors.

Guidelines for Managing the Aftermath of an Employee Layoff

1. Hold a meeting with survivors.

2. Provide access to EAP services for survivors.


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3. Provide a vision for the future.

4. Avoid signs of extravagant spending following a layoff.

5. Maintain open channels of communication with employees.

6. Set realistic expectations among survivors regarding the possibility of

future layoffs.


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Statistics

Probability: A number expressing the likelihood that a specific event will occur

expressed as the ratio of the number of actual occurrences to the number of

possible occurrences.

Statistics: The mathematics of the collection, organization, and interpretation of

numerical data, especially the analysis of population characteristics by inference

from sampling

Histogram: A bar graph of a frequency distribution in which the widths of the

bars are proportional to the classes into which the variable has been divided and

the heights of the bars are proportional to the class frequencies

Know how to solve probability problems by using the following:

Counting Techniques

Independent Trials

Binomial Distribution: The frequency distribution of the probability of a specified

number of successes in an arbitrary number of repeated independent Bernoulli

trials

Joint Probability: The probability that two or more specific outcomes will occur

in an event

Measures of Central Tendency

Average (mean): The sum of a set of values divided by the number of values


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Weighted Average: An average that takes into account the proportional

relevance of each component, rather than treating each component equally

Range: The difference or interval between the smallest and largest values in a

frequency distribution

Median: Relating to or constituting the middle value in a distribution

Mode: The value or item occurring most frequently in a series of observations or

statistical data

Standard deviation: A statistic used as a measure of the dispersion or variation

in a distribution, equal to the square root of the arithmetic mean of the squares of

the deviations from the arithmetic mean

Variance: The square of the standard deviation

Balance Scale: One definition of central tendency is the point at which the distribution is in

balance.

Smallest Absolute Deviation: Another way to define the center of a distribution is based on the concept of the

sum of the absolute differences.

Smallest Squared Deviation: We shall discuss one more way to define the center of a distribution. It is based

on the concept of the sum of squared differences.


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Central Tendency: The center or middle of a distribution. There are many

measures of central tendency. The most common are the mean, median, and

mode. Others include the trimea, trimmed mean, and geometric mean.

Class Frequency: One of the components of a histogram, the class frequency is the number of

observations in each class interval.

Class Interval: Bin Width: Also known as bin width, the class interval is a division of data for use

in a histogram.

Discrete: Variables that can only take on a finite number of values are called "discrete

variables." All qualitative variables are discrete. Some quantitative variables are

discrete, such as performance rated as 1, 2, 3, 4, or 5, or temperature rounded to

the nearest degree.

Distribution: Frequency Distribution: The distribution of empirical data is called a frequency

distribution and consists of a count of the number of occurrences of each value. If

the data are continuous, then a grouped frequency distribution is used. Typically,

a distribution is portrayed using a frequency polygon or a histogram.

Frequency Polygon: A frequency polygon is a graphical representation of a distribution. It partitions

the variable on the x-axis into various contiguous class intervals of (usually)

equal widths. The heights of the polygon's points represent the class frequencies.

Grouped Frequency Distribution:


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A grouped frequency distribution is a frequency distribution in which frequencies

are displayed for ranges of data rather than for individual values. For example,

the distribution of heights might be calculated by defining one-inch ranges.


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Special Report: Which Study Guides and Practice Tests Are Worth Your Time

We believe the following practice tests and guide present uncommon value to our

customers who wish to “really study” for the CPHQ tests. While our manual

teaches some valuable tricks and tips that no one else covers, learning the basic

coursework tested on the exam is also necessary.

Practice Tests

Practice Test Questions

http://www.jbqualitysolutions.com/About/handbook.php

Study Guides

1. “A Dash through the Data! Using Data for Improvement”, a two-hour videotape on the basics of using data for QI by Sandra K. Murray, available through the National Association for Healthcare Quality (NAHQ), 4700 W. Lake Avenue, Glenview, IL 60025-1485, 800-966-9392, international 847-375-4720, FAX 847-375-6320, www.nahq.org.

2. Handbook for Improvement, a Reference Guide for Tools & Concepts, Second Edition, published by Executive Learning, Inc., 7101 Executive Center Drive, Ste. 160, Brentwood, TN 37027, international 615-373-8483, 800-929-7890, FAX 615-373-8635, www.elinc.com.

3. The Healthcare Quality Handbook: A Professional Resource and Study Guide, published by Janet A. Brown, RN, CPHQ, JB Quality Solutions, Inc., 2309 Paloma Street, Pasadena, CA 91104, international 626-797-3074, FAX 626-797-3864, e-mail: [email protected], www.jbqualitysolutions.com. Workshop audio tapes or CDs also available.

4. Hospital Peer Review published by American Health Consultants, Inc., 3525 Piedmont Road, Building Six, Suite 400, Atlanta, GA 30305, international 404-262-7436, 800-688-2421, FAX 404-262-7837, www.ahcpub.com.

5. Journal for Healthcare Quality published by the National Association for Healthcare Quality (NAHQ), 4700 W. Lake Avenue, Glenview, IL 60025-1485, 800-966-9392, international 847-375-4720, FAX 847-375-6320, www.nahq.org.

6. Managing Performance Measurement Data in Health Care, published by Joint Commission Resources, One Renaissance Blvd., Oakbrook Terrace, IL 60181, 630-792-5800, Library of Congress Catalog Card No. 00-110892, International Standard Book No. 0-86688-693-1, www.jcrinc.com.


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Special Report: Retaking the Test: What Are Your Chances at Improving Your Score?

After going through the experience of taking a major test, many test takers

feel that once is enough. The test usually comes during a period of transition

in the test taker’s life, and taking the test is only one of a series of important

events. With so many distractions and conflicting recommendations, it may

be difficult for a test taker to rationally determine whether or not he should

retake the test after viewing his scores.

The importance of the test usually only adds to the burden of the retake

decision. However, don’t be swayed by emotion. There a few simple

questions that you can ask yourself to guide you as you try to determine

whether a retake would improve your score:

1. What went wrong? Why wasn’t your score what you expected?

Can you point to a single factor or problem that you feel caused the low

score? Were you sick on test day? Was there an emotional upheaval in your

life that caused a distraction? Were you late for the test or not able to use the

full time allotment? If you can point to any of these specific, individual

problems, then a retake should definitely be considered.

2. Is there enough time to improve?

Many problems that may show up in your score report may take a lot of time

for improvement. A deficiency in a particular math skill may require weeks or

months of tutoring and studying to improve. If you have enough time to

improve an identified weakness, then a retake should definitely be

considered.


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3. How will additional scores be used? Will a score average, highest score,

or most recent score be used?

Different test scores may be handled completely differently. If you’ve taken

the test multiple times, sometimes your highest score is used, sometimes

your average score is computed and used, and sometimes your most recent

score is used. Make sure you understand what method will be used to

evaluate your scores, and use that to help you determine whether a retake

should be considered.

4. Are my practice test scores significantly higher than my actual test score?

If you have taken a lot of practice tests and are consistently scoring at a much

higher level than your actual test score, then you should consider a retake.

However, if you’ve taken five practice tests and only one of your scores was

higher than your actual test score, or if your practice test scores were only

slightly higher than your actual test score, then it is unlikely that you will

significantly increase your score.

5. Do I need perfect scores or will I be able to live with this score? Will this

score still allow me to follow my dreams?

What kind of score is acceptable to you? Is your current score “good

enough?” Do you have to have a certain score in order to pursue the future

of your dreams? If you won’t be happy with your current score, and there’s

no way that you could live with it, then you should consider a retake.

However, don’t get your hopes up. If you are looking for significant

improvement, that may or may not be possible. But if you won’t be happy

otherwise, it is at least worth the effort.


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Remember that there are other considerations. To achieve your dream, it is

likely that your grades may also be taken into account. A great test score is

usually not the only thing necessary to succeed. Make sure that you aren’t

overemphasizing the importance of a high test score.

Furthermore, a retake does not always result in a higher score. Some test

takers will score lower on a retake, rather than higher. One study shows that

one-fourth of test takers will achieve a significant improvement in test score,

while one-sixth of test takers will actually show a decrease. While this shows

that most test takers will improve, the majority will only improve their scores a

little and a retake may not be worth the test taker’s effort.

Finally, if a test is taken only once and is considered in the added context of

good grades on the part of a test taker, the person reviewing the grades and

scores may be tempted to assume that the test taker just had a bad day while

taking the test, and may discount the low test score in favor of the high

grades. But if the test is retaken and the scores are approximately the same,

then the validity of the low scores are only confirmed. Therefore, a retake

could actually hurt a test taker by definitely bracketing a test taker’s score

ability to a limited range.


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Special Report: Ethics Research and Websites

Business Ethics Resources on WWW

Links to sites in the areas of codes of ethics, organizations, publications, specific

topics, and papers.

http://www.ethics.ubc.ca/resources/business

Discussions of Ethics on the Net

List of Internet discussion groups with links and subscription addresses.

http://frank.mtsu.edu/~jpurcell/Ethics/ethics.html

Ethics Resources on the Net

Links to sites in areas of business ethics such as codes of conduct, reference

sources, organizations, issues, corporations, consultants, and commentaries.

Also includes links to other types of ethics sites

(human rights, environment, etc.)

http://www.depaul.edu/ethics/

The On-Line Journal of Ethics

http://condor.depaul.edu/ethics/ethg1.html

The Newsletter of DePaul University's Institute for Business & Professional

Ethics

http://www.depaul.edu/ethics/newslet.html

Center for Ethical Business Cultures

Assists business leaders in developing practical, productive and responsible

relationships with key stakeholders.

http://www.stthomas.edu/www/mccr_http/index.html


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Special Report: Key Formulas

COST FORMULAS

CV = Cost Variance EV - AC

A negative variance indicates a

cost overrun

BCWP -ACWP

(+ under budget, - over budget)

SV = Schedule Variance EV - PV

(> 0 = ahead of schedule; < 0

behind schedule)

BCWP-BCWS

If CV is positive and SV is

negative

Either the task has not started or it has started and not

enough resources have been applied

If CV is negative and SV is

negative

The costs are overrun and the schedule is slipping

If CV is negative and SV is

positive

This indicates that money was spent to crash the

schedule

If CV is positive and SV is

positive

The project is under budget and ahead of schedule

CPI = Cost Performance Index EV/AC

(=1.0 perfect performance, < 1.0

poor, > 1.0 exceptional)

BCWP/ACWP

How efficient is my cost

SPI = Schedule Performance

Index

EV/PV


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(-1.0 perfect performance, <1.0

poor, > 1.0 exceptional)

BCWP/BCWS

How efficient is my schedule

EAC = Estimate At Completion AC + ETC This formula is used when past performance shows that

the original estimating assumptions were fundamentally

flawed or that they are no longer relevant because of a

change in conditions; Actuals to date plus a new

estimate for all remaining work.

AC + (BAC - EV)/CPI (where CPI is cumulative CPI)

This formula is used when current variances are seen as

typical of future variances; Modified by a performance

factor.

AC + BAC - EV

This formula is used when current variances are seen

as atypical and Project Manager's team expectation is

that similar variances will not occur in the future;

Actuals to date plus remaining budget (BAC-EV)

ETC = Estimate to Complete BAC - EV

(BAC-BCWP) /CPI BAC = Budget at Completion Sum of total project budget

VAC = Variance At Completion VAC = BAC - EAC

How far off will I be at the end of

the project?


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CV% = Cost Variance

Percentage

CV% = CV/EV*100

How far off is my cost?

SV% = Schedule Variance

Percentage

SV% = SV/PV*100

How far off is my schedule?

VAC% = Variance At

Completion Percentage

VAC% = VAC/BAC*100

Variable and Type Earned Value Description

PV = Planned Value (BCWS) The cost of what I planned to get done

EV = Earned Value (BCWP) The value of the work actually done

AC = Actual Cost (ACWP) The totals of costs incurred in a given period

Other Formulas

Straight Line Depreciation Cost- Salvage/Time Double Declining Balance Double the SL Depreciation; $ X original cost -

accumulated depreciation

Sum of Years (SOY) (Cost-Salvage) X year/sum of years (3-2-1/6)

Future Value D(r+1) to the # of periods

Simple Interest Interest = Principle X Rate X Time Compound Interest FV (Future Value) = Deposit (1 + rate) ; Principle/ (r+1)

to the # of periods

Communication Channels # Of Team Members (t) X (t-1)/2

Expected Value Optimistic + (4XMost Likely) + Pessimistic/6

Standard Deviation Optimistic-Pessimistic/6 (one deviation is the difference

between EV and SD)


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Standard Deviations 68.26, 95.46, 99.73

Variance Planned - Actual; % Variance = Variance/Planned

EMV = Expected Monetary

Value

probability X amount of Stake (probability is

frequency/# of possible; amount at stake = cost of loss

and least

cost to restoreNPV = Net Present Value Initial payment of 12,000, annual discount rate of 10-%

cost or revenue/(1-r) to the t

Sometimes called discounted cash flows, assumes that

there is a minimum desired rate of return and that all

future cash flows are discounted to the present time. It is

the sum of all the discounted cash flows, both outgoing

and incoming, over the life of the project.


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Special Report: What is Test Anxiety and How to Overcome It?

The very nature of tests caters to some level of anxiety, nervousness or

tension, just as we feel for any important event that occurs in our lives. A little

bit of anxiety or nervousness can be a good thing. It helps us with motivation,

and makes achievement just that much sweeter. However, too much anxiety

can be a problem; especially if it hinders our ability to function and perform.

“Test anxiety,” is the term that refers to the emotional reactions that some

test-takers experience when faced with a test or exam. Having a fear of

testing and exams is based upon a rational fear, since the test-taker’s

performance can shape the course of an academic career. Nevertheless,

experiencing excessive fear of examinations will only interfere with the test-

takers ability to perform, and his/her chances to be successful.

There are a large variety of causes that can contribute to the development

and sensation of test anxiety. These include, but are not limited to lack of

performance and worrying about issues surrounding the test.

Lack of Preparation

Lack of preparation can be identified by the following behaviors or situations:

Not scheduling enough time to study, and therefore cramming the night

before the test or exam

Managing time poorly, to create the sensation that there is not enough time to

do everything

Failing to organize the text information in advance, so that the study material

consists of the entire text and not simply the pertinent information

Poor overall studying habits


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Worrying, on the other hand, can be related to both the test taker, or many

other factors around him/her that will be affected by the results of the test.

These include worrying about:

Previous performances on similar exams, or exams in general

How friends and other students are achieving

The negative consequences that will result from a poor grade or failure

There are three primary elements to test anxiety. Physical components,

which involve the same typical bodily reactions as those to acute anxiety (to

be discussed below). Emotional factors have to do with fear or panic. Mental

or cognitive issues concerning attention spans and memory abilities.

Physical Signals

There are many different symptoms of test anxiety, and these are not limited

to mental and emotional strain. Frequently there are a range of physical

signals that will let a test taker know that he/she is suffering from test anxiety.

These bodily changes can include the following:

Perspiring

Sweaty palms

Wet, trembling hands

Nausea

Dry mouth

A knot in the stomach

Headache

Faintness

Muscle tension


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Aching shoulders, back and neck

Rapid heart beat

Feeling too hot/cold

To recognize the sensation of test anxiety, a test-taker should monitor

him/herself for the following sensations:

The physical distress symptoms as listed above

Emotional sensitivity, expressing emotional feelings such as the need to cry

or laugh too much, or a sensation of anger or helplessness

A decreased ability to think, causing the test-taker to blank out or have racing

thoughts that are hard to organize or control.

Though most students will feel some level of anxiety when faced with a test or

exam, the majority can cope with that anxiety and maintain it at a manageable

level. However, those who cannot are faced with a very real and very serious

condition, which can and should be controlled for the immeasurable benefit of

this sufferer.

Naturally, these sensations lead to negative results for the testing experience.

The most common effects of test anxiety have to do with nervousness and

mental blocking.

Nervousness

Nervousness can appear in several different levels:

The test-taker’s difficulty, or even inability to read and understand the

questions on the test

The difficulty or inability to organize thoughts to a coherent form


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The difficulty or inability to recall key words and concepts relating to the

testing questions (especially essays)

The receipt of poor grades on a test, though the test material was well known

by the test taker

Conversely, a person may also experience mental blocking, which involves:

Blanking out on test questions

Only remembering the correct answers to the questions when the test has

already finished.

Fortunately for test anxiety sufferers, beating these feelings, to a large

degree, has to do with proper preparation. When a test taker has a feeling of

preparedness, then anxiety will be dramatically lessened.

The first step to resolving anxiety issues is to distinguish which of the two

types of anxiety are being suffered. If the anxiety is a direct result of a lack of

preparation, this should be considered a normal reaction, and the anxiety

level (as opposed to the test results) shouldn’t be anything to worry about.

However, if, when adequately prepared, the test-taker still panics, blanks out,

or seems to overreact, this is not a fully rational reaction. While this can be

considered normal too, there are many ways to combat and overcome these

effects.

Remember that anxiety cannot be entirely eliminated, however, there are

ways to minimize it, to make the anxiety easier to manage. Preparation is

one of the best ways to minimize test anxiety. Therefore the following

techniques are wise in order to best fight off any anxiety that may want to

build.


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To begin with, try to avoid cramming before a test, whenever it is possible.

By trying to memorize an entire term’s worth of information in one day, you’ll

be shocking your system, and not giving yourself a very good chance to

absorb the information. This is an easy path to anxiety, so for those who

suffer from test anxiety, cramming should not even be considered an option.

Instead of cramming, work throughout the semester to combine all of the

material which is presented throughout the semester, and work on it gradually

as the course goes by, making sure to master the main concepts first, leaving

minor details for a week or so before the test.

To study for the upcoming exam, be sure to pose questions that may be on

the examination, to gauge the ability to answer them by integrating the ideas

from your texts, notes and lectures, as well as any supplementary readings.

If it is truly impossible to cover all of the information that was covered in that

particular term, concentrate on the most important portions, that can be

covered very well. Learn these concepts as best as possible, so that when

the test comes, a goal can be made to use these concepts as presentations

of your knowledge.

In addition to study habits, changes in attitude are critical to beating a struggle

with test anxiety. In fact, an improvement of the perspective over the entire

test-taking experience can actually help a test taker to enjoy studying and

therefore improve the overall experience. Be certain not to overemphasize

the significance of the grade - know that the result of the test is neither a

reflection of self worth, nor is it a measure of intelligence; one grade will not

predict a person’s future success.

To improve an overall testing outlook, the following steps should be tried:


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Keeping in mind that the most reasonable expectation for taking a test is to

expect to try to demonstrate as much of what you know as you possibly can.

Reminding ourselves that a test is only one test; this is not the only one, and

there will be others.

The thought of thinking of oneself in an irrational, all-or-nothing term should

be avoided at all costs.

A reward should be designated for after the test, so there’s something to look

forward to. Whether it be going to a movie, going out to eat, or simply visiting

friends, schedule it in advance, and do it no matter what result is expected on

the exam.

Test-takers should also keep in mind that the basics are some of the most

important things, even beyond anti-anxiety techniques and studying. Never

neglect the basic social, emotional and biological needs, in order to try to

absorb information. In order to best achieve, these three factors must be held

as just as important as the studying itself.

Study Steps

Remember the following important steps for studying:

Maintain healthy nutrition and exercise habits. Continue both your

recreational activities and social pass times. These both contribute to your

physical and emotional well being.

Be certain to get a good amount of sleep, especially the night before the test,

because when you’re overtired you are not able to perform to the best of your

best ability.

Keep the studying pace to a moderate level by taking breaks when they are

needed, and varying the work whenever possible, to keep the mind fresh

instead of getting bored.


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When enough studying has been done that all the material that can be

learned has been learned, and the test taker is prepared for the test, stop

studying and do something relaxing such as listening to music, watching a

movie, or taking a warm bubble bath.

There are also many other techniques to minimize the uneasiness or

apprehension that is experienced along with test anxiety before, during, or

even after the examination. In fact, there are a great deal of things that can

be done to stop anxiety from interfering with lifestyle and performance.

Again, remember that anxiety will not be eliminated entirely, and it shouldn’t

be. Otherwise that “up” feeling for exams would not exist, and most of us

depend on that sensation to perform better than usual. However, this anxiety

has to be at a level that is manageable.

Of course, as we have just discussed, being prepared for the exam is half the

battle right away. Attending all classes, finding out what knowledge will be

expected on the exam, and knowing the exam schedules are easy steps to

lowering anxiety. Keeping up with work will remove the need to cram, and

efficient study habits will eliminate wasted time. Studying should be done in

an ideal location for concentration, so that it is simple to become interested in

the material and give it complete attention. A method such as SQ3R (Survey,

Question, Read, Recite, Review) is a wonderful key to follow to make sure

that the study habits are as effective as possible, especially in the case of

learning from a textbook. Flashcards are great techniques for memorization.

Learning to take good notes will mean that notes will be full of useful

information, so that less sifting will need to be done to seek out what is

pertinent for studying. Reviewing notes after class and then again on

occasion will keep the information fresh in the mind. From notes that have

been taken summary sheets and outlines can be made for simpler reviewing.


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A study group can also be a very motivational and helpful place to study, as

there will be a sharing of ideas, all of the minds can work together, to make

sure that everyone understands, and the studying will be made more

interesting because it will be a social occasion.

Basically, though, as long as the test-taker remains organized and self

confident, with efficient study habits, less time will need to be spent studying,

and higher grades will be achieved.

To become self confident, there are many useful steps. The first of these is

“self talk.” It has been shown through extensive research, that self-talk for

students who suffer from test anxiety, should be well monitored, in order to

make sure that it contributes to self confidence as opposed to sinking the

student. Frequently the self talk of test-anxious students is negative or self-

defeating, thinking that everyone else is smarter and faster, that they always

mess up, and that if they don’t do well, they’ll fail the entire course. It is

important to decreasing anxiety that awareness is made of self talk. Try

writing any negative self thoughts and then disputing them with a positive

statement instead. Begin self-encouragement as though it was a friend

speaking. Repeat positive statements to help reprogram the mind to

believing in successes instead of failures.

Helpful Techniques

Other extremely helpful techniques include:

Self-visualization of doing well and reaching goals

While aiming for an “A” level of understanding, don’t try to “overprotect” by

setting your expectations lower. This will only convince the mind to stop

studying in order to meet the lower expectations.


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Don’t make comparisons with the results or habits of other students. These

are individual factors, and different things work for different people, causing

different results.

Strive to become an expert in learning what works well, and what can be

done in order to improve. Consider collecting this data in a journal.

Create rewards for after studying instead of doing things before studying that

will only turn into avoidance behaviors.

Make a practice of relaxing - by using methods such as progressive

relaxation, self-hypnosis, guided imagery, etc - in order to make relaxation an

automatic sensation.

Work on creating a state of relaxed concentration so that concentrating will

take on the focus of the mind, so that none will be wasted on worrying.

Take good care of the physical self by eating well and getting enough sleep.

Plan in time for exercise and stick to this plan.

Beyond these techniques, there are other methods to be used before, during

and after the test that will help the test-taker perform well in addition to

overcoming anxiety.

Before the exam comes the academic preparation. This involves establishing

a study schedule and beginning at least one week before the actual date of

the test. By doing this, the anxiety of not having enough time to study for the

test will be automatically eliminated. Moreover, this will make the studying a

much more effective experience, ensuring that the learning will be an easier

process. This relieves much undue pressure on the test-taker.

Summary sheets, note cards, and flash cards with the main concepts and

examples of these main concepts should be prepared in advance of the

actual studying time. A topic should never be eliminated from this process.

By omitting a topic because it isn’t expected to be on the test is only setting

up the test-taker for anxiety should it actually appear on the exam. Utilize the


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course syllabus for laying out the topics that should be studied. Carefully go

over the notes that were made in class, paying special attention to any of the

issues that the professor took special care to emphasize while lecturing in

class. In the textbooks, use the chapter review, or if possible, the chapter

tests, to begin your review.

It may even be possible to ask the instructor what information will be covered

on the exam, or what the format of the exam will be (for example, multiple

choice, essay, free form, true-false). Additionally, see if it is possible to find

out how many questions will be on the test. If a review sheet or sample test

has been offered by the professor, make good use of it, above anything else,

for the preparation for the test. Another great resource for getting to know the

examination is reviewing tests from previous semesters. Use these tests to

review, and aim to achieve a 100% score on each of the possible topics.

With a few exceptions, the goal that you set for yourself is the highest one

that you will reach.

Take all of the questions that were assigned as homework, and rework them

to any other possible course material. The more problems reworked, the

more skill and confidence will form as a result. When forming the solution to

a problem, write out each of the steps. Don’t simply do head work. By doing

as many steps on paper as possible, much clarification and therefore

confidence will be formed. Do this with as many homework problems as

possible, before checking the answers. By checking the answer after each

problem, a reinforcement will exist, that will not be on the exam. Study

situations should be as exam-like as possible, to prime the test-taker’s system

for the experience. By waiting to check the answers at the end, a

psychological advantage will be formed, to decrease the stress factor.

Another fantastic reason for not cramming is the avoidance of confusion in

concepts, especially when it comes to mathematics. 8-10 hours of study will


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become one hundred percent more effective if it is spread out over a week or

at least several days, instead of doing it all in one sitting. Recognize that the

human brain requires time in order to assimilate new material, so frequent

breaks and a span of study time over several days will be much more

beneficial.

Additionally, don’t study right up until the point of the exam. Studying should

stop a minimum of one hour before the exam begins. This allows the brain to

rest and put things in their proper order. This will also provide the time to

become as relaxed as possible when going into the examination room. The

test-taker will also have time to eat well and eat sensibly. Know that the brain

needs food as much as the rest of the body. With enough food and enough

sleep, as well as a relaxed attitude, the body and the mind are primed for

success.

Avoid any anxious classmates who are talking about the exam. These

students only spread anxiety, and are not worth sharing the anxious

sentimentalities.

Before the test also involves creating a positive attitude, so mental

preparation should also be a point of concentration. There are many keys to

creating a positive attitude. Should fears become rushing in, make a

visualization of taking the exam, doing well, and seeing an A written on the

paper. Write out a list of affirmations that will bring a feeling of confidence,

such as “I am doing well in my English class,” “I studied well and know my

material,” “I enjoy this class.” Even if the affirmations aren’t believed at first, it

sends a positive message to the subconscious which will result in an

alteration of the overall belief system, which is the system that creates reality.

If a sensation of panic begins, work with the fear and imagine the very worst!

Work through the entire scenario of not passing the test, failing the entire


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course, and dropping out of school, followed by not getting a job, and pushing

a shopping cart through the dark alley where you’ll live. This will place things

into perspective! Then, practice deep breathing and create a visualization of

the opposite situation - achieving an “A” on the exam, passing the entire

course, receiving the degree at a graduation ceremony.

On the day of the test, there are many things to be done to ensure the best

results, as well as the most calm outlook. The following stages are suggested

in order to maximize test-taking potential:

Begin the examination day with a moderate breakfast, and avoid any coffee

or beverages with caffeine if the test taker is prone to jitters. Even people

who are used to managing caffeine can feel jittery or light-headed when it is

taken on a test day.

Attempt to do something that is relaxing before the examination begins. As

last minute cramming clouds the mastering of overall concepts, it is better to

use this time to create a calming outlook.

Be certain to arrive at the test location well in advance, in order to provide

time to select a location that is away from doors, windows and other

distractions, as well as giving enough time to relax before the test begins.

Keep away from anxiety generating classmates who will upset the sensation

of stability and relaxation that is being attempted before the exam.

Should the waiting period before the exam begins cause anxiety, create a

self-distraction by reading a light magazine or something else that is relaxing

and simple.

During the exam itself, read the entire exam from beginning to end, and find

out how much time should be allotted to each individual problem. Once

writing the exam, should more time be taken for a problem, it should be

abandoned, in order to begin another problem. If there is time at the end, the

unfinished problem can always be returned to and completed.


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Read the instructions very carefully - twice - so that unpleasant surprises

won’t follow during or after the exam has ended.

When writing the exam, pretend that the situation is actually simply the

completion of homework within a library, or at home. This will assist in

forming a relaxed atmosphere, and will allow the brain extra focus for the

complex thinking function.

Begin the exam with all of the questions with which the most confidence is

felt. This will build the confidence level regarding the entire exam and will

begin a quality momentum. This will also create encouragement for trying the

problems where uncertainty resides.

Going with the “gut instinct” is always the way to go when solving a problem.

Second guessing should be avoided at all costs. Have confidence in the

ability to do well.

For essay questions, create an outline in advance that will keep the mind

organized and make certain that all of the points are remembered. For

multiple choice, read every answer, even if the correct one has been spotted -

a better one may exist.

Continue at a pace that is reasonable and not rushed, in order to be able to

work carefully. Provide enough time to go over the answers at the end, to

check for small errors that can be corrected.

Should a feeling of panic begin, breathe deeply, and think of the feeling of the

body releasing sand through its pores. Visualize a calm, peaceful place, and

include all of the sights, sounds and sensations of this image. Continue the


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deep breathing, and take a few minutes to continue this with closed eyes.

When all is well again, return to the test.

If a “blanking” occurs for a certain question, skip it and move on to the next

question. There will be time to return to the other question later. Get

everything done that can be done, first, to guarantee all the grades that can

be compiled, and to build all of the confidence possible. Then return to the

weaker questions to build the marks from there.

Remember, one’s own reality can be created, so as long as the belief is there,

success will follow. And remember: anxiety can happen later, right now,

there’s an exam to be written!

After the examination is complete, whether there is a feeling for a good grade

or a bad grade, don’t dwell on the exam, and be certain to follow through on

the reward that was promised…and enjoy it! Don’t dwell on any mistakes that

have been made, as there is nothing that can be done at this point anyway.

Additionally, don’t begin to study for the next test right away. Do something

relaxing for a while, and let the mind relax and prepare itself to begin

absorbing information again.

From the results of the exam - both the grade and the entire experience, be

certain to learn from what has gone on. Perfect studying habits and work

some more on confidence in order to make the next examination experience

even better than the last one.

Learn to avoid places where openings occurred for laziness, procrastination

and day dreaming.


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Use the time between this exam and the next one to better learn to relax,

even learning to relax on cue, so that any anxiety can be controlled during the

next exam. Learn how to relax the body. Slouch in your chair if that helps.

Tighten and then relax all of the different muscle groups, one group at a time,

beginning with the feet and then working all the way up to the neck and face.

This will ultimately relax the muscles more than they were to begin with.

Learn how to breath deeply and comfortably, and focus on this breathing

going in and out as a relaxing thought. With every exhale, repeat the word

“relax.”

As common as test anxiety is, it is very possible to overcome it. Make

yourself one of the test-takers who overcome this frustrating hindrance.


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Special Report: Additional Bonus Material

Due to our efforts to try to keep this book to a manageable length, we’ve

created a link that will give you access to all of your additional bonus material.

Please visit http://www.mo-media.com/cphq/bonuses to access the

information.

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