Chapter 17

Chapter 17Decisions, Decisions

Identify the essential elements of the decision-making process, determine how the common constraints define the boundaries of the decision environment, and relate risk, uncertainty, and potential consequences to the decision-making effort.

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CHAPTER 17The basic decision-making processIdentifying the problemGathering informationAnalyzing information and creating alternativesChoosing an alternativeImplementing the alternativeFollowing up

Your text book suggests a 6 step decision-making process that is shown here.2

IDENTIFYING THE PROBLEMIn identifying the problem, always be wary of focusing on a symptom rather than on the real problem

When identifying a problem, be sure that it is a real problem worthy of your time. If you do actually have a problem, it is something based in fact, not opinion.

Is the problem unique or recurring? If it is recurring, do procedures already exist to solve it?

Is this a true problem or the symptom of a problem? Treating a symptom may have a positive effect on the situation but usually the problem will reappear because you have not drilled down to the root cause. Take, for instance, the example in your text. The transcription department is behind on its work, so you authorize overtime or temporary help the backlog is eliminated and the problem solved, right? But several days later, the transcription department is behind on their work again. Why? Because we treated a symptom of the problem, not the problem itself. There is the need to examine the real difficulty. Maybe you do not have enough staff to handle the volume of transcription. Maybe the supervisor is distributing the work properly. And perhaps its the physicians and how or whrn they dictate patient notes.

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GATHERING INFORMATIONIn gathering information, how much is enough? Let the potential consequences of the decision govern how much effort goes into collecting information

There is no need to gather all of the information when trying to solve a problem. Why? Because there is never an end to the collection of information.

As a manager, you have to decide if you have sufficient information on which to base a decision. That decision is embedded in realizing the relationship between risk and reward. How much risk is there in the consequences of your decision? Is it worth the risk to reap the potential benefits? The larger the risk, the more information you will need to gather in order to make a decision because the potential consequences may be far-reaching.

When a health care organization needs to make a decision about purchasing an expensive piece of diagnostic equipment, the decision making process requires the gathering of a fairly large amount of information. This decision may deal with hundreds of thousands of dollars and also with the ability of physicians to make informed decisions. The risk is high but so is the reward if you decide correctly.

The decision whether to use blue or black ink on encounter forms will not require the same amount of information gathering as our diagnostic equipment. The decision has very low risk and low reward. The decision might be made after spending a few minutes talking to the employees who work with encounter forms and asking them about the consequences of the decision.4

TEST YOUR DECISIONDoes this really address the cause?Does this affect policy or set precedent?Will implementation adversely affect any other part of operations?

Now it is time to use the information you have gathered to develop some alternative solutions. Youll compare these alternate solutions with each other. Youll check policy, procedures, and practices to make sure the alternatives do not violate the law or the organizations policies. Then you must weigh the impact of each solution on the individuals or groups involved will it make them more or less productive?5

CHOICE AND ACTIONA decision is both choice and actionthe choice is incomplete without the action

Now you have a decision, youve made a choice, and it is time to take action. There are still questions to be asked:

Do I have authority, real or implied, to implement the decision? Or do you need to take it to your manager for approval?

If the decision is to be implemented when is the best time to act? Just like in comedy, timing is everything.6

COMMON CONSTRAINTSTimeMoneyQualityPersonalitiesPolitics

Constraints are the conditions that limit or restrict decision making. This slide lists the most common decision-making constraints:

Time may or may not play a part in your decision. Simple, low risk decisions may not require you to worry about how long it takes to reach a decision. On the other hand, if JCAHO is coming for a site visit next week, you will need to make a decision quickly because you now have a time constraint.Money a very common constraint. Your organization may or may not have the funds available to implement your decision. Is it in the budget for this year or do you need to submit it as a budget expense for next year? Is there grant money available that will enable you to implement the decision? Or is there no money available?Quality health care consumers continue to demand a high level of quality care. As such, the affect your decision has on patient care and service can be a large constraint on implementing your decision. The implementation cannot negatively affect quality of care.Personalities while not the largest consideration in decision making, peoples personalities may play an important part in the implementation of the decision. Remember that the decision is implemented through and with people who may or may not have an opinion about how things should be done.Politics how different group in the organization will react to the decision is also a constraint. Perhaps you believe that in order to save money in a tight economy, it is necessary for the organization to stop contributing to employees 401K retirement plans. This decision, while fiscally sound, will alienate the employees and negatively affect morale. If your decision meets with strong political opposition, it will be difficult to marshal the resources and effort to implement it.

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A CONSTRAINT MAY BE:Absolute, providing a specific barrier that cannot be overcomePractical, not an absolute barrier but approaching a point beyond which proceeding is impractical

Constraints can be either absolute or practical.

If the constraint is absolute, then it is a limit beyond which you may not proceed. The most obvious absolute constraint is money. If you are given a fixed amount of money to solve a problem, you cannot exceed that limit.

A practical constraint is not an absolute barrier. Instead, one must determine when it is no longer practical to implement an alternative. Your diagnostic equipment requires 2,000 square feet of space in order to function properly. Is there 2,000 square feet available to house the equipment? If not, then the purchase become impractical.8

EVERY DECISION INVOLVES:Risk (something can be lost if its wrong)Uncertainty (the outcome is never 100% assured in advance)

As I said earlier, every decision involves risk and reward. Risk exists because something may be lost if the wrong decision is made time, money, efficiency, or safety. Uncertainty also exists because you can never be 100% certain that a particular decision will come out correctly.

A Major objective of decision making is to reduce the risk and uncertainty as much as possible. The risk and uncertainty are certainly evident in this old logic problem:

The Lady or the TigerA young prince and princess had fallen in love, but the girl's father, a bitter old King, opposed the marriage. So the King contrived to lure the Prince into a trap. In front of his entire Court nobles, clergy, jesters and even scullery-maids he challenged the Prince to prove his love in a highly unusual and dangerous game.

"The Princess," said the King, "is behind one of these three doors I have placed in front of you. Behind the other two are hungry tigers who will most certainly eat you for dinner. If you prove your love by picking the correct door, you may marry my daughter!""And just to demonstrate that I'm not a bitter old man," said the King (who secretly suspected that's exactly what everyone thought of him), "I will help you. Once you make your choice, but before you open the door, I will show you a tiger behind one of the other doors. And then," intoned the King magnanimously, "you may pick again!"

The court broke out into polite and dutiful applause. The King smiled, convinced that the Prince would not be man enough to take the challenge, even with the King's help.

Now the Prince knew that if he walked away he would likely be banished in shame from the Kingdom forever, never to see his love again. This he could not bear. And he was also a very clever Prince. So he swallowed hard, uttered a short prayer for luck, and then picked a door at random.

"I choose this door," said the prince in his deep, manly voice, as he walked over to one of the doors.

"Wait!" commanded the King in surprise. "I am as good as my word. Now I will show you a tiger. Guards! Reveal a tiger from behind one of the two remaining doors!"

Three of the Kings guards cautiously walked over to one of the other doors, opened it a crack, and then quick as they could slammed it shut. A huge hungry tiger had been crouching right behind it! The door shook as the tiger leaped up against it.

"Now," said the King, "Make your choice!" And, glancing to his court, he added, "Unless of course you wish to give up now and walk away..."

What Are the Prince's Chances?The prince is now left with two doors. Behind one of them is a tiger, and behind the other is the Princess. Should he stick with the original door he picked, or open the other one?

How high is the risk and uncertainty in this decision making process?9

REDUCING RISKAll activity invested in analyzing alternatives is aimed at reducing risk and uncertaintyIf there were no risk and no uncertainty, there would be no decision to make because the outcome is self-evident

All of our efforts at gathering and analyzing information, the use of sophisticated mathematical models, or decision trees, etc. are efforts to remove as much human judgment as possible from the decision making process. Hopefully, the quantitative and qualitative information you have gathered and analyzed will decrease the chance of being wrong.

Without risk and uncertainty, there is no need for decision making. 10

THE NO-DECISION OPTION Consciously deciding not to decide, orIgnoring the situationAnd this kind of decision can have the most far-reaching consequences

Not making a decision is making a decision. You have decided to ignore or postpone the problem and not deal with it. We hope that the problem will cure itself. Surprisingly, some times it works! Most often, when things are left to themselves, they go from bad to worse.

A Theodore Roosevelt said, In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.

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DECISIONS AND AUTHORITYThe decisions you make must fall within your own scope of authorityany potential decision affecting other groups must become a matter of joint consideration

When you make a decision that affects the employees in your span of control, it is consistent with your position as their manager. It is very important to realize however, that if you make a decision that affects employees in your department and another department, you must involve the supervisor for the other department.

Thats it for chapter 17 Decisions. Let me leave you with this thought from author, Isaac Asimov: It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.

See you next time!12