Implementing capitation of Medicaid mental health services in Colorado: is "readiness" a necessary condition?

A theory of organizational readiness for change

Background

Change management experts have emphasized the importance of establishing organizational readiness for change and recommended various strategies for creating it. Although the advice seems reasonable, the scientific basis for it is limited. Unlike individual readiness for change, organizational readiness for change has not been subject to extensive theoretical development or empirical study. In this article, I conceptually define organizational readiness for change and develop a theory of its determinants and outcomes. I focus on the organizational level of analysis because many promising approaches to improving healthcare delivery entail collective behavior change in the form of systems redesign--that is, multiple, simultaneous changes in staffing, work flow, decision making, communication, and reward systems.

Discussion

Organizational readiness for change is a multi-level, multi-faceted construct. As an organization-level construct, readiness for change refers to organizational members' shared resolve to implement a change (change commitment) and shared belief in their collective capability to do so (change efficacy). Organizational readiness for change varies as a function of how much organizational members value the change and how favorably they appraise three key determinants of implementation capability: task demands, resource availability, and situational factors. When organizational readiness for change is high, organizational members are more likely to initiate change, exert greater effort, exhibit greater persistence, and display more cooperative behavior. The result is more effective implementation.

Summary

The theory described in this article treats organizational readiness as a shared psychological state in which organizational members feel committed to implementing an organizational change and confident in their collective abilities to do so. This way of thinking about organizational readiness is best suited for examining organizational changes where collective behavior change is necessary in order to effectively implement the change and, in some instances, for the change to produce anticipated benefits. Testing the theory would require further measurement development and careful sampling decisions. The theory offers a means of reconciling the structural and psychological views of organizational readiness found in the literature. Further, the theory suggests the possibility that the strategies that change management experts recommend are equifinal. That is, there is no 'one best way' to increase organizational readiness for change.

Impact of workplace sociocultural attributes on participation in health assessments

OBJECTIVE

To investigate the impact of sociocultural workplace attributes on participation in employer sponsored health assessments.

METHODS

Medical center employees were encouraged to participate in free, voluntary, and confidential biometric screening and on-line health risk appraisal. A job satisfaction database, aggregated by job type and work area, was used to identify workplace sociocultural attributes correlated with participation.

RESULTS

: Thirty-seven percent of the population engaged in the health assessments; however, participation varied widely by work area (10% to 83%) and by job type (17% to 56%). Participation was significantly correlated with selected aspects of job satisfaction.

CONCLUSIONS

Overall participation rates in employee population health assessments can disguise large variation in employee engagement. This variation is associated with work sociocultural characteristics. Attention to these attributes may be essential to improving involvement in employer sponsored health promotion.

Evaluating health care programs by combining cost with quality of life measures: a case study comparing capitation and fee for service

OBJECTIVE

To demonstrate cost-effectiveness analysis (CEA) for evaluating different reimbursement models.

DATA SOURCES/STUDY SETTING

The CEA used an observational study comparing fee for service (FFS) versus capitation for Medicaid cases with severe mental illness (n=522). Under capitation, services were provided either directly (direct capitation [DC]) by not-for-profit community mental health centers (CMHC), or in a joint venture between CMHCs and a for-profit managed behavioral health organization (MBHO).

STUDY DESIGN

A nonparametric matching method (genetic matching) was used to identify those cases that minimized baseline differences across the groups. Quality-adjusted life years (QALYs) were reported for each group. Incremental QALYs were valued at different thresholds for a QALY gained, and combined with cost estimates to plot cost-effectiveness acceptability curves.

PRINCIPAL FINDINGS

QALYs were similar across reimbursement models. Compared with FFS, the MBHO model had incremental costs of -$1,991 and the probability that this model was cost-effective exceeded 0.90. The DC model had incremental costs of $4,694; the probability that this model was cost-effective compared with FFS was <0.10.

CONCLUSIONS

A capitation model with a for-profit element was more cost-effective for Medicaid patients with severe mental illness than not-for-profit capitation or FFS models.

Review: Conceptualization and Measurement of Organizational Readiness for Change

Health care practitioners and change experts contend that organizational readiness for change is a critical precursor to successful change implementation. This article assesses how organizational readiness for change has been defined and measured in health services research and other fields. Analysis of 106 peer-reviewed articles reveals conceptual ambiguities and disagreements in current thinking and writing about organizational readiness for change. Inspection of 43 instruments for measuring organizational readiness for change reveals limited evidence of reliability or validity for most publicly available measures. Several conceptual and methodological issues that need to be addressed to generate knowledge useful for practice are identified and discussed.

Mental health costs and access under alternative capitation systems in Colorado

OBJECTIVE

To examine service cost and access for persons with severe mental illness under Medicaid mental health capitation payment in Colorado. Capitation contracts were made with two organizational models: community mental health centers (CMHCs) that manage and deliver services (direct capitation [DC]) and joint ventures between CMHCs and a for-profit managed care firm (managed behavioral health organization, [MBHO]) and compared to fee for service (F.F.S.).

DATA SOURCES/STUDY SETTING

Both primary and secondary data were collected for the year prior to the new financing policy and the following two years (1995-1998).

STUDY DESIGN

A stratified random sample of 522 severely mentally ill subjects was selected from comparable geographic areas within the capitated and FFS regions of Colorado. Major variables include service cost, utilization, and access (probability of service use) derived from secondary claims data, subject reported access collected at six-month intervals, and baseline outcomes (symptoms, functioning, and quality of life).

PRINCIPAL FINDINGS

In comparison to the FFS area, cost per person was reduced in the capitated areas in each of the two years following implementation. By the end of year two, cost per person was reduced by two-thirds in the MBHO areas and by one-fifth in the DC areas. Reductions in access were found for both capitated areas, although reductions in utilization for those receiving service were found only in the MBHO model.

CONCLUSIONS

Medicaid mental health capitation in Colorado resulted in cost reducing service changes for persons with severe mental illness. Assessment of outcome change is necessary to identify cost effectiveness.