Contract Management:
Filling the Void Created by CNE Vacancies
Betty J. Noyes, RN, MA
Journal of Nursing Administration, Vol. 22, No.
10 (October), 1992, pp. 21-24
Contract management can provide interim chief nurse executives (CNEs)
during the search process for a permanent executive. Experienced and effective, interim
nursing executives can communicate to all audiences, prepare the organization for the next
permanent nursing executive, and their presence avoids problems that arise during a long
recruitment period. Typically interim nursing executives find that working through
contract management is a rewarding and challenging experience.
When a hospital's chief
nurse executive (CNE) position is vacated, it often takes 6-8 months for administrators to
find a capable, creative, well-trained nursing administrator to deal with the many and
complex problems facing the nursing profession today. This absence of leadership is often
preceded by a period of time in which the incumbent is either making the decision to leave
or when serious problems are arising in nursing care delivery, as judged by the
administrator, medical staff, or nursing staff. Until a suitable, replacement is found and
can begin to make necessary changes, these problems not only continue - they grow. The
entire process leading up to the separation and ensuing search for a suitable replacement
can extend to at least 1 year of floundering, uncertainty, and a rapid deterioration of
services.
During this time, the self-confidence of the nursing staff is at low ebb and they lack
the spirited and committed direction needed to motivate them. Not having a CNE for a
length of time is a disservice to nursing staff and to patients.
Contrary to the belief that the hospital is making a financial gain during the period
of time that the CNEs salary is not being paid (or at least not incurring the cost of
severance pay plus a new nurse executive's salary), there are visible as well as
intangible costs. They include lack of leadership measured by reduced productivity, poor
budget compliance, decline in preparation of accreditation and licensure visits, employee
attrition, decline in interdepartmental planning and program implementation, and physician
and employee low morale. These costs can run the organization even further aground. It is
estimated that it takes 3 days of work to make up for 1 vacation day. To be without a CNE
for 6 months will certainly cost the organization 1 year of makeup time.
Acting Nurse Executives Face a Myriad of Problems
If administrators place a noncandidate member of the nursing staff in an acting CNE
position, as is often the case, additional problems can arise. Uncertainty as to how to
handle the underlying causes of existing problems leads to reactive rather than pro-active
behavior on the part of the acting executive.
To compound the problem, the interim or acting non candidate may have difficult with
his or her new role of working within the hospital's administrative structure. This can
lead to disillusionment, apathy, ineffectiveness, and hostility, making it even more
difficult for the noncandidate to resume an effective second-in-command role within the
organization when a permanent CNE is found and on board.
Among the many problems that can arise from this dilemma is the way in which the entire
nursing profession is perceived. To place a member of the nursing staff in the acting
position, who has not had the education or experience necessary to administer and provide
leadership, only reinforces the negative notion that nurses are interchangeable resources
rather than specialists. It negates the choices that all nurses make to determine which
role in a particular organization they can assume with unlimited confidence, competence,
and joy. In smaller hospitals, it is difficult if not impossible to find an interim CNE
within the ranks who is educationally or experimentally prepared.
Contract Management: An Innovative Solution
There is a new and innovative alternative, offering a solution to this undesirable
healthcare management situation in which hospitals often find themselves. The solution is
to turn to contract management, a service that provides experienced and effective nurse
executives who are able to fill the void on an interim basis and can prepare the
organization for the next permanent CNE.
Case Study
The management style of a CNE in large mid-western hospital endorsed the theory of
complete and total independent nursing management of nine major nursing divisions. This
resulted in the organization's frustration and inability to make and communicate
centralized decisions regarding the entire nursing service. This management style affected
the CEO and became intolerable to the medical staff.
An interim, nonnurse administrator, who was a strong authority figure, was assigned to
replace the CNE in an effort to regain some centralized control over budget, staffing,
capital equipment, policy, and procedure issues. The plan failed and revolution was
imminent. By the time a decision was made to search for a new CNE, too much time had
lapsed, resulting in extreme discontent on the part of everyone involved in the situation.
Finally, a contract management employee was brought in. For 9 months, a credible nurse
executive was given an opportunity to centralize the appropriate functions while retaining
the realistic empowerment of the independent nursing divisions. Management meetings were
established, and uniformity in nursing education, nursing practice, and nursing
communication with executive management, medical staff, and the governing board was soon
achieved.
When a new CNE was employed, she was free to enter the situation with the necessary
reorganization behind her. She was allowed to develop her own management style with the
nursing divisions and all other members of the hospital's staff.
In another example, a large university teaching facility in the south had a CEO who
could not arrive at a decision among several candidates that a search firm had presented.
The match that the CEO, medical staff, and the university were seeking did not seem to
exist among the candidates.
The acting nurse executive was uncomfortable in the position, and reluctant to make
management decisions due to a combined lack of self-confidence and concern. She looked
forward to returning to her previous position and feared the possibility of making enemies
of those people who she knew within the ranks. She was also a long-term employee of the
facility whose vision of nursing was to return the nursing department to the way it was
when she began her career in nursing.
This vision was not compatible with the facility's plans to modernize the physical
plant and recruit newer and better-trained physicians. The acting CNE's lack of a masters
degree and subsequent training also hindered her ability to maintain a liaison with the
university.
Contract management provided an interim CNE on a 1-year contract, to assist in
achieving the teaching facility's goals. After 8 months at the facility, the interim nurse
executive was offered and accepted an invitation to become a permanent CNE, much to
everyone's satisfaction.
Apparent Advantages to Contract Management
Several advantages to contract management are apparent:
- Interim contracted management can step in and release the energies of the
associate-level directors and assist them in regaining confidence in the organization and
themselves.
- Medical staff, nursing staff, and the hospital community will respond favorably and
quickly to an experienced, effective, and communicative team builder, albeit an
"out-sider", who will evaluate the nursing practices and level of patient care
in a considerate, objective, and nonthreatening manner.
Contracted interim CNEs know how to assimilate quickly and communicate with the
administrative team, medical staff, and governing board. At the same time, they are able
to communicate reasons for change to the nursing staff.
Some situations may require an interim nurse management team, which contract management
firms can effectively provide. These teams usually include a special projects person,
educational staff, and someone who is capable of filing a middle-management position. For
a contract management team to maximally benefit a facility, care and time are spent in the
team-building process before its arrival at the site in question. Clearly, the interim
team that has already worked together is ideal. All candidates must be carefully screened,
meet the expectations of the client and the contract management firm, and be supported by
the contract management firm's staff.
Typically, nurse executives find employment as an interim CNE a challenging and
rewarding experience. Eager for leadership roles, they are given opportunities to work
closely with hospital administrators who place an emphasis on and value leadership. They
can demonstrate their ability to function at a high level and turn around problem
situations without worrying about playing the usual long-term politics found in most
organizations. Consequently, they can concentrate on cultivating relationships based on
truth and candor, moving swiftly to resolve problems.
Especially suited for this challenge are those who can bond quickly with the hospital
staff who will most likely remain within the organization after the change. They must have
teaching skills and the ability to orient the new, permanent CNE in an effective manner.
In addition, they must be team players and motivators and have the skills and experience
to match the institution's crisis needs, i.e., regulatory agency inspections, budget
preparation or readjustment, human resource management, and human relationship skills.
They must be willing to relocate approximately every 4-6 months.
In a few cases, the organization desires a "maintenance" interim CNE whose
prime responsibility is to keep the existing system operational vs. creating a change in
the systems. The maintenance interim CNE must know how to adapt to the organizational
style of the management quickly and keep the vital nursing leadership functions moving
without a need to do things their way.
Few firms specifically offer contract management service for interim CNEs, although
much has been reported in the media regarding firms that provide interim personnel for
chief financial officer and operating officer positions, as well as positions in
traditional medical departments such as Emergency, Anesthesia, Radiology, and of course,
the well-known dietary and housekeeping contract management firms.
Interim contract management firms are often found in the "yellow pages" in
major cities. Frequently they are found by networking with healthcare colleagues and
sometimes they can be found working closely with executive nurse recruitment firms. It
should be noted that the services contract management firms provide are different from
recruitment firms. Contract management firms only provide interim placement and do not
search for permanent replacements. Some contract management firms advertise in
professional publications and are represented at conventions and conferences.
Contracts are typically structured so that the interim CNE receives his or her ultimate
salary and benefit package based on the scale of the organization plus a premium for
interim services. Either the interim person is a contractee of the organization, is an
employee of the contract management firm, or is contracted as a self-employed freelancer.
Out-of-pocket expenses are typically paid for by the client hospital. Depending on the
contract, transportation, relocation, and housing costs may be included in the benefit
package. The client hospital usually arranges health benefits. However, for self-employed
workers, health benefits are not a consideration because most freelancers have access to
group policies through various professional organizations.
Career Opportunities Benefit Varied Interests
Although travel and relocation are frequently necessary career considerations, the
opportunity to work with a contract management firm in an interim nurse executive position
is an exceptional opportunity and learning experience for the nurse executive who is close
to retirement, one who is retired and looking for a few months of challenging work, or
someone in between jobs who wants to see and experience another part of the world
(literally and figuratively).
Conclusion
Although change can prove beneficial, it is often met with resistance. It can, however,
present a golden opportunity to delivery quality healthcare administration backed by an
innovative contract management firm. This valid alternative of welcoming change as
opportunity is well worth serious investigation and consideration by hospital
administrators and nursing professionals.
References
- Southrada L. Contract management. Hospitals. 1991; 65(16):54-58.
- Mueller J, Lavendero R. Interim nursing management as temporary employment. Nursing
Management. 1990; 21 (1):43-46.
- Lutz S. Contract management firms gain ground. Modern Healthcare.
1990;20(33):55-66.
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