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Conditions of Certainty, Uncertainty, and Risk in Organizational Decision-Making in Long Term Health Care

Published February 28, 2008 12:37 PM by Brian Garavaglia

The level of information that one has to makes decisions in health care settings often differs dramatically in any one situation. Decisions are often incumbent on the level of information that is available to the decision makers. Administrators face these issues daily when making decisions.  Therefore, it is important for administrators to realize that decision-making is not a one-dimensional process. Although individuals often think of decision-making as “taking a stand” and “being decisive,” the complexity of decisions is predicated on more then these common trite explanations; the type and amount of information that lends itself to administrators and the administrative staff has to also be taken into consideration.    

        

For instance, in understanding the complexity of decisions, one has to evaluate whether you are dealing with a “programmed” or “non-programmed” decision. Programmed decisions occur frequently. Because they occur frequently there are often well-developed types of procedures and rules that guide decisions in these areas. Take for instance dealing with disciplinary actions dealing with employee absenteeism or tardiness. The administrative staff often deals with these issues frequently and quite commonly. Since this is a recurrent issue, decisions rules in this area are not only explicitly stated, but also implicitly determined. Even dealing with routine survey issues that administrators face are frequently programmed, especially for those administrators who have been involved in long-term care for quite some time. 

        

Conversely, non-programmed decisions are encountered in situations that happen less frequently and are more unusual. Often there fails to be well-established decision rules for dealing with these issues, and because of their less frequent occurrence, administrators often face greater levels of ambiguity in addressing these concerns. Because of the unique situations that are frequently part of non-programmed decisions, the lack of routinization that is part of programmed decision-making leads to a comfort zone that is much less secure for many administrators.

 

The problem of dealing with abuse, fires and evacuation, or being informed that there needs to be an immediate abatement to an immediate jeopardy citation leads to the need for insightful decisions that are not part of one’s daily, routinized decision-making ability. This may lead many to ask the question, is this not the fault of the administrator since they were not prepared? The answer to this question is even the very best administrators cannot anticipate every contingency, and even though you may have layers of policies that in some way, shape or form, address many of these issues, the reality of the situation always supersedes simulation and paper policies. 

        

Also, even though long-term care environments share a great deal of similarity in what are programmed and what are non-programmed decisions, there are also inter-facility differences.  For example, facility A may deal with a high level of acuity as it relates to issues of bariatric residents. Emergent issues related to bariatric residents may be quite routinized and part of their daily programmed decision-making strategies. However, facility B may have a lower acuity and they may not deal with the needs of bariatric residents as routinely as facility A. Therefore, if facility B has a bariatric resident that becomes severely compromised, the decision rules may be more ambiguous due to not having to frequently deal with this type of issue.

 

So what is a programmed decision in one facility may actually be a non-programmed decision in another. Administrators have to be aware of many of these common facility-to-facility programmed decisions as well as the variances that are found between facilities that lead to non-programmed decisions to be encountered.                

        

Health care decisions, regardless of being programmed or non-programmed, can also exist under conditions of certainty, uncertainty and risk. In some cases the decisions that are made exist under conditions of certainty, in which the outcomes and alternatives to particular outcomes are known. In this condition administrators have a clear understanding of the alternatives and how each alternative will impact the health care facility. In most conditions it is clear that if they have $30,000 to spend for capital improvement and two areas need improvement, the kitchen and physical therapy, then what is spent on the kitchen becomes and opportunity cost to physical therapy. If $20,000 is spent on the kitchen it is clear that only $10,000 exists for physical therapy enhancement. 

        

With conditions of uncertainty there is not enough information to make a clear decision and understand how making a decision will influence alternative outcomes. Under these circumstances some individuals will guess at what they “think” is the right decision.  Administrators often like to use the “based on my years of experience argument” to justify their decisions on a lack of information. In reality this skewed type of thinking just does not happen in health care, but in all phases of our lives. However, in a case when one is dealing with lives, the must prudent means is often to seek more information to act and decide in a prudent manner. 

        

However, probably the most difficult decisions that are faced are those that incur some probability of risk. In reality, many decisions that administrators face are probabilistic in nature, where they are unable to know with certainty what outcome given actions will have after decisions are made.  Under these conditions of risk there is often enough information available to the administrator to make informed decisions based on a level of probability. However, just because you decide to make a decision based on an 80% probability that the payback period will be six months or less or that there is an 80% probability that instituting a wage increase will reduce nursing turnover by 50 percent does not mean that it always will. 

 

In addition, it is very common to make decisions based on probability but to delude ourselves into thinking that the probability will become the actual occurrence. Psychologically this helps use feel better about decisions that often incur risk. However, just because the probability of a penny being either heads or tails is 50% and that it has turned up heads on the first toss, does not mean that the probability for it to be tails on the second toss increases. The probability still remains at 50 percent.        

        

For many, decision-making appears to be a clear and easy process. However, as been addressed in the preceding paragraphs, decisions hold a level of complexity that is often not recognized. Long-term care administrators face many different types of decisions and it is important for long-term care professionals to understand that decision-making is more than just an arbitrary and capricious enterprise. Yet, understanding about the decision-making process, the types of decisions that are often incurred by long-tem care professionals, and the challenges they face in dealing with this very important task, will help professionals deal with the unending conundrum and anxiety that is part of decision-making. Therefore, decision-making is a skill that can be improved by being cognizant of the types of decisions that one is presented with, the common problems that exist in making decisions, as well as recognizing your strengths and weaknesses in this area.   

 

                                                         References

 

Moorhead, G. & Griffin, R.W. (2004). Organizational behavior: Managing people and

organizations.  Boston, Houghton Mifflin.

 

Plous, Scott (1993). The psychology of judgment and decision making.  New York,

McGraw-Hill.

 

Rajagopalan, N, Rasheed, A.M.A. & Datta, D. K. (1993). Strategic decision processes:

Critical review and future directions.  Journal of Management, 19(2): 349-384

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About this Blog


    Brian Garavaglia, PhD
    Occupation: Long-term care administrator
    Setting: Sterling Heights, Mich.
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