Implementing managed care in a state mental health authority: Implications for organizational change

Abstract

Abstract Organizational change is a significant challenge facing providers of health services in a rapidly shifting managed care environment. Market forces have driven a massive restructuring of the health care system despite the recent failure of federal reforms. In a highly competitive environment, health care organizations have been forced to develop new techniques and technologies in order to survive. In particular, the advent of managed care has been the catalyst for remarkable changes in the system. While the private sector is not immune to these pressures, managers in the public arena face daunting service, political, and fiscal challenges as they grapple to manage organizational change. What challenges do health care managers face in restructuring a system of care? What key issues must be addressed? What are helpful strategies? What are the pitfalls? How can change be accomplished most effectively? This article addresses these questions by describing the common challenges managers face in the change process, how these key issues were approached strategically by a state mental health authority and the critical role of leadership in producing positive reform. For clarification, case examples are cited. While the restructuring principles and associated steps described occurred within a public mental health department, the central themes are applicable to other organizational settings.