By Alyson Lyon, MBA

As hospital and health system leaders position their organization for future reimbursement models, it is vital to consider that properly managed conflict has been identified as the #1 cost containment strategy available to effective leaders. Unresolved and mismanaged conflict leads to hidden agendas, lack of timely communication and reduced collaboration resulting in patient care mistakes, increased turnover and lost opportunities.

W. Edwards Deming, known as the Father of the Quality Evolution, said “it’s impossible to predict the long-term consequences of poor quality.”  The same can be said of unresolved conflict.

Costs related to mismanaged conflict include:

• Increased management activities – Managers spend more than 25% of their time working on reducing conflict.
• Poor decision-making due to poor communication
• Less efficient workload – workload is restructured to accommodate employees in conflict.
• ‘Presenteeism’ – a term that describes a person who “retires on the job.”  They intend on leaving the job, but don’t.  They have lower commitment to their job and reduced moral.  It’s estimated that presenteeism may be as much as three times that of absenteeism (WarrenShepel (online), Health & Wellness Research Database, 2005).
• Absenteeism due to stress-related illness and the desire to avoid the conflict
• Employee replacement costs including termination costs, recruitment and effective onboarding time – the national average of voluntary resignations due to unresolved conflict is 65%
• Litigation and dealing with grievances