A 2014 survey by HealthLeaders Media reported that the top cost containment strategies for hospitals, physicians groups, and healthcare systems are 1) process improvements, 2) labor productivity, 3) supply chain efficiencies, 4) capacity management, and 5) staff reductions. This isn’t surprising as healthcare staffing is the largest driver of both clinical and financial success.
Process improvements were cited by 81% of healthcare executives who are looking for sustainable cost containment strategies that offer year after year reductions rather than short-term fixes such as layoffs (20% of respondents). Labor productivity increases were chosen by 67% of healthcare executives as a favored cost reduction strategy.
Strong Emphasis on Process Improvement
The emphasis on process improvement through workforce analytics helps identify opportunities where labor can be employed more effectively. Process improvements and labor productivity gains then become part of a continuous improvement culture that is practiced daily.
The greatest challenge for staffing managers is to match labor to patient census. Staffing requirements can vary considerably day-to-day and having ready access to current workforce data via dashboards can help staffing managers to devise plans to better meet census. Visibility into workforce data is necessary for both long-term strategic planning and short-term cost management tactics.
Healthcare Staffing Optimization
To be successful and produce returns year after year, expense reduction must be sustainable. The first step is to automate workforce management processes such as time and attendance, staffing and scheduling, human resources and payroll. Through automation, managers gain a better understanding of workforce dynamics both currently and cumulatively.
According to the survey, the top workforce management initiatives for healthcare labor cost reduction include:
Monitor and reduce overtime pay - overtime can be reduced with workforce planning and scheduling software. For example, the ability to analyze incidental overtime can lead to improvements in shift change procedures.
Develop and monitor productivity metrics – choosing the right Key Performance Indicators (KPIs) will improve workforce performance monitoring. For KPIs to be effective, they must be clearly defined and measurable across the organization.
Adopt acuity-based staffing – delves deeper into optimal healthcare staffing strategies than nurse-to-patient ratios. It seeks to base staffing on patient need by ensuring an appropriate mix of skill sets and competencies. Contingent employees are often used to shore up staff and skill gaps.
Better manage contingent staff – most healthcare organizations use a variable staffing model that changes based on patient census. It’s important to have the right tools to manage the contingent workforce for cost containment and efficiency. It also helps to have the right workforce management software for tracking documentation, posting open positions, and project costs for different staffing mix scenarios.
Reduce premium labor usage – workforce analytics enables managers to identify opportunities for cost containment or reduction such as overtime, contingent labor usage, and overstaffing.
Optimize external staffing agencies – the ongoing workforce shortage has most providers using external healthcare staffing agencies to source and recruit medical staff. It can be difficult for human resources to continually field telephone calls, emails, and instant messaging from various healthcare staffing agencies. Web-based Vendor Management Software (VMS) for the healthcare industry consolidates and centralizes external staffing agency communication. Through the software, staffing managers can communicate with hundreds of healthcare staffing agencies nationwide as well as analyze staffing metrics for continuous improvement initiatives.
Healthcare staff layoffs – only 20 percent of healthcare executives are looking at employee layoffs to reduce costs.
Healthcare workforce analytic dashboards quickly provide managers with the data needed to make staffing decisions before the cost is incurred thereby saving more money in the long term. Staffing changes can be made as new data arises giving managers the opportunity to maximize the quality of patient care at the lowest cost available. Managers spend less time gathering and verifying workforce information and more time maximizing workforce potential based on up-to-the-minute information.
It takes only 30 minutes of your time to have an online demonstration of our vendor management software designed specifically for the healthcare industry. Schedule an appointment now by calling 800-585-1710 or contact us online. Remember to ask about our free software installation!