Managing Healthcare Staffing Costs
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The improvement began with better data, Mahan says. The labor management team worked with the consultants to develop a peer group and pull together better benchmarking information for comparing Frederick to the rest of the industry.
Senior leaders then set targets for all nonclinical personnel to operate within the top third percentile of their peer group, and for nurses to strive for the median.
The key to making it work was the departmental directors, Mahan says. They had seats on the labor management team, but more important, they made the day-to-day labor management decisions. Senior leaders only set the targets for the directors, but the benchmarking improvement gave both executives and directors better information for making decisions and setting realistic targets. "The buy-in from directors was fabulous, because they're really controlling labor and have the tools to manage labor better," Mahan says.
Benchmarking against other organizations isn't enough, however. Internal data is equally important, and many organizations don't yet have integrated, real-time systems for tracking their own metrics, says ChrysMarie Suby, RN, president and CEO of the Labor Management Institute, a Bloomington, MN-based healthcare consultancy. "Organizations are drowning in data but don't have meaningful information put into formats that all levels of management can understand," she says.
When managers have to wait six weeks after a pay period to get payroll data, they can't react as quickly to emerging trends, particularly in a recession when fast action and flawless decisions become crucial. In a down economy, employees tend to pick up extra overtime and change habits in other ways that can increase labor expenses, she says.
"Often some of the big-bang-for-your-buck things have to do with identifying those trends early enough to do the predictive scheduling that's going to lead to better staffing decisions," Suby says.
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