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Labor Efficiency Emerges as Cost Containment Measure

Michael Zeis, for HealthLeaders Media, October 17, 2012

Administration: Friend or foe?

Budgets come from administration. Patient care comes from the clinical staff. Traditionally, the groups are not inclined to work closely, so in some organizations, closeness becomes someone's job. At Pocono Medical Center, that is part of Cors' responsibilities.

"We have the traditional finance-driven budget process and then we have a clinical-driven examination of how we are actually providing care," Cors says. "Part of my job is to bridge the chasm between the finance department, which isn't even in the hospital—it's four blocks away—and the clinicians, who come to work through the hospital's side door by the medical staff lounge." Mentioned by 19%, survey respondents say physician-hospital relationships represent the biggest barrier to achieving sustainable cost reductions, which is second only to government mandates (27%).

Fundamental healthcare industry changes such as new regulations, the shift to value-based purchasing, declining reimbursements, and merger and acquisition activity are challenging working relationships. Says Cors, "With these changes, people are scared, they are uncertain. We can see the nature of conflict going off the scale on physician-hospital relationships. Hospitals that successfully navigate physician-hospital relationships will do well, and the hospitals that do not will not." A principal tactic used by Cors and Pocono in pursuit of efficiency is care coordination. "We are taking a service line approach, bringing together disparate elements that might touch the same surgical patients during their stay. By coordinating better, we will be looking at some significant changes in our work process and therefore our costs."

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