21 April 2016

Your most valuable resources are costing you money – and not in the way you probably think

It’s time to pull back the drapes and shed light on pervasive hospital inefficiencies.

Inefficiencies in patient flow and workforce are deeply eroding the profitability of many, if not most healthcare providers.  Even medium sized hospitals (3,000 employees) can be spending almost $200M on a highly skilled workforce that is very inefficiently allocated to patient workload.

Providers are faced with multiple challenges when attempting to manage their workforce.  As with many industries, there is natural tension between managing costs and providing a good patient experience.  All too often though, we see healthcare providers achieving the worst of all cases – escalating costs while simultaneously getting low marks for an unsatisfactory patient experience.

Why is this happening?

The single largest costs for any healthcare provider is people.  Employee costs average about 54% of the total annual expenditures for any given provider.  Layered on top of this fact is that most providers have insufficient tools for their business operations people to accurately track, report and easily adapt to changes in patient service demand.  There is often no way to see into the patient flow or workforce to determine how the business is managing costs, people, or the patient experience.

Hospital Staff Rushing Around - Need for Workforce OptimizationProviders are faced with multiple challenges when attempting to manage their workforce to meet the patient workload.  These challenges are manifested by all too common frustrations.

Do any of these sound familiar?

  • I’m scheduling people for shifts with an Excel spreadsheet.
  • My overtime costs continue to spiral up due to patients being re-admitted for the same issues.
  • My recruiting and re-staffing costs are going up year after year due to employee churn
  • Long waits for key resources (radiologists, technicians, nurses, etc.) is putting strain on everyone and even longer staff hours does not improve the situation.
  • Staffing is rarely balanced to meet patient load and everyone in the care provider workflow feels they are always reactive, and never proactive.

Unfortunately, these inefficiencies are a direct result of workforce imbalance and their inherent costs have negative implications to healthcare organizations and their patients.  Let’s look at some of the challenges healthcare providers face a little closer.

Operations Challenge: Manual Scheduling Processes

Many providers to this day schedule some of their most highly skilled resources (nurses, lab technicians, and many others) with excel spreadsheets.  This, largely, is an evolution of finding a tool that worked with low ramp time for learning.  There are myriad problems with this approach.

There is no real way to assess who is available and adjust for any changes in staffing – such as someone calling in sick.  As the number of employees grows, so too does the complexity of managing workload manually.  Providers with 160 nurses can spend 80 hours manually managing their schedules.  While this keeps people on the floor, it does nothing to enhance flexibility to adapt to changes in patient demand.   This inevitably leads to patient frustration and unmanageable bottlenecks in patient flow throughout the care center.  Further, there is limited visibility for management, and there is frequently no good way to…

  • Get reports on how staffing is comparing to patient workload
  • Make forecasts
  • Determine meaningful business costs.

The end result to hospital inefficiency is some of the best, brightest and most dedicated people are disadvantaged by a lack of ability to:

  • Gain visibility into the overall patient experience
  • Reasonably predict patient load & staff accordingly
  • Adapt to unforeseen changes in patient workload
  • Incorporate patient care data into a system that meaningfully aligns workforce to patient demand

Operations Challenge: Staff Churn

Another vexing issue operations faces is staff churn.  Churn is a particularly insidious problem.  Generally, hospitals see a shocking 43% churn in employees annually.  This not only costs the organization due to high recruiting efforts, but it also has significant negative impact on employee engagement which will often flow through to the patient experience.

Operations Challenge: Misaligned Patient Load to Staff Availability  

Another very costly area of inefficiency is misalignment of patient load and staff availability.  Patients regularly experience long wait times throughout the cycle of care.   This is caused by several factors, including lack of visibility of the overall experience from patient admittance to discharge.  This is compounded by inability to forecast the patient load to the available workforce.

Providers are continually frustrated by having multiple systems with patient information but none can manage the patient flow throughout the care experience.  This leads to regular redundancies in data collection and no visibility to the patient’s experience through the process.  Further, there is no way for operations resources to determine what’s working and what’s not working with the patient flow.

So… what are healthcare organizations doing?

Healthcare providers are realizing that they need to take steps to automate processes like scheduling, forecasting and workflow balance and gain reporting and visibility into the entire patient journey to match staffing to patient demand.

One example we’ve observed is a healthcare provider invested in a workforce management and analytics solution that enabled supervisors to forecast, plan and automate scheduling for the changing patient demand. The analytics solution gave visibility to costs associated with scheduling to optimize employee placement based on outcomes. Hospital employees submit scheduling needs online or by phone and supervisors schedule by skill and patient demand.   This reduced administrative schedule costs by 90%, provided dramatically more flexibility for nurses to meet patient demand and gave the operations team data visibility to provide better care outcomes.

In another case, a hospital system desperately needed to reduce staff churn.  They used the reporting from a workforce management solution to understand the staff to patient loads across the hospital. This enabled them to increase hiring and staffing in compacted departments, which had a positive effect on both staff and patients. In tandem, a quality assurance tool allowed supervisors to see the skills that staff needed help with and offer training to increase productivity.

There are pockets of successful hospitals, within the broad ecosystem of healthcare providers, that are attempting to address the workforce issues.  It often takes someone who sees and owns the many painful challenges to step forward on the hospital operations team and drive change.  Those that quickly realize that the tools and solutions to help manage staffing and patient flow challenges offer more reward than effort increase patient and employee engagement.

If you would like to learn how hospitals are bringing an end to operational inefficiency, read our report or download our competitive analysis of workforce optimization solution providers.

Authored bY

Joseph Haas

As director of business development and alliance manager for PTP, I’ve worked with the best customer experience solution providers in the market. I love working with partners and customers to solve complex customer experience and business consumer interaction challenges. I see similarities of enterprises in Health and Life Sciences to other enterprises in rapidly changing industries and believe there is vast opportunity to create truly amazing customer interactions.


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