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Alven Weil
Premier healthcare alliance

Michigan hospital saves $4 million with Premier healthcare alliance labor solution

Premier's LaborConnect program helps Crittenton Hospital Medical Center save money, reduce overtime, increase patient satisfaction

CHARLOTTE, N.C. (March 9, 2011)Crittenton Hospital Medical Center (CHMC), in Rochester, Mich., saved more than $4 million with the Premier healthcare alliance's LaborConnect® labor management program.

Health reform's proposed reimbursement cuts are a severe threat to hospitals where more than 60 percent of hospital expenses are in labor. CHMC operates in a dynamic and competitive environment where most hospital workers are unionized, so an effective labor management program is a necessity.

"We have definitely proven the value in Premier's benchmarking/productivity system integrated into our labor productivity program," said Gary Altman, program leader for process engineering at CHMC. Altman joined CHMC in 2008 to give new life to its labor management program.

CHMC joined the more than 500 hospitals that use LaborConnect's OperationsAdvisor® productivity and benchmarking solution four and a half years ago. Over three years, CHMC saved more than $4 million in labor expenses. OperationsAdvisor is the only Web-based, total labor management solution that fully integrates a productivity measurement system with quarterly benchmarking. Hospital members of LaborConnect saved more than $120 million last year.

Altman continued, "To be compared to other hospitals at a high level is an enormous benefit. We have been pleased with the support and guidance from Premier. The best practices for establishing a labor productivity program were an excellent guide to getting us started."

Premier helped CHMC outline best practices, such as solid senior leadership support. CHMC's Labor Productivity Steering Committee (LPSC) was reorganized and revitalized with executive team members meeting weekly to strategize their labor productivity improvement. In doing so, the hospital has significantly reduced overtime. The use of agency nurses has been eliminated and sustained over two years. Physician, employee and patient satisfaction has increased with a decrease in turnover. And now new positions are under tight control as they must result in significant savings or new revenue to be approved.

"Our labor productivity program is designed to protect resources, not to reduce them. You cannot lay people off and expect to keep morale up or maintain a high quality community image," stated a representative from the LPSC.

The LPSC used Premier's recommended business plan to develop department-focused initiatives that are posted on a weekly project tracker for all employees to access on the hospital's intranet.

The hospital's goal is to achieve top percentile on OperationsAdvisor benchmarks. "Our leadership team understands that to do this correctly, we need to have the dedicated time and commitment to accomplish our goals," Altman said.

In 2008, Premier helped CHMC reset productivity targets to adapt to changes in the environment and the addition of new programs. At this time, CHMC hired a new labor productivity engineer, Kerry Coran, to further support for the initiatives.

Each year, CHMC critically reviews each department, but gives highest priority to those below 50th percentile. Today, the number of departments within a 5 percent variance of target has increased from 31 percent to 75 percent and continues to grow. The LPSC also closely monitors agency and sitter use overtime, and new position requests with the metrics are presented to the governing board of trustees.

CHMC has also benefited from access to the Premier Performance Improvement Portal™, a library of industry best practices. Participants tap into a networking community for knowledge sharing and interaction with industry specialists, hospital and health system peers and Premier's knowledge experts. "The Premier Performance Improvement Portal is a good resource for finding new ideas when a manager needs help," said Coran.

About Crittenton Hospital Medical Center
Crittenton Hospital Medical Center, Rochester, Mich., a 290-bed hospital, serves Oakland, Macomb and Lapeer counties. It provides a full continuum of clinical programs with a medical staff of nearly 500 physicians. It partners with the University of Michigan Health System for cardiac surgery and with the Barbara Ann Karmanos Cancer Center for cancer care. It is a teaching hospital for Wayne State University's School of Medicine’s family medicine and ear, nose and throat residents.

About the Premier healthcare alliance, Malcolm Baldrige National Quality Award recipient
Premier is a performance improvement alliance of more than 2,600 U.S. hospitals and 86,000-plus other sites using the power of collaboration and technology to lead the transformation to coordinated, high-quality, cost-effective care. Owned by hospitals, health systems and other providers, Premier operates a leading healthcare purchasing network with more than $4 billion in annual savings. Premier also maintains the nation's largest clinical, financial and outcomes database with information on 1 in 4 patient discharges. A world leader in delivering measurable improvements in care, Premier works with the Centers for Medicare & Medicaid Services. Headquartered in Charlotte, N.C., Premier also has an office in Washington. Stay connected on Facebook, Twitter and YouTube.