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Four Keys to Taking Workforce Management to the Next Level

Workforce expenses make up nearly 60 percent of health system operating margins – equaling more than half of the $3.5 trillion spent on American healthcare. In today’s environment, where opportunities must be prioritized to proactively manage margins without compromising outcomes, healthcare leaders need a bold approach to optimizing workforce spend within the framework of maintaining or improving care delivery.

The challenge is that some organizations lack the diligence and discipline necessary to most effectively deploy their precious clinical resources. As leaders in these organizations focus more on providing high-quality care, managing efficiency and throughput, and preparing for shifts in reimbursement models, their day-to-day priorities may not be to optimize workforce expense.

However, there is a clear opportunity to leverage the healthcare workforce in a manner that ensures operational alignment to the organization’s strategic direction. Organizations can succeed in deploying a more efficient infrastructure by removing the complexity of workforce management, ingraining processes into daily routines and providing simple decision-making tools for leaders.

Here are four keys to success.

1. Leverage Business Intelligence

Leaders should have access to robust data, analytics and benchmarking capabilities to establish staffing levels that are attainable, safe and efficient. Advanced technology solutions and expertise are a critical component to building benchmarks and moving these successful efforts forward. For example, analytics should have the following benchmarking capabilities to enable leaders to staff volume efficiently.

They must be:

  • Transparent: Every peer should be visible in the comparison so that department leaders feel confident in their ability to achieve a benchmark or connect with peers to understand successes or challenges.
  • Flexible: Peer groups in a benchmark analysis should be flexible to enable benchmark comparisons based on quality and other factors. To fully leverage benchmarking analytics and understand performance, health systems must compare themselves against local, peer and national metrics.
  • Mission-driven: Delivering results that directly correspond with how the organization operates is essential to be relevant and actionable. For example, data in the benchmark should reflect exactly how the organization assigns its workforce by cost centers. Data that is normalized does not always produce meaningful benchmarks, due to the rigorous process needed to maintain and manage these databases, and the way in which normalized data inconveniently stratifies workforce by job code (the role they play) versus cost center (the department to which they’re assigned in an organization).
  • Precise: Benchmarks should provide details on characteristics so that the peer comparison can be modified if necessary or, more critically, that operational characteristics can be modified to drive improvement. For example, if the hours of operation do not align with other like organizations, it provides context for the variance to the peer group and also enables the organization to ask if its own hours should be modified.
  • Actionable: To adjust daily operations, benchmarking analytics should allow for clear takeaways. For example, the worked hours per unit of service (WHpU) measure is important and necessary to assess an overall staffing ratio, but it’s best combined with a staffing-to-volume correlation factor – a key component that’s seldom used but best represents a manager’s ability to flex workforce. To evaluate staffing trends, managers should balance the correlation factor with the variance of actual versus target WHpU. Combined, these metrics foster efficient staffing ratios within the department, while also ensuring the staff scheduling patterns are tailored to patient volume.

While data and analytics often provide a plethora of information, the right partner can help analyze the data to pinpoint, prioritize and implement opportunities. These steps reclaim waste in variable workforce expense to drive financial improvement. When efficiency and business intelligence combine, outcomes are positive for both the health system and the patient.

2. Set and Support Expectations

Establishing expectations is the crucial first step at the beginning of a workforce optimization journey to ensure colleagues throughout the organization understand the changes. For example, leaders typically appoint one manager to lead performance improvement among the workforce, which enhances results and reduces the need for coordination among multiple stakeholders. As part of organizational readiness, teams must understand that person’s role, the new roles supporting it and what any restructuring is set out to accomplish. Leaders must also effectively translate expectations to daily operations and monitor performance regularly, equipping their teams with resources that will allow them to succeed.

3. Establish Accountability

Anticipating and preparing for the barriers and setbacks that will occur is critical. Leaders can make training programs available to promote a culture that encourages communication and teamwork, and if managers do not consistently meet the expectations, leaders should activate accountability measures. One effective style of doing so is called management by exception. This style of management pulls in leaders only when situations deviate from the norm and require their attention, and otherwise empowers staff to make decisions and fulfill tasks themselves.

4. Ensure Sustainability

Underlying all of these principles should be a guiding philosophy of continuous improvement. Leaders understand that reimbursement pressures will always drive a need to identify better ways of operating, and should continually compare performance against others to drive improvement. A two-tiered approach to continuous improvement helps track progress:

  • During the budget cycle, whether annual or ongoing, organizations should expect improvement from departments that are not meeting benchmarks. For example, those departments that are performing worse than the 50th percentile should have cost reduction goals of 5 percent, while those performing at or below the 25th percentile are demonstrating progress and can maintain performance.
  • On an ongoing basis, departments with the highest variance to benchmark should be assessed for process improvement, such as optimizing operating room case start times, modifying the staff schedule to better align with volume of activity in the emergency department or eliminating unnecessary tasks.

Managing staffing to benefit the organization, individual staff and, most importantly, the patient is essential to effectively achieve the ideal workforce scenario.

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