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Case Study: Reducing Labor Costs without reducing FTE's
St. Peters Health System's journey to labor optimization


Prepared by
Kathleen Brodbeck, RN MS NEA-BC
CNO/Vice President of Operations
St Peter's Health System

Converted to webpage by
Keith Bush
Chief Information Officer
Workforce Prescriptions
Original Word Document Can Be Viewed By Clicking Here
UPDATE: Changed any references of 'Pay Practice Audit'(old) to 'Labor Utilization Audit'(new). The original Word document remains unchanged. - Keith, Jan 2010



One of the most challenging issues facing hospitals today is the need to effectively implement a labor management program that reduces cost without compromising quality and staff satisfaction. The common processes and labor practices currently used in many hospitals have become obsolete and are actually contributing to the economic decline of many hospitals. Healthcare, as an industry, has grown in complexity over time and acute providers must discover ways to become more efficient now that revenue and labor are no longer connected through current reimbursement mechanisms.

Project Objectives:

Both St. Peters and Workforce Prescriptions (our consulting partner) share the belief that a redesigned leadership approach to labor management is necessary to produce desired results in a radically different financial environment. The locus of the project was our own mid-sized health system in Albany, NY. We and the consultants selected each other due to the belief that both groups shared common missions, values and goals. The objective of the shared project was to determine the most effective mechanisms for reducing labor expense without eliminating staff positions. Collectively, our goal was to identify opportunities for expense reduction that when addressed, would allow for financial gain without undermining employee engagement. The focus of the program was to purposefully create more than $1M in annual labor expense reductions through changes to underlying operating conditions/processes that would be largely invisible to the workforce and would be perceived as positive by both management and staff.

St. Peter's has consistently been a top performer in labor cost optimization; therefore, additional efforts to reduce labor expense required the support of management to discover new ways of acquiring and deploying staff. Our strategies were intended to be sensitive to the impacts of any changes to pay types, pay policies, scheduling policies that could be viewed as "takeaway's" by staff. We knew that one of the key sources of our success in cost management derived from the fact that our "very engaged" employees consistently rewarded our leaders with "discretionary effort" (work beyond the scope of what their roles required).

One of the key goals of the program was to find ways to change the operating environment in ways that were largely invisible to the general workforce. When invisibility was not an option, our goal was to craft solutions that would be viewed as positive and welcomed by our staff. Moreover, both ourselves and the consultants were keenly aware that communications and change planning had to supersede efforts at cost reduction if the reductions were to become permanent and sustainable.

Project Stakeholders:

System stakeholders involved in study:

  • System executives: CNO/VP Operations; VP of Human Resources; CEO
  • Key Directors and Managers: Medical/Surgical; Critical Care; Case Management; HR Specialists;

External consultants:
Workforce Prescriptions is unusual by any consulting standard. Founded as a "retirement" company, its focus is on partnering with deserving organizations to provide expert advice, guidance, measurement and analytics that allow for new perspectives and a vision for change that exceeds the scope of mere "consulting"... A fundamental difference in the approach with Workforce Prescriptions was the commitment to an integrated partnership. Unlike most consulting relationships, this project evolved from a shared commitment to improve the vitality of the organization. Having both entities fully vested in the process and implementation was a key driver of success. This premise challenged traditional management thinking and required our leaders to be opportunity seekers, open to new possibilities.

Setting the Stage for Success:

Most leaders faced with the presence of a potential threatening consultant brought on to reduce labor costs will react in a way to protect and defend current use and allocation of labor. This engagement was not launched until the goals of the project were clearly shared and entrusted by all parties. Following the establishment of the goals, the "on-boarding" process continued with the requisite leadership behaviors defined.

Required leadership attributes:
  • Creativity
  • Accountability
  • Champion of Change
  • Humor
  • Sensitivity
  • Collaboration
  • Team Recognition
Unacceptable leadership behaviors:
  • Maintaining status quo
  • Lobbying for additional resources
  • Victim management
  • Triangulation

Project Process:

The program implemented by the consultants consisted of 9 distinct phases, the first 8 of which occurred over an 8 week period of time:

  1. Quantitative Information Gathering
  2. Qualitative Information Gathering
  3. Supportive/Contradictive information Gathering (surveying)
  4. Data comparison for validity & reconciliation
  5. Analysis
  6. Presentation of findings/Conclusions reached
  7. Subjective Validation
  8. Implementation planning
  9. Implementation

The process included a promise by the consultants that if a finding wasn't validated by at least 3 segregate sources (IE; Quantitative data, qualitative data and surveys) that the minimum threshold would not be reached and the conclusion/cause/waste would be deemed, "invalid". The goal was to identify "root causes" of labor waste rather than merely "correlating factors" so that any change proposed would be lasting and not require invasive ongoing support.



Initial Information Gathering:

Operational areas/functions were selected that each were "known" contributors to labor expense/waste. The operations/functions/outputs evaluated included:

  • Length of stay (specifically focused on internal coordination of care and discharge management)
    • Seeking root causes of "avoidable yet uncompensated" days of care
  • Payroll processes and measurement/reporting
  • Policy & the governance of policies directly related to how staff were paid and at what rate, for what reasons
  • Cost center/unit budgeting process
  • Cost center/unit staff scheduling process/effectiveness
  • Staffing levels & practices:
    • Recruiting & Hiring (with a special emphasis on "high demand/low supply" position types)
    • Key work processes known to drive labor waste (IE; things that pull nurses away from the bedside, etc...)

Quantitative Information Gathered:
Initial data was aggregated for each area including but not limited to:
  • 5 year financial performance history (P&L & Labor expense including contract labor & benefits)
  • 3 year productivity history
  • 3 year volume & acuity history
  • Previous 12 months unbundled payroll data for all "non-exempt" staff
  • Key HR metrics from previous 12 months (PTO & Vacation accruals -including bank size/limits, hires, terms, benefit costs, etc...)
  • Pay code cross-walk (defining and categorizing each pay code)
  • Mathematical calculations of "premium components" of each pay code

Qualitative Information Gathered:
The consultants and senior leadership conducted interviews with dozens of department managers in order to explore things that interfered with building filling & managing schedules, things that drove OT, Registry, Agency and other cost plus staffing use, how productivity was designed, measured, understood and the impacts productivity initiatives were having on performance (both good & bad), the impacts of budgets on staffing levels and access to labor, the source and scope of "avoidable days of care" and critical challenges created by the workforce structure & management (IE; the impact of cluster strategies - or lack of clusters, etc...).

Staff interviewed came from many operational areas and were combined into groups. There were a minimum of two groups created for each of the 3 topic areas discussed to ensure that comments from one group were validated by a second (or sometimes 3rd group). Groups ranged in size from 5 to 20 participants and each group was only asked questions about 1 of 4 key issues:

  1. Length-of-stay/avoidable days and their causes/issues that contributed to them
  2. What "drove managers nuts" (added difficulty to) about staff scheduling, time off management and the payroll process
  3. How staff were paid, for what, when and why
  4. The impacts of current productivity measures on local labor performance
Participants included staff from:
  • Nursing (at all levels)
  • Case Management/Social Work
  • Human Resources
  • Employed Physicians
  • Finance

Supportive/Contradictive information Gathered (surveying)
To further validate and tie together the qualitative and quantitative information gathered, surveys were deployed to different target groups designed to elicit more detailed feedback from larger pools of the workforce. 4 surveys were deployed:
  • Care Efficiency Survey - completed by the nursing workforce, focused on collecting responses about perceived operational challenges to, and opportunities for, "delivering efficient care in a timely manner".
  • Case Management Survey - completed by case managers in order to establish cause and prevalence of "avoidable days".
  • Scheduling Survey - completed by dept managers/schedulers focused on scheduling practices and challenges associated with matching staffing to operational/volume needs.
  • SR Leadership HR survey - Completed by organizational VP's/C's as a "subjective assessment" of HR performance and capacity to drive/support anticipated project change requirements.


Data Comparison for validity & reconciliation:

The consultants aggregated over 1500 quantitative data points, 800 qualitative data points and the responses to over 80 survey items with response amplitudes ranging from 20 to 300 participants. The first step in their "evidence-based" approach was to identify issues with the highest amplitude of agreement between the survey and interview data. The decision to begin with this more "qualitative" data was based on the premise that, "whether true or not, if something is widely perceived as true ... it will be acted upon as if it is". The underlying belief being that the decisions driving labor waste were rooted in perceptions whether those perceptions were valid or not. This produced two lists of issues:

  • Issues that had strong correlation between data sets
  • Issues that had no/little correlation between data sets

The second step in data comparison was to rank high correlating issues and then look for validation of impact from within the quantitative data. This methodology allowed the consultants to rapidly compose lists of two types of issues identified:

  • Issues that had a provable correlation to labor expense
  • Issues that had no provable correlation to labor expense

The 813 qualitative data points (issues that could possibly be contributing to or causing labor waste) were reduced by 588 through the first pass comparison. The remaining 225 issues were further reduced by 203 when validated against quantitative data (proof of impact). This left the consultants with only 22 issues that met the conditions of "3 points of correlation" and were "validated as causing a measurable/calculable financial impact".

General Findings:
  • Labor expense was the result of thousands of independent decisions made at the department level. Decisions which may not have always been in the best interest of the larger organization.
  • Those decisions were based on the individual perceptions and understandings of managers as well as the availability of certain information as well as access to executive decision making.
  • Labor expense had less to do with staffing levels, productivity measures or FTE's but rather with how people are PAID and for what work.
General Root Causes of avoidable labor expense:
The consultants concluded that there were 6 major contributors to labor expense:
  • Excess/Avoidable Days - When length of stay rose (or didn't fall in proportion to lowering of census or acuity), not just patient throughput was impacted. Staff that might have been able to float became "stuck" and staff that might have been sent home or never scheduled ended up working.
  • Scheduling Complexities - We discovered that modeling, balancing and managing a staff schedule requires the mathematical ability to balance up to 10 variables (Ki square analysis) a mathematical skill not prevalent among the organization's managers. Ten variables: The number of FTE's on the roster, The number of work hours in addition to that each will work, The skill level of each staff member & the position of each staff member, The complexity and acuity of case types & patients (in direct patient care departments), Vacation and time off needs, Changes in local & facility volumes, The number of anticipated bed turns on a given shift, True non-productive load needed to be covered and staff shift and day preferences.
  • Workforce Behaviors - #1 Ease of Use - We discovered that it was FAR easier for a given manager to reach for additional money (play, "let's make a deal") than it was to pursue less expensive options. #2 Perceptions of Staffing Shortages - We uncovered that when managers "feel" that staff are working harder due to short staffing they are far more willing to offer extra money to their staff (an unofficial incentive). #3 Challenges in Governance and Policy - There were variances in understanding of the rules and practices that provide the best stewardship of organizational resources at the manager level. Such struggles lead to variances in adoption of policies and created significant labor waste. #4 "Fixes" Becoming Entitlements - short term pay programs had become (in some cases) long term components of core compensation.
  • Productivity Confusion - We discovered that our heavy reliance upon external benchmarks of "productive hours per volume" as a productivity measure was distracting our staff from focusing on the cost of those hours of labor.
  • Workforce inflexibility - We discovered that our workforce wasn't flexible and portable enough to shift when accommodating local department volume spikes/drops. This created "partial people math" whereby nurses in several areas had a patient or two short of full ratio utilization yet neither patients nor staff could be consolidated to reduce the waste associated with this phenomenon.
  • Clinical Availability - We discovered that nurses were spending an average of 100 minutes per nurse/per shift in just two activities: hunting for needed equipment and completing the redundant portions of forms & paperwork.


Specific Findings:
Avoidable Days & Collaboration in care:
Cause of "avoidable days" - Surveys and data requests identified 27 unique contributors to "avoidable days" of uncompensated care. The issues boiled down to two major categories:
  • Challenges the organization was having in placing patients at the point of discharge.
  • Difficulties the organization was experiencing in organizing how care was managed and prioritized to ensure that patients weren't waiting for results of tests, procedures, treatments or signed orders.
  1. The placement challenges created two major impacts on organizational labor expense:
    • Patients who stayed longer required care and supplies even though payment would not be expanded (creating a major disconnection between revenue and labor expense, making labor a higher % of revenue)
    • Kept needed beds full, reducing the ability of the ED to place patients or floors to move patients through descending levels of acuity, potentially reducing revenue and artificially lowering the nurse-to-patient ratio (consequently raising nursing care hours per patient)
  2. The issues with organizing and prioritizing care created three major impacts on organizational labor expense:
    • Patients nearing the end of their anticipated LOS were being "hung up" by missing/incomplete organizational actions increasing the level and duration of "uncompensated care" for even ensured patients for whom reimbursements were made on a DRG or Case rate basis
    • Ancillary departments were not always sure in what order to complete their work to ensure efficient support of patient care/discharge causing case management staff, attending physicians, hospitalists and bedside nursing to compete for resources by escalating to "stat" care needs for "their" specific patients. This was delaying discharges and creating duplicative work/tracking while fostering inconsistencies in care delivery.
    • The level of collaboration in care was stunted and was occurring in one-on-one and daisy-chain conversations rather than in real-time with all necessary parties involved. This was lowering the satisfaction of attending physicians, forcing hospitalists to "bat clean-up" and creating tension between bedside nursing and case management who each had (at times) differing views of patient priority.

Staff Scheduling:
Surveys, interviews and data requests all validated that modeling, managing, balancing and administering staff schedules had become the single largest administrative time consumer of department managers. The process of reconciling budgets with schedules, directing swiping errors, and maintaining balanced, full schedules in the facing of changing volumes, expected & unexpected time off and productivity needs had become extremely difficult and was creating frequent cases of over and under scheduling that were being overcome through the use of expensive registry staff, agency staff, overtime and other types of "premium pay".

We discovered that scheduling challenges were contributing nearly 11.8% to overall labor expense and were caused by a combination of "over & under scheduling" based on faulty modeling of historical volumes and by a miss-alignment of the number of PT staff to volume variability. These issues created three major impacts on the organization:
  • The shift by shift cost variance between scheduling the right number of staff vs. using calling & canceling, OT and registry represented as much as a 40% cost variance per hour of labor
  • Over and under scheduling contributed greatly to perceptions of "staffing shortages"
  • Scheduling difficulties masked the miss-alignment of rosters to volumes creating perceptions of FTE shortages where in reality, roster changes were needed instead (many departments had too many full-time staff and more PT staff were needed to efficiently "flex" to volume variability)

Workforce behavior:
A well validated expense reduction opportunity was discovered to be waste associated with the behavior of department managers and staff that contributed to waste. Through the auspices of such behaviors as:
  • Swiping in/out before parking/eating and staff not swiping in at all contributed as much as 800 hours per department per quarter in incremental overtime and labor that was compensated but not provided (actual waste varied based on department size and number of shifts covered per week)
  • Managers finding it easier to play "let's make a deal" in order to get staff to cover additional shifts rather than doing the harder work of calling through an entire roster, switching days staff worked or requesting staff from other departments in order to fill unexpected vacancies created by call-out's or volume spikes. While all these activities were pursued by some managers at some times, none of them was consistently performed by all managers at all times.
  • We discovered that pay programs originally intended to incent specific behavior to combat unique circumstances (such as unexpected short term staffing shortages) had been sporadically adopted as ongoing and expected components of core compensation. Over time, this phenomenon had created an atmosphere where many of our highest compensated employees were part-timers who had reduced their FTE status (but who were still working full time) just to have a greater capacity to work shifts at "premium pay" rates.

Productivity/Variability:
We discovered that our organization's focus on the "hours of labor" tied to census (rather than the "cost per hour of labor" tied to local work volumes) was having some dramatic impacts on labor expense (and in places actually producing the opposite result of what was intended):
  • Departments with a large proportion of exempt staff felt forced to choose between sending home people who were then, "paid PTO to not work", or miss their productivity goals. This raised the average cost-per-hour of labor in largely exempt departments (as well as reducing their access to labor).
  • Departments with high volume variability were flexing down so often that some staff risked depleting their PTO banks which reduced access to discretionary effort, workforce flexibility and risked heightened turnover (and the replacement costs associated with it)
  • Support departments whose volumes were not readily attributable to house census felt forced to send staff home even when their workload was static or increasing which increased perceptions of both staff shortages and work-burden
  • Contract staff were not always counted in productive labor so some parts of the organization were accelerating their use of contract labor to maintain productivity targets (which increased overall labor spending in those departments)
  • The mix of core staff, part time and full time FTEs was not balanced appropriate to the unit needs.

Premium Pay Practice Abuses:
Years of accumulated and outdated methods of using premium pay along with poor governance of pay practice policies contributed to excessive hourly rates of pay:
  • Unclear criteria for use of special pay programs
  • Lack of approval mechanisms for manager use of special pay programs
  • No audit of payroll
  • No targeted objectives for reduction in rates of pay

Human Resource Recruitment:
The lack of strategic alignment with HR was evident in the staff rosters of the various units. Years of coping with perceived staffing shortages resulted in numerous deficits in the make-up of the staff:
  • Excessive orientation hours
  • Lack of per diem staff
  • Imbalance of full and part time FTEs
  • Lack of internal recruitment (advancing within the organization)
  • Lack of forecasting expected turnover/ anticipating vacancies
  • Lack of focus on a patient care directed volunteer pool

Workforce Flexibility:
Our workforce flexibility challenges were rooted in 2 issues that while once thought to be an asset, were now creating barriers to efficiency:
  • Overspecialization of 24/7 care areas/staff
  • Small independent units
The combination of these two beliefs had created not just silos, but contributed to labor management waste caused by inefficient patient flow and poor census targeting. If one telemetry floor was full, the second telemetry floor could/would and did refuse patients for not being the "right type" to receive care in their department. These silos created two distinct barriers to workforce flexibility:
  • Difficulties in moving staff between departments (a lack of formal "cluster" strategies)
  • Difficulties in moving patients between departments (too narrow of definition of "right type of patient" for departments of similar acuity)
The difficulties in moving staff & patients between departments created two major impacts on organizational labor expense:
  • It forced greater frequency of "partial people math". Partial people math is the phenomenon where nurses in multiple departments with fixed nurse-to-patient ratio have 1 or 2 less patients than allowed by their ratio (this does not include times where acuity or sitters require variances to staffing ratios). This waste could account for as much as 79 RN hours per day (14.5 FTE's per year).
  • If forced patients to wait for beds, reducing throughput, backing up the ED and lengthening stays for affected patients (driving even more uncompensated labor needs)
These challenges also had a measurable effect on some patients (not a part of the project, but noticed and documented)
  • Patients occasionally "sat" in departments where an inappropriate level of care was provided (not bad care, just not perfectly aligned care) such as the ER, or in a critical care area when they were clearly ready to move to a medical floor

Clinical Availability:
Surveys and interviews validated that nurses were spending an inordinate amount of time away from the bedside is processes that were identified as "readily remediable". Key waste appeared in two areas:
  • Hunting for needed/hidden equipment
  • Completing the redundant portions of paperwork or redundant forms
These two issues alone contributed nearly 100 minutes per nurse per shift to labor waste of which 74 minutes was determined to be "reducible". This created two measureable impacts on organizational labor expense:
  • Heightened the perceptions of staffing shortage and work burden, triggering costly behaviors from both staff and managers
  • Reduced the number of clinical hours at the bedside by nearly 60 nursing FTE's per year


Analysis:

Calculating the cost of waste:
The 22 identified "opportunities" were readily sorted into 6 major buckets:
  • Opportunities created by "avoidable days" & "collaboration in care"
  • Opportunities available through optimization of "staff scheduling practices"
  • Opportunities derived by making changes to workforce behavior
  • Productivity
  • Workforce Flexibility
  • Clinical Availability
The financial impact of each opportunity was assessed though the mechanical comparison of its prevalence and the cost per incident on payroll. Impacts were discovered in 3 key labor areas:
  1. The heightened use of labor - labor that would not have been necessary had the issue not occurred
  2. The heightened cost of labor - the difference between core rate pay and enhanced rate pay that would not have been necessary had the issue not occurred
  3. The heightened use of contract labor - the difference between core labor expense and contract labor expense that would not have been necessary had the issue not occurred

The final "unnecessary expense" figures were calculated by multiplying the prevalence by the cost per incident for each issue in each key labor area.

Determining recapture timing:
Once expense figures were created, they were discounted for two issues:
  • Discounted for replacement cost - for all needed labor, the consultants calculated the rate + benefits cost that would have needed to be paid and subtracted that amount from the waste total
  • Discounted for sustainability - for all needed labor, the consultants calculated the level of flexibility required to meet operational needs and discounted recapture by that percentage in order to ensure operational flexibility was maintained
Of the recapture opportunity remaining, the consultants then calculated an estimated time for adoption of change and created a recapture timeline that spread over 8 calendar quarters with a budgetary reset after 12 quarters (budgetary reset assumes that after a certain period of time, a labor expense reduction can no longer be considered "recapture" and will instead be considered the new budgetary floor). The timeline concluded that:
  • The organization could achieve 7.5% of the total possible quarterly recapture during Q1 of implementation
  • The organization could achieve 20.8% of the total possible quarterly recapture during Q2 of implementation
  • The organization could achieve 47.3% of the total possible quarterly recapture during Q3 of implementation
  • The organization could achieve 84.3% of the total possible quarterly recapture during Q4 of implementation
  • The organization could achieve 92.4% of the total possible quarterly recapture during Q5 of implementation
  • The organization could achieve 95.2% of the total possible quarterly recapture during Q6 of implementation
  • The organization could achieve 100% of the total possible quarterly recapture during Q7 of implementation

Recapture by source:
The recapture amounts also were determined to vary greatly by source of the opportunity:
  • Opportunities created by "avoidable days" & "collaboration in care" represented 57.5% of the total identified waste
  • Opportunities available through optimization of "staff scheduling practices" represented 6.7% of the total identified waste
  • Opportunities derived by making changes to workforce behavior represented 22.2% of the total identified waste
  • Productivity represented 5.6% of the total identified waste
  • Workforce Flexibility represented 2.9% of the total identified waste
  • Clinical Availability represented 5.1% of the total identified waste

The total reducible labor waste identified and targeted was $6,465,474 per year. As labor represents a "paid expense", recapturing this amount would create a bottom line improvement of 2.4% of net revenue.



What was implemented:

Avoidable Days & Collaboration in care:

Significant gains have been made in overall medical/surgical length of stay primarily from the result of aggressive outlier management and focused management of the hospitalist program and emergency department throughput. Case Management changes include:
  • Realignment of nurse case managers and social workers to focus on discrete populations
  • Automation of discharge planning with facility required transfers
  • Increased collaboration with referral/payer/ and regulatory agencies
Hospitalist changes:
  • Realignment from hospital based assignments to unit based to improve continuity of care
  • Institution of multidisciplinary rounds
  • Incorporation of targeted discharge planning/working DRG into multidisciplinary rounds
Emergency Department Patient Throughput
  • Realignment of teams including physicians
  • Institution of multidisciplinary rounds in ED
  • Reorganization of treat and release care process in development
Hospital priority: patient flow
  • CMO and CNO weekly facilitated meetings with emphasis on length of stay, patient flow
  • Aggressive evaluation of Emergency department throughput/access to beds
  • Establishment of patient flow coordinator
  • Increased alignment with other physician providers including intensivists and cardiologists
Scheduling
All medical surgical units have implemented census forecasting and staffing roster tools to improve demand matching between staffing and patient census:
  • Managers have implemented census forecasting tool that have enabled them to schedule more effectively
  • Staffing rosters are being refined to match core staffing needs
  • Managers are working with Human Resources to match recruitment for specific hours/shifts as determined by the vacancies in the staffing rosters
  • Managers are in the process of determining their expected nonproductive work load (orientation, sitters, education) and developing required staffing based on nonproductive hours patient care required hours
Workforce Flexibility:
In development is the process of moving from unit based staffing to cluster staffing in three areas: med/surg cluster; cardiology cluster; and critical care cluster. The clusters will allow staff with similar competences to move where the patient demand is. This will reduce the number of excess hours related to unnecessary staffing as well as reduce the number of unnecessary patient transfers. Progress to date:
  • All new staff are hired into clusters versus the unit
  • Cross training across clusters has been initiated
  • Sharing of staff and patients has been initiated
  • Staff rotation plan in development (to ensure competencies remain sharp)
Recruitment/Education/Promotion
All medical/surgical and critical care units have agreed to promote vertical promotion to eliminate the current practice of hiring graduate nurses into critical care areas. In cooperation with Human Resources current plans are in development to:
  • Create Service level agreements about vertical hiring of staff
  • Identify vertical competency gaps and provide necessary training
  • Establish curriculum for all GN's that anticipates needs of the vertical acuity transfer strategy
Workforce behavior/policy & governance:
In collaboration with human resources, several changes were instituted to ensure consistency and clarity of expected manager performance:
  • Implementation of a labor management policy
  • Organizational monitoring of compliance with the policy
  • Reward and recognition for management exceeding performance targets
Clinical Availability/ Volunteer Pool Development:

Coincidental to this project launch, a major implementation of a clinical information system was being planned. Findings from this survey were used to reinforce the objectives of clinical automation. The system has recently gone live and staff while still adapting to this clinical transformation effort, report the following benefits:
  • Less redundancy
  • Improved information sharing
  • Increased time at patient bedside
In collaboration with the director of volunteers, a recruitment strategy has been initiated to secure volunteers to clean, find, and transport necessary patient equipment and supplies. Accomplishments to date include:
  • Unit based volunteers available daily
  • Pursing options to secure off shift volunteer resources


Progress & results to-date:

Results
While the work effort is still in development, the preliminary results have demonstrated effective labor management cost reduction strategies:
  • Reduced use of overtime
  • Reduced agency usage
  • Reduced use of special pay programs
  • Improved staff satisfaction with consistency of management practices
Additional and Unexpected Findings (Counter intuitive results):
  • Flexing down is more cost effective than flexing up
  • Over hiring improved productivity and reduced premium pay usage
  • More core staff, less reliance on per diem staff reduced overall labor cost/ hour

The following table is the current status of the achieved reductions. It is important to note that these cost reductions were achieved without reducing staff nor were overall hours of care per patient day reduced. This achievement was consistent with our goal to engage staff and redirect clinical time to clinical care.

% Change Annualized $ Reduction
Annualized Overtime and Premium Pay Reduction 25% $488,000
Annualized Agency Reduction 90% $1,632,106
Hours reduction saved from LOS reduction* 2% $697,630
Total $2,817,736
* Medical/Surgical LOS Reduction = .6 days (all numbers are increasing as implementation proceeds)


Next steps:

Work on the project will continue until we have achieved and sustained the predetermined goals. Immediate next steps include:
  • Completion of 90 day action plans within each unit to achieve goals
  • Continued work with Human Resources to fill vacancies at the desired entry level and increase vertical movement of RNS
  • Restructure Emergency Department patient flow processes
  • Expand hospitalist floor-based coverage model
  • Expand volunteer pool


About St Peters Health System:

St. Peter's Health Care Services (SPHCS), acting in the Catholic tradition of the Religious Sisters of Mercy, is a community of persons committed to being a transforming, healing presence within the communities we serve. We treat all persons with dignity, hospitality and compassion, calling forth their best human potential. We provide comprehensive services that support healthy communities, including quality care with holistic approaches to healing body, mind and spirit.

To achieve this mission, SPHCS not only provides care at St. Peter's Hospital - its 442-bed acute-care facility - but also throughout the community at ambulatory care sites, long-term care and addiction recovery facilities, and in numerous residential homes via St. Peter's ALS Center, The Community Hospice and St. Peter's Home Care. SPHCS is a regional health corporation of Catholic Health East (CHE), sponsored by the Religious Sisters of Mercy, Northeast Regional Community.


About Workforce Prescriptions:

Workforce Prescriptions is an "evidence-based" consulting firm headquartered in Hudson, FL that provides assistance to hospitals desiring to: enhance their revenue opportunities, reduce their cost of labor & length of stay or to improve their human capital practices.

Workforce Prescriptions focuses primarily in the not-for-profit sector of healthcare in order to "assist those organizations whose own mission requires them to take extraordinary risks in order to ensure access to quality healthcare for the neediest of American's." Workforce Prescriptions can be contacted at (888) 343-8403 or online at http://www.workforcerx.org





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