How to Optimize Labor Management in Your Organization July 12, 2013 1 Healthcare market trends Consolidation • Named as biggest healthcare market trend (CEO of Cleveland Clinic) • 60% of AHA member hospitals are now part of a multiple-hospital system Focus on Savings • Healthcare organizations moving from ‘revenue’ mindset to ‘cost’ mindset due to downward pressure on reimbursements • Need to do better with less = more efficient HELM Methodology TM 3 Healthcare Enterprise Labor Management 4 Logan Pigg – MSHA • 13 hospitals, serving 29 counties in Tennessee, Virginia, Kentucky and North Carolina • Tennessee’s first Magnet® facility - Johnson City Medical Center 2005, 2009 • 2012 Most Wired Health System • National Quality Forum’s National Quality Healthcare Award winner – August 2012 • 1 Union-workforce facility, Norton Community Hospital 5 A Case Study Opportunity: • National Nursing Shortage; resource mix not appropriate • Reactive and expensive incentive program • Silo-approach to managing labor • Lack of organization communication and resource sharing • Inability to coordinate resources system-wide 6 A Case Study Opportunity, cont’d.: • Communications breakdown between Nursing and Finance • Lack of transparency relative to staffing and productivity metrics and data • Productivity and financial data was not timely 7 3 Strategies to Better Manage Labor 8 1 Optimize labor resources, including internal contingency staff, to align with staffing plans 9 10 Right-Sized & Layered Float Resources 11 Contract Labor FTE Comparison FY2012 # FTEs FY2011 FY2010 FY09 140 120 100 80 60 40 20 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Pay Period # 12 26 Contingency Labor Cost Trends Sept 08 – Jul 10 Holding the Gains 13 Premium Pay Cost Trends FY08-FY12 YTD Open Shift & Bonus Average Hourly Rates by Skill FYTD Jan 2012 $10.07 $9.60 $9.20 $7.13 $7.37 $6.07 $4.78 $4.90 $4.77 $4.23 $3.50 $3.31 $2.32 $2.29 RN LPN Facility 1 Facility 2 Facility 3 $2.03 $2.31 $2.50 UL Facility 4 Facility 5 Facility 6 Facility Comparison by Skill Level 14 Open Shift Management Tool 15 2 Centralized Staffing enables a coordinated response to needs across the system 16 Sample Enterprise Staffing Analysis 17 Sample Enterprise Staffing Analysis 18 System-Wide Deployment 19 3 Continuously Measure Outcomes 20 A Case Study MSHA implemented: • Business Intelligence Tools • Schedule, Financial, and Variance Dashboards 21 Sample Financial Dashboard 22 Sample Financial Dashboard 23 Sample Financial Dashboard 24 Sample Variance Dashboard 25 Sample Variance Dashboard 26 Incidental Worked Time 27 Outcomes • $3.2M savings within first year • $12M annual savings in contract labor costs • Increased core staff / reduced reliance on contingency • Reduced hourly incentives from $20 to $7 • Project expansion to ancillary departments, ED, rehab, and physician clinics 28 Outcomes • Integrated 24/7 staffing office coordinating activities across 12 hospitals • Nurse satisfaction scores improved • Automated business rules at enterprise, hospital, and unit levels to accommodate facility and department specific rules and union requirements 29 Outcomes • Productivity and variance-related data is available on a daily basis • Actionable data allows nurse managers to adjust staffing on an hourly, daily, and monthly basis • Managers struggling with issues related to productivity can be spotted and mentored 30 Recap – 3 Strategies to Better Manage Labor 1 Optimize labor resources, including internal contingency staff, to align with staffing plans 2 Centralized Staffing enables a coordinated response to needs across the system 3 Continuously Measure Outcomes 31 Presenter Contact Information Chris Fox Logan Pigg [email protected] 402.717.7794 www.avantas.com [email protected] 423.302.3349 www.msha.com CEO Avantas Corporate Dir. Of Finance MSHA 32 Upcoming Events • Webinar: Topic TBA – August 13 • Webinar: Optimizing Reimbursement – September 10 • Webinar: Topic TBA – October 8 • Webinar: Navigating ACA Eligibility – November 12 tnhfma.org/calendar tnhfma.org/webinars • Cahaba Road Show – September 2013 • Fall Institute – October 23-25, 2013 • TSCPA Healthcare Conference – December 2-3, 2013 • Tri-State Institute – January 22-24, 2014 • Dixie Institute – February 25-28, 2014 33