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The Secret Sauce to Labor Improvement in Health Care

11/08/16

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Jack Datz, Managing Principal, Advisory Solutions

In health care, clinicians have been trained that using safety checklists, watching for changes in vital signs and reviewing fluctuations in labs can catch a problem early or, even better, avoid it completely by taking a proactive approach. Success at these tasks is often rewarded with promotion to front-line leadership roles. However, many aren’t prepared to take on responsibility for planning, forecasting, coordinating and leading as many as 100 employees and maintaining high levels of patient satisfaction. As a result, they fall into “fire-fighting” mode; dealing with problems as they develop and, for good reason, just focusing on the life and death nature of clinical care.

In this “fire-fighting” management approach, new front-line leaders tend to be overly focused on tasks. They have no time to step back and look at longer-term employee productivity trends or even identify and respond to emerging performance issues. It's stressful, inefficient and, unfortunately, it often becomes routine.

This routine is especially troubling because ultimately the front-line leaders are responsible for effectively managing the three things that most impact a hospital’s real bottom line: patient care, outcomes and labor cost.

Ladle on the training
The delivery of labor improvement depends on people, process and technology coming together. No matter how sophisticated the processes and technological investments, quality health care will always require people effectively managing other people.

In my experience, front-line managers and supervisors tend to be successful nurses, clinicians or technicians who have been promoted but have not had the benefit of management training to help them develop the appropriate skills required for today’s cost-conscience environment.

Although difficult to quantify, there is a tremendous cost associated with the gap between current management practices at the front line and ideal labor management practices. Typically these can be as much as 15 percent or more of labor costs. These costs are evident not only in lost productivity and decreased quality, but may be expressed also in terms of low employee morale and patient dissatisfaction, which can impact reimbursements.

An additional variable for front-line managers when implementing a workforce initiative is including all leaders, formal and informal, in at least some aspects of the program. This includes roles that have a huge influence on the operational success or failure of an organization such as charge nurses, lead techs and house supervisors.

Focusing on these five skills will give front-line managers a systematic method to successfully managing their department:

  • Leadership
  • Coaching and employee engagement
  • Understanding and effectively managing productivity
  • Process design, improvement and management
  • Proactive management

Add equal measures of process improvement and tools
Investing in training of new front-line leaders is only half of the recipe for success. The other half is giving them important labor management tools and predictive workload information with which to manage effectively and proactively.

Hospitals that are looking to close performance and cost gaps in the coming years of health care reform will need to do the following to support front-line managers:

  • Map and analyze processes to eliminate redundancy and non-value added activities
  • Benchmark best practices through literature reviews, sharing practice information with peers, and utilization of national databases
  • Collect historical operational data to determine trends and incorporate into a collaborative operational target development process
  • Remove limiting conditions

Once that work is done, front-line managers will need tools to implement change and sustain productivity and performance. Invest in automating and integrating key workforce management processes, such as position control, time and attendance and scheduling and staffing to demand to proactively manage overall labor cost, including premium dollars like overtime and contract labor.

Next, leverage analytics to connect the organization. Consider linking staffing decisions to patient outcomes to further guide labor optimization strategies and connect them to the organization’s key performance indicators.

Fold in all employees
To ensure success of labor optimization, you must appropriately engage staff in any productivity initiative. Front-line managers will need to involve each and every employee up and down the ladder for labor transformation to become successful. Use a collaborative approach that engages all levels to improve current limiting conditions and help construct new labor targets they understand and validate.

This can be achieved through involving shared governance or labor unions in the development of staffing plans and productivity targets, so that all parties have understanding and visibility around the challenges facing the organization, including financial, quality, safety and regulatory.

Stir continuously while heating to the right temperature
Managing staff resources in an environment where patient volume can be unpredictable and patient engagement is critical is a very real challenge for hospitals. The make-or-break component of labor improvement is the mentorship of all individuals making decisions who impact labor, from the shift staffing to the annual budget. This often requires those with the expertise to spend time literally floor coaching: providing guidance and support in real time for real-world scenarios to those who are making the decision on a day-to-day, shift-to-shift basis.

Hospitals must invest in a workforce program or training to help develop leaders and tools that support the organization’s ability to plan, manage and engage staff to meet productivity and quality goals.

Vizient has several ideas on how organizations can improve the efficiency of their workforce. Click here to learn more.

About the author. Jack Datz uses his successful 23-year track record in health care consulting and workforce leadership to lead the workforce optimization practice at Vizient, focusing on labor cost consulting and contract labor management. He has effectively implemented numerous programs that focus on workforce efficiency, management development and optimizing labor costs in health care. He is recognized nationally as a change leader with an extensive background transforming health care systems into best-in-class operational and cost-improvement organizations.

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