Empowered staff delivers better financial outcomes

With the workforce accounting for 54.2% of operating expenses[1], utilizing up-to-date workforce technologies to manage and optimize staffing makes fiscal sense. But, those benefits should extend beyond the budget.

Research has shown that changes in technology may allow for substantial improvements in the use of nurses’ time and the delivery of safe patient care[2]. In addition to helping nurses increase their daily effectiveness, workforce management technology can also help manage broader job satisfaction.

Technology that enables staff satisfaction and workforce optimization can lead to better outcomes. However, different disciplines across the health system can have widely different strategies to reach that goal. For example, finance is focused on labor cost containment, patient outcomes are the priority for clinicians, and the operations team is looking at how to improve productivity. Those strategies can either complement or compete with one another. An overarching strategy that relies on analytics to drive decisions can help ensure that everyone within the health system is working collaboratively rather than in disconnected silos.

For example, solutions that harness analytics to match nurses and patients based on staff skills and preferences, patient care needs and budget constraints allow the organization to effectively flex the workforce. Nurse workloads are more balanced, and that can be a satisfier for both nurses and their patients.

Research has shown that providing nurses with control over their work schedule can enhance their sense of control and predictability, as well as improve the quality of work life[3]. For example, labor cost containment can be achieved by more effectively utilizing internal staffing resources through tactics that engage front-line staff in the process of filling open shifts. Data transparency gives employees the ability to view open shifts that they are qualified to work, providing them with the opportunity to voluntarily pick up an available shift and eliminating the need for the organization to incur costly premium labor or overtime expenses. With this collaborative staffing approach, patient care needs are met, nurses achieve a better work-life balance and labor costs are contained.

The benefits of a work-life balance extend beyond nurse satisfaction, and unmanaged overtime is a critical issue. However, for many hospitals, nursing overtime is the rule, not the exception. According to industry surveys, more than 50% of full-time nurses work an average of 7 hours of overtime each week[4]. When left unchecked, 41% of a hospital’s nurses may work overtime. That’s not only an expensive proposition, but makes it difficult for nurses to have a work-life balance. Accounting for up to 7-10% of total worked hours, nurse overtime for a 300-bed hospital can cost some $3.7 million annually[5].

Nurses that work too much overtime can suffer from fatigue and stress that can result in serious, expensive medical errors, such as an increased risk of patient falls and hospital-acquired infections and an increased likelihood of medication errors[6]. With experts estimating an astonishing 400,000 deaths caused by medical errors each year[7] and the cost of medical errors topping $17 billion annually[8], reducing the number of medical errors is a clear priority for an industry focused on patient outcomes and quality of care.

Eliminating overtime completely may be unrealistic, but C-suite executives should question what amount of overtime is acceptable. For comparison, consider from an industry perspective that the 30th percentile performers average roughly 2.5% of overtime as a percentage of total work hours[9].

So where do we go from here? First and foremost, health systems need to take a collaborative team approach that uses analytics to drive data-driven staffing decisions. Recognizing the importance of staff satisfaction and leveraging the power of an engaged workforce helps ensure the organization can achieve the clinical, financial and operational goals they are seeking.

[1] Becker’s Healthcare. 10 Statistics on Hospital Labor Costs as a Percentage of Operating Revenue. Accessed December 10, 2013.
[2] Hendrich, Ann, et al. “A 36-Hospital Time and Motion Study: How Do Medical-Surgical Nurses Spend Their Time?” The Permanente Journal 2008
[3] Kilpatrick, K., & Lavoie-Tremblay, M. “Shiftwork: What health care managers need to know. Health Care Manager” 25(2), 160-166.
[4] Bae, Sung-Heui. “Nursing Overtime: Why, How Much, and Under What Working Conditions?” Nursing Economics, 30, no 2 (March/April 2012): pg. 64.
[5] Sage Growth Partners Analysis.
[6] Bae, Sung-Heui. “Presence of Mandatory Overtime Regulations and Nurse and Patient Outcomes.” Nursing Economics. March/April 2013: 31, no.2: 59-89.
[7] Allen, Marshall. “How Many Die from Medical Mistakes in U.S. Hospitals?” ProPublica September 13, 2013. 
[8] Van Den Bos, et al. “The $17.1 Billion Problem: The Annual Cost of Measureable Medical Errors.” Health Affairs, April 2011, No. 4: 596-603.
[9] The Advisory Board Company. “Data and Analytics Nursing Productivity Benchmark Generator.” Accessed July 2, 2014. 

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