1. Use accurate productivity reporting. The hospital should use metrics to measure work dollars per procedure at the department level. “Ideally, this should be done daily and at the least it should be done monthly,” Mr. Gift says. “Also, it has to be managed from shift to shift.” Hospitals that don’t have this information are flying blind and tend to overstaff to be on the safe side, he says.
2. Budget on actual volumes. When creating departmental budgets, many organizations simply update the previous year’s budget for inflation and perhaps a few other variables. Mr. Gift says budgeting should be based on departmental volumes. “Look at volumes for last year and identify changes,” he says. Calculations can be made using the budgeting component in the hospital accounting system.
3. Monitor skill-mix. Many hospitals have too rich a skills mix — that is, too many nurses as opposed to less skilled workers, such as nurses’ aides. Keep on top of labor costs per procedure by comparing actual staffing to departmental staffing plans, Mr. Gift says.
4. Make managers accountable. “The manager has to be on the hook for performance,” Mr. Gift says. Assess the manager in terms of productivity, costs per unit of service and patient, physician and employee satisfaction. Discuss outcomes at yearly evaluations and perhaps tie the outcomes to the managers’ pay.
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