Evaluating the financial implications and benefits of hiring an interim healthcare leader

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Hiring the right interim healthcare leader is the most important step in ensuring the success of an interim engagement. But, how do you choose the right person? Moreover, how do you evaluate the financial implications and benefits?

“Evaluating the Financial Implications and Benefits of Hiring an Interim Healthcare Leader,” is the last article in The Healthcare Executive's Guide to Effective Interim Healthcare Leadership series. Read the previous articles;

Part 1: How to handle your healthcare staffing crises and challenges?
Part 2: Why use interim healthcare leaders?
Part 3: Is an interim healthcare leader right for your organization?
Part 4: Interim healthcare leaders: More than a placeholder
Part 5: Three critical steps to successfully onboard interim leaders
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First: Understand the Interim Leader Applicant Pool
Some people mistakenly assume leaders are retreads, burnouts, or individuals who have been fired and are looking for a temporary job while they actively look for a permanent situation. Although there are people like that in the market, there are far greater numbers of suitable candidates.

What Makes a Good Interim Leader Candidate?
Typically, superb candidates for interim healthcare leadership positions are long-tenured executives, directors, or managers who may be close to retirement or want to make a change in their professional career path.

• Highly qualified interims are not ready to retire—they want to continue to contribute to the field.
• Some only want to work on a few assignments each year.
• Others are empty-nesters and have wanderlust.
• Some do not want to relocate, and others do.
• Some feel stale and want some variety.
• Others are interested in an interim position as a way to explore the possibility of a permanent fit in an organization.

In other words, there are a number of compelling reasons that good people are drawn to this career option.

Experienced interim firms and human resources professionals are excellent at distinguishing what kinds of applicants make the best interim healthcare leaders.

Quality Begets Quality
In quality healthcare interim firms, the function of evaluating and interviewing prospective hires are performed only by senior-level staff with many years of experience. There are nuances in reference checking, evaluating career progression, and discerning the truth behind pat answers that only people who have done a lot of this work understand; it is a learned art.

This is yet another reason to carefully consider the firm that will supply the interim – a quality firm begets a quality interim leader.

Evaluating the Financial Implications
Next, the decision to hire an interim healthcare leader can and should be evaluated from a financial point of view. There are many factors to consider, but this is an important perspective when determining how best to deploy your hospital’s limited resources.

The Primary Factor - Pricing
The first factor to examine when considering the financial implications of the use of interim healthcare leaders is pricing. Interim pricing varies considerably, primarily due to differences in the management and support provided to the interims and the client by the organization providing the interim leader.

Pricing Variations and Implications
Pricing for interim leaders will vary by the firm. Some interim firms price their services low to secure more business. Other firms that deploy interim healthcare leaders price their services higher to ensure that the best people are deployed and fully supported by experienced healthcare executives with relevant hospital and leadership experience.

Variations in pricing are often indicative of the skills and experience of individual interim leaders and/or the depth of support given to them.

Generally speaking, firms that pay their interims and internal support staff well attract and retain the best talent. Lower prices can indicate that a firm has recruited interim healthcare leaders who are willing to work for less money, or that the firm is not providing a deeply experienced support staff. Though this is not always the case, healthcare leaders should carefully consider not only the price of interim healthcare leadership services, but also the potential consequences of that price.

The Benefits of Investing in Interim Leaders
The decision to hire an interim healthcare leader should be evaluated from a financial point of view, but qualitative benefits are also important. What are the benefits—financial and cultural—of hiring interim healthcare leaders to fill a needed void?

The deployment of a talented, well-supported interim director, manager, or executive can positively affect staff morale, recruitment, patient safety, preparation for the survey by The Joint Commission or CMS, and transition to the new permanent replacement.

In addition to fostering a positive environment within a hospital, improvements such as increases in the hospital’s productivity, case volume increases, and staffing stabilization can also have a dramatic impact on its bottom line.

In some instances, hospitals deploy teams of interims to fix especially egregious problems.

Example 1: CMS Immediate Jeopardy
An interim CEO, interim COO/CNO, interim OR Director, and interim Quality Director were deployed to a hospital with multiple crisis issues ranging from possible loss of Medicare certification to medical staff uproar, financial losses, and quality issues in the OR.

The hospital’s very existence was threatened, but, through the intervention of a team of outstanding interim healthcare leaders, the problems were addressed effectively, Medicare certification was reinstated, medical staff issues were resolved, and $2.2 million was added annually to the bottom line.

Example 2: Stabilize Staffing & Reduce Turnover
In another case, an interim Patient Care Director of Surgical Services cut costs and increased revenue significantly for one 318-bed community hospital.

To stabilize staffing and decrease turnover, 19 FTEs were hired, and agency staff was eliminated in the hospital’s OR, saving $140,000. The block schedule was adjusted and OR utilization time was revised, resulting in a 7% improvement in utilization.

In addition, the interim director worked to increase case volume by collaborating with surgeons to meet their needs and assigning more block time when needed.

As a result of the interim director’s efforts, the productivity in the hospital’s OR reached 105%. The availability of OR rooms improved, on-time starts for first cases increased by over 30%, and case volume increased by 25 cases per month, all leading to financial gains.

Hiring an interim leader can have a positive impact on engagement, quality of care, and efficiency for many hospitals. When considering the costs and benefits of hiring an interim, it is important for hospital administrators to consider the substantial financial impact that such improvements can make.

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“How to Evaluate the Financial Implications and Benefits of Hiring an Interim Leader,” is an excerpt from The Healthcare Executive's Guide to Effective Interim Leadership, by Hugo A. Aguas, MPA, and Kate M. Fenner, PhD, RN.

About the authors
Hugo Aguas, MPA
Hugo Aguas has more than 35 years of experience in human resources management in large health systems, teaching and research hospitals, and community hospitals, as well as experience managing hospital operations in several clinical and support services departments. As the Director of Interim Services at Compass Clinical Consulting, Hugo develops strategic partnerships with hospital and health system clients, identifying and placing skilled interim healthcare executives, clinical directors, and managers to help clients meet both short- and long-range objectives. Before joining Compass, Hugo spent more than 10 years as Assistant Vice President, Human Resources at Inova Alexandria Hospital and Inova Fairfax Medical Center, where he managed all facets of the Human Resources function and had operational oversight of several clinical and support departments.

Hugo earned his Master of Public Administration from Golden Gate University in San Francisco and his Bachelor of Science in Psychology from Loyola University in Los Angeles. He is a member of the American Society for Healthcare Human Resource Administration and the Society for Human Resource Management.

Kate M. Fenner, PhD, RN
Kate Fenner understands hospital leadership. First as a nurse and later as an education leader and consultant, Kate has immersed herself in the regulatory and operational issues that face today's healthcare organizations.

As Managing Director and CEO of Compass, Kate has led and participated in dozens of mock surveys to help healthcare organizations meet the standards and expectations of regulatory bodies such as the Joint Commission, the Centers for Medicare and Medicaid Services, and State Departments of Health, and guides hospitals and health systems through accreditation and regulatory compliance response and recovery efforts.

A regular keynote speaker throughout the country, she authored a leading college text on law and ethics in healthcare, co-authored other texts on a variety of healthcare issues, and currently, serves on the editorial board of the Journal for Nursing in the 21st Century.

Contact: Haguas@compass-clinical.com
Contact: Kfenner@compass-clinical.com
Website: www.compass-clinical.com
Twitter: @Compasscc
LinkedIn: https://www.linkedin.com/company/compassclinicalconsulting
Facebook: https://www.facebook.com/CompassClinical/

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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