This document provides an overview of labor management in healthcare, including key concepts, metrics, processes, and best practices. The summary includes:
Labor management aims to control labor costs, which account for 60% of hospital spending, through measuring productivity, benchmarking performance, and holding leaders accountable. It encompasses hiring, scheduling, and staff management across the organization.
Premier's labor management model focuses on measurement, processes/accountability, and program support. Key principles include executive leadership and transparency, using benchmark data to set targets above median performance, dedicating a labor coach, and allowing flexibility in staffing across departments. The goal is continuous improvement through established productivity standards and action plans.
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Labor Management in Healthcare
1. Introduction to Labor Management in Healthcare Material in this presentation can be used only with permission of Premier, Inc - Healthcare Informatics Contact: doug_miller@premierinc.com PE200
6. A high standard of quality attracts and retains clinicians and physicians.
7. Delivering high quality, evidence-based care reduces errors and is crucial to a clinical loss prevention strategy.National Pay-for-Performance (P4P) studies continue to prove that delivering high quality and maintaining low costs are not mutually exclusive objectives.
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9. Labor costs, as a percentage of total hospital spending, is approximately 60%.²Given this evidence, it is clear that managing labor cost is a necessary strategy for achieving high-order operational efficiency. PricewaterhouseCoopers, “Cost of Caring: Key Drivers of Growth in Spending on Hospital Care,” February 19, 2003, p. 3;8. “Health Care Costs 101,” p.5. Caroline Sternberg, “Special Report: Cost Drivers,” American Hospital Association. www.hospitalconnect.com/hospitalconnect/index.jsp.
10. The Labor Management Continuum Hiring Scheduling Management An effective labor management program encompasses hiring, scheduling, and management of staff.
13. Processes and Accountability, which encompasses the means in which leaders are held accountable for performance results and the ways in which they are educated to these processes.
62. Tools and Processes Drive the Program Additionally, these tools and processes can help drive the accountability behind the program Requisition and position control process Standardized job request form Replacement positions New positions Focus Review department assessment Scheduling processes Budgeting and labor standards development processes
130. Use 25th, 33rd, or 50th percentile performance when making benchmark comparisons
131. Set expectation of continuous improvement through tightening of labor standards
132. Establish 1 and 3 month goals for each department not performing at expected levels
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134. Leadership must work with line managers to establish expectations and assist in evaluating the best methods to implement changes within departments
148. Develop policies to allow flexing of staff without eliminating positions, delaying hiring, or other more drastic measures:
149. For example, allow staff to keep full-time status with 72 hours per pay period, and allow these staff to take unpaid time off with approval of manager