Budgets and Benchmarks and Productivity OH MY! Leveraging Labor Management Tools to Identify Cost Opportunity

Transcription

1 Budgets and Benchmarks and Productivity OH MY! Leveraging Labor Management Tools to Identify Cost Opportunity Elaine Eichman, MBA, MT(ASCP) Senior Management Engineer Management Engineering-Medical Operations, EBI 5/19/2017 l 0

2 Take-aways The Big Picture Role of performance monitoring tools in your organization Meaningful use Productivity Refresher: Budget as the Calibration Point Alignment to Organizational Goals Use of External Benchmarks: Role of Benchmark use in the Organization. Application of Benchmarks at CCF Opportunity Identification: Opportunity vs. Punishment Organization Reality Balance 5/19/2017 l 1

3 Data without Insight is just 5/19/2017 l 2

4 Harland & Wolff Shipyard, Belfast, Ireland, Titanic Build 5/19/2017 l 3

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6 A Thousand Ways to tell a story Data inundates our industry. Apply Meaningful Use outcomes to our internal metrics. Improve quality, safety and efficiency Increased transparency and efficiency Empowered Individuals Healthcare Environment: Financial Pressure Call for Transparency Movement from volume-based to value-based care model Constrained Resources Consolidation leading to blurring of roles Clinically integrated networks Competitive Intensity Uncertainty How well do our managers understand how to use data tools for meaningful application in department performance? 5/19/2017 l 5

7 ($ in 1,000s) EBIDA (Current Operations) Variance January MTD EBIDA Volume Net Rev* Other Rev Sal, Wg, Ben Sup & Pharm Purch Svcs Admin Srvcs Bud Var Fac & Ins

8 Budget: The Foundation Business Dictionary Definition: An estimate of costs, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals. Plan of action to achieve stated objectives Standard for measuring performance Tool for coping with foreseeable adverse situations How do your managers participate in the budget process? 5/19/2017 l 7

9 Key Considerations for the Budget Process: Labor Budgeting Process Must be Transparent and Inclusive: Managers need a clear understanding of ALL changes effecting labor Departmental input/ideas for enhanced efficiency Organizational Imperatives Entire Leadership Team Should Understand and Endorse Targets: Team Sport All In! No one gets thrown under the bus! NOT my way or the highway! 5/19/2017 l 8

10 Budget Impact Analysis: VOLUME PRODUCTIVE FTE PRODUCTIVITY STANDARD (HPU) ANALYSIS HPU % INCREASE (DECREASE) 2016 TARGET Jan-June Average Growth Rate 2017 TARGET 2016 BUDGET Jan - June Average 2017 BUDGET 2016 TARGET Jan - June Actual 2017 TARGET from 2016 TARGET to 2017 TARGET from Jan - June ACTUAL to 2017 TARGET EMERGENCY RM % % 1.7% CLINICIANS % % 53.3% CARE MGMT % % 20.1% UTILIZATION % % -5.6% PACU % % -7.8% OPERATING RM % % -7.8% CNTRL STERILE % % -12.8% DIAGNOSTIC % % 3.5% CT % % 6.0% ULTRASOUND % % 38.3% MRI % % -3.8% OR IMG SUPPORT % % -2.5% PHY THRPY % % 37.2% OCCUP THRPY % % 18.9% RESP THERAPY % % -20.1% PHARMACY % % 6.4% LAB ANALYTIC % % 3.3% PRE-ANALYTIC % % 1.8% PT TRANSPORT % % 12.0% EVS + LAUNDRY % % -2.4% 5/19/2017 l 9

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12 QUIZ TIME: Salary, Wages & Benefits 1. Pharmacy: A. 78% 2. Radiology: 3. EVS: 4. Nursing: B. 42% C. 96% D. 59% E. 85% 5. Physical Therapy: 5/19/2017 l 11

13 ANSWERS: Salary, Wages & Benefits 1. Pharmacy = 42% (B) 2. Radiology = 59% (D) 3. EVS = 78% (A) 4. Nursing = 85% (E) 5. Physical Therapy = 96% (C) 5/19/2017 l 12

14 Why Be Concerned About Labor Productivity? Labor is the most critical resource: impact on care. Labor represents the largest cost to the organization. Labor is the most controllable resource. Healthcare Environment: Financial Pressure Call for Transparency Movement from volume to value-based care model Constrained Resources Consolidation leading to blurring of roles Clinically integrated networks Competitive Intensity Uncertainty Having the right people in the right place at the right time with the right skills for the volume present drives effective patient care, patient experience and quality outcomes with fiscal responsibility. 5/19/2017 l 13

15 The Productivity Equation Volume (Activity Counted) Standard X (HPU) = Hours per Unit Earned Hours RVU x Vol = Wt. Vol Wt. Vol x HPU = Earned Hours Calculated Value Determined by the Budget (Informed by Benchmarks) Budgeted Prod Hours / Budgeted Vol. Earned Hours / 80 = FTE EH / AH = Productivity % 5/19/2017 l 14

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18 Cardinal Rules of Productivity: Trending Tool Outcomes based versus task Self-measured metrics are dangerous: preserve objectivity Auditable, Track-able, Reproducible and from a Reliable Source No hash-tags on a steno pad data The goal is not about looking good: it s about understanding operational factors influencing staffing decisions. No reward for broken processes: (Politics and productivity do not mix well) Productivity is not the problem; it is the symptom! 5/19/2017 l 17

19 Benchmarking: Definition: A quality assurance process in which an organization sets goals and measures its performance compared with the competition for products, service and practices offered. Dimensions typically measured are quality, time and cost. Benchmarking is used to measure performance using a specific indicator resulting in a metric of performance that is then compared to others. (Wikipedia) 5/19/2017 l 18

20 BENCHMARKS: Data is a starting point for comparison Attribute surveys are utilized to help distinguish within functions (departments) Objective is to identify departments similar (but not identical) to yours for you to learn from. Benchmarking Is. Continuous search for a better way of doing things Continuous process to improve productivity, operations, patient flow, quality, or cost Learning/discovery/ improvement process Adaptive A collaborative planning process Benchmarking Is NOT. One time program Cookbook process Copying others Strictly a cost reduction program Benchmarking: The practice of being humble enough to admit that someone else is better at something and being wise enough to try to learn how to match (and even surpass) them at it. International Benchmarking Clearing House 5/19/2017 l 19

21 Benchmarks are like Guardrails for FTE s & HPU s With the same volume, what are your peers consuming at the different percentiles? 500,000 tests 25 th Percentile 35 th Percentile Less efficient 50 th Percentile More efficient 10 FTE s 14 FTE s 20FTE s HPU HPU HPU What can the Hospital afford? (BUDGET) 5/19/2017 l 20

22 Monthly Performance Report 5/19/2017 l 21

23 Productivity + Benchmarks = Opportunity Productivity: Calibrated to budget Performance is a comparison to set budget targets Static Benchmarks: Percentiles calculated based on submitted data Performance is a comparison to overall Peer Group Data Dynamic QUESTION: How can the 2 systems work together? 5/19/2017 l 22

24 BENCHMARKS INFORMING THE BUDGET 5/19/2017 l 23

25 Opportunity Analysis: 5/19/2017 l 24

26 Labor Productivity Current Month Actual Prod FTE FTE Prod% FTE Var. Wage Prod% Cost Variance Year to Date Actual Prod FTE Fte Prod% FTE Var. Wage Prod% Cost Variance % % $90, % % $209,820 High Productivity Description Prod FTE Wage Prod% Cost Variance AOI Percentile IP PHYSICAL THRPY % $9,220 <25 Volume up 17.2% Comment 6N MOOD DISORDER % $6, Skill Mix using PCNA s instead of RN s DIAGNOSTIC RAD % $5,759 <25 Volume up 14.8%. Overtime use below budget Potential Opportunities Description Prod FTE Wage Prod% Cost Variance AOI Percentile Comment EVS + LAUNDRY % ($9,394) 40 Overtime use exceeds budget OPERATING RM % ($6,647) 41 RN and OR Tech overtime exceeds budget IP INTEGRTD CARE % ($3,343) > RN s over budget; Pt. case mix

27 Current Month Actual Prod FTE FTE Prod% FTE Var. Labor Productivity Wage Prod% Cost Variance Year to Date Actual Wage Prod FTE Fte Prod% FTE Var. Prod% Cost Variance 1, % % $465,329 1, % % $1,387,117 Accomplishments Regular performance reviews established; dialogue is constructive Education sessions with Radiology and Surgery conducted Reviewed staffing plan for Inpatient PT- found opportunity to improve Risks / Opportunities Nursing Productivity at 106% - risk for turnover, Caregiver Engagement Volumes in satellite Radiology low is at core staffing level Next Steps / New Action Monitor Inpatient PT scheduling changes for impact Increase supplemental staffing from CCSR for Nursing particularly ICU & SDU

28 Opportunity versus Reality: Maintaining the Balance OPPORTUNITY Cost Savings Cost Avoidance Flexible Workforce Efficiency Gains Lean Operation REALITY Quality Safety/Risk Outcomes Patient Satisfaction Employee Engagement Quality is not a function of Quantity; Quality is the outcome of process + inspiration. 5/19/2017 l 27

29 How? You ask Intentional Change Build a Learning Agenda: Design actions to move towards desired outcomes. Experiment with new behaviors. Implement useful accountability methods that align with organizational reality. Don t Just wish for it Work for it! 5/19/2017 l 28

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31 My New Mantra: Cost-cutting is important in situations where there is excess, but it is not what catalyzes evolution; if the point here is to make healthcare more effective, not just more efficient, cuts alone won t do it. - Elizabeth Spiers 5/19/2017 l 30

32 Information and analysis are critical to the effective management of your organization and to a fact-based system for improving health care and operational performance. Information and analysis serve as a foundation for the performance management system. Baldridge National Quality Program Health Care Criteria for Performance Excellence 5/19/2017 l 31

33 Questions / Comments? Elaine Eichman eeichman@ccf.org 5/19/2017 l 32

34 Productivity in Action: The Flex Response Flexing Staff up to volume Short Term: Add Staff when inefficiencies appear. Long term: PI allows more volume before adding staff Absorption Volume Rainy Day Fund Opportunity FTE s Budget Flexing Staff down to volume Minimum Staffing Staff required to maintain operations with safety, risk and outcomes intact Short term focused 5/19/2017 l 33