Unit-Level Scorecards: Helping Managers Monitor Operations

Leaders at St. Joseph Health System of Lexington, Kentucky, wanted their nurses to be more business-minded. Specifically, nurse managers needed a better way to analyze their unit functions and make sure that their daily operations fit their goals. Since 2003, the system has used a six-item dashboard or scorecard—appropriately called a “six-pack”—that helps motivate nurses to be more efficient and accountable on key measures like labor costs, volume, and productivity.

Putting a unit-level dashboard together at St. Joseph Health System required a productive partnership between nursing and finance with the goal of making clinical leaders more business-savvy. “It is important to share the same focus regardless of which discipline we represent,” says Gary Ermers, CFO.

A Visual Aid

Working together, nursing and finance developed a simple scorecard that nursing managers at St. Joseph use to track these key areas in their departments:

? Department volume, trended monthly
? Total department costs—full-time equivalents (FTEs) and supplies—depicted in a bar graph
? Patient satisfaction, as measured by The Jackson Organization
? Turnover, including the number and percentage of nurses
? Percentage of premium labor used, such as overtime, agency, and pool usage (the target for overtime is less than 2 percent of labor costs)
? Productivity measured in hours per patient day (HPPD), tracked every two weeks based on data from payroll, patient accounting, time and attendance,  and budgets

Each month, a nursing secretary pulls data from different hospital reports into a spreadsheet to create the dashboards. The result is a one-page visual that compares the actual results in these six areas for the current and previous fiscal years (view the exhibit).

With timely data on these measures, clinical managers can make real-time changes in how they run their departments. For example, they can look at variances in supply costs and ensure that supplies are properly assigned to their departments. Or they might look for dips in patient satisfaction and make necessary changes accordingly.

Partnering on Productivity

Using the six pack reports to improve productivity—without affecting other measures—has been a major goal. “We wanted to take a balanced approach when looking at these parameters, so that we could see if changes in labor productivity had an impact on other measures such as patient satisfaction or turnover,” says Chris Mays, RN, MSN, chief nursing executive and chief operating officer at St. Joseph Hospital and St. Joseph East.

The measures are interrelated. For example, if a unit has 8 percent overtime for several pay periods, what is the impact on turnover?

Keeping nurse managers focused on the business is important in a heavily managed care market like central Kentucky, where St. Joseph is located. Productivity measures like HPPD provide a picture of how many resources are required to achieve a result. HPPD is a reflection of total staff hours worked (by nurses, managers, and secretaries) divided by unit census. In health care, missing productivity targets can have serious financial implications. For example, a unit with an HPPD target of 9.0 may stand to lose thousands of dollars if it runs over budget by just a few percentage points.

Biweekly reporting of HPPD helps eliminate confusion over monthly accruals, which can skew productivity numbers, according to Mays. “By changing the tracking of HPPD to be per pay period, we have a consistent 14-day period that we count the hours worked per employee and we have an accurate reflection of the workload and the productivity for that department.”

Enlisting Financial Assistance

When setting productivity targets for each unit, hospitals can look at benchmarks from national standards or state hospital associations. They also may review the experience level of nurses on the unit. Units staffed with more seasoned nurses can run leaner than areas staffed primarily with new graduates, says Mays.

To develop the proper metrics for each unit at St. Joseph, nursing leaders collaborated with the finance team. They realized that some units required a more sophisticated approach depending on their patient acuity and case mix.

For example, leaders needed to develop a blended target for HPPD for one medical-surgical unit serving bariatric and orthopedic patients. They assessed the average patient day for their bariatric patients and orthopedic patients, and combined the weighted averages for a blended target.

Maintain Accountability Monthly

Each month, nurse managers review the six-pack reports for variances, comparing actual results to targets in the six areas for the current and previous fiscal year. After receiving the monthly reports, nurse managers have 10 days to develop an action plan to address any variances. The action plans must outline three steps that they can take to improve their metrics in the next 30 days. Then, the managers present their action plans at the monthly management team meetings.

“At first, nurses were intimidated to share their data in front of their peers,” says Mays. “But nurses now realize that it’s an opportunity to share ideas with 40 of their peers.” Each manager presents for about two minutes, so meetings are usually completed within two hours. All executives, including finance and other members of the executive suite, may attend.

The six-pack reports, combined with monthly meetings and action plans to address variances, have helped nurse managers develop—and share—ideas for improvement. “The focus is not on what happened, but what they can do,” Mays says. For example, periodically, the six-pack meeting may have a specific focus around opportunities to improve patient satisfaction. The departments that are exceeding their patient satisfaction targets will generate ideas to assist the group by offering best practices, such as intentional hourly rounding, which is proven effective in increasing patient satisfaction scores. Managers have monthly opportunities to share their experiences and learn from others’ successes.

Impressive Results

Since the implementation of the reports and monthly meetings, St. Joseph Hospital and Saint Joseph East has had a reduction in HPPD from 248.34 in 2005 to 241.58 in 2008. They have also seen the following results:

? An increase in annual average daily census from 287 in 2003 to 326 in 2008
? Steady improvement in patient satisfaction, from about 8.6 to 9.11 out of a 10-point scale (which is greater than the 90th percentile).
? Two percent reduction in RN turnover

“Nurses have to know their data better now more than ever,” says Mays. In other words, if they aren’t asking the questions, they may not be able to find the answers.
 

This article is from the March 2009 issue of The Business of Caring, a free electronic resource. Learn more about The Business of Caring.