An hfm Web Exclusive

Sue Willoughby
Brian Graves

By effectively bridging the gap between clinicians and finance, Saint Thomas Hospital of Nashville, Tenn., has enhanced productivity, lowered agency and overtime costs, and improved employee satisfaction.

Every day, hospitals across the nation struggle with a delicate balancing act: how to deliver high-quality care and support a positive work environment for staff while effectively managing costs.

Saint Thomas Hospital of Nashville, Tenn., is employing innovative workforce management strategies to align its clinical and finance departments. By effectively bridging the gaps between these departments, Saint Thomas has been able to drive operational improvements that have increased productivity, lowered agency and overtime costs, and improved employee satisfaction. In this improved operational environment, Saint Thomas is more effectively supporting the delivery of high-quality patient care--and enhancing its bottom line

Controlling Rising Labor Costs through Biweekly Reporting

Managing patient workload was difficult for Saint Thomas because the organization lacked timely productivity data that would allow managers to effectively set staff levels to the fluctuating demand. And since productivity data play a critical role in aligning actual labor costs to budgets and workload, Saint Thomas was challenged to control rising labor costs.

Saint Thomas sought to improve processes by leveraging workforce management technology. Saint Thomas implemented a comprehensive and strategic workforce management solution that allowed the hospital to gather data from payroll, patient accounting, time and attendance, and budgets to more effectively analyze workforce productivity, allowing managers to plan and allocate labor costs for both short- and long-term cost management. The hospital now has a more complete picture of the labor that is being used to deliver care as well as the resulting costs.

Biweekly labor reporting gives Saint Thomas visibility into nursing labor utilization such as hours per patient day and bedside orientation. The workforce management solution also breaks out overtime, agency, and traveler expenditures, so nurse managers can allocate resources and make decisions that allow them to stay within labor budgets. By using this tool, Saint Thomas has reduced nursing bedside orientation hours per equivalent patient day from 0.57 hours in 2003 to 0.23 hours in 2007, resulting in an estimated savings of $2.7 million.

Process Improvement in Special Procedures

Saint Thomas Hospital used process improvement combined with automated workforce management tools to increase efficiency in the radiology special procedures department, where a lack of slots to perform procedures, delays in starts, and turnover of rooms had led to concerns regarding labor productivity. The hospital needed to take an objective look at turnaround times and patient flow, evaluate the data, and report the findings.

Inefficient processes and problems with patient flow were common in Saint Thomas' special procedures department. Procedures rooms were assigned inconsistently, and timely scheduling information was not being shared with staff. The problems were particularly acute for peripherally inserted central catheter (PICC) procedures. These procedures involve a special type of catheter that is used to provide infusions into one of the large central veins in the chest. Special procedures rooms--which were often in short supply--were routinely being used for PICCs. Although radiologists can perform PICCs in these rooms, they prefer to reserve the rooms for other, more complicated cases.

Saint Thomas used labor analytics to track the percentage of PICCs being performed in special procedures rooms versus those inserted at bedside by an IV therapist. They found that when appropriate, a properly trained IV team (consisting of registered nurses) could successfully do PICCs at the patient bedsides. In FY05, 76 percent of PICCS were performed by an IV team, a dramatic increase from 32 percent just two years earlier. This increase has helped make special procedures rooms available more often for more complex cases.

Cutting Down on Callouts

Department staff also clarified internal guidelines to redefine emergent versus urgent cases and what could realistically be scheduled for the next day instead of as late add-on cases for that same day. This helped improve scheduling and patient flow, especially in the late afternoon, contributing to reduced overtime and callouts. It also reduced the need to call staff back to work after they had gone home, contributing to significantly boosted employee morale.

Saint Thomas used data from the workforce management solution to provide managers and executives with timely productive hours reporting and trends. This additional information helped the hospital more efficiently manage valuable labor resources. Previously, Saint Thomas' staff was tracking procedures, but was not converting them to relative value units (RVUs). By studying RVUs, staff were able to evaluate the effect of procedure complexity on productivity and measures.

Saint Thomas staff also worked with nursing units to refine the processes and decision making for add-on procedures and scheduling. As a result, the special procedures department was able to reduce both overtime and callouts. Overtime hours and callout overtime as a percentage of total paid hours fell from 7.3 percent in FY03 to 3.5 percent in FY06.

The department also achieved a significant reduction in its use of agency and outside labor. Outside labor hours as a percentage of total paid hours declined from 11.6 percent in FY03 to 0.4 percent in FY05 and FY06, and were eliminated by March 2006.

Pinning Down Labor Costs

The cost of agency and outside labor wasn't just an issue for the radiology department; the entire organization was dealing with rising costs for supplemental labor, and the challenge was exacerbated by the Nashville area's competitive environment for hiring and retaining nurses. Under the previous system, supplemental hours incurred by agency and traveler nurses were not being tracked or reported in the general ledger.

This arrangement made it difficult for Saint Thomas to align labor to budgets and control rising labor costs. The hospital operated within a budget that was established a year in advance. Monthly budgets didn't flex to volume, and late charge entries led to volume and revenue delays.

Now, with actionable, volume-adjusted productivity and staffing information, Saint Thomas managers can make workload-driven decisions about deploying resources. They receive biweekly labor reports that detail a variety of details including nursing units, patient days, target and actual hours worked, overtime and agency hours, and variances.

These reports are also used to evaluate staffing trends at the hospital, providing an accurate view of actual hours worked per patient day. New positions must be justified through a 30-pay-period trend report that demonstrates the need for additional hiring.

Bridging the Gap Between Finance and Nursing

Some of the obstacles that Saint Thomas encountered during this improvement process involved cultural and communications considerations within and among the hospital's various departments. Traditionally, departments like nursing and finance used very different language to manage and track their departments' responsibilities. In order for the workforce management solution to be effective, a common vernacular had to be defined and agreed upon. Another challenge involved getting buy-in on the accuracy of data. Since the hospital previously lacked the ability to gather and analyze timely productivity data, many employees were accustomed to questioning the validity of data and trends and developed a resistance to change that made improvements even more difficult to achieve.

To overcome these obstacles, the finance and nursing departments worked together to develop a collaborative process for reports and trend analysis of labor utilization on which everyone could agree. Throughout the process, careful attention was placed on educating managers and staff on the new workforce management strategies. Benchmark goals and targets were instituted, and accountability for both staff and managers was built into processes. Along with strong executive support, these steps helped to ensure the successful implementation of Saint Thomas' workforce management initiatives.

Achieving Operational Excellence

Driving operational improvements that bring together the clinical and finance departments is extremely challenging for most healthcare organizations. By implementing a comprehensive workforce management solution that facilitated the collaboration between clinical practice and finance, Saint Thomas Hospital was able to achieve significant results, including reduced labor costs and improved efficiency across departments, to better support the delivery of high-quality patient care.

 


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Sue Willoughby, RN, BSN, is management resource office consultant, Saint Thomas Hospital, Nashville, Tenn. (swilloug@stthomas.org).

Brian Graves is global practice leader, health care, Kronos Incorporated, Chelmsford, Mass. (brian.graves@kronos.com).


Saint Thomas Hospital of Nashville, Tenn., was established in 1898 by the Daughters of Charity healthcare ministry. Today, the 541-bed facility, with more than 3,500 employees and 750 physicians on staff, provides adult specialty care to a market area of more than 2 million residents of central Tennessee, southwestern Kentucky, and northern Alabama. Saint Thomas is part of the Ascension Health family of hospitals, the nation's largest not-for-profit health system, with more than 100,000 associates located in facilities in 20 states and the District of Columbia.

Publication Date: Tuesday, April 01, 2008

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