Have you ever stepped on a scale after a long avoidance and been shocked by the number you saw just beyond your toes? Perhaps you suspected that you had put on a few pounds, noticing that your pants were a bit snugger. But, until you stepped on the scale, you hadn’t realized how much weight you had put on. You may have asked yourself, “How did I allow this to happen?”
What Gets Measured Gets Managed
Most of us have had this unwelcome experience. It happens because we took our eye off the scale. There is that old adage: What gets measured gets managed. This is why tools like My Fitness Pal, Noom, and Weight Watchers are so effective when used consistently. Nowadays, many people are turning to quick-fix solutions such as GLP-1s and getting immediate results. Unfortunately, many of the same people gain weight back after they stop using the drug. The quick fix didn’t teach them new habits or make them accountable.
Managing labor in healthcare is no different. Without hours per unit of service targets, cost targets, and regular “weigh-ins,” an organization can quickly find itself over its labor budget by millions of dollars. Sure, a quick fix like a one-time layoff (think GLP-1) may temporarily do the trick, but generally those full-time equivalents “grow back” over time, and the organization’s head count is right where it used to be.
How to Keep the Weight Off
The reason those labor budgets got heavy again is that the managers were not taught to manage their labor effectively. Their habits didn’t change. To effect lasting change, labor management must be built around education, road maps, a daily scale, timely feedback, and a sustained culture of continuous improvement. Occasionally, if some “pounds” creep back on, a reboot and re-engagement must happen.
Education and Coaching
Like someone trying to lose or manage weight, labor management starts with education for each front-line manager. To manage a hospital’s largest and most significant expense, they need to be well-equipped, educated, and groomed to think like business owners. To do that, they need to understand key concepts and calculations such as Worked Hours per Unit of Service (WHPUOS), Paid Hours per Unit of Service (PHPUOS), and Cost per Unit of Service (CPUOS).
Roadmaps
To lose weight, one must have a plan. Similarly, managers must establish and develop a staffing plan and roadmap to achieve their WHPUOS, PHPUOS, and CPUOS targets. Staffing Calculators, Staffing Grids, and Scheduler Tools help to define and keep them on the plan.
Daily Scale
One measure of success as it relates to a weight loss or maintenance goal is to get on a scale every day and track the results. In labor management, managers should log their staff hours and volumes daily, so they can see their variances in a timely manner and course correct, avoiding unfavorable surprises at the end of the pay period.
Timely Feedback
We all need timely feedback regarding our progress or, in some cases, lack thereof. The daily scale should predict what the end-of-pay-period reports will look like. However, formal bi-weekly productivity reports should be provided that allow each manager to see where they landed with their salaries, hours, and volumes, with the goal of zero variance.
Accountability Groups
There is a reason why Weight Watchers and others encourage in-person meetings. These meetings are designed to foster accountability. Similarly, in labor management, we encourage bi-weekly huddles with “like” departments such as nursing, ancillary, support services, and perioperative services to review past pay period results, understand causes of variances, but most importantly to present the action plan to eliminate and/or mitigate unfavorable variances. Additionally, such groups offer peer-to-peer support, idea exchange, problem-solving, and collaboration.
Culture of Continuous Improvement
Most individuals regain weight after a GLP-1 is stopped, because no foundation was built to change habits. Similarly, organizations looking for a “quick fix” to reduce labor expenses often resort to layoffs and draconian cuts to their labor force. While it takes more time and energy, it is worth it to build a culture and awareness around labor management, so there is never a need to turn to those unfavorable measures.
A continuous improvement culture is what locks in the gains, and it mostly comes down to building the commitment to use the tools and process we’ve described and keep moving forward. To demonstrate how this works, if a department outperforms its targets during a fiscal year (they beat the budget), we recommend that they adopt that run rate for the next fiscal year’s targets. If they miss the original target, we recommend they “try it again.” In other words, if they “lost weight,” we want to help them keep it off. If they “gained weight,” we encourage them to keep going.
Is your organization ready to lose the “weight” and keep it off? Impact Advisors can help. We provide comprehensive, high-quality consulting services that help our client partners improve the business and delivery of healthcare. We have earned the #1 Best in KLAS ranking for Financial/Clinical Consulting for the last three years and 32 total KLAS awards in 18 years – more than any other consulting firm. We can validate your potential cost savings at no charge, so don’t hesitate to contact us via email or phone to coordinate a time to talk. We promise it will be time well spent.
