|Better labor-management yields savings at hospital chain
|Using integrated time and attendance and productivity solutions from Kronos Incorporated, Catholic Health Partners saved $8 million in 2009 by reducing overtime and use of temporary staff from outside agencies.
According to Catholic Health Partners, in early 2010, premium labor expenses declined 8.4%, saving an additional $3.1 million in agency costs and $2.4 million in overtime labor. The improvements are noted in a recent case study in Healthcare Financial Management Association, written by a senior manager at Catholic Health and a senior manager at Kronos.
“It’s all about the data. The ability to accurately analyze – in real time – labor resources across different locations, units, shifts, skill levels, and other dimensions can directly translate into lower labor costs without any negative impact on continually improving patient care,” the authors say.
Based in Cincinnati, Catholic Health Partners comprises 100 organizations – including 24 hospitals, 15 senior living communities, five hospice programs, and eight home health agencies, and an insurance plan in Ohio and Kentucky. The organization is one of the largest not-for-profit health systems in the United States, and faces one of the largest labor-management challenges in health care.
Kronos is headquartered in Massachusetts and is known for its solutions in workforce management, including recording time and attendance transactions, scheduling diverse workforces, and managing employee absence. The company has a presence at over half of the Fortune 1000 companies.
Kronos reports it helped Catholic Health Partners assess the impact of labor decisions on budgets and productivity through real-time analysis of critical labor data. This enabled the healthcare organization to select employees with the most appropriate skill sets from the most cost-effective source, and in making timely adjustments to align labor levels with fluctuating patient volume.
Catholic Health Partners credits its success also to decentralized productivity management, which gave its regional executives greater control over their productivity tools and data. Other important factors were the healthcare organization’s decision to retain centralized management of its benchmarking and analytics and an enterprise database with standardized information.
Because Catholic Health Partners is so large and diverse, developing standardized definitions and concepts was not a small matter. There was not a consensus even on what constituted a “patient day,” according to the authors of the recent article.