Health system executives are examining ways to manage costs associated with staffing and benefits.
The University of Nebraska Medical Center has taken steps to reduce the cost per unit of labor and the number of units as part of the overall strategy, according to Jeffrey P. Gold, MD, chancellor of the University of Nebraska Medical Center in Omaha.
The academic medical center is addressing cost per unit by:
1. Providing optimal training and mentoring.
2. Supporting individuals with technology and equipment.
3. Looking at productivity in clinical and non-clinical areas.
4. Evaluating the benefits program to balance the value with expense.
"Benefit programming must become more agile and meet colleagues where they are in their careers, no more one-size-fits-all benefits," he said. "We are evaluating the trade-off between wages and benefits."
Mark Behl, executive vice president and COO of Froedtert & The Medical College of Wisconsin in Milwaukee, said labor expenses are front and center for his system as well.
"Representing nearly half of our budget, we simply must continually look for opportunities to reduce this expense," he said. "The explosive growth in contract labor during the pandemic exacerbated the need to manage, and more importantly, reduce labor costs in the coming years."
Mr. Behl and his team are focused on reducing reliance on contract labor by strengthening the system's talent pipeline, employee retention and learning development. The system is also reducing premium pay and reducing hours of operation, programs and other services. Finally, the system is considering a restructuring.
"We are looking at reducing duplicate operations, streamlining leadership structures and revising our services model to better support frontline workers," Mr. Behl said. "We are also looking to change the way we deliver care with the use of artificial technology, digital tools that optimize the experience for both patients and employees."
Recruiting and retention is also top-of-mind for many health system leaders, as staff turnover comes with a high price tag. Jean Ann Larson, EdD, chief learning and development officer and senior associate dean of leadership development at the University of Alabama at Birmingham Heersink School of Medicine, said UAB Health System is taking the long view to manage labor costs.
"We have a people and culture that says, 'Become a magnet for individuals who thrive in a team-based culture where innovation, dedication and compassion are valued.' To create this culture, we need to develop our leaders so that they have the mindsets and skills to attract and retain employees who share our values," she said. "Those leaders also need the courage and skills to address behaviors that do not attract and retain the right people."
In addition to reducing costs per labor unit, Dr. Gold outlined the medical center's strategy to reduce the number of units of labor.
"The best way to address the number of units is through redesigning the care model," he said. "The redesign of the care model will help us analyze the critical tasks performed while a patient is hospitalized and evaluate the labor stack surrounding a patient while keeping in mind the academic mission."
Hospital leaders look at whether tasks can be added, eliminated or combined into a singular role. Nurses and support staff should be working at the top of their license and delegate other tasks or reskill staff based on capabilities instead of licensure requirements, Dr. Gold said.
Technology will also play a role.
"Are we providing the very best technology support to eliminate waste effort and optimize care outcomes?" he said. "Can we use generative AI to automate aspects of care, documentation, etc.? How do we incorporate virtual nursing and other technologies to leverage skilled nurses who may have physical limitations or are aging out of the workforce?"
Finally, Dr. Gold said the University of Nebraska Medical Center is evaluating fixed labor cost departments and roles. The slow or halting of FTE growth will "force innovation, organizational redesign, use of technology and productivity gains," he said.
His team is also examining clinical departments to prioritize investments and de-emphasize duplicate or no longer necessary programs.