Staffing and benefits costs continue to hamstring hospitals and health systems across the U.S.
Last year, staffing and benefits costs were up 11 percent and then grew another 7 percent year over year in the first quarter of 2023, according to Moody's Investor Services. Executive teams are examining many tactics to cut costs and retain needed services. Some are focused on staff retention and reducing contractors, while others are turning to layoffs and cutting services.
A less painful option is out there: increased productivity.
More productive teams are typically more engaged with the organization's mission and more satisfied with their work. It seems simple, but scaled to an entire healthcare organization, increasing productivity becomes complex.
Jim Heilsberg, CFO of Tri-State Memorial Hospital and Medical Campus in Clarkston, Wash., told Becker's increasing productivity and efficiency is a central part of the hospital's labor cost reduction strategy.
"We have reviewed and will likely be investing in data tools that will allow for improved efficiency based on comparison to other data benchmarks," he said. "We intend to use that data to allow departments to improve productivity with current and new system tools to be implemented."
The executive team at Tri-State Memorial plans to examine workflow improvement for both operational and clinical areas for staff to become more efficient and "do more with less." They are playing the long game to thrive in the coming years.
"In all efforts, any efficiencies found and realized are intended to be capitalized on to reduce costs over time," he said.
But increasing productivity without thoughtful attention to burnout is a recipe for disaster. Productivity initiatives should be coupled with the right focus and technology to support team members, particularly clinicians, to avoid burnout and worsen the problem.
"We are managing the cost of physician labor and reducing provider burnout by focusing on physician productivity using AI (augmented intelligence, not artificial intelligence) to reduce low-value work and time-consuming tasks," said David Lubarsky, CEO and vice chancellor of human health sciences at UC Davis Health in Sacramento, Calif. "Non-productive tasks for a doctor include data entry, scrolling through screens, answering inbox messages, coding visit activities, and carefully reviewing images with no findings."
Mr. Lubarsky said those tasks are handled by other care team members and AI assistance instead of outsourcing. Since enacting the change, he said UC Davis Health has seen higher revenue per encounter and lower total cost of care.
Sunil Dadlani, executive vice president and chief information and digital officer at Atlantic Health System in Morristown, N.J., is also working with his team to deploy workforce management software and predictive analytics to optimize staffing needs, reduce unnecessary labor costs and improve productivity.
"We are accelerating our efforts in utilizing hyper-intelligent automation process improvement to enhance productivity and reduce labor requirements," he told Becker's. "Implementing digital health solutions and telemedicine platforms is also improving care delivery efficiency and decreasing the need for labor-intensive tasks. Investing in team member training programs, encouraging cross-training and multi-skilling, and promoting continuous learning and professional development can enhance workforce flexibility and effectiveness."