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April 4, 2020
But why is that? If the goal of measuring productivity is to find a way to accomplish more with less, then why isn’t our new focus on productivity being met with cheers and adulation? Everyone wants to be as efficient as possible don’t they? We as an industry want to be able to provide more for less in our pursuit of our ultimate goal: great healthcare for all . . . don’t we? The core answers to those questions are a resounding, “yes”! Yet we are struggling as an industry with our first forays into improving productivity and it is time we understood, “why”. In spite of what 100’s of managers, directors and VP’s we have spoken with think, improving productivity is not a bad thing! As a matter of fact, it is a long overdue necessity for healthcare. As reimbursements shrink (we have less money to spend per volume of service) and workforces age (we have to spend more per hour of labor) and boomers are beginning to retire (we have fewer people to do the work) and volumes are rising (we have more work to do) it seems to us as if productivity should be the most open water cooler conversation in healthcare. See if any of these sound familiar to you:
The challenge: If the goal of productivity is to provide our services at lower cost and with greater efficiency, then we have problems with every area of productivity: What we measure – Our first challenge with productivity is determining what the right things are to measure. Should we be measuring worked hours per unit of service (which initially seems to make sense) or should we measure paid hours per unit of service (there are some good arguments for that as well)? Should we use instead of worked or paid hours, “labor cost per unit of service” or better yet, “cost per output of unit of service”? Which of these measures will work? Should it be the same for all departments? The short answer is that they each have their place but what’s more valuable to understand is that, “the measure isn’t nearly as important as IMPROVING productivity”! Many organizations (and departments within organizations) have become totally lost in their frustration with the measures being applied and have lost sight of the reality that the entire purpose of measuring productivity is to incentivizes and encourage the improvement of productivity! There is always time later to negotiate a different or more appropriate measure. What needs to occur today is for productivity to actually improve.
How we are applying it – When the understanding of productivity is awry and the measurement of productivity is adrift is it any wonder that the application of productivity doesn’t actually reduce costs? When productivity is being applied through the reduction of available worked hours then the accomplishments of productivity are five-fold: 1.) You heightened burnout for exempt employees 2.) You heightened turnover of non-exempt employees 3.) You incentivizes the miss-use of PTO 4.) You decrease in the satisfaction of staff and management 5.) You decrease the productive work per FTE of your workforce (so you need MORE people for the same work ‘cause each are working less)