SlideShare une entreprise Scribd logo
Pascack Valley Hospital Productivity Review August 2004
Introduction Executive Summary Scope  Overview - Phase I “Global Review” Global Observations Global Conclusions Overview - Phase II “Departmental Review” Process Findings Overtime Utilization Contract Labor On-Call Dollars FTE’s - by Category Departmental Conclusions Recommendations Summary & Questions
Executive Summary Global Conclusions *Reduction of 49 to 140 FTEs Savings of approximately $3.6 to $10.6 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results. Departmental Conclusions *Reduction of 122 to 224 FTEs Savings of approximately $6.9 to $12.9 million in annual salary and benefit expenditures Assumes 75% of Average hourly rate in actual reduction.
Executive Summary Recommendations Subject departments identified as “outliers” per the benchmark review to Phase III review and have Cambio Consultants recommend  benchmarks Subject departments designated by management to Phase IV review and have Cambio develop staffing plans and recommend  targets
Scope An analysis of current labor costs and an estimate of potential labor savings by cost center Provide management with additional initiatives that may be considered for improving operational performance Evaluation of any productivity monitoring system in place and whether these systems are used effectively
Global Overview - Phase I Organization’s performance is compared against universal benchmarks derived from national/state data Solucient’s “Comparative Performance of U.S. Hospitals – The Sourcebook” State of New Jersey was used to calculate FTE’s per Adjusted Occupied Bed (AOB) reductions
Global Overview - Phase I Comparative items include: FTEs/Adjusted Occupied Bed Salary and Benefits expenses as a % of Operating Expenses Salary and Benefit expenditures per FTE Salary and Benefits expenses as a % of Operating or Net Revenues
Global Overview - Phase I The following tables illustrate the performance of Pascack Valley Hospital (PVH) at the global level The 75 th  percentile represents the top 25% performers in the database The 50 th  percentile represents the median (“mediocre”) The 25 th  percentile represents the lowest (worst) quartile of performers (i.e. 75% of reviewed hospitals performed better)
Global Observations The Patient Days and Adjusted Patient days were based on Annualizing June Year-To-Date. This assumes Patient Days lost by the closing of the TCU will be back filled.  If the TCU Patient Days are not replaced with other inpatients, then additional FTE reductions would be needed to achieve benchmarks.
Global Observations (cont.) 50% of the Hospitals in New Jersey have lower FTE’s per AOB than PVH.  Source:  Solucient Sourcebook 2003
Global Observations (cont.) PVH’s Salary and Benefits as a % of Operating Expense is higher than the worst quartile of performers in New Jersey  Source:  Solucient Sourcebook 2003
Global Observations (cont.) PVH’s Average Salary and Benefits Cost per FTE is higher than the worst quartile of performers in New Jersey  Source:  Solucient Sourcebook 2003
Global Observations (cont.) PVH’s Salary and Benefits Costs as a % of Operating (net) Revenue 7 percentage points higher than the worst quartile of performers in New Jersey Source:  Solucient Sourcebook 2003
Global Conclusions The results* of the high level assessment show attainment of peer benchmarks between 50 th  and 75 th  percentile would yield: Reduction between 49 and 140 FTEs Savings of approximately between $3.6 to $10.6 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results.
Global Conclusions Findings from slides: Staffing compared to peers – cost savings opportunities available Salary & Benefits as a percent of expenses are high compared to peers. Staff salaries are 27% higher than 75% of peers SW%B as a percent of operating (net) revenue is over 61% Definite SW&B opportunities Possible revenue opportunities
Overview - Phase II “Departmental” Collected payroll and volume data to compare the organization’s performance, at the department level, to that of “peer” departments Comparisons are based on benchmarks from peer hospitals as found in the Solucient benchmarking database As needed, the database is supplemented with a database of national hospital operational benchmarks
Overview - Phase II “Departmental” High-level reports are completed, showing staff levels required at: Lo – 90 th  percentile (top tenth of peers - “Best”) Hi – 75 th  percentile (top quartile of peers - “Good”)
Process Data was collected from Finance and I/S departments for departmental reviews: Payroll and Contract Labor (Registry, etc) Hours Dollars Volumes Inpatient days Ancillary tests and treatments Outpatient visits and procedures
Process (cont.) The FTE’s for June 2004 were based on pay periods ending 6/12/04 and 6/26/04 plus the contract labor for June 2004. Note: The Financials used PPE 5/29/04 and 6/12/04. Departments with more than 1 FTEs variances were verified to be correct. The FTE’s for June 2004 YTD was based on an average of 14 pay periods of data. Note: The appropriate adjustment was made to the hours to use only 13 pay periods.
Process (cont.) Assumptions: Admissions = Discharges Average Length Of Stay for TCU patients was 6.37 days to calculate the Admissions to TCU The patient days on 3 East now 4 East for June 2004 were lower than average for the year. Therefore what appears to be a staffing increase is driven off of the higher average number of patients day. There is an actual decrease in the hours per patient day needed to achieve the benchmarks.
Process (cont.) An on-site visit was conducted to understand the general lay out of the facility and departments. Interviews were conducted to determine if Hours and Volumes were valid. Benchmarks were selected/adjusted and reports of findings prepared
Findings - Overtime Utilization Cambio recommends overtime utilization at less than 5% overtime hours as a percent of total paid hours For FYTD pay date 7/29/04, overtime utilization at PVH ran 6.02% - approx. $4.7 million annually Reduction to 5% would yield approx, $48,000 in annual savings Reduction to 3% would yield over $144,000 in annual savings Source: payroll data 16PPs pay date 7/29/04
Findings - OT Utilization (cont.) The top departments for overtime utilization  included: 617 – 3 East Medical (now 4E) 6,842 hours 615 – 4 West Surgical/Ortho 6,297 hours 6125 – 3 West Telemetry 6,141 hours 640 – ICU/CCU 5,874 hours 680 – ER 5,555 hours 645 – OB 4,851 hours Source: payroll data 16PPs pay date 7/29/04
Findings - OT Utilization (cont.) Premium Pay Practice If a person works a Double shift they will either earn: 2.5 times there base for the 2 nd  8 hour shift if they take the next day off. 3.0 times there base for the 2 nd  8 hour shift if they work the next day.
Findings - Contract Labor Contract Labor (Nurse agency, travelers and other temporary labor) totaled approximately 35.3 FTEs in the six months ended June 2004. For the month of June 2004, utilization declined to  approximately 24.2 FTEs. Source: Budget Director
Findings – On-Call Dollars On-Call dollars totaled approximately $176,000 in the 16 pay periods ended pay date July 29, 2004. Annualized amount of approximately $286,000 A significant change in average cost per pay period ($1,200) was noted between current pay period ($12,200) and YTD average ($11,000.)  Source: payroll data 16PPs pay date 7/29/04
Findings – On-Call Dollars (cont.) The top departments for being paid to be On-Call included: Department Annualized $ 926 - Systems and Programming  $ 65,000 665 – PACU $ 36,000 660 – OR $ 35,000 721 – Nuclear Medicine $ 29,000  723 – Ultrasound $ 21,000 724 – CT $ 20,000 Source: payroll data 16PPs pay date 7/29/04
Findings – On-Call Hours Worked Actual Hours Called-In to Work YTD Department  “Called-in-OT” 926 - Systems and Program  24 hours 665 – PACU 749 hours 660 – OR 722 hours 721 - Nuclear Medicine  260 hours 723 – Ultrasound 788 hours 724 – CT 1,146 hours Source: payroll data 14PPs pay date 7/1/04
Findings All patients are admitted No patients are billed as observation patients Many managers tracking “home-grown” statistics  Cannot be compared with industry peers Often change year to year – cannot be compared to prior year
Findings (cont.) Subsequent to the consultant’s interviews with hospital executives and managers, benchmarks were adjusted for Emergency Department to account for Registration and ER Hold Patient days. Nursery, OB, and L&D to account for the cross utilization of staff and the staff not clocking-in and out of the departments where they worked.
Departmental Findings - by Category
Departmental Conclusions The results* of the high level assessment show attainment of peer benchmarks between 75 th  and 90 th  percentile would yield: Reduction of 122 to 224 FTEs Savings of approximately $6.9 to $12.9 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results.
Recommendations – On-Call Hours Worked Evaluate the need for and the amount of people being Paid to be On-Call and Actual Hours Called-In to Work.  926 - Systems and Programming paid $65,000 to be On-Call and only Called-In to work 24 hours 721 - Nuclear Medicine paid $29,000 to be On-Call and only Called-In to work  260 hours Source: payroll data 14PPs pay date 7/1/04
Recommendations (cont.) Provide managers with daily staffing tools to enable “driving” rather than “reflecting” productivity Implement the effective use of the ANSOS (automated nurse staffing and scheduling system) by loading budgeted Hours and Dollars per patient day to provide Nursing with the tools manage the labor.
Recommendations (cont.) Hold managers accountable for staffing relative to volumes on a 14 day rolling report produced daily Incorporate compliance with  flexed  staffing standards in the managers’ annual evaluations up to 50% of increase
Recommendations (cont.) Perform Phase III assessment  Departments identified as “outliers” per the Phase II (High Level) review Managers and executives are interviewed to ascertain unique constraints to comparisons or efficiency that may require adjustments to benchmarks Benchmarks are selected and, if appropriate, adjusted Cosultant Recommends benchmark level. This may be one of the percentiles, an adjusted benchmark or, if internal results are better than external benchmarks, an internal standard
Recommendations (cont.) Consultant perform Phase IV assessment Departments designated by management Managers and executives are interviewed to ascertain unique constraints on efficiency that may require adjustments to targets Consultant Recommends staffing  targets Consultant develops staffing plans for achieving targets with management
Recommendations (cont.) Consultant perform Span Of Control Analysis Traditional command & control ‘Rule of Fives’ structure - 5 staff members per supervisor and 5 managerial levels in the structure Healthcare processes require a high level of professional, independent thinking and acting staff which enable healthcare structures to be flatter and with wider spans Traditional healthcare organization structural span of control ranges from 1 manager to 8 - 15 staff  Best practice healthcare structures result in span of 1 manager to 20 staff
Recommendations (cont.) Consider the following issues in further developing staffing levels: Process and infrastructure issues People issues – cultural and regional Functional improvement initiatives Clinical resource utilization improvement initiatives Program and service improvements Human resource strategies/abilities to deal with staffing plan changes
Recommendations (cont.) Contract directly with Financial Review Services to implement the Charge Capture improvements. Contract Directly with Am-Tel to implement the following improvements: Mailing & Postage Office Supplies Printing Waste Removal & Recycling Freight Natural Gas and/or Electric  Telecommunications
Summary & Questions If PVH wants it’s Labor Resource Management to be in the top quartile (75 th  percentile) of hospitals in New Jersey, then it appears a reduction of FTE’s would be required. Anywhere from 140 FTEs based on the Global Comparison to 122 FTE’s based on the Departmental Comparison

Contenu connexe

Similaire à Pascack Valley Hospital

BUDGET IN NURSING, TYPES, CLASSIFICATION
BUDGET IN NURSING, TYPES, CLASSIFICATIONBUDGET IN NURSING, TYPES, CLASSIFICATION
BUDGET IN NURSING, TYPES, CLASSIFICATION
Harshika Surendra Tembhurne
 
Feels Like the Odyssey?
Feels Like the Odyssey?Feels Like the Odyssey?
Feels Like the Odyssey?
PYA, P.C.
 
415 frazier and janotha
415 frazier and janotha415 frazier and janotha
415 frazier and janotha
hfmadixie
 
What goes on behind those budget doors?
What goes on behind those budget doors?What goes on behind those budget doors?
What goes on behind those budget doors?
Debby Sieradzki
 
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
gilbertkpeters11344
 
Rural Urgent Care Centers Business PlanI. Executive Summary.docx
Rural Urgent Care Centers Business PlanI. Executive Summary.docxRural Urgent Care Centers Business PlanI. Executive Summary.docx
Rural Urgent Care Centers Business PlanI. Executive Summary.docx
anhlodge
 
BPM Efficiency
BPM EfficiencyBPM Efficiency
BPM Efficiency
Kenyatta Lovett, Ph.D.
 
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docxN4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
gilpinleeanna
 
The Business of Facilities Management Benchmarking
The Business of Facilities Management BenchmarkingThe Business of Facilities Management Benchmarking
The Business of Facilities Management Benchmarking
International Facility Management Association
 
Christus
ChristusChristus
Christus
lponssa
 
A z hs curriculum effort reporting system thu., march 26, 2009 final
A z hs curriculum effort reporting system thu., march 26, 2009 finalA z hs curriculum effort reporting system thu., march 26, 2009 final
A z hs curriculum effort reporting system thu., march 26, 2009 final
d8smith
 
HealthWaysBudgetTable 1. HealthWays Clinic, Monthly Expense Budge.docx
HealthWaysBudgetTable 1.  HealthWays Clinic, Monthly Expense Budge.docxHealthWaysBudgetTable 1.  HealthWays Clinic, Monthly Expense Budge.docx
HealthWaysBudgetTable 1. HealthWays Clinic, Monthly Expense Budge.docx
pooleavelina
 
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docxAssignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
faithxdunce63732
 
Development of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
Development of Financial Performance Benchmark Of MOPH’s hospitals in ThailandDevelopment of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
Development of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
Utoomporn Wongsin
 
A Case Study with Orlando Health: Driving new levels of business performance ...
A Case Study with Orlando Health: Driving new levels of business performance ...A Case Study with Orlando Health: Driving new levels of business performance ...
A Case Study with Orlando Health: Driving new levels of business performance ...
GE Healthcare - IT
 
Hospital and Healthcare System Strategic Planning and Financial Forecasting
Hospital and Healthcare System Strategic Planning and Financial ForecastingHospital and Healthcare System Strategic Planning and Financial Forecasting
Hospital and Healthcare System Strategic Planning and Financial Forecasting
Axiom EPM
 
February 2010 - Strategies in developing a workload model
February 2010 - Strategies in developing a workload modelFebruary 2010 - Strategies in developing a workload model
February 2010 - Strategies in developing a workload model
Vandad Yousefi MD, CCFP, FHM
 
Environmental_Services and management review_1.ppt
Environmental_Services and management review_1.pptEnvironmental_Services and management review_1.ppt
Environmental_Services and management review_1.ppt
AllenArockiaraj
 
Corus™ Suite: Next-Generation Cost Management Technology
Corus™ Suite: Next-Generation Cost Management TechnologyCorus™ Suite: Next-Generation Cost Management Technology
Corus™ Suite: Next-Generation Cost Management Technology
Health Catalyst
 
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docxWeek 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
jessiehampson
 

Similaire à Pascack Valley Hospital (20)

BUDGET IN NURSING, TYPES, CLASSIFICATION
BUDGET IN NURSING, TYPES, CLASSIFICATIONBUDGET IN NURSING, TYPES, CLASSIFICATION
BUDGET IN NURSING, TYPES, CLASSIFICATION
 
Feels Like the Odyssey?
Feels Like the Odyssey?Feels Like the Odyssey?
Feels Like the Odyssey?
 
415 frazier and janotha
415 frazier and janotha415 frazier and janotha
415 frazier and janotha
 
What goes on behind those budget doors?
What goes on behind those budget doors?What goes on behind those budget doors?
What goes on behind those budget doors?
 
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
5 EXERCiSE Evaluating the Financial Impact of Human Resour.docx
 
Rural Urgent Care Centers Business PlanI. Executive Summary.docx
Rural Urgent Care Centers Business PlanI. Executive Summary.docxRural Urgent Care Centers Business PlanI. Executive Summary.docx
Rural Urgent Care Centers Business PlanI. Executive Summary.docx
 
BPM Efficiency
BPM EfficiencyBPM Efficiency
BPM Efficiency
 
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docxN4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
N4455 Nursing Leadership and ManagementWeek 3 Assignment 1.docx
 
The Business of Facilities Management Benchmarking
The Business of Facilities Management BenchmarkingThe Business of Facilities Management Benchmarking
The Business of Facilities Management Benchmarking
 
Christus
ChristusChristus
Christus
 
A z hs curriculum effort reporting system thu., march 26, 2009 final
A z hs curriculum effort reporting system thu., march 26, 2009 finalA z hs curriculum effort reporting system thu., march 26, 2009 final
A z hs curriculum effort reporting system thu., march 26, 2009 final
 
HealthWaysBudgetTable 1. HealthWays Clinic, Monthly Expense Budge.docx
HealthWaysBudgetTable 1.  HealthWays Clinic, Monthly Expense Budge.docxHealthWaysBudgetTable 1.  HealthWays Clinic, Monthly Expense Budge.docx
HealthWaysBudgetTable 1. HealthWays Clinic, Monthly Expense Budge.docx
 
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docxAssignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
Assignment Exercise 13–2 Trend AnalysisRefer to the Metropolis H.docx
 
Development of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
Development of Financial Performance Benchmark Of MOPH’s hospitals in ThailandDevelopment of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
Development of Financial Performance Benchmark Of MOPH’s hospitals in Thailand
 
A Case Study with Orlando Health: Driving new levels of business performance ...
A Case Study with Orlando Health: Driving new levels of business performance ...A Case Study with Orlando Health: Driving new levels of business performance ...
A Case Study with Orlando Health: Driving new levels of business performance ...
 
Hospital and Healthcare System Strategic Planning and Financial Forecasting
Hospital and Healthcare System Strategic Planning and Financial ForecastingHospital and Healthcare System Strategic Planning and Financial Forecasting
Hospital and Healthcare System Strategic Planning and Financial Forecasting
 
February 2010 - Strategies in developing a workload model
February 2010 - Strategies in developing a workload modelFebruary 2010 - Strategies in developing a workload model
February 2010 - Strategies in developing a workload model
 
Environmental_Services and management review_1.ppt
Environmental_Services and management review_1.pptEnvironmental_Services and management review_1.ppt
Environmental_Services and management review_1.ppt
 
Corus™ Suite: Next-Generation Cost Management Technology
Corus™ Suite: Next-Generation Cost Management TechnologyCorus™ Suite: Next-Generation Cost Management Technology
Corus™ Suite: Next-Generation Cost Management Technology
 
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docxWeek 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
Week 4 Staffing BudgetsFTEs Variance AnalysisAssignment Guide.docx
 

Pascack Valley Hospital

  • 1. Pascack Valley Hospital Productivity Review August 2004
  • 2. Introduction Executive Summary Scope Overview - Phase I “Global Review” Global Observations Global Conclusions Overview - Phase II “Departmental Review” Process Findings Overtime Utilization Contract Labor On-Call Dollars FTE’s - by Category Departmental Conclusions Recommendations Summary & Questions
  • 3. Executive Summary Global Conclusions *Reduction of 49 to 140 FTEs Savings of approximately $3.6 to $10.6 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results. Departmental Conclusions *Reduction of 122 to 224 FTEs Savings of approximately $6.9 to $12.9 million in annual salary and benefit expenditures Assumes 75% of Average hourly rate in actual reduction.
  • 4. Executive Summary Recommendations Subject departments identified as “outliers” per the benchmark review to Phase III review and have Cambio Consultants recommend benchmarks Subject departments designated by management to Phase IV review and have Cambio develop staffing plans and recommend targets
  • 5. Scope An analysis of current labor costs and an estimate of potential labor savings by cost center Provide management with additional initiatives that may be considered for improving operational performance Evaluation of any productivity monitoring system in place and whether these systems are used effectively
  • 6. Global Overview - Phase I Organization’s performance is compared against universal benchmarks derived from national/state data Solucient’s “Comparative Performance of U.S. Hospitals – The Sourcebook” State of New Jersey was used to calculate FTE’s per Adjusted Occupied Bed (AOB) reductions
  • 7. Global Overview - Phase I Comparative items include: FTEs/Adjusted Occupied Bed Salary and Benefits expenses as a % of Operating Expenses Salary and Benefit expenditures per FTE Salary and Benefits expenses as a % of Operating or Net Revenues
  • 8. Global Overview - Phase I The following tables illustrate the performance of Pascack Valley Hospital (PVH) at the global level The 75 th percentile represents the top 25% performers in the database The 50 th percentile represents the median (“mediocre”) The 25 th percentile represents the lowest (worst) quartile of performers (i.e. 75% of reviewed hospitals performed better)
  • 9. Global Observations The Patient Days and Adjusted Patient days were based on Annualizing June Year-To-Date. This assumes Patient Days lost by the closing of the TCU will be back filled. If the TCU Patient Days are not replaced with other inpatients, then additional FTE reductions would be needed to achieve benchmarks.
  • 10. Global Observations (cont.) 50% of the Hospitals in New Jersey have lower FTE’s per AOB than PVH. Source: Solucient Sourcebook 2003
  • 11. Global Observations (cont.) PVH’s Salary and Benefits as a % of Operating Expense is higher than the worst quartile of performers in New Jersey Source: Solucient Sourcebook 2003
  • 12. Global Observations (cont.) PVH’s Average Salary and Benefits Cost per FTE is higher than the worst quartile of performers in New Jersey Source: Solucient Sourcebook 2003
  • 13. Global Observations (cont.) PVH’s Salary and Benefits Costs as a % of Operating (net) Revenue 7 percentage points higher than the worst quartile of performers in New Jersey Source: Solucient Sourcebook 2003
  • 14. Global Conclusions The results* of the high level assessment show attainment of peer benchmarks between 50 th and 75 th percentile would yield: Reduction between 49 and 140 FTEs Savings of approximately between $3.6 to $10.6 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results.
  • 15. Global Conclusions Findings from slides: Staffing compared to peers – cost savings opportunities available Salary & Benefits as a percent of expenses are high compared to peers. Staff salaries are 27% higher than 75% of peers SW%B as a percent of operating (net) revenue is over 61% Definite SW&B opportunities Possible revenue opportunities
  • 16. Overview - Phase II “Departmental” Collected payroll and volume data to compare the organization’s performance, at the department level, to that of “peer” departments Comparisons are based on benchmarks from peer hospitals as found in the Solucient benchmarking database As needed, the database is supplemented with a database of national hospital operational benchmarks
  • 17. Overview - Phase II “Departmental” High-level reports are completed, showing staff levels required at: Lo – 90 th percentile (top tenth of peers - “Best”) Hi – 75 th percentile (top quartile of peers - “Good”)
  • 18. Process Data was collected from Finance and I/S departments for departmental reviews: Payroll and Contract Labor (Registry, etc) Hours Dollars Volumes Inpatient days Ancillary tests and treatments Outpatient visits and procedures
  • 19. Process (cont.) The FTE’s for June 2004 were based on pay periods ending 6/12/04 and 6/26/04 plus the contract labor for June 2004. Note: The Financials used PPE 5/29/04 and 6/12/04. Departments with more than 1 FTEs variances were verified to be correct. The FTE’s for June 2004 YTD was based on an average of 14 pay periods of data. Note: The appropriate adjustment was made to the hours to use only 13 pay periods.
  • 20. Process (cont.) Assumptions: Admissions = Discharges Average Length Of Stay for TCU patients was 6.37 days to calculate the Admissions to TCU The patient days on 3 East now 4 East for June 2004 were lower than average for the year. Therefore what appears to be a staffing increase is driven off of the higher average number of patients day. There is an actual decrease in the hours per patient day needed to achieve the benchmarks.
  • 21. Process (cont.) An on-site visit was conducted to understand the general lay out of the facility and departments. Interviews were conducted to determine if Hours and Volumes were valid. Benchmarks were selected/adjusted and reports of findings prepared
  • 22. Findings - Overtime Utilization Cambio recommends overtime utilization at less than 5% overtime hours as a percent of total paid hours For FYTD pay date 7/29/04, overtime utilization at PVH ran 6.02% - approx. $4.7 million annually Reduction to 5% would yield approx, $48,000 in annual savings Reduction to 3% would yield over $144,000 in annual savings Source: payroll data 16PPs pay date 7/29/04
  • 23. Findings - OT Utilization (cont.) The top departments for overtime utilization included: 617 – 3 East Medical (now 4E) 6,842 hours 615 – 4 West Surgical/Ortho 6,297 hours 6125 – 3 West Telemetry 6,141 hours 640 – ICU/CCU 5,874 hours 680 – ER 5,555 hours 645 – OB 4,851 hours Source: payroll data 16PPs pay date 7/29/04
  • 24. Findings - OT Utilization (cont.) Premium Pay Practice If a person works a Double shift they will either earn: 2.5 times there base for the 2 nd 8 hour shift if they take the next day off. 3.0 times there base for the 2 nd 8 hour shift if they work the next day.
  • 25. Findings - Contract Labor Contract Labor (Nurse agency, travelers and other temporary labor) totaled approximately 35.3 FTEs in the six months ended June 2004. For the month of June 2004, utilization declined to approximately 24.2 FTEs. Source: Budget Director
  • 26. Findings – On-Call Dollars On-Call dollars totaled approximately $176,000 in the 16 pay periods ended pay date July 29, 2004. Annualized amount of approximately $286,000 A significant change in average cost per pay period ($1,200) was noted between current pay period ($12,200) and YTD average ($11,000.) Source: payroll data 16PPs pay date 7/29/04
  • 27. Findings – On-Call Dollars (cont.) The top departments for being paid to be On-Call included: Department Annualized $ 926 - Systems and Programming $ 65,000 665 – PACU $ 36,000 660 – OR $ 35,000 721 – Nuclear Medicine $ 29,000 723 – Ultrasound $ 21,000 724 – CT $ 20,000 Source: payroll data 16PPs pay date 7/29/04
  • 28. Findings – On-Call Hours Worked Actual Hours Called-In to Work YTD Department “Called-in-OT” 926 - Systems and Program 24 hours 665 – PACU 749 hours 660 – OR 722 hours 721 - Nuclear Medicine 260 hours 723 – Ultrasound 788 hours 724 – CT 1,146 hours Source: payroll data 14PPs pay date 7/1/04
  • 29. Findings All patients are admitted No patients are billed as observation patients Many managers tracking “home-grown” statistics Cannot be compared with industry peers Often change year to year – cannot be compared to prior year
  • 30. Findings (cont.) Subsequent to the consultant’s interviews with hospital executives and managers, benchmarks were adjusted for Emergency Department to account for Registration and ER Hold Patient days. Nursery, OB, and L&D to account for the cross utilization of staff and the staff not clocking-in and out of the departments where they worked.
  • 31. Departmental Findings - by Category
  • 32. Departmental Conclusions The results* of the high level assessment show attainment of peer benchmarks between 75 th and 90 th percentile would yield: Reduction of 122 to 224 FTEs Savings of approximately $6.9 to $12.9 million in annual salary and benefit expenditures *Note: On-site, detailed assessment of departments may yield different results.
  • 33. Recommendations – On-Call Hours Worked Evaluate the need for and the amount of people being Paid to be On-Call and Actual Hours Called-In to Work. 926 - Systems and Programming paid $65,000 to be On-Call and only Called-In to work 24 hours 721 - Nuclear Medicine paid $29,000 to be On-Call and only Called-In to work 260 hours Source: payroll data 14PPs pay date 7/1/04
  • 34. Recommendations (cont.) Provide managers with daily staffing tools to enable “driving” rather than “reflecting” productivity Implement the effective use of the ANSOS (automated nurse staffing and scheduling system) by loading budgeted Hours and Dollars per patient day to provide Nursing with the tools manage the labor.
  • 35. Recommendations (cont.) Hold managers accountable for staffing relative to volumes on a 14 day rolling report produced daily Incorporate compliance with flexed staffing standards in the managers’ annual evaluations up to 50% of increase
  • 36. Recommendations (cont.) Perform Phase III assessment Departments identified as “outliers” per the Phase II (High Level) review Managers and executives are interviewed to ascertain unique constraints to comparisons or efficiency that may require adjustments to benchmarks Benchmarks are selected and, if appropriate, adjusted Cosultant Recommends benchmark level. This may be one of the percentiles, an adjusted benchmark or, if internal results are better than external benchmarks, an internal standard
  • 37. Recommendations (cont.) Consultant perform Phase IV assessment Departments designated by management Managers and executives are interviewed to ascertain unique constraints on efficiency that may require adjustments to targets Consultant Recommends staffing targets Consultant develops staffing plans for achieving targets with management
  • 38. Recommendations (cont.) Consultant perform Span Of Control Analysis Traditional command & control ‘Rule of Fives’ structure - 5 staff members per supervisor and 5 managerial levels in the structure Healthcare processes require a high level of professional, independent thinking and acting staff which enable healthcare structures to be flatter and with wider spans Traditional healthcare organization structural span of control ranges from 1 manager to 8 - 15 staff Best practice healthcare structures result in span of 1 manager to 20 staff
  • 39. Recommendations (cont.) Consider the following issues in further developing staffing levels: Process and infrastructure issues People issues – cultural and regional Functional improvement initiatives Clinical resource utilization improvement initiatives Program and service improvements Human resource strategies/abilities to deal with staffing plan changes
  • 40. Recommendations (cont.) Contract directly with Financial Review Services to implement the Charge Capture improvements. Contract Directly with Am-Tel to implement the following improvements: Mailing & Postage Office Supplies Printing Waste Removal & Recycling Freight Natural Gas and/or Electric Telecommunications
  • 41. Summary & Questions If PVH wants it’s Labor Resource Management to be in the top quartile (75 th percentile) of hospitals in New Jersey, then it appears a reduction of FTE’s would be required. Anywhere from 140 FTEs based on the Global Comparison to 122 FTE’s based on the Departmental Comparison