7 ways hospitals can reduce staffing costs without jeopardizing quality
Hospitals are constantly under pressure to reduce costs. Since staffing is their biggest expense, it’s usually one of the first items on the chopping block. But too many layoffs could compromise the quality of care provided.
Following recent staffing cuts at the University of Louisville Hospital, Dr. David Richardson, vice chair of surgery at the hospital and current president of the American College of Surgeons, told The Courier-Journal that the layoffs have rendered the care of seriously ill or injured patients at the hospital “unsafe”.
“Please understand this is not the complaining of a senior surgeon but a major patient safety issue!” Richardson said in an e-mail to The Courier-Journal.
The hospital denies the surgeon’s allegations. “UHL is an excellent hospital with a dedicated and talented team of professionals that is staffed to meet the patient’s needs,” KentuckyOne Health, the organization that manages the hospital, said in a statement. “Our focus has always been on quality, safety and patient experience.”
Maintaining safety while lowering costs
Unfortunately, staff layoffs are part of the solution to cost cutting. But there are still ways to cut staffing costs without putting patients at risk. Here are some strategies:
- Eliminate (or at least minimize) overtime: In an article for HealthLeaders Media, Mary Nash, PhD, RN, chief nurse executive for Ohio State University Medical Center in Columbus, said she was able to cut down on overtime by utilizing a new staffing and scheduling system and by establishing a staffing pool to supplement staffing needs.
- Use staff more efficiently. For example, in a blog post for FreemanWhite, Kristyna Culp estimated that using nurses to transport patients to and from the emergency department (as opposed to using transport staff) would cost a hospital an additional $111,690 per year. The estimate assumes a pay rate of $19.50/hour for transport staff and $45/hour for nurses and a round trip transport time of 30 minutes per patient.
- Reduce staff turnover: It’s expensive to train new staff. Aside from offering competitive pay and benefits packages, some methods for retaining current staff include streamlining processes to ease employee workload, offering rewards and recognition, treating employees with respect and promoting from within.
- Streamline services. Andrew Miller, president at ACM Consulting, told Healthcare Dive that healthcare leaders often try to accomplish too many things at once, leaving them unable to get the results they want from any of them. “Healthcare leaders need to envision their ideal future state and then find the fastest and most effective way to achieve it,” he said.
- Eliminate unnecessary positions. Look first at jobs that are currently unfilled.
- Decrease the use of travel or agency staffing. Hunt told HealthLeaders Media that supplemental labor should be used during seasonal increases in patient volumes or medical leaves or to fill in during large training initiatives (e.g., ICD-10). She said it’s not meant to be used to meet daily census demands.
- Consider outsourcing. Services that some hospitals are currently outsourcing include information technology and housekeeping.
In an article for Hospitals & Health Networks, Charles Hightower, chief financial officer at Archbold Medical Center in Thomasville, Ga., said it’s important for hospital financial leaders to manage costs on an ongoing basis, rather than in “big bunches” when a crisis comes along.
“Get started now because the longer you put it off, the more drastic the reductions are going to have to be when you do finally make them,” Hightower said.