Workforce Management, Patient Care and Enhanced Financial Performance
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- Dwain Patterson
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1 Workforce Management, Patient Care and Enhanced Financial Performance This white paper discusses how healthcare organizations can enhance profitability by employing a strategic workforce management solution.
2 North America: United Kingdom: +44 (0) Australia: +61 (0) Copyright 2007 Infor Global Solutions GmbH and/or its affiliates and subsidiaries. All rights reserved. The word and design marks set forth herein are trademarks and/or registered trademarks of Infor Global Solutions GmbH and/or its affiliates and subsidiaries. All rights reserved. All other trademarks listed herein are the property of their respective owners. INFWP_WROIGEENUS_
3 INTRODUCTION...4 TODAY S HEALTHCARE WORKFORCE...5 WORKFORCE STABILITY AND QUALITY OF CARE...6 WORKFORCE STABILITY AND THE BOTTOM LINE...7 ENVIRONMENT AND POSITIVE RESULTS...8 INFOR FOR HEALTHCARE...8 CREATING A WORLD-CLASS HEALTHCARE ORGANIZATION...9 GENERATING TANGIBLE RESULTS...10 ACHIEVING MAGNET STATUS...11 CONCLUSION
4 Introduction Today s healthcare organizations operate in an environment of incredible scrutiny, liability and pressure. In addition to the traditional concerns of managing expenses and improving the overall operation of the business, healthcare professionals must contend with added business pressures in four key areas: Financial Performance Despite the fact that many healthcare institutions indicate that they are non-profit or not-for-profit organizations, the financial performance of the organization is an ongoing concern. Pre-defined reimbursement amounts force healthcare organizations to always be mindful of the bottom line and seek ways to streamline operations. Controlling costs, eliminating wasteful activities and improving operational performance is critical to long-term success. Regulatory Compliance Regulatory oversight governs virtually every aspect of healthcare operations from the health and safety of patients, to the security and privacy of patient information and everything in between. These regulations are created and enforced by state, local and federal agencies, nursing unions, voluntary accrediting agencies (such as JACHO) and the organization's own policies. As a result, healthcare organizations are forced to conduct business within one of the most complex and heavily regulated environments today, and the penalties for violation are substantial. Employee Satisfaction Due to the magnitude of the specialized, labor-intensive work requirements, a hospital s payroll typically represents 60% of overall expenses. The workforce represents a significant investment for healthcare organizations and when employees leave the organization either through attrition or staff reductions replacing them with a new hire or with a temp from an agency is a costly exercise. Improving employee satisfaction stands as one of the most effective and efficient ways to control expenses, reduce turnover, and improve the environment for patients and employees alike. Patient Care The overall success of any healthcare organization begins and ends with the patient. To this end, hospitals must ensure that staffing levels are sufficient for the number and acuity of patients and that on-duty nurses are 4
5 not being over-worked due to excessive overtime or poorly coordinated schedules. Failure to address these issues could have dire consequences. Studies show that there is a direct correlation between the satisfaction of your workforce and the safety of your patients. Although these issues may seem somewhat unrelated at first glance there is common denominator comprehensive workforce management processes can transform these challenges into opportunities. In this whitepaper, we ll explore: current market conditions and how those dynamics affect the day-to-day operations of your organization the critical relationship between the quality of your workforce practices, the health of your patients and the overall financial health of your organization how creating a more positive, more empowering work environment can significantly improve your ability to attract and retain the best staff how Infor for Healthcare can help you improve the performance of your staff, the quality of their work environment and ultimately the health of your patients Today s Healthcare Workforce Like so many industries today, the healthcare industry is experiencing a skills gap. Senior and experienced staffers are leaving the profession, accepting opportunities at other organizations (typically outside of the acute care setting) or dramatically reducing their hours. The resulting gap as we ll see in this whitepaper is substantial and can have a significant affect on both the health of your patients and the health of your bottom line. Recent industry statistics show that the demand for skilled healthcare laborers is growing at a brisk pace. According to the Health Resources and Services Administration (HRSA), there are an estimated 126,000 vacant Registered Nurse (RN) positions in North America. In the timeframe between 2000 and 2020, there will be an expected 41% increase in demand for RNs. With an average time-to-fill rate of 3.3 months, individuals who remain on staff within your hospital are being stretched thinner than ever before. Excessive overtime costs are common, as is the reliance on staffing agencies and traveling 5
6 nurses. The negative impact this phenomenon has on the financial health of your organization is obvious and should serve as a call to action for ensuring the stability of your workforce. A more disturbing impact, however, is the negative effect this skills gap can have on the safety and satisfaction of your patients. Workforce Stability and Quality of Care On the surface, the correlation between nursing schedules and patient health is not an easy one to draw. After all, as long as there are enough skilled nurses onduty whether they come from your own staff or an agency conventional wisdom indicates that patient needs will be met. The reality of the situation, however, paints quite a different picture. According to the Institute of Medicine (IOM), 44,000 to 98,000 people die from preventable medical errors each year in U.S. hospitals. To put this into perspective, fewer people die from breast cancer, traffic accidents or AIDS. Understaffing, over-worked nurses and heavy reliance on temporary help all contribute to these staggering numbers. The VHA an alliance of over 2,400 not-for-profit healthcare organizations released a landmark study that crystallized the connection between a positive and stable workforce and healthier patients. According to this study: Organizations with a turnover rate of 4% - 12% experienced an adjusted mortality index of 0.78 and a severity adjusted average length-of-stay of 3.81 Organizations with a turnover rate of 12% - 21% experienced an adjusted mortality index of 0.98 and a severity adjusted average length-of-stay of 4.81 Organizations with a turnover rate of 22% - 44% experienced an adjusted mortality index of 1.09 and a severity adjusted average length-of-stay of 5.02 In short, if you want to take care of your patients, you must first take care of your nurses. And a critical first step in being able to create a better environment for your nursing staff is ensuring you have the ability to create a more favorable financial position for your organization. 6
7 Workforce Stability and the Bottom Line In financial terms, the cost of workforce instability can be staggering. The Health Care Advisory Board (HCAB) estimates that the average replacement cost for an RN is between six months to one year of annual salary. Couple this statistic with the national average turnover rate of 15% and do the math the numbers add up quickly. Consider this data in a typical healthcare organization, one with approximately 600 RNs. Assuming a replacement cost of $46,000 per RN and a 15% turnover, the average healthcare organization can expect to lose over $4.1 million annually to RN turnover. The departure of RN talent also creates something of a downward spiral with regards to your existing staff and your reliance on external resources. As nurses leave, the remaining staff is forced to absorb a greater workload, incur unwanted overtime and, inevitably, feel less job satisfaction. Such conditions force even your best workers to update their resume and look for other employment opportunities. And given the current job market for nurses, they have plenty of alternatives. To avoid the cascading negative affects, creating a positive and empowering work environment is no longer a nice to have, it s a necessity. 7
8 Environment and Positive Results A common knee-jerk reaction to stemming the tide of employee turnover is simply raising salary or bonuses. Although these measures have their place, changing the fabric of your actual work environment will likely have a greater, more positive effect. The New York State Education Department (SED) asked nurses what healthcare organizations needed to do to keep RNs on staff. Nearly all respondents 98% of those surveyed stated that a reduction in caseloads would be highly effective. More stable work schedules and mandatory overtime restrictions also rated very highly. The answer is clear: to improve the stability of your workforce, you must improve the quality of its work environment. Empowering your nursing staff to have more control over its own schedules and to maintain a positive work/life balance yields significant dividends. You ll reduce turnover, improve the health care quality of patient care and deliver significant financial improvements that can be felt throughout your entire organization. Infor for Healthcare At Infor, we understand your unique day-to-day challenges. That s why we ve created Infor for Healthcare a suite of workforce management solutions designed specifically to address the dynamic needs of today s healthcare organizations. Transcending traditional time-and-attendance applications, Infor for Healthcare s holistic approach includes: Complete time and attendance Infor automates 100% of your organization s payrules including union rules, premium calculations, shift differentials and more eliminating the need for costly manual processes. Furthermore, Infor for Healthcare can also help you to more effectively and efficiently manage qualifying FLSA/FMLA absences as well. Robust scheduling Infor comes complete with a diverse array of scheduling options, creating unprecedented flexibility for you and your organization. From the highly-configurable Multi View Scheduler to the Real-Time Self-Scheduler, Infor for Healthcare can help you to ensure proper coverage and skill mix while your staff enjoys improved schedule visibility and flexibility. 8
9 Powerful analytics Delivering a wide selection of pre-built reports, as well as the ability to quickly and easily create reports reflecting the unique needs of your organization, Workbrain Intelligence enables you to transform raw time, attendance and scheduling data into actionable information in real-time. Also, Workbrain Intelligence enables root cause analysis of historical variances, empowering you with the tools you need to understand and anticipate potential issues. You can define Key Performance Indicators (KPI), measure your staff s performance against those KPIs and proactively leverage that information to make better informed business decisions. Best of all, role-based dashboard views enable you to share that information with the right person, in the right format, at the right time. Comprehensive planning As daily census, acuity or other unit of service data is collected and recorded in the system, Infor for Healthcare will automatically make scheduling recommendations based on your projected number of patients and their medical needs. Furthermore, alert and alarm functionality built into the solution enables you to proactively address potential issues before they can impact your staff or your patients. As a result, Infor for Healthcare enables your entire organization to become more agile and more responsive to shifting demand. Creating a World-Class Healthcare Organization Infor for Healthcare was designed from the ground-up to accommodate the unique and dynamic needs of a large healthcare organization. Our approach has been refined through the creation and adoption of best practices in workforce management, field-proven by the hundreds of customers and millions of workers who use Infor each and every day. Key features include: Standards-based architecture that delivers unprecedented flexibility As a J2EE native application, Infor for Healthcare is one of the most flexible and extensible solutions currently available. Leveraging this web-based architecture ensures that Infor fits seamlessly into any existing IT infrastructure. Infor also provides access to a diverse array of data entry solutions from an equally diverse array of providers. From our own web-based data entry interface to more conventional swipe cards and biometric devices, we enable you to leverage best-of-breed solutions that are designed to meet your specific functional and operational needs. 9
10 Modular approach enables you to add functionality at your own pace Each of the modules that comprise Infor for Healthcare is available individually, enabling you to create a custom-tailored solution on your own timetable. Begin with our robust time and attendance solution, then add the Multi-View Scheduler and Workbrain Analytics as your needs grow. Infor also offers solutions designed to streamline absence administration processes, ensure adherence to FMLA regulations, and accelerate system training. Each is modular, integrated and designed to help you improve the overall performance of your organization. 100% pay rule automation reduces errors and trims expenses Union contracts, federal and state regulations, shift differentials and multiple premium pay conditions combine to create some of the most complex payrules in business today. Infor for Healthcare was built from the ground-up to accommodate such complexities, enabling you to automate the application of 100% of your payrules and leverage that data to make more strategic business decisions. With Infor for Healthcare, you can eliminate costly and inefficient manual processes while dramatically improving the overall accuracy of your payroll and efficiency of your organization. Intelligent scheduling reduces reliance on overtime and agencies Leveraging the data that is captured and collected through the time and attendance and scheduling system, Infor s powerful analysis, reporting and scheduling tools enable you to gain a holistic view of workforce activities, act accordingly and ensure that you have the right people, in the right place, at the right time. Furthermore, the self-service capabilities enable nurses to trade shifts and post shifts for other employees to work. By proactively identifying and addressing potential coverage issues before they become a problem, you can dramatically improve your ability to meet scheduling gaps using your own staff. Generating Tangible Results For a typical healthcare organization with 10,000 employees and $385 million in gross payroll, a modest 1.5% reduction is gross payroll costs equate to $5.7 million in annual savings. Studies have shown that facilities offering employee self-scheduling can reduce turnover by 5%. With cost estimates for employee replacement typically ranging between one half to one year of annual salary, the impact on financial performance of a decreased turnover rate is significant. Employee-selected scheduling through functionality such as employee selfservice, shift bidding and shift trading, builds a professional working environment while reducing unplanned absentee rates, last minute outside agency and inhouse overtime costs. 10
11 Achieving Magnet Status As you improve the performance of your workforce and the quality of the working environment you provide for RNs, the effects transcend the immediate financial and patient care benefits. The solutions delivered as part of Infor for Healthcare, combined with the practices they enforce and support, will help you move toward the achievement of Magnet Status a powerful tool in attracting and retaining the best talent possible. Magnet Status was created by the American Nurses Credentialing Center (ANCC) to: Recognize health care organizations that provide the very best in nursing care and uphold the tradition within nursing of professional nursing practice. The program also provides a vehicle for disseminating successful practices and strategies among nursing systems. To achieve Magnet Status, organizations must meet the requirements of each of the 14 Forces of Magnetism categories as defined by the ANCC. Infor for Healthcare was designed with these best practices in mind. The solution delivers the functionality necessary to support your efforts in achieving Magnet Status in several of these areas, including: 11
12 Personnel Policies and Programs Formal, informal, and ongoing regular performance appraisal processes are evident and include self appraisal and peer review The peer review requires identifying nurses that have worked together on the same shifts, and in some cases, nurses that have followed nurses on subsequent shifts. Infor s fully extensible solution allows organizations to implement robust Assignment Sheet functionality. This can be utilized to automate the process of identifying staff most appropriate for peer review, thereby saving many hours of management time. Demonstrate how trending data is used in the formulation of the staffing plan and to acquire necessary resources Workbrain Intelligence allows for the analysis of staffing requirements and actual staffing across time. Recording patient census or acuity data for each shift allows more detailed analysis for projecting and understanding labor requirements. This sophisticated analysis of staffing and scheduling data, enables organizations to build sound, intelligent staffing plans. Furthermore, Infor for Healthcare ensures that you can schedule and allocate staff with the appropriate skills across the organization to meet patient needs. Explain how staffing adjustments are made in response to fluctuating patient workload and acuity (e.g. use of agency, float staff, overtime). Infor s Multi View Scheduler, in conjunction with census and acuity data, provides real-time coverage information across the entire organization. This information allows organizations to respond to ongoing real-time changes in staffing requirements. Also, reporting facilitates analysis of overtime, agency utilization, or other measures employed to respond to changing demands for labor. Infor alerts proactively inform managers and schedulers of potential staffing issues, so the can be addressed before they become issues. 12
13 Demonstrate mechanisms by which direct care nurses are educated about matching staff assignments to patient needs and staff member skill sets and experience The Infor Skills and Training module, and the qualifications concept, allows the person making the patient assignments to readily access staff member skills, and match those skills to the type of patient being assigned. Within the Multi View Scheduler, the scheduler can easily search for staff members with specific skills, assess the availability of that staff member and schedule them. Professional Models of Care (Staffing Systems) Provide representative examples that depict the scheduling process and describe how scheduling is tailored to the patient population, unit needs, and the needs of individual staff members The rules-based Real-Time Self-Scheduler allows managers to establish unit specific scheduling rules to ensure the needs of the patient population are met. The manager establishes coverage requirements for each skill for the schedule period, and the specific rules employees must adhere to when self-scheduling. Employees have maximum scheduling flexibility, while simultaneously meeting the needs of the unit and patient population. Provide several examples of how direct care nurses influence scheduling. Infor is a web-based solution, allowing staff members to access the system from home or any location with a web-enabled PC. Through this web-based selfservice functionality, employees can create their own schedules, request leave, trade shifts with other qualified employees, define availability in addition to a variety of other functions. Describe how the various levels of nurse leaders ensure that the utilization of personnel resources is consistent with the established staffing plan, scheduling plan, patient needs, and model of care. Workbrain Intelligence reporting capabilities allow detailed analysis of staffing at a granular level, enabling you to assess the effectiveness of meeting the staffing plan. This root cause analysis enables organizations to identify trends, and build intelligent staffing plans to mitigate future challenges. Also, scheduling rules enforce staffing policies real time, ensuring compliance with the organization s staffing plan. 13
14 Quality of Care (Patient Safety): Describe the process by which innovative patient safety programs or initiatives have been developed, implemented, and evaluated. Infor enables managers to define the rules governing employee self-scheduling at a granular level. Also, schedule compliance rules can be configured so that when the manager is making schedule edits, scheduling rules are enforced in real-time at the time of the scheduling event. As a result, scheduling situations that may cause fatigue-related errors are identified and eliminated before patient safety can be compromised. Professional Development: Identify clinical skills and/or competencies recognized by nursing as requiring formal credentialing and privileging mechanisms Infor for Healthcare comes complete with a skill and training module which allows healthcare providers to track and report staff credentials, competencies, licensure, formal education level, and other qualifications. This information is leveraged by the Multi View Scheduler and Real-Time Self-Scheduler to ensure that employees with the appropriate skills are scheduled. Infor for Healthcare was designed to meet the needs of your organization while creating an empowering professional work environment for staff members. The robust self-service capabilities provide nurses with an opportunity to build a schedule that accommodates their preferences while ensuring that all relevant workforce rules and required nursing skills are taken into consideration, fostering a greater work/life balance. Conclusion Creating a more positive work environment for your staff while delivering unparalleled quality of care for your patients is the ultimate goal of any healthcare organization. But successfully creating such an environment has never been easy. Infor for Healthcare helps you overcome these challenges and create a world-class 14
15 healthcare organization. We accomplish this by helping you optimize the performance and utilization of your single greatest asset your staff. Through Infor for Healthcare and its staff and patient-centric approach to workforce management, you can reduce costs, create a more positive work environment and ultimately improve the quality of care that your patients receive. You ll also successfully meet stringent regulatory and voluntary accreditation standards, ensuring that your organization remains a center of excellence and becomes a magnet for increasingly scarce nursing talent. 15
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