Our team of Healthcare Industrial Engineers created this newsletter to share the industry’s best practices with leaders who can apply operational efficiencies in their daily work.
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Productivity targets help hospitals balance resource requirements with financial goals by budgeting specific hours for the workload in each department. To support operations, it is imperative that these targets are realistic and reflective of the department’s workload. Industry leaders ensure that the right staff are in the right place at the right time by budgeting efficient productivity targets that also support operations, quality outcomes, and patient satisfaction.
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The process of setting productivity targets can present a challenge to both nursing and finance leaders as they work together to identify the ideal goal. Many leaders rely on benchmark data to understand peer department performance, but can become discouraged when they discover wide variation. Zero based staffing is a data-driven method for establishing productivity targets that directly reflect operations.
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When calculating workload, don’t forget to include non-productive time and all department tasks! Typically, PTO, Jury Duty, and Bereavement are considered non-productive hours but be sure to validate with your local finance and HR teams.
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Psst... Depending on what is included, non-productive time can represent between 10 and 15% of total paid hours
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Is Your Department’s Productivity Target Reasonable?
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While zero-basing requires a bit more effort than referencing historical department performance or benchmark comparisons to set a goal, it is the most accurate way to establish productivity targets to support operations. Taking the time to understand operations to customize budgeted productivity targets builds confidence for C-suite and department leaders alike.
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Meeting the measurements of inpatient staffing productivity
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To evaluate the department's productivity, you must first establish the target or goal for the department if it were 100% productive. The target is determined with the following formula: measurement of work multiplied by the budgeted hours per patient day (HPPD) for a defined period.
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Daily Productivity Management: Reducing Labor Spend without Reducing Workforce
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Daily productivity management is considered an industry best practice because it requires no change to patient ratios, budgeted productivity targets, or compensation. A successful strategy ensures that leaders have access to daily productivity metrics, such as hours per patient day, and holds them accountable to their department labor productivity budget.
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ZERO BASED BEST PRACTICE GUIDE
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1) IDENTIFY REQUIRED HOURS OF OPERATION
Meet with the department leader to learn the hours of operation for their department. While hours of operation may be known, involving the leader in the zero basing process can be helpful in creating engagement and reducing distrust in set productivity targets.
In our example, Unit A operates 24 hours per day.
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2) QUANTIFY ANTICIPATED VOLUMES
Obtain at least one year of department census data to quantify anticipated workload volumes.
Unit A has a consistent census of 12 patients.
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3) CALCULATE TOTAL STAFF REQUIRED TO PROVIDE SERVICE
Determine the number of staff needed to complete the work. Partner with leaders to gain consensus on operational needs as they are the most familiar with the functions and processes on their unit.
Be sure to account for additional support tasks that require completion! Examples of additional support tasks can include cleaning, stocking, and scheduling. Time studies can be particularly helpful to estimate hours required to complete support tasks.
Unit A requires a staff to patient ratio of 1:4. With a consistent census of 12 patients, this will require 3 nurses. For simplicity, Unit A does not have additional support tasks.
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4) COMBINE HOURS OF OPERATION WITH STAFF REQUIRED
After determining the number of staff required for the workload and hours of operation, sum the total work hours.
Unit A requires 3 nurses for 24 hours each day. Hence, the total number of hours is 72.
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5) DIVIDE TOTAL HOURS BY WORKLOAD VOLUMES
To calculate your zero based target, divide total required work hours by anticipated volumes. If desired, these can be compared to historical targets to identify similarities.
If Unit A requires 72 worked hours, and anticipates 12 patients per day, the department’s target is 6 hours/patient day.
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6) INCLUDE FIXED STAFF IN CALCULATION
It is important that all staff paid out of a department are included in the calculation to align with financial budgets. Don’t forget to include all fixed positions, such as educators or department leaders, and non-productive time.
If non-productive time, such as PTO, is not included in your calculation, your targets may be understated by 10-15%.
Unit A also has 5.7 hours of education, 11.4 hours of management, and 12 hours of non-productive time per day. Factoring these in, the department’s target is 8.43 hours/patient day.
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7) CREATE AN ENVIRONMENT OF EDUCATION AND ACCOUNTABILITY
After all productivity targets have been set, meet with each department leader to communicate changes. High performing organizations engage leaders in the budget process and ensure that staffing plans are in place to support department budgets. Reviewing volume and FTE calculations builds trust with leaders by allowing discussion for any concerns about updated goals.
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