One of the most critical processes in acute care today isn't happening at the patient's bedside. Or in the units where clinicians use leading-edge treatments and devices to increase care quality and improve patient outcomes. It's happening in the offices and at the desks of nurse managers and executives who devise labor schedules for diverse staffs with varying levels of experience, seniority, and availability.
Such a tactical, clerical task might not seem overly important to outsiders. But, as anyone who's held that role can tell you, managing the staff's schedule is both a significant challenge, and a never-ending one. Creating the right mix of skilled employees, meeting each employee's availability, constraints and preferences, and controlling associated costs in the face of constantly fluctuating workloads requires countless hours. No one wants to create a sub-optimal schedule that less-than-fully meets the needs of patients, nurses, payers, and the institution, or that introduces the possibility of unacceptable risks.
The single largest risk, of course, is any compromise in patient care. An improperly developed schedule could, for instance, create skills mismatches and experience gaps that affect the ability to deliver timely and appropriate patient care. That can affect patient safety, patient satisfaction, and staff morale, and potentially induce turnover. What's more, a flawed schedule also drives up costs through the use of overtime and travel nurses, and departments can quickly exceed their budgets. Over-reliance on key personnel and any (accurate or inaccurate) perceptions of favoritism or schedule imbalances can further erode staff satisfaction.
The fact is, in acute care organizations, labor costs can account for 60% of operating expenses, and a patient care department's labor expense can even reach 80% of the department's total expense. At our facility, Banner Thunderbird Medical Center in Glendale, Ariz., we faced many of these same challenges firsthand. Thunderbird is one of 23 hospitals and healthcare facilities in the Banner Health System, one of the largest nonprofit health systems in the country, operating in seven western states. It's a 469-bed acute-care facility with 2,750 employees and 127,196 patient-days, more than 31,000 admissions, 76,500 ER visits, 3,900 births, and 5,900 inpatient surgeries annually.
Strategies, practices, and technology
The diversity of Thunderbird's patients, services, and staff meant that there were hundreds of policies and thousands of shifts to reconcile each week. Unfortunately, as recently as just a few years ago, we were still creating most of our schedules for the entire Thunderbird facility using pencils and paper. Each month, nurse managers across the hospital spent anywhere from six to 14 hours creating basic four-week schedules for their units and departments. Inevitably, those fragile schedules led to daily crises - a department cutting or seeking staff - that consumed additional management time.
The result? Thunderbird used an extraordinary amount of travel nurses to plug holes in staff schedules. During some peak periods, we may have had as many as 30 travel nurse FTEs per pay period in various units, including surgery and the EDR. While travel nurses are valuable and talented people, our preference is to staff through our own employees. That helps create greater continuity of care, ensure closer compliance with our defined clinical protocols, and lower our premium labor costs, which was $19 million in 2008 and $9 million in 2010.
While Thunderbird had been fortunate enough to avoid major compromises in patient care and other serious pitfalls that inadequate scheduling can create, we also recognized that "good fortune" isn't a sustainable management strategy. To address our scheduling shortcomings, we deployed an automated workforce scheduling solution and developed a series of appropriate strategies and practices to streamline our scheduling, control costs and, most importantly, preserve patient safety and care quality.
To facilitate what we understood was a significant change to our organization and culture, we established a meaningful collaboration between our financial and clinical services teams. That's best exemplified by the creation of a new staff position - Clinical Operations Consultant-to help our managers learn how to maximize the value of labor scheduling in their departments. Over the course of 18 months, starting with our progressive care units, we had as many as 40 separate one-on-one consultations in 25 separate departments to help nurse managers dive deeper into the new scheduling tool finding ways to optimize and improve the scheduling process and result.
The lesson here: for our institution, implementing the scheduling solution was about process as much as it was about technology. It wasn't a case of "build it and they will come" - a true training cycle was necessary to get the level of adoption we sought. A simple five-minute conversation and demo isn't a viable training strategy. We needed to ensure comfort with and competence in using the new scheduling system.
The education process now included staff. We met during staff meetings or during report times and then conducted follow-up meetings about two weeks later to gauge progress. Additional classes were also made available to help employees better understand the system. That need extended across to the hundreds of people we employ, showing them how to request certain shifts and PTO and access their upcoming schedules through our new staffing solution. This access empowered our employees to act accordingly, allowing the process to be more flexible, and enabling staff to have better work-life balance-and all with minimal intervention from managers.
Fortunately, this deployment strategy was successful for Thunderbird. We were able to decrease our overtime and premium labor costs by approximately 50%. As we started to move into the 2008 recession, this focus on managing healthcare dollars was very much aligned with our organizational needs. Our scheduling success wasn't merely focused on "getting to a budget." We had to simultaneously ensure that patient care was never compromised, even in the face of variable patient volumes.
Impact on managers and nurses
Without question, the beneficial impact of the new scheduling system - and our underlying finance/clinical services collaboration - at Thunderbird was significant. Managers spend no more than one to three hours balancing the schedule to accommodate PTO requests and appropriately spread out the skills and experience needed in different areas. While there will always be daily issues and interruptions to the schedule (such as a sick day), there are far fewer scheduling concerns. As a result, nurse managers are able to spend far more time on patient care, mentoring, managing, teaching, and focusing on other tasks that are more fulfilling and rewarding.
For our nurse employees, the new schedule has also been very well-received. Today, nurses can electronically enter their schedule requests and take advantage of more choices and options than before. They can access the system on PCs, kiosks, and hundreds of data-collection terminals around the facility. The system's rules-based scheduling eliminates questions of equity which has translated into greater job satisfaction.
Identifying opportunities to improve
After the deployment of its workforce scheduling system, Banner Health strengthened the partnership between our clinical team and the finance department by implementing a labor analytics software package at Thunderbird from the same vendor. One strategy we assumed was to reinforce this program by asking nurse managers to spend as little as five minutes a day using the system to engrain the habit of using the scheduler and create a level of comfort and familiarity. This enabled us to focus on our expected hours vs. exception hours.
Expected hours are the planned work hours in the employee's schedule. Any hours worked above and beyond the schedule are considered exceptions and "time over shift." These hours generally fall into one of the following conditions:
* incidental hours at regular rate (such as early clock-in or late clock-out)
* incidental hours at overtime rate
* manager-requested additional hours at regular rate
* manager-requested additional hours at overtime rate
* exception hours, such as missed meal periods.
The employee schedule must be accurate, which means frequent updating. Inaccurate employee schedules create exception hours. To reduce these exception hours, we followed a three-step process:
1. Provide additional education on the scheduling system, with an emphasis on identifying and managing exception hours.
2. Review and update the policy and procedures to ensure expectations are clear regarding exception time.
3. Ask managers to update employee schedules for accuracy.
Our focus on monitoring exception hours in just a handful of Thunderbird's departments translated into direct reduction of labor expense. The cumulative savings over a two-year period was $1.2 million, and our expectation is that the annual savings amount will be sustainable into the future as we continue to more effectively manage schedules and exceptions. Our use of automated scheduling systems has provided better data on how our facility allocates labor resources, including quantitative information on the efficiency of labor resources in all areas.
By using the tool's business intelligence, we've also been able to make smarter strategic decisions about our workforce, including non-clinical staff. For instance, our analytics showed us that, in our hospital's coding department, there were month-end spikes in exception hours. Further investigation revealed that, because coding deadlines typically occur at month-end, the department would add overtime (OT) hours to meet the demand. The answer was to cross-train more people to avoid the month-end crunch and reduce much of our OT costs.
Analytics are also providing our frontline managers with real-time visibility into workforce performance issues. They're now able to make quick, timely adjustments to labor levels and fluctuating patient volumes to further control their costs and improve productivity.
Collectively, our finance team expects that the use of labor analytics will achieve an estimated cost savings of $30 million over the next six years. Our vice president of finance has been a champion of this effort and has made it clear that tracking the schedules of employees and gaining real-time visibility into labor analytics data helps the hospital make better decisions that improve labor budgets and productivity.