First off, let's define productivity. Productivity = a department's input divided by that same department's output.
How to calculate productivity:
This calculation shows what the actual department's metric is (i.e., 1.62 hrs/procedure). This tells us that this department is actually using 1.62 hours for every procedure they perform.
This calculation shows what the budgeted department's metric is (i.e., 1.4 hrs/procedure). This tells us that this department is expected to use 1.4 hours for every procedure they perform.
To calculate a department's productivity index, we need to divide the department's targeted hours by the department's actual hours. In this case:
1.4 hrs / 1.62 hrs = 86%.
If this calculation is less than 100%, it means your department is under-performing and using too many hours for each procedure being done. If this calculation is greater than 100%, it means your department is over-performing and using fewer hours for each procedure than what was originally budgeted.
So where's the best place to be? The goal is to manage your department's productivity index to be at or slightly below 100%.
Now that we've established what productivity is and how it's calculated, let's talk about productivity's real-world practical use in a clinical setting.
Putting productivity to work
Since labor is the largest component of healthcare costs, with some places as high as 60% of net revenue, we should spend the majority of our time managing department expenses. And let's not forget patient care reimbursement is going down - not up.
Now, the biggest challenge facing clinical managers is providing quality patient care and staying under budget. It used to be said that we should monitor the productivity in our department on an ongoing basis.
However, this is no longer true.
What we should actually be doing is MANAGING the productivity in our department on a near real-time basis. The goal for every clinical department should be to make productivity management part of the daily routine. This is the only way to truly manage your staff based on the department's workload.
This graph shows the importance of daily productivity.
As you can see, the blue line (which is this department's productivity index) wavers below the lower threshold on many days. The smart manager will look at yesterday's productivity index and compare it to today's patient and staffing schedule. Staffing adjustments should be made as early in the day as possible and should be based on the anticipated patient schedule for the day.
In an ambulatory setting, where the patient load is all scheduled, daily productivty management is a very straightforward task. One can very easily determine how many staff hours are needed to take care of the schedule.
Where there's not a patient schedule (like at a walk-in clinic), daily productivity management becomes more of an art than a science. Minimal staffing guidelines, along with supplementary staff, become necessary and staffing will often need to be adjusted throughout the day.
In summary, best practice for staffing an ambulatory department should include a productivity management tool that delivers daily productivity reports. This is the only way the department will have a fighting chance of maintaining a net profit while ensuring great patient care is delivered.
This post first appeared on Action for Better Healthcare.