Labor Management Standards Development in Healthcare ... 2017... · 3) Collect productivity targets...

Copyright © 2017 S.L. Furterer

Labor Management

Standards Development in

Healthcare: Flaws and Best

Practices

Sandy L. Furterer, PhD, MBAASQ Certified Six Sigma Black Belt, ASQ Certified Quality Engineer,

ASQ Fellow, Master Black Belt

Associate Professor, Engineering Management, Systems & Technology Department

University of Dayton

IISE Annual Conference May 20171


Table of Contents

Presentation Objectives

The Problem

Work Measurement Methodology

Critical elements

Example of Standard Calculations

Fatal Flaws of Healthcare Productivity Setting Practices

Recommended Labor Management Standard Development Practices

Conclusions

2



3



Describe flaws of healthcare organization in productivity

setting practices

Describe the labor management setting standard

requirements

Describe a best practice methodology for setting healthcare

labor management standards

4


The Problem

5


The Problem

Setting labor management standards is critical in

healthcare, Why?

50% to 70% of healthcare costs are attributed to

labor costs

Labor represents more than half the cost of

business in a healthcare facility1

Healthcare organizations can use poor labor

standard setting practices, with “fatal flaws” that

negatively impact morale and productivity.

6

1 American Hospital Association, aha.org


Work Measurement

Methodology

7


Work Measurement Methodology1

8

1 Smith Jr., George, L., Work Measurement, A Systems Approach, Grid Publishing, Inc., Columbus, Ohio 1978

State Objectives

Notify appropriate

persons

Determine scope

Select operator

Establish activity elements

Conduct the study

Specify the allowances

Test standard

Gain agreement


Critical Elements

9


Critical Elements for Valid Work

Measurement & Setting Labor

Management Standards

There are critical elements that must be applied to develop an appropriate

labor standard:

The actual work performed should be observed and measured to

develop the work standard.

The unavoidable delays should be identified through observation, and

an allowance be applied to the performance factor, so as not to

penalize the operator for delays beyond his or her control, that are

systemic to the work design. Only through application of process

improvement efforts can these unavoidable delays be removed, and

therefore enable a tighter standard.

The work standard should be agreed to between management and the

operator.10


Example of Standard

Calculations

11


Example of Standard Calculations

Example of developing work standards in the

operating room.

1) Define job functions, group by category

2) Identify actual number of Full Time Equivalents (FTEs)

3) Collect productivity targets of FTEs, management

determines target goal, using 25th percentile

4) Set standard & assess performance

12


Example of Standard Calculations1) Define job functions, group by category

13

Job Category Job Function

Management

Executive Director

Nurse Manager

Surgery Coordinator

Professional (non-nurse) Coordinator

Perfusionist

Professional (direct) Clinical Nurse I

Clinical Nurse II

Clinical Nurse III

Clinical Nurse IV

Professional (non-direct) Nurse clinician

Support Clinical Assistant I

Clinical Assistant II

Clerical Clinical Support coordinator I

Inventory control specialist

Inventory control coordinator

Scheduling coordinator

Technical OR Tech I

OR Tech II

OR Tech III

TOTAL

These are pay

grades, and do not

correlate directly

with work

performed


Example of Standard Calculations2) Identify actual number of Full Time Equivalents (FTEs)

14

Job Category Job Function Full Time Equivalents

(FTEs)

Hours Worked Per Pay

Period (80 hours)

Management

Executive Director 1.0 80

Nurse Manager 1.0 80

Surgery Coordinator 3.1 248

Professional (non-nurse) Coordinator 1.1 88

Perfusionist 3.6 288

Professional (direct) Clinical Nurse I 8.6 688

Clinical Nurse II 14.9 1192

Clinical Nurse III 7.6 608

Clinical Nurse IV 2.7 216

Professional (non-direct) Nurse clinician 4.4 352

Support Clinical Assistant I 10.6 848

Clinical Assistant II 2.5 200

Clerical Clinical Support coordinator I 2.3 184

Inventory control specialist 1.0 80

Inventory control coordinator 1.9 152

Scheduling coordinator 2.1 168

Technical OR Tech I 12.2 976

OR Tech II 7.4 592

OR Tech III 1.8 144

TOTAL 89.8 7184


Example of Standard Calculations3) Collect productivity targets of FTEs, management

determines target goal, using 25th percentile

15

Productivity Operating Standard = Productive Hours (PH)

Unit of Service

Productive Hours

Per Number Cases

Based on target

hours for 25th

percentile

092.8799

8462


Example of Standard Calculations4) Set standard & assess performance

16

Productivity Operating Standard = Productive Hours (PH)

Unit of Service

610.7799

6080

Productivity Operating

Standard for Year in OR

Based on target

hours for 25th

percentile


Example of Standard Calculations4) Set standard & assess performance

17

Hours are

“statistically”

stable, but

Workforce

Management

Policy Violations

are investigated

0

500

1000

1500

2000

2500

3000

3500

1/1

/201

1

1/1

5/2

01

1

1/2

9/2

01

1

2/1

2/2

01

1

2/2

6/2

01

1

3/1

2/2

01

1

3/2

6/2

01

1

4/9

/201

1

4/2

3/2

01

1

5/7

/201

1

5/2

1/2

01

1

Ho

urs

Date

Total Worked Hours

02 Management

03 Professional(Non-Nsg)

04 Professional(Nsg-Direct)

05 Professional(Nsg-NON-Direct)

08 Support

09 CLERICAL

10 Technical

Department # Workforce

Management Policy

Violations

Radiology 4

OR 3

ED 2

Outpatient 1

Inpatient 6


Fatal Flaws of Healthcare

Productivity Setting Practices

18


Fatal flaws

Standards setting based on benchmark databases and arbitrary standards, not based on actual work performed, where processes are neither designed for or are capable of meeting the standards set

Collect actual volume worked across the past year

Collect volume (inpatients, ED visits, OR cases, etc.)

Calculate labor standard = Productive hours worked / units produced

Note: productive hours includes training and orientation, just not paid time off

Review national productivity benchmark standard database

Select desired productivity level, say 25th percentile

Set based on desired level, not capable level

Not based on process improvement

Not based on your hospital factors

Not based on actual work performed

19


Fatal flaws

Standards based on organization structure, not work performed.

Operating room has many work functions whose work can vary:

Anesthesia activities: anesthesia room prep, patient assessment, monitor patient

Orderly activities: retrieve and setup OR, help to position patients, order surgical supplies, stock surgical supplies, clean and turn over rooms

Scrub tech activities: open and setup cases, assist in surgery with needed supplies and instruments, remove used instruments

Circulator nurses: Interview and assess patient’s readiness, document patient care, transfer patient care, record specimens

Department managers: mange staff, define staffing schedules, problem solve, manage crises, monitor time reporting, manage surgeon relationships, apply discipline, administer performance evaluations

Surgical coordinators: manage cases, update preference cards, interface with surgeons

20


Fatal flaws

Fixed departments expected to fluctuate with patient

volume in some hospitals

Process improvement group has 3 FTEs

If one of the process improvement analysts don’t work, the

department is “more” productive, which is counter-intuitive,

because we are not helping to improve processes

Using per-diem staff to augment work volumes when

highly skilled staff is not available, which induces pay

check variability for core staff

21


Fatal flaws

Standard is developed based on aggregate volume, but

work is managed daily

Hours worked is “statistically” stable, but if the

productivity targets are not met, assignable causes are

looked for and fear is driven into the organization

22

5/21/20115/7/20114/23/20114/9/20113/26/20113/12/20112/26/20112/12/20111/29/20111/15/20111/1/2011

400

350

300

250

Date_2

In

div

idu

al

Va

lue

_X=344.8

UC L=425.3

LC L=264.3

5/21/20115/7/20114/23/20114/9/20113/26/20113/12/20112/26/20112/12/20111/29/20111/15/20111/1/2011

100

75

50

25

0

Date_2

Mo

vin

g R

an

ge

__MR=30.3

UC L=98.8

LC L=0

I-MR Chart of 03 Professional (Non-Nsg)_2


Fatal flaws

Not incorporating systemic process improvement

Driving fear into the workplace

Expecting associates to meet productivity standards that

are unrealistic, not based upon the actual work and

process capability, and for unavoidable delays that they

cannot control, creates fear and poor morale

23


Recommended Labor

Management Standard

Development Practices

24


Recommended Labor Management Standard

Development Practices

Base productivity standards on actual work across service lines

o Create a cross-functional productivity standard based on the functions that do the work across a service line.

• Will help to eliminate cross-purpose goals

Example: Flexing off housekeeping to meet productivity when patients are being discharged

Create productivity standards based on daily work and volume patterns

Create standards based on day of week, time of day, seasonality and other appropriate factors

Perform work sampling to identify unavoidable delays

Use work measurement methods and tools25


Conclusions

26


Conclusions

Presentation provided flaws, examples and best practices

for labor standard setting

This topic is important to help hospitals manage labor,

which contributes to 50% to 70% of hospital costs

27


28

Questions & Contact

Contact Info:

Sandy Furterer

[email protected]


References

American Hospital Association, aha.org, 2011

Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations,

1776.

Smith Jr., George, L., Work Measurement, A Systems Approach, Grid

Publishing, Inc., Columbus, Ohio, 1978.

29

Labor Management Standards Development in Healthcare ... 2017... · 3) Collect productivity targets...

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