Labor Solution Helps TX Hospital Save $500K a Month

January 11, 2017

CHALLENGE

“It’s a fast-paced, quick-change environment,” said Charles N. Rivera, director, financial operations at Doctors Hospital at Renaissance (DHR). The large hospital was using an ineffective home-grown tool to help manage labor. “We needed a tool to ensure that we were getting relevant data in front of our department heads so they didn’t lose sight of key metrics as the hospital was going through a growth mode.”

SOLUTION

DHR joined the Premier, Inc. (NASDAQ: PINC) GPO in September 2012 as an affiliate of SSM Health in St Louis. In short order, the organization quickly signed up for most other services and solutions that Premier offers. DHR began using the PremierConnect® Operations (OperationsAdvisor®) solution in September 2014.

“We went from not knowing much at all about Premier to having just about everything Premier offers,” Rivera said.

But it was a slow process in the beginning as the labor solution was installed and staff were introduced, trained and got comfortable using it, Rivera recalled. DHR began with a biweekly reporting model but found that the data was three weeks old before it got into department managers’ hands. “It was useful for identifying trends but not so useful in day-to-day labor management,” he said.

“We really started gaining traction and making significant productivity improvement when we adopted daily productivity reporting,” Rivera said. “That was the absolute key to having OperationsAdvisor work for our directors.”

The rollout of daily reporting began in mid-January with a handful of departments including two that were “struggling in a major way.” The process went so well that within two months all 110 departments were using daily productivity reporting. “It’s made all the difference,” he noted.

RESULT

In the past five months, savings have averaged about $500,000 a month. That was the goal. “Going forward, we want to sustain it,” Rivera said. And soon there will be 12 months of data, which will be helpful in setting targets and benchmarking during budgeting.

The home-grown Excel-based system was not well-understood and there was little buy-in from managers. “It was just another report from accounting that usually ended up in the delete box,” Rivera said.

“We now have a system they see as value-added,” he continued. “They were brought in at the beginning and have bought in over time. They are being held accountable too. They see my team adding value in a consultative role to help ensure they meet their productivity goals and stay off the list for improvement. That’s a great motivator.”

In addition to the daily productivity reports from PremierConnect Operations, Rivera and his team also provide managers with census reports every four hours. “That made the point that staffing is an ongoing process,” he said. “Light bulbs went off. Productivity changed after those reports started to go out. They started to manage to census. Productivity started to creep back up.”

The high level data provided throughout the day helps them make changes “on the fly” that they can see the next day in productivity reports, he explained. Rivera cited other dividends. Patient throughput has increased, especially in areas where procedures are performed and productivity is tied to volume. It has not only helped improve labor management but also helped increase revenue because managers pay closer attention to charge entry.

“There are no buy-in issues now. Most comments today are positive. They see it as a tool in their toolbox to help them manage their departments,” Rivera said. “Yes, we’ve done well over the past 12 months. We’ll celebrate the good job by everyone, then we’ll begin to focus on the next 12 months.”

*     *     *

Doctors Hospital at Renaissance in Edinburg, TX, is a 530-bed physician-owned health system that offers some of the most comprehensive medical care on the U.S. southern border. Founded in 1997, DHR has plans to add 300 beds and significantly expand services including graduate medical education. The service area includes more than 1.3 million residents. Services include a full continuum of care in more than 70 different sub-specialties.

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