Part 7 of 12 – Deploy these lean staffing tools to improve service and reduce costs – Here is How

12 Part Series: MedCV Practice Financial Management – Insights & Tips You Need to Know About to Quickly Maximize Your Income

Tip 7 of 12 – Staffing minutes per encounter

Non-Provider Staffing Levels:
a. Assessment: Apart from provider compensation, workforce staffing is typically the largest single contributor to expenses in the physician enterprise.  Accordingly, prudent management requires continuous vigilance over this resource.  Two areas of resource management are required, staffing levels and pay per hour. 

To determine the staffing level opportunity, identify the difference between the actual minutes per encounter and the benchmark for this metric. Then multiply the difference by the number of encounters to get the total excess minutes. Divide the total excess minutes by 60 and multiply the result by the average hourly rate to identify the dollar value of opportunity on this factor.

(Note: The benchmark for this metric is typically calculated by converting the industry benchmarks on FTE per 100 encounters to staff minutes per encounter. This conversion creates a more actionable KPI for the organization.)

b. Improvement Action: An initial step in managing staffing is to complete weekly clinic plans at least a week in advance.  These plans should be in half day units, identifying each provider’s expected encounter volume and room assignments, as well as the dedicated staff and shared staff needs.   Applying a staffing to volume approach to planning will appropriately assign staff based on each provider’s volume.  In addition, when providers are out of the clinic with PTO, education, or for other reasons the staffing plan should reflect a reassignment of personnel to other duties.  The weekly clinic plans must also recognize the services provided for patients pre and post clinic to insure adequate staffing.   When scheduling staff it is helpful to distinguish between patient interactive work and business work.   Patient interactive work, such as answering the phones and patient check-in, are driven by patient demand and involve windows of opportunity to meet the patient’s needs.  Staffing must be adequate to consistently meet these opportunities.  Meanwhile, business work such as obtaining authorizations and records also have a degree of time dependency but there is greater freedom to schedule this work.  Staffing requirements can be smoothed through cross training and then distributing business work to periods of low patient interactive work demand. 

A second step to optimize staffing is through the application of lean workflow and activity-based management tools.  The lean workflow tool guides managers in identifying the process of care and all the activities required to serve the various patients seen by their providers.  The activity-based management tool is then used to apply workload and costs drivers to the activities,  leading to a quantification of full time equivalent (FTE) staffing needs.   The deployment of these tools gives managers a deep functional understanding of clinic operations and provides a framework upon which process improvements can be identified and wastes can be continually removed from the system.

A final step to prevent over staffing is to develop a staffing policy for the physician enterprise.  This staffing policy formalizes the process of adding and replacing positions by inserting an evaluation of workload, staff minutes per visit and clinic cost-to-revenue before positions are approved.  The policy should also set limits on overtime utilization as well as establish internal controls to monitor and address negative variations from the standards.

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Like we like to remind our physician members at the end of each of these 12 part series, as a physician, if this sounds like a lot of work and maybe even has your “business anxiety level” up a few notches, you are not alone. The great news is that your role in this should just be to make sure it gets done and that those who are going to be responsible and accountable for this can explain and report details about what the plan looks like and its status to you.

Share this article with your practice manager, group administration, or hospital administration to make sure they are working on this or see what resources they have to get at this work. If they need help in getting started, they should consider connecting with John Rezen at Value Health. The key is to be able to have your baseline, you would expect your team to report to you the improvement(s) made and the results.

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Again, it’s in your best financial interest to make sure each of these 12 Key Performance Indicators are optimized, you understand them, and take action, even if the action you take is to share the series and your new found business insight with your group or hospital administration.

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Financial Improvement

Each of the 12 part “2-3 minute reads” in this Financial Improvement series provided by John Rezen, FACHE, MHA and your MedCV team can quickly add CASH to your bottom line just by having your practice “work smarter” for you. Even if you are not directly responsible for the management of your practice, knowing this information will help you make sure you are making the income you deserve.

As hospitals and medical groups emerge from the COVID- 19 economic shutdown, they will be faced with significant pressure to improve their financial performance. The following checklist of performance measures should help physician enterprises identify financial opportunities and accelerate their improvements. Below are the 12 topics, to read a previous segment, click on the name/link. The current segment is Blue and upcoming segments are Black.

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