Deploy These Lean Staffing Tools to Improve Service and Reduce Costs – Here is How – Part 7 of 12

Lean staffing improves service and reduces costs

Practice Financial Management – Insights & Tips From MedCV That You Need to Quickly Maximize Your Income

Financial Improvement

Hospitals and medical groups are finally shaking off the economic fallout of the Covid-19 Pandemic, but now historic inflation and looming economic uncertainties continue to place significant pressure on them to improve their financial performance. That’s why John Rezen (FACHE, MHA) in collaboration with MedCV has brought back this series of 2-3 minute reads on how You can assess and improve your practice financial performance in 12 essential areas. Each installment will help you and your team quickly add cash to your bottom line by allowing your practice to work smarter and harder. The following checklist of performance measures will 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 in Blue and upcoming segments are in Black.

Expenses

  1. Staffing minutes per encounter
  2. Average staff pay rate per hour
  3. Providers’ pay per wRVU
  4. Service costs-to-revenue
  5. Supply and drug costs-to-revenue
  6. Overhead costs-to-revenue

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 and your team have earned. So let’s get started!


Tip 7 of 12 – Staffing Minutes per Encounter

Non-Provider Staffing Levels:

a. Assessment: Apart from provider compensation, workforce staffing is typically the largest contributor to physician enterprise expenses. 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: The initial step in staffing management 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 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 ensure 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, is driven by patient demand and involves 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 has a degree of time dependency. There is greater freedom to schedule this work, however. Staffing requirements can be smoothed through cross-training followed by distribution of business work during periods of low patient interactive work demand.

The second step to optimize staffing is through the application of activity-based and lean workflow 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 cost drivers to the activities, leading to a quantification of full-time equivalent (FTE) staffing needs. The deployment of these tools gives managers a better 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.

The final step to prevent overstaffing 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.


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.


Stay tuned for Part 8 of 12: Average Staff Pay Rate per Hour next week. If you can’t wait that long, no problem, just contact John for the full 12-part series. 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 newfound business insight with your group or hospital administration.

John Rezen

John Rezen, CAPT, USN (Ret), FACHE, MHA, LSSBB, CRCR
President & CEO
Value Health, LLC
jrezen@valuehealth1.com

MedCV Advisory Board Member
https://www.linkedin.com/in/johnrezen/


Your Career is More Than Your Practice

MedCV is a Private Credentials Vault App built specifically for Physicians and Advanced Practice Providers where you can manage & control your most valuable career and practice documents, remind you of license and certification expirations, track your CME, and of course… even find your next great job! Additionally, MedCV includes important tips, tools, and resources to help you navigate the ever-changing “Business of Healthcare.” Join the MedCV community if you haven’t already!

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