Pur­su­ing pro­duc­tiv­ity

As a la­bor-in­ten­sive in­dus­try, health­care works to be­come more ef­fi­cient

Modern Healthcare - - BEST PLACES TO WORK 2016 - By Bob Her­man

TEXAS HEALTH PRES­BY­TE­RIAN HOS­PI­TAL Flower Mound, a small hos­pi­tal in the out­skirts of Dal­las, has prided it­self on the sat­is­fac­tion of its pa­tients and em­ploy­ees. But the hos­pi­tal also has taken mea­sures to en­sure it is equally pro­duc­tive.

Flower Mound, which has about 700 em­ploy­ees, uses la­bor an­a­lyt­ics soft­ware to staff ap­pro­pri­ately. It has an elec­tronic health record that’s fully in­te­grated with its par­ent sys­tem, Ar­ling­ton-based Texas Health Re­sources. And the hos­pi­tal has a Six Sigma black belt per­son on staff— some­one whose job it is to find and ex­tract waste­ful pro­cesses from the or­ga­ni­za­tion.

“We re­ally try to look and make sure our pro­cesses are solid and sound and ef­fi­cient as pos­si­ble,” said Spencer Turner, pres­i­dent of Texas Health Pres­by­te­rian Hos­pi­tal Flower Mound, which captured the No. 1 over­all rank­ing and top spot among providers on Mod­ern Health­care’s 2016 Best Places to Work in Health­care list.

Health­care or­ga­ni­za­tions in the post-re­form era, es­pe­cially hospi­tals and med­i­cal groups, are rou­tinely faced with the chal­lenge of hav­ing to do more with less. The Af­ford­able Care Act ac­tu­ally in­sti­tuted a la­bor

Health­care or­ga­ni­za­tions in the post-re­form era, es­pe­cially hospi­tals and med­i­cal groups, are rou­tinely faced with the chal­lenge of hav­ing to do more with less

pro­duc­tiv­ity ad­just­ment to Medi­care pay­ments. If health­care pro­duc­tiv­ity growth falls be­low the broader econ­omy, Medi­care re­im­burse­ment will be bent down­ward.

Yet from a pro­duc­tiv­ity stand­point, there is a lot of room for im­prove­ment in health­care, which his­tor­i­cally has lagged be­hind the rest of the econ­omy.

Hos­pi­tal pro­duc­tiv­ity fell an av­er­age of 0.2% ev­ery year from 2004 to 2013, de­spite mod­est gains in re­cent years, ac­cord­ing to the lat­est data avail­able from the Bureau of La­bor Statis­tics. That es­sen­tially means la­bor costs and cap­i­tal ex­penses out­paced the crude out­put of hospi­tals (pa­tient vol­ume and rev­enue). In­deed, in­pa­tient ad­mis­sions con­tinue to de­cline across the coun­try even though hir­ing has gone up.

Pro­duc­tiv­ity in­creased in most other in­dus­tries due in large part to ad­vances in tech­nol­ogy. In health­care, tele­health has the po­ten­tial to lower costs and in­crease ac­cess for pa­tients in re­mote ar­eas. Us­ing more physi­cian as­sis­tants, nurse prac­ti­tion­ers and tech­ni­cians to con­duct or help with rou­tine cases in­stead of doc­tors also could keep la­bor costs in check while main­tain­ing qual­ity care.

In some re­spects, health­care pro­duc­tiv­ity growth is some­what lim­ited be­cause the la­bor-in­ten­sive in­dus­try has to rely heav­ily on the well-paid work of doc­tors, nurses and other clin­i­cians. The air­line in­dus­try,

for ex­am­ple, re­placed ticket agents with kiosks. But ro­bots haven’t re­placed hu­man med­i­cal providers, at least not yet.

“The prac­tice of health­care it­self— the fun­da­men­tal of be­ing able to com­mu­ni­cate with a provider who can dis­cuss your is­sues, spend time with the pa­tient—those are all things that you can’t get rid of,” said Kyle Salem, chief of staff at Omaha, Neb.based con­sult­ing firm CQuence Health Group, the No. 1 sup­plier on the Best Places list.

The out­look for health­care pro­duc­tiv­ity gains is mixed. The ACA’s in­sur­ance ex­pan­sion in 2014, along with low job growth in the health­care sec­tor, ap­pears to have sig­nif­i­cantly boosted pro­duc­tiv­ity that year, ac­cord­ing to an anal­y­sis con­ducted by Paul Hughes-Cromwick, co-direc­tor of the Al­tarum In­sti­tute’s Cen­ter for Sus­tain­able Health Spend­ing, an eco­nomic think tank. But a surge in hir­ing over the past two years— al­most 675,000 health­care jobs have been cre­ated from Jan­uary 2015 to June 2016—could eat away at the in­dus­try’s briefly im­proved ef­fi­ciency.

Fur­ther, over the past sev­eral years more hospi­tals and health sys­tems have ei­ther be­gun em­ploy­ing physi­cians or added more em­ployed doc­tors.

Fi­nan­cial state­ments an­a­lyzed by Mod­ern Health­care show that physi­cian em­ploy­ment has re­sulted in higher la­bor costs, but ef­fi­ciency has not al­ways fol­lowed.

It’s worth not­ing that cal­cu­lat­ing pro­duc­tiv­ity within hospi­tals is not an ex­act sci­ence. Bureau of La­bor Statis­tics fig­ures, for ex­am­ple, do not take into ac­count the qual­ity of care or out­comes. “With health­care, there’s al­ways this ques­tion of un­mea­sured qual­ity as­sess­ment,” Hughes-Cromwick said.

For ex­am­ple, vol­umes could de­crease be­cause pa­tients don’t need to be read­mit­ted, or pa­tients are re­ceiv­ing care in am­bu­la­tory surgery cen­ters and other out­pa­tient set­tings that they once would have got­ten in hospi­tals.

With ad­mis­sions de­clin­ing, the larger num­ber of em­ploy­ees may be car­ing for a higher-acu­ity case mix of in­pa­tients.

“The tech­nol­ogy has im­proved so cer­tain types of ser­vices don’t re­quire hos­pi­tal­iza­tion,” said Brian Chan­sky, a Bureau of La­bor Statis­tics econ­o­mist who stud­ies in­dus­try pro­duc­tiv­ity.

Although many health sys­tems and com­pa­nies are mov­ing to value-based care strate­gies that en­cour­age more out­pa­tient care, a lot of the sys­tem still re­volves around the model of be­ing paid for each ser­vice or treat­ment. Fa­cil­i­ties that re­quire a big in­vest­ment, such as pro­ton-beam ther­apy cen­ters or di­ag­nos­tic fa­cil­i­ties, often are built with the in­tent of re­coup­ing money— pro­duc­tiv­ity be damned.

“The goals of the health­care sys­tem from a pro­duc­tiv­ity stand­point are often mis­aligned with the goals of the pa­tient and the pa­tient’s fam­ily,” Salem said.

Turner of Texas Health Flower Mound be­lieves root­ing out the wrong in­cen­tives and, more im­por­tantly, em­pow­er­ing em­ploy­ees to do the right thing may be the best ways to boost ef­fi­ciency.

“We’ve got a highly sat­is­fied work­force,” Turner said. “When you put those types of em­ploy­ees in an en­vi­ron­ment where you have re­ally re­fined pro­cesses, it be­comes a re­ally pro­duc­tive fa­cil­ity.”

Care­givers cel­e­brate be­ing named ICU Team of the Month for Jan­uary at Texas Health Pres­by­te­rian Flower Mound. #1 Over­all #1 Provider

#2 Over­all #1 Sup­plier Em­ploy­ees at CQuence Health Group do­nated more than 100 toys for the Sal­va­tion Army’s hol­i­day drive.

At a re­cent monthly awards cer­e­mony, the surgery de­part­ment at Texas Health Pres­by­te­rian Flower Mound was rec­og­nized for hav­ing the high­est pa­tientsat­is­fac­tion scores.

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