Changes in reimbursements (Margins) Increase in both self pay and charity cases Labor percentage of operating expenses

Labor expense percentage at profit hospitals 42 – 47% Labor expense percentage at not-for-profit hospitals 50 – 56%

1 – 2 % potential reduction in labor expenses. A 1% labor expense reduction at a 600 FTE hospital with an average hourly rate of $25 = $312,000

Catch off budget practices earlier to can minimize or prevent reductions in force or layoffs

Provides department managers with tools to manage to operating budgets

Gives executive leadership tools to specific reports provides managers immediate feedback (Daily and Cumulative scorecards for pay period)

• Labor Hours

• Volume Statistics

DailyEntry

• Hours Target Met?

Daily Review

• Hours Target Met?

Pay Period

• Corrective Action

Pay Period

Potential to reduce labor expenses by 1 – 2 %

Easy to use (Department enters Labor and Volume data from prior day)

Linked department and facility-wide reports for executive review of departmental productivity

Excel based worksheets, no need for system upgrades

Loads on hospital intranet

Department specific reports provides managers immediate feedback (Daily and Cumulative scorecards for pay period)

Labor Variance Reporting

Fixed and variable departments reports

Managers can take corrective action, eliminate unfavorable variances within a pay period

Green for favorable results, Red for unfavorable results

Helps to eliminate or minimize RIF’s

All non-data entry cells are protected

Reasonably priced, includes training

Shows department productivity results for every pay period of the fiscal year

Shows Pay Period Labor Hour Variances by highlighting and results

Shows Pay Period FTE Variances by highlighting and results

Calculates FYTD Totals and Average Pay Period results

Volume and Labor entry fills all worksheets

Shows Productivity by day of week

Shows average daily volumes

Shows average daily labor usage

Shows average hour variances by day of week

Assists managers in making staffing decisions

Shows if managers are making staffing decisions based on volume levels

Report for each for every pay period and FYTD Summary Report

Provides Executive Leadership with productivity results for EVERY department

Report shows productivity results for each executive

Report shows total facility productivity results

Report shows departmental compliance with data entry

Number of Hospital Departments

Percent of Departments Meeting Productivity Target

Percent of Departments Missing Productivity Targets

Number of Departments Meeting Productivity Targets

Number of Departments Missing Productivity Targets

Average productive hours improvement using the Productivity Tool for off-budget departments

Potential hours savings from off-budget departments

FTE savings per pay period

Average Hourly Rate

Potential pay period labor expense reductions

Number of yearly pay periods

Labor Savings from Example

80

60%

40%

48

32

15

480

6

$25.00

$12,000

26

$312,000

Facility FTE's

Salary Expense (AHR = $25.00)

Savings with a 1% Productivity Improvement

First Year ROI

300 $15,600,000 $156,000 5.2 : 1

375 $19,500,000 $195,000 6.5 : 1

450 $23,400,000 $234,000 7.8 : 1

525 $27,300,000 $273,000 9.1 : 1

600 $31,200,000 $312,000 10.4 : 1

675 $35,100,000 $351,000 11.7: 1

750 $39,000,000 $390,000 13.0 : 1

825 $42,900,000 $429,000 14.3 : 1

900 $46,800,000 $468,000 15.6 : 1

975 $50,700,000 $507,000 16.9 : 1