Cut costs, cut costs, cut costs. This is the mantra being sung all across corporate America and especially in healthcare due to the reduction of Medicaid payments. Labor typically represents about 65% of healthcare organizations costs. In corporate America, it is “do more with less,” but that doesn’t work in hospitals. A low nurse staffing level tends to lead to higher rates of poor patient outcomes such as pneumonia, shock, cardiac arrest, urinary tract infections, and all other sorts of other maladies.
How can budget strained healthcare organizations cut their largest expenditure, labor, without effecting patient care?
The easiest way to reduce labor costs is to reduce the amount of agency spending and overtime hours. Some CFO’s would love to implement a policy that says you cannot book staff through an agency or put a nurse into overtime, but this is easier said than done. What do you do when there is a critical hole in the schedule and there is no one available on staff to fill it?
The solution: Internal Float Pools. Health care organizations everywhere are attempting to build float pools to help manage their labor spending and reduce nursing burn-out.
Quite often, the biggest and the most well-funded hospitals in an area scoop up most of the qualified staff. They can guarantee the most hours and offer fancy ways to schedule shifts online. They also usually offer the highest pay. So how can healthcare organizations that are late to the game – or just need to increase the size of their float pool – compete?
- Try to reach a different group of people. Promote the flexibility of being able to work as much or as little as you want in order to recruit people who might be superb employees, but are not looking for full-time work.
- Market your float pool. Come up with a catchy name and advertise it. You can do word of mouth advertising through employee referrals or even try something like Google AdWords.
- Offer convenient and fun ways to pick up open shifts. For example, you can use a web-based solution (like ShiftWise) to send a text message to everyone qualified to work a particular shift. Regardless of what your float pool staff is doing at the time, they can pick up the shift right from their phone by responding to the text message.
- Offer different tiers of pay to incentivize good habits and bring on the right people.
- Make it easy to post their own availability. The best employees are also the busiest. Remove cumbersome fax machines, paperwork and time consuming phone calls by taking availability online.
The management of a float pool is different than other labor types and it does require a different philosophy and set of tools. However dramatic cost savings in labor can be realized once a float pool is fully developed and properly managed. Job satisfaction will go up and patient care will be improved. Healthcare CFO’s everywhere can finally catch a good night’s sleep because overtime and agency spending will only be a last resort.