Cost targets that haven’t been achieved, quality metrics that stay put, write offs that won’t go away… sound familiar?

Despite hiring consultants, assigning process improvement teams and redesigning workflow, hospitals across the country struggle with stagnant metrics. Not only is this frustrating, but having ineffective processes and roles is costly.

At a time when most healthcare systems have cost reduction targets of over $100 million, it is clearly time to challenge conventional wisdom and contest organizational inertia. The path forward is a purpose-built organization.

A purpose-built organization is one in which the roles are specifically designed and staffed to produce the output that is needed in the most efficient manner. By employing a built-for-purpose strategy across your organization, you will not only be able to improve performance on important metrics, but also drive out a significant amount of excess cost.

Most importantly, we know that doing more of the same will only get us more of the same. Building-for-purpose is a way to break that cycle.  To build a purpose-built organization, begin with the end in mind: ‘What results does our organization really need?’ Then begin designing roles and processes that are created specifically to achieve that outcome. Compare that to the current state and you will find a canyon between what you need and what you have. That canyon can be very costly.

Next, identify a metric that will not move, perhaps length of stay (LOS), overtime expense, level of care write offs, cost per case, and ask yourself: ‘Is this process, role or department producing the results we need?’

Then start asking hard questions:

How do staff spend their time? How do they prioritize their work? Start by asking the staff what they do… what they really do. What tasks are they responsible for? How much does time each one take? Now, find out how they prioritize their work. Perhaps that metric that won’t move is the task that always falls to the bottom of their list, or they don’t have the tools and empowerment to do the task well. Perhaps, none of the metrics they are responsible for move because they can never dedicate the attention needed to drive results. The point is that your #1 priority is not theirs.

Then look at the level of skill or licensure needed to perform each task. Are staff and managers doing tasks that don’t require their level of licensure and experience? Are they assigned tasks that they don’t have the expertise to fulfill and then constantly have to coordinate with others to complete them? When digging this deep into how work gets done, there is no doubt that you will find mismatches between task and skills. And in these mismatches are inefficiencies that contribute to unnecessary labor expenses. By defining purpose built roles in which the skill level matches the output needed, you will not only drive efficiency but also improve employees’ job satisfaction.

Are staff members productive for their entire shift? This sounds very basic and most managers would answer “yes” without thinking twice. But take a walk around your facility at 7 a.m. and at 2 a.m., and you will likely find otherwise. Are the people who clean beds busy at 7 a.m. or waiting for patients to be discharged? Are the nursing aids on the units productively caring for patients at 2 a.m. or productively managing their Facebook account? The key is to define what you need from each role, when volume of that activity is highest and lowest and staff accordingly. You’ll see a decrease in worked hours, over time expense, and overall labor cost.

Are roles flexible enough to lend a hand during volume surges? Often, roles and the skills of people in those roles, are narrowly defined. But when volume spikes, they don’t have the skill set to pitch in. On paper, it may defy the skill mix optimization principles, but having a higher skilled, higher paid, flexible workforce can actually reduce labor cost, not to mention increase employee morale.

Clearly, there is no single approach for creating purpose-built roles, but there are questions to ask that will lead you down the right path for your organization. However, once the gaps have been identified and new roles proposed, arguably the most important next step is to create a compelling case for change.

Unfortunately, this is where these improvement ideas often fall apart. The data is not readily accessible, the analysis are too time consuming, and leaders are hesitant commit without solid analysis showing the benefits. Thus the purpose built improvements are not budgeted, no action is taken. And business as usual continues.

To break that cycle and to effectively bend the cost curve on a continuous basis, it is critical commit to a purpose-built approach. Clearly new approaches are needed and this is an important one to consider for your organization.

Liz Kirk, Contributing Writer
Liz Kirk is vice president of cost management solutions at Strata Decision Technology. Prior to joining Strata, she was responsible for cost reduction and revenue improvement at Northwestern Memorial Hospital in Chicago.

June 19, 2014
Written by Liz Kirk