Business Foreacasting

Productivity and Forecasting

Demand in healthcare, by nature, can be hard to predict. A fundamental part of care delivery is being prepared for the unexpected, whether that be the effects of a natural disaster, large-scale safety event, or global pandemic. However, that does not mean that daily staffing patterns and annual budgets should be buffered to accommodate the “what-ifs.” Now, more than ever, it is important for hospitals and health systems to use historical performance and current volume trends to more accurately forecast service utilization. With this insight, appropriate resources can be allocated, labor costs kept in check, and greater operating efficiencies gained.

Productivity plays an essential role in establishing a proper balance between staffing needs and anticipated volumes. An effective productivity system includes all facets of operations, from patient care areas to support services, and provides external performance comparisons from which realistic internal goals can be developed. Productivity metrics should incorporate all labor hours, whether direct care, indirect care, or administrative, and be continuously monitored against a variable volume statistic. Approaching performance improvement in this way ensures that departmental staffing is frequently flexed to best meet overall service demands.

In the past, productivity had been viewed as a “once in a while” exercise in assessing improvement opportunities and capitalizing on existing cost savings. Gradually this perception has shifted in the eyes of healthcare leaders with productivity taking on a greater role in routine management strategies. Executives have realized that consistently making small operational changes is easier and more impactful than a large overhaul every few years. Immediate, widespread change can negatively affect staff morale and community perception. Embracing productivity as an annual practice, much like a budget cycle, leads to greater sustainability.

The COVID-19 pandemic has taught healthcare, as an industry, just how quickly care delivery can change and how important volume-based staffing is in mitigating recovery. Now healthcare leaders are evaluating pre-COVID volume trends and applying gradual growth projections to their performance goals in order to keep operations in the black going forward. Demand forecasting is being done on a quarterly basis and, with the help of bi-weekly productivity monitoring, staffing levels are being adjusted in a “real-time” manner to appropriately flex to current utilization rates. In addition, managers are taking a closer look at staff capacity to determine the tipping points for when further support may be needed, sustaining the inadvertent gains that COVID-related furloughs, exits, etc. have created, and only hiring when truly necessary.

ALTIUS continues to assist our client hospitals and health systems in their endeavors to make productivity and effective volume forecasting a routine part of their operations at all levels. We provide the data and tools needed to properly establish achievable goals, track performance, and adjust based on rebounding volumes.

Let the ALTIUS team support your organization in establishing a meaningful productivity process that will yield lasting results! Reach out to us directly today to learn more.

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