 7 steps toward gaining control of your labor costs
7 steps toward gaining control of your labor costs
As healthcare organizations face shrinking revenues and rising expenses, one cost-saving solution could lie in addressing your facility's labor costs.
Labor costs account for more than 60 percent of total healthcare expenses. Increasing turnover, rising vacancy rates, and temporary agency utilization all contribute to increasing labor expenses-partly because many healthcare systems don't efficiently manage these expenses and productivity.
Often, labor expenses add up unexpectedly, with overtime, extra shift bonuses, on-call and call-in bonuses, and other expenses necessary for safely staffing healthcare facilities. Unfortunately, these are typically bundled into the pay system and often go untracked and unevaluated. In many ways, they simply become part of the organizational culture.
However, there are many ways to identify and address additional labor costs; the key is to use processes that work for your organization. It is critical to know how much your actual labor spend is and where it is coming from. Once you begin tracking these expenses, you can begin to benchmark-and then improve-productivity. |