The old adage "You can't manage what you can't measure" is particularly true for hospitals and medical care facilities. Entities in the health care industry run on data, from lab tests to billing information. From a management perspective, this expands to include workforce intelligence and other operating costs that comprise budgets.
According to Ron Shinkman of Fierce Health Finance, one of the biggest hurdles hospital CFOs face in boosting efficiency is collecting data about labor costs. He spoke to hospital financial consultant Rich Miller about tracking compensation costs by service area.
"Among the biggest factors: Determining how much time and effort the organization needs to calculate the cost of payroll and overtime," writes Shinkman. "Oftentimes, complicated work schedules can lead to the manual input of time cards, which can lead to "an astonishing amount of time" expended for each payroll period, Miller said. Physicians often receive on-call and other incentive pay."
Hospital CFO's understand that physicians represent just one segment of a care facility's workforce. From custodians to receptionists and everything in between, labor costs account for 60 percent of healthcare operating budgets, according to Miller. This makes those expenses one of the most critical areas of a budget to focus on to improve efficiency, profitability and quality of care. For that reason, performing analytics on workforce management data is necessary to improve operations.
If your accounts receivable administrators are working around the clock to collect on outstanding payments, the payroll costs might be eating away at your budget. Organizations that choose to outsource receivables management reduce the caseloads of outstanding claims in medical offices, requiring fewer man hours to move through the volume. This reduces backlog and presents a way for care facilities to save resources.