3 Ways Labor Optimization Can Improve Your Bottom Line

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With the need to expand margin so they can reinvest in innovation and patient care, hospitals and nursing executives are under constant pressure to control labor costs, while improving quality and the patient experience.  Labor is the single biggest line item for many hospitals and health systems, representing over 54% of every dollar a hospital spends each year.  Thus visibility into how and where this budget is allocated is crucial as leaders evaluate ways to maximize labor resources and accurately calculate costs.  Having previously turned to new processes, consultants, or outdated software, leaders are exhausting ways to optimize these costs while improving outcomes.  

Here are three key reasons why hospitals are exploring new ways to tackle this equation, turning their attention to innovative solutions that address one of their largest costs: labor.  

Patient Safety and Satisfaction

Patient outcomes are among the most important factors considered when evaluating labor and the associated costs.  Preventable harm events such as patient falls are increasingly pushing healthcare organizations to adopt workforce optimization programs that focus on improving safety, quality, and experience.  In fact, Agency for Healthcare Research and Quality (AHRQ) estimates that 700,000 to 1 million hospitalized patients fall each year.  More than one third of in-hospital falls result in injury and the Centers for Medicare and Medicaid Services do not reimburse hospitals for the additional costs associated with these falls.  According to The Joint Commission, a hospital fall that results in an injury can cost a hospital up to $14,000.  Even for patients who don’t incur an injury, psychological factors including anxiety and distress while being treated, can be detrimental to the patient experience.

Timely nurse rounding has been shown to improve patient safety outcomes and satisfaction, reducing patient falls by 50%, improving pain management reports by 11%, and patient satisfaction by 12%.  Through our own research, we have also found that long absences between when a nurse visits a patient room, increases the risk of a patient falling, proving the need to increase transparency and protocol for Purposeful Hourly Rounding, Bedside Shift Reporting, and other critical workflows.


Cost of Care Variation 

The cost for patient care is also critical to the labor equation.  Unlike most industries, the price for providing a healthcare service can vary drastically, and until now, there has not been an accurate way to capture the amount of labor each case or patient requires.  While acuity data, stopwatch methods, cost accounting tools, and traditional costing models have historically helped provide guidance, significant discrepancies in how much it costs to treat each patient can greatly impact the bottom line.  This challenge particularly presents an opportunity for hospitals as factors such as an aging patient population, declining and changing government reimbursements, and rising costs affect operating margins.  


Staff Engagement 

Nurses are essential in driving patient satisfaction. Between delivering care, communicating with patients, family members, and caregivers, or helping with tasks such as hygiene and toileting, nurses spend an average of two hours and 25 minutes with patients per each nine hour shift. Their communication, consistent presence, and attention to detail heavily influences the patient experience.  While nurses and clinical workers are dedicated to delivering high-quality, patient-centered care every day, time constraints, packed workloads, and lack of resources can have significant impact on clinical engagement and ultimately patient safety.  Studies show that up to 98% of nurses report missing one or more patient care task in their previous shift, and more than 60% agree their job has resulted in burn out.  

Smarter, more efficient staffing that combines quantitative acuity data, with patient EHR data, and real-time location and time tracking information for clinical tasks can help hospitals better determine staffing ratios for maximum efficiency and an improved patient experience.


SwipeSense Labor Visibility: Labor Data At Your Fingertips 

To address these challenges, SwipeSense is breaking new ground with an innovative approach using sensors and location data through our Labor Visibility application.  Leaders can leverage SwipeSense Labor Visibility data to automatically gather data needed for predictive assignments, ensuring best practices are consistently applied to critical workflows and staffing models. The application’s data set can be used to:

  • Optimize patient assignments and ensure even workload across staff  

  • Ensure patients are visited on an hourly basis, eliminating long absences and preventing potential harm

  • Ensure Bedside Shift Reporting is carried out morning and evening for every patient

  • Track time spent by all clinical staff with individual patients

  • Leverage time-at-bedside to determine total labor cost per case, increasing accuracy of unit cost calculations, and understanding of case profitability

Learn more about SwipeSense Labor Visibility and how this unique data set can be leveraged across hospital departments.