A New Model for Managing Human Capital
17 June, 2019
In a new article from GE Healthcare Partners in Healthcare Business Today, our Human Capital team leads shares insights on how hospitals and health systems can manage workforce investments and savings opportunities holistically along the Human Capital Value Chain in order to attain balance.
A healthcare organization’s workforce can consume as much as 50% of net operating revenue. Optimizing workforce efficiency is a major priority for finance leaders. However, identifying effective workforce development and cost control strategies is complex. As any hospital CFO knows, there is a big difference between potential gains and true hard-dollar improvements.
Consider the following scenario: A hospital finance team identifies an opportunity to reduce excessive premium pay in the nursing division, potentially saving $20 million per year. They invest in a series of initiatives aimed at improving flexible staffing strategies. However, for a variety of reasons, the organization is unable to hire key roles in a timely manner or consistently retain staff. This forces unit managers to increase agency nurse utilization, overtime pay and shift bonuses, undercutting projected savings. At year end, cost per unit of service has actually increased.