Controlling Premium Labor Costs…Ten Minutes at a Time

Managing premium labor costs without having a negative impact on the quality of patient care is top of mind for healthcare executives. Yet, many health systems are missing out on an opportunity to make some relatively easy process and policy adjustments that could save them hundreds of thousands of dollars annually…without harming the quality of care.

The opportunity involves managing incidental overtime. Sometimes called incremental or creeping overtime, incidental overtime is short periods of unplanned and preventable overtime. While these periods of overtime are typically just 10-15 minutes, the financial impact is anything but incidental. Through our work with hundreds of health systems, we’ve found that incidental overtime typically accounts for about 5-10% of total overtime expenses.  Often, incidental overtime is an entirely unnecessary expense that can be eliminated since it is not adding value to the organization, but is rather the result of an employee badging in to their shift early, staying a few minutes late or missing their lunch period. Those brief, but high-cost stints of overtime can be eliminated through policy and process changes.

So, how can incidental overtime be better managed? Start with data transparency. Find out how many occurrences of overtime are an hour long or less. Gather data about how many employees are missing their lunch breaks. Pay attention to which units have more issues…

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How to Avoid Three Common Staffing and Scheduling Pitfalls

Managing staff scheduling and ensuring open shifts are filled is an ongoing challenge for every healthcare organization. Matching staff with patients in a way that meets patient care needs, minimizes costs, and satisfies staff can seem nearly impossible. In an … Read more