Productivity Goes Beyond Cutting Labor Costs

When the payment model for healthcare was focused on fee-for-service, the primary goal for a productivity initiative was typically reducing labor costs. That’s changing as healthcare reform moves healthcare to a value-based industry.  While driving down labor costs is still important, workforce productivity initiatives now need to focus on improving the patient experience and employee engagement as well.

A recent survey done by HealthLeaders asked 126 healthcare executives about the outcomes they desired from a workforce productivity initiative. The results showed a nearly even split between financial metrics, patient experience measures and employee engagement.1


What’s the key to achieving results beyond cost savings from a productivity initiative? First, it’s important to recognize that financial, clinical and employee engagement outcomes are tightly interlinked. For example, when nurses need to work long hours to complete their work, patient satisfaction suffers and HCAHPS scores are lower.2 That impacts reimbursements.

Next, healthcare leaders need access to the workforce analytics that empower them to make data-driven decisions. For example, how can productivity be improved so that nurses no longer need to work as many long shifts to meet patient care needs?  How can each shift be right-staffed to match patients and caregivers so that patient care needs can be met in the most effective way possible?

As patient satisfaction and clinical outcomes continue to have a greater impact on reimbursements, the need for productivity initiatives to deliver results beyond just cutting labor costs will grow exponentially. Finding a way to harness a wide range of diverse, complex analytics to reveal a clear picture of how staffing and workforce decisions impact clinical, financial and employee outcomes is a necessity. The need to understand what’s happening and what needs to happen will drive the next generation of workforce productivity strategies.

For a closer look at the connection between workforce productivity and patient satisfaction, take a look at a recent white paper: “The Rising Importance of Patient Satisfaction in a Value-Based Environment.”


1“Targeting Better Outcomes & Patient Satisfaction Through Workforce Management Initiatives.” HealthLeaders and API Healthcare, 2015.
2Stimpfel, Amy, et al. The Longer the Shifts for Hospital Nurses, The Higher the Levels of Burnout and Patient Satisfaction. Health Affairs, 31, no.11 (2012): 2501-2509.’


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