Medical center saved $25 million with smarter, more efficient staffing

The American College of Healthcare Executives' annual Congress is a venue more of seriousness rather than urgency.

However, urgency was specifically required for St. Anthony's Medical Center in St. Louis. When the financial markets took a tumble in 2008, the result was a cash flow crunch requiring the system to eliminate nearly $18 million in expenses or face a potentially crippling deficit.

St. Anthony's response: it cut $25 million from bottom-line expenses during fiscal 2009.
How did it achieve that? As discussed at an ACHE Congress session, the hospital set its eyes on the single biggest expense: staffing. But rather than cut jobs wholesale, it focused on the efficiencies that could be wrought by making incremental but nearly instantaneous changes. As Robert P. Thames, St. Anthony's chief operating officer remarked, "The theory behind this is easy, but it is hard to implement."

What was implemented specifically? St. Anthony's lasered in on its mix of nursing staff, which accounts for one its largest chunks of payroll. The practice of using traveling nursing agencies to fill in for absent staff was all but abandoned, given that an agency nurse costs about double what a regular full-time hire would. Although nursing hires increased about 8 percent during the year, non-nursing hires were cut by nearly 20 percent. Overall staff turnover changed from about 75 percent voluntary in 2008 to an even mix of voluntary and non-voluntary turnover.

When new nurses were hired, St. Anthony's strongly emphasized the recruitment of more highly skilled and better-educated registered nurses; the hiring of licensed vocational and practical nurses was cut by 20 percent.

The scheduling of employees also changed. Units had consistent work schedules in order to improve morale and cut down on absences, which usually forced the use of outside agencies. Daily staff "huddles" became mandatory. Ninety-day "workouts" were also used on certain practices to vastly improve staff efficiency. The hospital also developed inhouse software to better deploy the staff on a real-time basis.

"Every unit in the hospital inputs their staffing and census information two hours into a shift," said Thames, noting that this practice allowed a quick redeployment of resources if required.

This also led to the virtual elimination of yet another practice: the use of emergency room diversions, which cost the hospital's badly needed revenue through inpatient admissions. In May 2008, St. Anthony's was on diversion 250 hours during the month, or more than 10 full days. Within a year, it was on diversion for no hours.

The end result: St. Anthony's got through its crisis, and continues to enjoy a staff that is far more efficient than it had been in the past.
"We're very proud of our team's resiliency and its ability to respond," Thames said. - Ron