Three labor management practices to improve care, compliance and cost

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OnShift CEO Mark Woodka
OnShift CEO Mark Woodka

Recent lawsuits against nursing homes in California should be a wake-up call for all organizations providing care to the elderly. These high-profile cases put the spotlight on one of the long-term care industry's greatest challenges: managing staffing levels to meet state requirements to ensure quality resident care.

But for today's long-term care providers, the challenge lies in not only complying with regulations to maintain care, but doing so in a way that keeps labor costs in check. Downward pressures on revenue from reimbursement reductions and lagging economic conditions have intensified the need for providers to control costs across facilities.   

Common ways of managing staffing—hand writing schedules, scheduling-by-spreadsheet and waiting for payroll reports to determine compliance or overtime—will not hold up in this environment. Only a strategic approach to labor management will put your facilities at top performance, with qualified staff where you need them, when you need them, all while maintaining the quality of care your residents deserve. Follow these three steps and you'll be on your way to successful labor management that delivers results across care, compliance and cost.

1. Make staffing and PPD compliance a daily, proactive process.

Many providers review PPD (per patient day) only historically, using time clock data to determine if staffing levels were appropriate. This approach to compliance is reactive. If an out-of-bounds situation occurred, it's too late to take action and it opens your organization to significant risk.

Instead of reviewing PPD at the end of the week or pay period, make it a daily practice. Correlate your scheduled labor to internal PPD budgets and state minimums at least every day, if not every shift. Be sure to plan for appropriate staffing levels based on your fluctuating resident census. For example, if you have several in-takes planned for the next day, calculate the PPD with the new census to ensure you have planned for the right number of qualified staff to maintain quality care.

Keeping a close eye on census fluctuations will also help control costs. If your census is estimated to decrease in the near future, there may be an opportunity to reduce shifts without sacrificing quality of care. Calculating your scheduled labor against your PPD budget will make sure your costs are aligned with your actual census. Additionally, it's good practice to keep management informed of fluctuations in staffing levels and your PPD budgets. Set up a process to alert management should your staffing plan fall below state minimums or your internal PPD thresholds.

2. Be aggressive about controlling overtime. 

Waiting for payroll reports to understand and analyze overtime makes labor cost management an afterthought. Unfortunately, at this point in time the costs have already been incurred and there is nothing that can be done to reduce the overtime.

Fix this approach by getting aggressive about overtime and put controls in place to head off overtime before it occurs. Start by gaining visibility into projected overtime for each employee. This projection should be calculated daily, based on what each employee has worked week-to-date and what they are scheduled for the remainder of the week. 

Once equipped with these projections, you can further refine to determine which shift will put an employee into overtime. You may be able to identify days in advance where your overtime will be incurred—pinpointing which employees and which shifts. You now have the opportunity to prevent the overtime by replacing them with other staff members. 

The cost savings of controlling overtime can be dramatic. For example a 2% reduction in overtime for a 10-home provider will save more than $500,000. Slashing overtime is one of the fastest and most visible ways to reduce labor management costs and run your facilities more efficiently.

3.  Maintain a detailed audit trail.

Think about the number of changes that occur to your staff schedules throughout the course of just a single day. There can be call-offs, no-shows, shift swaps, demand for more staff due to an increase in census, and more. All of these changes—and your responses to them—need to be documented as they occur.

With tightening controls around state minimum staffing requirements, regulators will seek appropriate documentation to support your claims. Be prepared to address issues like:

-      Attempts you made to manage staffing shortages.

-      Processes you followed in managing shortages, such as call-offs or open shifts.

-      Potential staff replacements contacted.

-      The results of your attempts to fill shifts.

A good first step is to ensure that you have tracked and documented all such changes, even if it's self-reported.  But hand-written schedules and explanations to the above information may become less credible over time. A systematized approach will help ensure consistency and provide you with the necessary reports and audit trail you need to support your compliance efforts.

While these three steps are just a few practices to get you started, they are important in laying the foundation for a strategic approach to labor management. Protect yourself, your business and your residents by elevating labor management to a strategic priority, and make sure you are on top of it, day in and day out.

Mark Woodka is CEO of OnShift, a leading provider of Web-based staff scheduling software for the long-term care industry. In this role, Woodka works closely with long-term care providers on strategic labor management initiatives to improve efficiencies and resident care. For more information please visit www.onshift.com.

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