It’s a familiar scene. A hospital inpatient unit chronically misses its productivity target or budget by approximately ten percent. The nurse manager for the unit repeatedly attempts to explain, but the targets remain unmet, and the financial ramifications of unnecessary hospital labor costs continue to mount.

Ingrained Attitudes Impede Improvement
In today’s hospitals, it’s not uncommon to encounter this type of defensiveness among inpatient unit managers who miss their targets. While some frustration amongst managers is understandable, the productivity losses that can accompany negative attitudes and biases pose a serious threat to hospitals’ bottom lines. So, before embarking on any hospital productivity improvement initiative, it is important to understand how misconceptions about productivity information and deep-seated biases can hinder progress.

When observing situations like the one described, we, as consultants, are not surprised to find certain attitudes and frustrations within hospital divisions like Nursing, Finance and Human Resources. Managers who think they are managing properly can begin to question the origin and validity of the data and targets contained in productivity reports and monthly financials. Likewise, nurse managers can express exasperation with relentless questioning of their productivity performance. And, attempted explanations of variances can solidify over time into institutionalized excuse-making and high hospital labor costs.

Different Perspectives Mean Different Biases
Within the Finance division, negativity regarding the motives and perhaps even the competence of unit managers who struggle with chronic productivity variances can arise. Members of hospital Finance divisions generally feel that they are supplying an abundance of valuable management information and frequently interpret productivity variances as evidence of overstaffing. In addition, those in Finance may express consternation when the request is made for a vacancy to be filled.

Similarly, members of the hospital’s Human Resources department may harbor negative misconceptions about nurse managers who have difficulty meeting their labor expense budgets. Such doubts may dampen the enthusiasm with which vacancies are recognized, posted and pursued to a speedy conclusion. Because, in general, members of hospital Finance and Human Resources divisions have little “clinical” education or background, there is a tendency for them to be inhibited about asking challenging questions that may actually illuminate the underlying causes of FTE variances and reduce hospital labor costs.

On the other hand, nursing administrators can also operate under their own set of faulty assumptions in the absence of a clear, fact-based understanding of productivity performance variance. This can lead to less time and energy spent on leadership and management development, and more emphasis on protecting managerial prerogatives. When you consider that typical hospital inpatient units are comprised of 40-45 FTEs, and their negative productivity variances can be 4-5 FTEs per unit, misconceptions and defensiveness can translate into significant, unnecessary hospital labor costs.

Positive Change from Objectivity
Constructively addressing hospital productivity means properly interpreting variance. It requires carefully examining multiple factors within the hospital as potential contributors to departures from expectations. A 4.1 FTE variance rarely means that there are four too many nurses working on a given inpatient unit, rather it is a mathematical relationship between actual and expected productivity within the hospital. Factors like overtime, incremental time, errors in scheduling, actions of the central staffing office, actions of the shift supervisor, etc. can all contribute to variances in hospital productivity measures, so it’s rarely possible to “blame” underperformance on a single factor or person.

So, when addressing hospital productivity, it is very important that analysis of data is undertaken in a neutral, objective manner, devoid of preconception or prejudice. Such efforts can help to diffuse defensive attitudes amongst hospital staff and aid members of multiple departments—like Finance, Nursing and Human Resources—in understanding the true implications of productivity data. Giving nursing managers and others the benefit of the doubt, and working to reverse negative attitudes can be crucial to the success of any hospital productivity initiative.

For more information about how to achieve improvements in hospital productivity, contact Eric Dam at 513.241.0142.