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Staffing
How Does Your Payroll Stack Up?
Chad Coben
Publish Date: October 10, 2007   |  Tags:   Staffing

Too many people on your payroll? Or too few? What about staff hours per case - are you allocating more OR minutes than other facilities? Three great scratch-your-head questions about your staff: your greatest asset, your greatest operating cost and your greatest management challenge. We hope to help you figure out the answers by sharing benchmarking data from 215 freestanding ASCs and 1 million cases.

Staffing Summary

All facilities

1-2 ORs

3-4 ORs

>= 5 ORs

Nurse FTE

13.1

7.7

11.7

18.2

Tech FTE

5.3

3.3

4.9

8.2

Administrative FTE

7.0

4.4

6.0

10.5

Administrator FTE

1.0

1.0

1.0

1.0

Total FTE

26.4

16.4

23.6

37.9

Staff Hours per Case

All facilities

1-2 ORs

3-4 ORs

>= 5 ORs

Nurse HPC

6.7

5.9

7.0

6.3

Tech HPC

2.8

2.5

2.9

2.8

Administrative HPC

3.7

3.2

3.7

3.7

Administrator HPC

0.5

0.6

0.5

0.3

Total HPC

13.7

12.2

14.1

13.1

Compare and contrast
Regardless of facility size, total staffing expenses should typically be around 23 percent of total net revenue, or 28 percent if you include benefits. If your center's staffing costs deviate higher or lower than that figure, you need to find out why.

Let's look at the "average" facility, which has three ORs that host 3,350 cases per year in four specialties: orthopedics, pain management, podiatry and endoscopy. The total staffing costs, including benefits, are $1.31 million, or 30.1 percent of net revenue. This facility is staffed with 27.1 full-time equivalents: 13 nurses, 5.8 techs, 7.3 administrative staffers and one administrator.

To calculate average hours per case, multiply FTEs by 0.62, which is the number of work hours in a year (2,080 divided by 3,350 cases). In our example, the average hours per case are 8.1 hours of nurse time (13 x 0.62), 3.6 hours of tech time (5.8 x 0.62) and 4.5 hours of administrative time (7.3 x 0.62).

When compared to industry benchmarks, staffing expenditures at this facility are higher than comparable facilities (see "Staffing Summary" and "Staff Hours per Case" on page 21). With total staff expenses exceeding industry norms, a closer look at the details can provide more insight as to why. Based on the data in the tables, the staffing levels of nurses, techs and administrative staff at this facility also appear to be higher than at similar facilities across all categories. Since the data includes both three- and four-OR facilities, and our example facility has only three ORs, it is important to compensate when comparing the figures to the benchmarks. In this case, the numbers we need might skew slightly lower than the data in the charts. But even so, the FTEs of our hypothetical center appear higher than in similar facilities and are likely the culprit in driving up staffing costs.

OK, so now what?
Evaluating your facility's performance against national benchmarks is a valuable tool, but the information is simply a starting point for change. Drilling down further to understand the drivers of staffing expenses, including the hours per case and the average costs of FTEs, provides additional insights and lets you actively manage staffing expenses as you work to correct problems as they're uncovered.

For example, average hourly rates for nurses and techs below industry benchmarks are simply an indicator flag to show you where to dig deeper for answers. A high staffing expense may be a conscious decision made by physician-owners who believe in taking a payroll hit to deliver quality patient care. To other cost-conscious facilities, high FTEs may be a clue to look for staffing inefficiencies and improve administrative processes with the hope of reducing the number of employees. Average wage rates that are higher than industry norms may also mean your staff is over qualified or too heavily weighted with management.

Other factors play an important role, too, including case mix, case volume and other general administrative expenses. The case mix from higher volume specialties like pain management and endoscopy might demand increased administrative staff to push papers and track reimbursements. High-acuity and low-volume cases - a heavy orthopedic schedule, for instance - may demand more nurses or techs dedicated to patient care.

The big picture
In this era of increasing pressure on reimbursements, it's becoming more important to pay closer attention to managing operating costs in order to maintain profitability. Constantly analyzing your facility's performance is an important part of your administrative duties, and a comparison to your peers helps to highlight issues that need addressing. Further evaluation of those issues identifies the root causes and maintains a clear understanding of the big picture that is critical to managing the business of your facility.

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