Employee adjustments: Look at outsourcing
By Stephen W. Earnhart, MS
President and CEO
Earnhart and Associates
Dallas
One of the most difficult decisions a manager - or any employer, for that matter - can make is the decision to let someone go.
It is painful, as it should be. But, chances are, your business has changed since the employee was hired or the position was created several years ago. Or, it could be a situation in which your hospital has developed its own freestanding surgery center and now has excess staff hanging around.
The same-day surgery industry has entered a new era: the era of "outsourcing." Take a look around you. What do you really do on site anymore? How many goods and services come under your control or from your own employees? The fact is that it is just too difficult to get the best people out there or to retain them if you have them.
The good news is that many of the people heading up these new outsourcing services are former same-day surgery employees. They have become entrepreneurial (myself as an example). We/they realize that by focusing on a small niche in this business and doing that one job exceedingly well, success will follow. (Some great examples of outsourced services are listed at right. The list could continue with a host of other services.)
Outsourcing makes sense. One transcriptionist can handle the work of several same-day surgery programs, work out of his or her house, make more money, and charge you less at the same time. Go figure. Usually outsourced services are less expensive or about the same price you're paying now - but without the personnel on board. It doesn't make sense to perform many of those tasks anymore. It's often cheaper to outsource, and you don't have to pay taxes or benefits for outsourced work.
The bad side is that we just don't need the same staffing levels we have had in the past. Many will argue that we are doing more sophisticated procedures with higher acuity, and therefore we require a higher level of staffing than before. To a point I would agree; however, we are becoming more proficient in this business. We are able to accommodate these procedures and patients in stride with less staffing than I would have predicted even two years ago. So while acuity may increase, staffing levels need not.
Fewer staff at surgery centers
The fact is that most for-profit surgery centers have fewer employees, for the same number of cases, than the hospital from which the cases came employed. So what happens to the nurses, techs, and orderlies who are no longer required in the hospital operating rooms after the patients have left? When hospitals develop freestanding surgery centers, usually the hospitals' staff have opportunities to apply for positions in the new centers. However, just because they apply does not necessarily mean their talents or positions will be needed.
The reduction in personnel at the hospital can often exceed 30 full-time equivalents after the cases leave the hospital. That number can equate to more than 60 employees! Hospitals tend to be more generous with the time it takes to reduce such employees through attrition, retirement, and new placement. That is a luxury few surgery centers can afford. However, it is still an adjustment hospital senior management must face.
So, who should be nervous about outsourcing? Let's say you decide to lease your employees. Depending upon what company and services you chose, personnel management, record keeping, human resource functions, payroll, personnel records, etc. are now done by the leasing company. How many employees currently handle that business for you? Or, heaven forbid, you do all that yourself! (How sweet to get rid of that headache for less than you spend now!)
Do you need a business manager?
Off-site accounting services and accounts receivable clearinghouses are picking up the bulk of the business end of the company. So, do you really need a dedicated business office manager anymore? Can you make do with a business office coordinator and fewer front-office staff? Certainly I am not recommending that you replace your existing position. But it is something to think about if you have to replace a departing employee.
The same issue for a transcriptionist and coder. Don't forget housekeeping, credentialing personnel, and continuous quality improvement/risk management. Do you encourage your surgeons to bring in their private scrub nurses? (Don't forget - they must be credentialed!) You should. The surgeons are probably going to steal your best scrubs anyway, so you might as well get some mileage out of it. FYI, I always get this question: Do you pay the private scrubs time while they are at the center? While there are always exceptions, generally we don't. It's the cost of doing business for the surgeon's practice.
Take a look at your surgery center or surgical department. With the cutbacks in reimbursement and the impetus for more cost effectiveness, can you really afford to keep your current staffing levels? Do you need the same compliment of personnel? Isn't it time to look at the flexibility of an all-RN staff? In your gut, you probably already know the answer. The difficult part is to act on it.
(Editor's note: Earnhart can be reached at Earnhart and Associates, 5905 Tree Shadow Place, Suite 1200, Dallas, TX 75252. E-mail: [email protected]. World Wide Web: http://www.earnhart.com.)
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