Examine staff costs to help bottom line
Happy employees can reduce costs
(Editors note: In this second part of a two-part series on cost-cutting strategies, we discuss travel and staff costs. In last month’s issue, we discussed cost-cutting strategies for supplies and overhead.)
As every home health manager looking for ways to cut costs knows, staff costs make up a major part of any home health agency’s expenses.
Because staff costs are a major expense for every agency, Tom Boyd, MBA, principal at Boyd & Nicholas, a Rohnert Park, CA-based financial consulting firm that specializes in home care, suggests that agencies look carefully at that area.
"Find ways to keep your staff motivated and happy, so you have a stable staff and don’t have to spend money on recruitment and training," he says. (For tips on effective recruitment and retention, see "Effective recruiting = successful retention," Hospital Home Health, March 2002, p. 29.)
"Many health care employees leave because of the overwhelming paperwork and constantly changing regulations and requirements of their jobs," Boyd says.
Help employees deal with these by making more educational seminars that are easy for them to attend such as audio or teleconferences, offer contact with a clinical consultant who can answer their questions, install user-friendly software for all clinical applications, and limit responsibility for Outcome and Assessment Information Set (OASIS) documentation to certain staff people, he suggests.
Take a look at your benefits, Boyd says. Stretch out the period of time in which new employees become eligible for benefits, he says. "For example, instead of having a new employee eligible for health benefits after 30 days, make it 60." In addition, cut the cost of health insurance by dropping dependents, implementing a copay, creating a higher deductible, or offering a health maintenance organization," he says.
It is very important to use an insurance broker who represents a variety of products and is not tied to just one company or one product, Boyd says. This will give you more flexibility in designing your health benefits program, he explains.
Scheduling can be another area in which your agency can control costs, Boyd says. "Both rural and metropolitan agencies need to schedule a clinician’s visits based upon geographic location." This cuts down on travel time and enables a clinician to visit more patients in the day, he adds.
One tip Boyd offers from one of his clients is to ask employees to list odometer readings on their expense reports rather than total number of miles. If you just ask an employee to list a number of miles, the number may be an educated guess, or may include errands run on the way to a patient’s home, he says. His client’s agency asked employees to write down odometer readings as a way of obtaining more accurate expense reports, he says. "The amount of money spent on transportation went down as employees had to become more precise in their record keeping."
Evaluate the days and hours your clinicians work, Boyd suggests. "Some nurses prefer working after hours or on weekends because their spouse is home to care for children. This means the nurses are not dealing with traffic jams and can see patients for whom the day of the week doesn’t matter."
Not only does this free up the time of weekday nurses to see new patients, but it also gives employees a chance to choose a work schedule that fits their personal schedule and increases employee satisfaction, he adds.
[For more information about cost-cutting tips, contact:
• Tom Boyd, MBA, Principal, Boyd & Nicholas, 5550 State Farm Drive, Suite C, Rohnert Park, CA 94928. Telephone: (877) 424-6527 or (707) 585-9317. Fax: (707) 585-7633. E-mail: [email protected]. Web site: www.boydandnicholas.com.]
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