Systemic Barriers to Hospital Productivity

Eric Dam | Apr 23, 2009 | 1 comment

By Eric Dam

 

Is Your Automated Time and Attendance System Sucking Money from Your Operating Budget?

 

clocking-inHospitals are entering a period of worsening financial performance as more and more are suffering operating deficits – some facing serious downturns that could threaten viability.  Before embarking on wrenching and disruptive layoffs, many hospitals would be well advised to take a good hard look at internal systems, policies and procedures that suck money quietly out of the hospital. Fix these and a relatively fast revival is likely.

 

One such area is to explore how automated time and attendance system is being managed.

 

A poorly managed time and attendance system can lead to a significant, yet undetected accumulation of careless clocking in and out by some employees. This can amount up to two percent of payroll cost.  It happens when a hospital, over time, drifts very far from ideal management of its automated time and attendance system.

 

The lack of periodic formal audits, including payroll audits, is an indicator of possible deficiency in the management of time and attendance.  Hospital departmental managers should be held responsible for performing bi-weekly system edits. If this critical function is instead delegated to clerical staff, this is an even stronger indication that payroll management is weak, leading to wasteful behaviors by employees.

 

The phenomenon to be wary of is incremental time or incremental overtime.  This is the frequent or habitual practice of some employees to clock in before the start of their assigned shift or to work well beyond the end of their shift, sometimes triggering overtime.  If management expectations are not clear and managers are not vigilant, then incremental time can mount to significant levels while remaining undetected.

 

If allowed to creep into the culture, incremental time has a way of spreading as some employee’s observe the behavior by co-workers and feel justified in helping themselves to a bit of extra income — and they may feel almost foolish if they do not do this.  The cost associated with undetected incremental time extends beyond direct added payroll expense and can affect morale, as employees question why management apparently tolerates such behavior.

 

  • When incremental time is recognized as a problem it is relatively easy to correct or eliminate. 
  • Expectations of managers and staff regarding clocking in and out should be clearly stated.
  • Managers should be expected to perform their own system edits, either daily or bi-weekly.
  • Detailed time and attendance policies should be stated and enforced.

Training sessions should be offered to teach manager’s how to audit and recognize problem behaviors.

 

When employees are concerned about job security, they tend to appreciate management vigilance and discipline about time and attendance issues as an alternative to layoffs.

 

If this policy is not addressed regularly, you will have an almost silent vacuum cleaner sucking badly needed financial resources out the door every day until suddenly a financial emergency hits the wall. When that happens, correction is likely to be more drastic than otherwise needed.

 

Eric Dam is a Senior Consultant in Hospital Labor Cost Management and Productivity Improvement. He can be reached at Compass Clinical Consulting, 513-241-0142.

Filed Under: Financial Performance

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About the Author

Eric is an expert in hospital operations. Eric’s quarter-century experience has been rooted both in theory and practice. As a Principal for Compass Group, Inc., Eric uses his specialized talents to address critical areas such as administration, operations, planning, information systems, and finance—with focused emphasis on hospital and patient care services redesign, organizational development, and the monitoring and improvement of productivity and business systems functions. Throughout Eric’s career, he has remained focused on operations and process improvement. Prior to joining Compass Group, Eric was the Owner and Partner of O’Neill Heathcare Resources, a company which worked on the philosophy that, “One must have the ability to have open, trusting communications with clients.” This philosophy allowed for a thorough understanding of problems and opportunities, and the ability to adapt quickly to diverse organization environments. The end result—not being seen as simply just a consultant, but as a successful partner needed to make essential changes. In addition, Eric served as a Senior Associate with Eric Canter Associates and Jacobson Consulting, Inc., where he provided consulting development and management services to hospitals, healthcare systems, integrated delivery networks, freestanding medical facilities, and ambulatory care. He was also Vice President for the largest pediatric medical center in the Untied States, where he managed clinical, professional, and support areas; and also served as Associate Professor in the Graduate Program of Hospital and Health Administration at Xavier University. Eric has the innate ability to apply his profound knowledge of hospital operations and apply it toward bottom-line hospital improvements, resulting in reduced average length of stay, improved materials/management/purchasing systems, advanced productivity monitoring systems, and, above all, educating managers on how to manage their labor expenses without negatively impacting the desired retention of full-time staff. Eric holds a Master’s in Hospital Administration from Xavier University, as well as an undergraduate degree in Industrial Psychology from Middle Tennessee State University.

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  1. Systemic Barriers to Hospital Productivity :: Compass Clinical Consulting Newsroom says:
    April 26, 2009 at 11:52 pm

    [...] the complete story “Systemic Barriers to Hospital Productivity,” via the Better Hospitals [...]

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