Skip to content Skip to navigation

Striking a Balance Between Cost and Quality of Care

September 30, 2014
by John DeGaspari
| Reprints
How HR professionals are setting priorities on care quality and employee retention amid budgetary constraints
Click To View Gallery

Although labor ranks among the highest-cost items in the budgets of most healthcare organizations, tight budgets and the lack of time and resources from tackling of too many initiatives have posed significant challenges to healthcare provider organizations when it comes to human resources and staffing issues. That’s among the conclusions of two recently released industry reports that look at issues of hiring, staffing and employee retention in the healthcare sector.

Yet employee productivity and skill sets are especially relevant to healthcare providers that are intent on improving the quality of care. Joe Van De Graaf, senior research director and author of a report from the Orem, Utah-based KLAS on human capital management released in August, points out that while human capital management—the set of practices and processes around managing people in an organization—may not be the absolute number-one priority from a strictly IT perspective, it is an important initiative and shared goal at the senior executive level at many provider organizations that are seeking to manage and train the employees they have.

He also thinks that human capital management is likely to become even more crucial going forward than it has been in the past, given the ramifications of the Affordable Care Act. He observes that transparency around physician performance, for example, is one of the competitive differentiators of providing care in an integrated value-based environment.

Many provider organizations have higher expectations when it comes to human capital management solutions. Broadly speaking, providers are beginning to require solutions that will support their efforts around accountable care, Van De Graaf says. “Healthcare organizations are looking for more than just efficiencies,” he says. One example of how HR and payroll systems might address provider needs:  a searchable database that will allow provider organizations to compensate employees based on performance. “The idea around accountable care is that we are going to provide healthcare in a way that not only gives better care and is patient centered, but we are going to be compensated for the way we perform,” he says.

With human capital management, Van De Graaf sees significant activity in terms of demand and vendor offerings in the area of staffing to predicatively manage employee time, and avoid unnecessary overtime expense. One particular area of interest is clinically advanced staffing, which goes beyond basic nurse staffing to mobile scheduling, and allows communication among the nursing staff without reliance of an IT administrator, he says.

While talent management systems have been used in the past to automate hiring and track performance goals, he is seeing early adoption of talent management for compensation and succession management as well. Although he acknowledges that human capital management and clinical systems are not a natural connection, he notes that that the employee is indeed at the center of the organization’s operation. “That’s what human capital management is about,” he says. “Not only can we have the right employees, but how we can help to train them, look at their employment record, and use these systems to optimize the training, the retention and the skills that are needed.”

Meanwhile, healthcare HR initiatives are moving forward on a number of fronts, according to a survey on healthcare initiatives sponsored by the American Society for Healthcare Human Resources Administration (ASHHRA) and HealthcareSource. The survey is based on the responses of HR professionals in 500 healthcare organizations in the U.S. 

Among the survey’s findings are: streamlining HR processes ranked number one in efforts to reduce costs, cited by 74 percent of respondents. It was followed by efforts to improve retention rates, cited by 69 percent of respondents. Interestingly, while the percentage of respondents concerned about healthcare reform was significant at 44 percent, that percentage was 20 percentage points lower than it was in last year’s survey.

Improving employee satisfaction (cited by 79 percent of respondents) and fostering a culture of employee accountability (68 percent) were top priorities for improving patient satisfaction. Other highly ranked initiatives for improving patient satisfaction include creating a service-oriented culture and providing employee education.

As for current HR initiatives to improve patient safety, 69 percent of respondents identified a focus on employee education and development, followed by improvement of employee satisfaction (59 percent) and hiring for cultural fit (54 percent).

Challenges to putting their initiatives into place are significant, according to respondents. The top challenges were too many initiatives (cited by 67 percent of respondents), followed by no budget to implement the programs (49 percent) and insufficient systems and inadequate technology (43 percent).

Alameda Health System: A Focus on Labor Utilization