The cost of health care workforce


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      Today’s healthcare is consistency changing in order to better improve the health care for both the employees and the clients whilst keeping costs as low as possible for the organization.

Key drivers of labour costs in hospitals

    Three main drivers of labour costs in hospitals are: supply chain demand, technology and workplace staffing. The supply chain of medical supplies that are actually being used and actually being wasted in hospital settings is quite significant and leads to higher wasted costs which ends up adding to be over thousands of dollars or more ever year. For example, a variety of a single item being ordered for surgical procedures based on surgeon’s preference. Instead there should be a mutual consensus amongst the surgeons of which supplies should be ordered that they will all use. Medical supplies are very expensive and add up quickly as they are used on hundreds of patients constantly on a daily basis therefore it is very important their usage be monitored and controlled. Another driver is technology which is very important in today’s health care industry and it helps to improve efficiency and communicate information effectively. It is important that the hospitals are servicing their medical equipment routinely to avoid breakdown or malfunction at a later time. It is also very important to invest in technology that will be used for years down the line, for example electronic health care records and electronic medication records which will provide easier access for health care professionals and also give patients access to their information promoting autonomy. When medical equipment or software is not up to date, health care costs increase into the millions. Another cost draining variable is workplace staffing in hospitals, there is not enough staff for the number of patients and therefore staff is burning out causing the employee turnover rate to become much higher, overtime rate and agency health care staff increases as well which all leads to increase in labour costs. 

Solutions and remediation activities
In order to better improve the key drivers and decrease labour costs, the hospital should incorporate a Quality Assurance (QA) unit throughout the hospital responsibly for monitoring the different increase of costs that can be better managed. This will help divide up the jobs and concentrate on the different duties of the organization. The QA department can work alongside additional units such as Critical Analysis and the IT department to better track supply uses, when medical equipment needs to be checked, the software programs are working efficiently and lastly that the staffing numbers are better managed. For example, if there are nurses and physicians on vacation at a certain time of the year then less patients and procedures should be booked around that time.

Future changes
Future changes for the hospital would be: quarterly reviews of data to see where changes of policies need to take place and informing management to put preventive measures in place. Testing all medical equipment throughout the hospital multiple times throughout the year. Development of a better staffing policy where staffing shortages can be predicted ahead of time and positions can be filled. Data reports will help capture information to improve cost saving strategies in the long run.


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