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The business of healthcare productivity

Lockhart, Lisa, MHA, MSN, RN, NE-BC

doi: 10.1097/01.NME.0000549622.20644.92
Department: Ask an Expert
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Lisa Lockhart is the Director of Nursing Services at Saint Joseph East in Lexington, Ky., and a Nursing made Incredibly Easy! Editorial Board Member.

The author has disclosed no financial relationships related to this article.

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Q: Our administrators frequently speak about productivity and managing our budget. What does this really mean?

A: Hours per patient day (HPPD) is the unit of measure that hospitals use to manage staff and keep the budget on track in the acute care setting. Through HPPD, nursing administration, charge nurses, and clinicians can focus on a common goal using a standard method to manage a financially secure organization. Understanding how HPPD is calculated empowers nurses and administrators to help comanage the budget. Multiple types of benchmark data should be utilized to influence joint decision-making within unit clinical practice committees. Tracking ongoing changes in benchmarks and comparing them with similar facilities that have similar patient populations not only helps improve productivity, but also measure quality.

According to the American Nurses Association, “...every aspect of patient and nonpatient expenditures must be continually scrutinized to ensure the highest level of efficiency.” The issue is that not all measures are reported, measured, or compared in the same way. Some organizations utilize measures that are developed by private vendors, such as episodes of care, lengths of stay, and hospital discharges. Additionally, the measure of HPPD doesn't consider total care hours. The calculation standard for HPPD is missing an important aspect of care: unlicensed assistive personnel and case management (see How to calculate HPPD). Further complicating the equation is throughput, workflow, and short stay or observation units. HPPD is budget based and takes a snapshot-in-time approach to care, which doesn't account for frequent turnover and acuity differentiations.

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It's been recommended that care hours per patient day be utilized as a staffing and productivity standard. This method addresses nurse-patient ratios versus HPPD, capturing the acuity and actual care hours required to manage specific patient populations by encompassing all care hours and including all support staff. To ensure the optimal use of staffing resources, we must use standardized benchmarks and quality indicators, including patient and staff satisfaction. We must also consider productive and nonproductive hours (education, leave, management hours), as well as the cost of incremental overtime.

It's imperative that your organization is consistent, ensuring that all participating areas understand the why and how of productivity and managing the budget. An accurate view of the patient population served; extenuating care needs; case mix index; and variations in admissions, discharges, and transfers is crucial when developing your targets and educating your team. Sharing the process and the work will improve engagement and facilitate overall growth.

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