Strategy 1:
Eliminate weekday OT for only Regular employees because agency and flex pool does not take any OT. This change will decrease the regular total labor coast from $ 4,630,263.28 to
$ 4,212,086.08 while Flex pool total labor coast will remain as $ 337,766.75
And Agency total labor coast will remain as $ 275,613.80.
This leads to decrease the total cost from $ 5,243,643.84 to $ $ 4,825,466.63
Strategy 2:
Beside Eliminate weekday OT for Regular employees, there were a change in the ratio of direct care staff. Which is reducing RN and increasing LPN. From 19: 4 to 15: 8
This change will affect the percentage of skill mix for RN and LPN.
The percentage of skill mix for RN was 76% and become 60% while The percentage of skill mix for LPN was 16% and become 32. The percentage of skill mix for NA remain as 8%.
This change affected the labor cost of regular, flex pool, and agency.
Total cost for regular was drop from $ 4,212,086.08 to. $ 3,987,869.53
Total cost for Flex pool was drop from $ 337,766.75 to. $ 320,086.49
Total cost for agency was drop from $ 275,613.80 to. $ 262,061.80
This leads to decrease the total cost from $4,825,466.63 to $ 4,570,017.82
The total saving from 1 and 2 is 673,626.02
We save more than 500000 which is the required number, however we need to improve the other aspect and solve the other problems such as the nursing strike.
Strategy 3:
Beside the above changes, there was a need to proposal right sizing the labor force. There was a staff need calculation on Excel based on direct care needed and average care FTE needed.
This calculation lead to changes in numbers of regular, flex pool, and agency staff which affected the total labor cost as below:
Total cost for regular was drop from $ 3,987,869.53 to. $ $ 2,868,115.08
Total cost for Flex pool was increased from $ 320,086.49 to $ 1,505,031.53
Total cost for agency was increased from $ 262,061.80 to. $ $ 554,444.80
This leads to increase the total cost from $ $ 4,570,017.82 to $ $ 4,927,591.41
This cost us 357,573.95. the total saving now is 316,052.07
Strategy 4:
This strategy was focusing on improving the technical support systems (information systems, communication systems, distribution systems) and increasing percentage of nurses' time in direct care from 45% to 50% which would require investment of $200,000.
and increasing percentage of nurses' time in direct care decreased the numbers of direct care staff was significantly which affected the total labor cost as below:
Total cost for regular was drop from $ 2,868,115.08 to. $ 2,579,942.98
Total cost for Flex pool was drop from 1,505,031.53 to $ 1,488,583.10
Total cost for agency was drop from $ 554,444.80 to $415,833.60
This leads to decrease the total cost from $ 4,927,591.41 to $ 4,484,359.67.
This strategy save $ 443,231.74. the total saving from the 4 strategies is 759,283.81.
We save more than 500000 which is the required number, however we need to reimburse to OT for the regular employees.
This strategy also changed Hours Surplus or Shortage in staff needs (3.5 acuity) which was calculated on excel files.
The change was from -12148.1766 hours to 785.085 annually. Which is on of the goals.
Strategy 5:
This change is to increases the regular employees’ hourly rate by 2% because their OT was eliminated.
The Total labor cost for regular has become $ 2,631,541.84.
This change lead to increase the total cost from 4,484,359.67. to $ 4,535,958.53.
The total coast saving now is 707,684.95. we safe more than 500000$ in a year. However, the investment of 200000 should be payed bake. The final total saving is
507,684.95$
Michelle_Michy
20191123000925explaination.docx
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