## In my previous post on Productivity, I reviewed what Productivity is and a simple calculation of productivity equaling half of the average treatment duration in your clinic. This provides a ‘good’ productivity goal for organizations to use in determining an appropriate clinic-specific goal.

In this post, I will be going into more detail on how a productivity number relates to dollars and the impact that can be made by improving your productivity by as little as 0.1 hours/treatment.

Question:      What’s the big deal about a productivity number of 1.7 versus 2.0?

Let’s take a look at just how much that could be in dollars. What I’ll be describing is an
oversimplified way of looking at it, but I believe it will help make sense of something that can be quite complicated.

For this example, I will use a \$25.00 blended rate (RN=\$35 and PCT \$15 is roughly a \$25 blended rate). Your hourly rates may give you a slightly different number, but \$25 is good enough for our example.

• Every 0.1 hr/tx improvement saves \$2.50/tx.

Here’s the math (don’t be scared!)

Back to our original question, if your current productivity is 2.0 hrs/tx and you get it down to a 1.7 hrs/tx,  it represents a 0.3 hours/tx savings.  Or \$7.50 per treatment!

Now take that dollar savings and multiply it by your average weekly treatment count, and you can see how quickly it adds up!  Assuming you do 300 tx/wk.  That comes out to saving \$2,250… each and every week!

And here are the monthly and annual potential savings:

• \$2,250 per week x 4 weeks = \$9,000/month
• \$9,000 per month x 12 months = \$108,000/year

The below table summarizes these findings:

WOW!  Right?!?!

When I first show our clients these numbers, their first thought often is, does this mean I have to cut staff?  If your organization is happy with its bottom line, then the answer is no.

For most clinics/organizations, labor is their greatest expense, so if you’re looking to find cost savings, right-sizing your staff is the greatest opportunity to meet that goal.   As you have seen in this post, even a 0.1 improvement can improve the financial health of your clinic/organization!

In my next and last post on this lovely topic, I will share a few ideas that you can implement to improve your clinic’s productivity.

We’d love to hear from you!

• Has this information been helpful?
• If so, please feel free to share!
• If not, please let me know how your organization looks at it differently.
• We’re always interested in learning how we can best support the renal community!

# Productivity, this simple word is anything but simple and often causes hearts to race, stomachs to turn or we simply want to ignore it and hope that it goes away.  However, it’s a vital piece of information to help us understand ‘how much staff do I need’?  ‘Am I really short or am I over staffed?’

#### Part of the distaste for productivity could be related to not fully understanding it.

It’s just some number given by finance, and what do they know about running a clinic?  Does it feel like you have no control in meeting the goal, if you even understand the goal to begin with?  Many people I have had the opportunity to work with are surprised at how easy it really is to understand, when it’s explained in terms of what it means to the daily operation of the dialysis facility and then equally find it easy to implement changes that can get them to their goal, or at least heading the right direction.

Alright, time for some full disclosure. Like many of you reading this, I went to school for nursing. I cared about people, loved science and wanted to better understand how I could take care of others and bring them back to optimal health. After working as a staff and charge RN for a few years in dialysis, I became the manager of a clinic.  When I first started in the role the responsibilities were so different. At first, it was good! The main duties included monitoring outcomes, survey readiness, hiring (and occasionally terminating) staff and my favorite part, team building.

As you may have noticed, there was no mention of running a multi-million-dollar business, which our clinics are. There were no business classes in my nursing school to help me understand P&L Statements, EBITDA, doing annual budgets, the bundle, payers, QIP and achieving a productivity goal. HECK! At first, I didn’t even know what made up the productivity goal. It was just a number I was supposed to achieve, and I was told every month (after the fact) if I made it or not. AND, there were no useful tools out there to help me figure it out proactively. It was very frustrating, to say the least!

OK, enough about me!  My goal here is to give you a better understanding of productivity, both from the perspective of what it is and how you can manage to it!   I recommend sharing this post with your entire team.  The more everyone understands it, the more successful you will be in meeting it… it really is a team effort!

It’s important to first state that meeting productivity does not ever mean that you compromise your quality of care in any way!  Quality and safety remain the first priority always!  If you are interested in a full presentation on this topic, you can go to the National Renal Administrator Association (NRAA) Education Station website https://www.pathlms.com/nraa and watch/listen to my presentation, “Understanding and Achieving Productivity”, which I presented at the Fall 2016 NRAA meeting and in February 2016 as part of the NRAA Webinar Wednesday series. https://www.pathlms.com/nraa/courses/2091/video_presentations/23511

To start this discussion, I would like to take a couple of minutes to explain the difference between the cost per treatment (\$/tx) and productivity, which is typically measured in hours per treatment (hrs/tx).  When looking at dollars per treatment, you are looking at actual costs and this number is more often looked at in arrears, in other words, many weeks after the fact!  Salary and wages are more or less set by upper management and not very controllable by a clinic manager.  For example, if you have an experienced staff, use a lot of overtime and/or use RN’s to cover what would otherwise be PCT shifts, your dollars per treatment will be higher versus the clinic that has a blend of experienced staff, uses little overtime, doesn’t need to cover PCT shifts with RN’s and/or does not use travelers.

While some overtime is controllable prior to it happening, for the most part as a manager, the dollars per treatment are impacted by less controllable factors.  Whereas focusing on and adjusting hours scheduled for an expected number of treatments is something that a manager has control over proactively.  By understanding how to calculate the needed staffing hours of PCT’s and RN’s, you can create a schedule that will meet your productivity goals.

Most dialysis organizations look at productivity as the number of hours worked by the PCT, LPN/LVN and RN on a per treatment basis.  These are the employees providing direct patient care (DPC) that are usually paid by the hour.  Your clinic may have additional support staff, not providing direct patient care (sometimes referred to as Indirect Patient Care or IPC or Fixed), such as nurse managers, dietitians, social workers, etc.  Depending on your organization, those hours may or may not count towards the total productivity goal.  If IPC and DPC are both used in the total productivity goal established by your organization, then using the calculation discussed in the next paragraph is not the correct final productivity number for you. In a future post, we will discuss how to determine total productivity including those support roles, what amount is the right amount for each of those roles and which portion of the total is the DPC portion.

#### I am often asked what a “good” productivity number would be.

If by “good” you mean the right amount of staff to provide quality care to our patients in a safe environment, then I suggest taking the average treatment duration for all your patients and dividing that number in half.  For example, if your average treatment duration is 4.0 hours, if you divide that by two you get a productivity number of 2.0. If your average treatment duration is 3.5, then a “good” productivity goal would be 1.75.  Instead of having one goal for the entire organization, my suggestion would be to look at each clinic individually and apply different goals based on that clinic’s average treatment duration.  Two clinics with very different average treatment durations should not be expected to achieve the same productivity goal.

Using this rule of thumb will serve to establish a good starting point for a productivity goal giving you the minimum amount of staffing hours per treatment to provide safe and effective care to your patients.  If your budget allows, you can add additional staff to meet your additional needs.  Keep in mind that this goal is what you need to provide Direct Patient Care(RN, LPN, PCT).  It does not include the Indirect staff.

#### Where do ratios come into the equation?

For the vast majority of States, we see staffing ratios of 4:1 for our PCT’s and 12:1 for our RN staff.  You can usually meet those ratios by using the above approach. If, however, your state requires certain ratios (e.g. Georgia requires a 10:1 RN to patient ratio) or your organization’s policies require a smaller patient to staff ratio, then your productivity goal will most likely need to be higher.

And that is about all the productivity talk anyone can muster in one sitting!  Thanks for reading!  I hope this post helped you better understand what productivity is and how you may choose to set a realistic productivity goal for your clinic or organization.  There will be a Part 2 of this post in which I will provide more detail of how productivity relates to dollars and the financial health of the clinic and organization.

#### We’d love to hear from you!

• Does your organization have a set productivity goal for your clinic to meet?
• How are you doing in meeting that goal?
• If you are over your organization’s stated productivity goal, yet your staff tell you they feel that they need additional help, how are you handling the two different viewpoints?
• Has this information been helpful? If so, please feel free to share! If not, please let me know how your organization looks at it differently. I’m always interested in learning how I can best support the renal community!