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.
I often get asked…
Question: What’s the big deal about a productivity number of 1.7 versus 2.0?
Answer: A lot!
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!
- Did this help you get a handle on productivity calculations?
- Were your surprised what a difference in your clinic’s bottom line could be made by simply improving your productivity by 0.1?
- 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!
