Productivity! Fun with Numbers! (Part 2)

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!

Mary Kay Hamilton

Mary Kay Hamilton

After staying on the sidelines for the first few years of the company start-up, I joined full time January 2015. Having a thirty-year dialysis career background in multiple roles from staff and charge RN, clinic manager and director of clinic services, I have an understanding of the clinical side, business side and Medicare regulations. I earned my Master’s in Healthcare Innovation from Arizona State University and love to help clinics and organizations find new and sustaining ways to solve challenging issues.

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