It takes a lot of things to help a hospital function and one of the most important things that continues to keep a hospital running is the people. Those people are the doctors, nurses, technicians, and a list of many other people. Those people work many hours and have to be compensated for those hours. This paper will evaluate the key drivers of labor cost, evaluate the industries solutions, and predict the future changes that may exacerbate or accelerate the solutions.
There are three key drivers of labor cost of the hospital sector of the healthcare world. One of the major key drivers is shortages in nurses and doctors (jsimmons@healthleadersmeida.com, 2010). This drives labor cost up because the staff that they have available has to work to compensate for the labor that should be available. Another major component that drives labor cost is high demand in health care needs. When hospitals experience high volumes of patients more staff have to be called in to compensate for the rise. This equates for a tremendous increase in labor cost. The last major part that drivers labor cost is callouts. Callouts may be the number one reason why labor cost increase because someone has to be called in to replace the person that called out.
Currently, the industry standard to fix the issue of labor cost going up there are many things that can be done. One thing that can be done is to set labor expectations on the front end (Becker’s Healthcare, 2010). The best thing to do in any situation is to have a plan to carry out and communicated the plan to the team. So if labor expectations are communicated on the front end then the team is more likely to comply. Another major thing that can be done is to recognize trends and adjust staff accordingly (Becker’s Healthcare, 2010). There are times of the year that are very demanding for hospitals like flu season and allergy season therefore on these times have extra staff and times where demand is small amount of staff to level out labor cost. Another tool that can be utilized to control labor cost is to implement labor cost as a part of evaluation (Becker’s Healthcare, 2010). This will definitely motivate staff to keep the labor cost regulated.
Even though there are many solutions to the labor cost issue there is still the issue that changes can arise in the healthcare world that can either cause labor cost to spike. One change that could affect labor cost is the new driverless vehicles (Masterson, 2017). This alone can cause for a major need in healthcare physicians and nurses if the vehicles malfunction. This is because they could cause accidents which would increase the need for more staff. At any moment healthcare regulations could change and require more staff to be available which would cause labor cost to rise as well.
In conclusion, there are three major key drivers of labor cost. The first one is staff shortages, the second one is high demand and the third one is callouts. These issues can be fixed through setting expectations, watching the healthcare market for trends, and implementing labor cost as a part of evaluations. Although, these things can be done things can arise like self driving vehicle malfunctions and healthcare regulation changes that could cause a spike in labor cost.
Reference
Becker’s Healthcare. (2010) Retrieved from https://www.beckershospitalreview.com/hospital-m
anagement-administration/8-ways-to-cut-labor-costs-in-your-hospital.html
jsimmons@healthleadersmedia.com. (2010). Retrieved from https://www.healthleadersmedia.c
om/strategy/aha-labor-biggest-factor-hospital-cost-growth
Masterson. (2017). Retrieved from https://www.healthworkscollective.com/4-things-that-will-cha
nge-healthcare-next-10-years/
There are three key drivers of labor cost of the hospital sector of the healthcare world. One of the major key drivers is shortages in nurses and doctors (jsimmons@healthleadersmeida.com, 2010). This drives labor cost up because the staff that they have available has to work to compensate for the labor that should be available. Another major component that drives labor cost is high demand in health care needs. When hospitals experience high volumes of patients more staff have to be called in to compensate for the rise. This equates for a tremendous increase in labor cost. The last major part that drivers labor cost is callouts. Callouts may be the number one reason why labor cost increase because someone has to be called in to replace the person that called out.
Currently, the industry standard to fix the issue of labor cost going up there are many things that can be done. One thing that can be done is to set labor expectations on the front end (Becker’s Healthcare, 2010). The best thing to do in any situation is to have a plan to carry out and communicated the plan to the team. So if labor expectations are communicated on the front end then the team is more likely to comply. Another major thing that can be done is to recognize trends and adjust staff accordingly (Becker’s Healthcare, 2010). There are times of the year that are very demanding for hospitals like flu season and allergy season therefore on these times have extra staff and times where demand is small amount of staff to level out labor cost. Another tool that can be utilized to control labor cost is to implement labor cost as a part of evaluation (Becker’s Healthcare, 2010). This will definitely motivate staff to keep the labor cost regulated.
Even though there are many solutions to the labor cost issue there is still the issue that changes can arise in the healthcare world that can either cause labor cost to spike. One change that could affect labor cost is the new driverless vehicles (Masterson, 2017). This alone can cause for a major need in healthcare physicians and nurses if the vehicles malfunction. This is because they could cause accidents which would increase the need for more staff. At any moment healthcare regulations could change and require more staff to be available which would cause labor cost to rise as well.
In conclusion, there are three major key drivers of labor cost. The first one is staff shortages, the second one is high demand and the third one is callouts. These issues can be fixed through setting expectations, watching the healthcare market for trends, and implementing labor cost as a part of evaluations. Although, these things can be done things can arise like self driving vehicle malfunctions and healthcare regulation changes that could cause a spike in labor cost.
Reference
Becker’s Healthcare. (2010) Retrieved from https://www.beckershospitalreview.com/hospital-m
anagement-administration/8-ways-to-cut-labor-costs-in-your-hospital.html
jsimmons@healthleadersmedia.com. (2010). Retrieved from https://www.healthleadersmedia.c
om/strategy/aha-labor-biggest-factor-hospital-cost-growth
Masterson. (2017). Retrieved from https://www.healthworkscollective.com/4-things-that-will-cha
nge-healthcare-next-10-years/