Shearry Richardson 1/18/2021
The Cost of the Health Care Workforce
Health care cost is something that people struggle with every day. Whether you can afford it or not, it does not mean that the struggle is not still very real. Especially when looking at the key factors of what is driving the labor cost in hospitals everywhere. It is said that innovations and technologies, administrative cost, as well as personnel cost are just some of the factors that drive labor cost in health care world.
Three Drivers of Labor Cost
Talking about what three factors that drive labor cost in hospitals it can be said that health care around the world is the most expensive commodity. In that, personnel cost plays a role in driving the labor cost. According to The Davis (2010) website workforce shortages during a time where service demand is rising, puts pressure on hospital cost. Another driver of labor cost is that of technology and innovations. It can be said that innovation and technology make room for the hospital to be more operationally efficient which in the end helps with what the hospital calls its bottom line. Then you have administrative cost that drive up labor cost in health care by ways of administrative complexities like, doubling intake forms, insurance billing even by that of transferring medical records. All these things play a part in driving the labor cost as we speak.
Industry Solutions
Most hospitals try to find savings and solutions to the problems that drive their labor cost. In that they hope to address the problems head on and find solutions that will work long term and not just for right now. Labor being hospitals largest expense to date, allows many areas that can be considered areas where solutions can be used. One solution is to segregate the labor. Segregate labor into different groups relative to the core competencies of the organization. For instance, collect financial data and take head count. Then you can break labor costs down by function, and recognizable "job functions" such as nursing and security. Also, develop logical pools of labor, such as core versus non-core or clinical versus support (Gamble, 2013). Another solution may be to evaluate what systems are there to manage labor productivity and spend policies in an efficient and sustainable way. These policies can introduce new technology that will help to reduce labor levels while taking the quality of service and increasing it, which in return will reduce the cost.
Prediction of Future Changes
There are predictions that are being drawn for the near future of health care. There is a prediction that Telehealth will increase due to the shortages of personnel and which causes telemedicine to be more appealing to the consumers and patients especially those who live a considerable distance from the hospitals and specialty care (Kaplan, 2020). Also, the companies that tackle health care solutions can innovate technology like the EHR system that reduces the cost of labor while providing real-time data or information.
Conclusion
In the end, there are so many things that drive labor cost like the growth in technology and innovations, administrative cost, and personnel cost. Some of this will require training and new policies along the way. Remember all the innovations in health care are doing what we call restructuring the industry. Who is to say that there will not be a permanent solution to that problem one day.
References
Davis, C. (2010). Labor costs are key driver of hospital cost growth. Labor costs are key driver of hospital cost growth
Gamble, M. (2013). Where Can Hospitals Find Labor Cost Savings? Where Can Hospitals Find Labor Cost Savings?
Kaplan, S. (2020). Six Trends Shaping the Future of Health Care The health care industry is an ecosystem. So are the companies disrupting it.. Six Trends Shaping the Future of Health Care
The Cost of the Health Care Workforce
Health care cost is something that people struggle with every day. Whether you can afford it or not, it does not mean that the struggle is not still very real. Especially when looking at the key factors of what is driving the labor cost in hospitals everywhere. It is said that innovations and technologies, administrative cost, as well as personnel cost are just some of the factors that drive labor cost in health care world.
Three Drivers of Labor Cost
Talking about what three factors that drive labor cost in hospitals it can be said that health care around the world is the most expensive commodity. In that, personnel cost plays a role in driving the labor cost. According to The Davis (2010) website workforce shortages during a time where service demand is rising, puts pressure on hospital cost. Another driver of labor cost is that of technology and innovations. It can be said that innovation and technology make room for the hospital to be more operationally efficient which in the end helps with what the hospital calls its bottom line. Then you have administrative cost that drive up labor cost in health care by ways of administrative complexities like, doubling intake forms, insurance billing even by that of transferring medical records. All these things play a part in driving the labor cost as we speak.
Industry Solutions
Most hospitals try to find savings and solutions to the problems that drive their labor cost. In that they hope to address the problems head on and find solutions that will work long term and not just for right now. Labor being hospitals largest expense to date, allows many areas that can be considered areas where solutions can be used. One solution is to segregate the labor. Segregate labor into different groups relative to the core competencies of the organization. For instance, collect financial data and take head count. Then you can break labor costs down by function, and recognizable "job functions" such as nursing and security. Also, develop logical pools of labor, such as core versus non-core or clinical versus support (Gamble, 2013). Another solution may be to evaluate what systems are there to manage labor productivity and spend policies in an efficient and sustainable way. These policies can introduce new technology that will help to reduce labor levels while taking the quality of service and increasing it, which in return will reduce the cost.
Prediction of Future Changes
There are predictions that are being drawn for the near future of health care. There is a prediction that Telehealth will increase due to the shortages of personnel and which causes telemedicine to be more appealing to the consumers and patients especially those who live a considerable distance from the hospitals and specialty care (Kaplan, 2020). Also, the companies that tackle health care solutions can innovate technology like the EHR system that reduces the cost of labor while providing real-time data or information.
Conclusion
In the end, there are so many things that drive labor cost like the growth in technology and innovations, administrative cost, and personnel cost. Some of this will require training and new policies along the way. Remember all the innovations in health care are doing what we call restructuring the industry. Who is to say that there will not be a permanent solution to that problem one day.
References
Davis, C. (2010). Labor costs are key driver of hospital cost growth. Labor costs are key driver of hospital cost growth
Gamble, M. (2013). Where Can Hospitals Find Labor Cost Savings? Where Can Hospitals Find Labor Cost Savings?
Kaplan, S. (2020). Six Trends Shaping the Future of Health Care The health care industry is an ecosystem. So are the companies disrupting it.. Six Trends Shaping the Future of Health Care