National healthcare labor costs have increased considerably in recent years, accounting for a significant portion of hospital budgets. INTEGRIS Health faced challenges managing its labor costs due to limited actionable data. By leveraging its data platform and analytics tools, the organization gained insights into labor expenses, hospital hours, and pay metrics. This allowed finance and operational leaders to identify cost drivers and opportunities for improvement, enabling INTEGRIS Health to manage labor costs while maintaining high-quality patient care effectively.
Hospital labor costs account for nearly 60 percent of the average hospital’s expenses, with total national labor costs increasing by more than $42.5 billion in recent years.1 Effective labor cost management is essential to controlling expenses and enabling healthcare organizations to continue delivering excellent patient care.
INTEGRIS Health’s labor costs had substantially increased. For the organization to continue its vital mission to serve Oklahomans, it needed to improve labor management and decrease costs while meeting patient service demand. The organization recognized its need to improve affordability, but a lack of actionable data impeded improvement efforts.
Teams could identify budget variances but couldn’t access the underlying data required to determine variance drivers or assess improvement opportunities. INTEGRIS Health needed a solution to support data-informed improvement efforts.
The Health Catalyst® Data Platform and PowerLabor™ application were the solutions INTEGRIS Health needed for detailed, high-quality, actionable data. For the first time, INTEGRIS Health can quickly access labor cost data, including aggregate and individual hospital hours and earnings, productive hours, non-productive hours, various types of premium pay by hours and percentage, earnings by general ledger code, and more. Finance and operational leaders can quickly analyze data to identify cost drivers and improvement opportunities.
Using its detailed data, INTEGRIS Health identified variance within registered nurse (RN) pay rates. The organization was able to drill into its data and review job codes and positions across various hospitals and departments, identifying higher than desired utilization of internal contingent float pool RNs and external contingent RNs. It was found that internal contingent RNs were being used more frequently than previously understood.
In addition to evaluating internal and external contingency staff spending, INTEGRIS Health evaluated the core staffing systemwide, evaluating worked hours to average daily census and patient demand, and identified gaps in core staffing, with many departments falling short of core staffing targets.
The organization developed and implemented a comprehensive labor strategy to stabilize core staffing, reduce internal and external contingency spending, and retain its RN staff. INTEGRIS conducted a market analysis and then made the following changes:
INTEGRIS Health uses capacity and demand planning analytics to align labor utilization with patient needs, improve admission processes, decrease administrative inefficiencies, and increase the number of patients seen daily. The organization implemented workflow changes to ensure patients receive timely inpatient admission. Using capacity and demand planning analytics, INTEGRIS Health predicts each patient’s length of stay (LOS) and visualizes the observed over-expected (O:E) LOS. Care teams use the O:E data to ensure they provide interventions to progress patients to safe discharge, increasing overall hospital capacity.
INTEGRIS Health’s data-informed labor management strategy stabilized its staffing, decreased external contingent staff spending, and increased retention while reducing costs. The organization has realized:
"Utilizing high-quality data transformed how we approached our labor strategy. It allowed us to understand and quantify detailed opportunities we couldn't effectively assess before, ultimately saving $30 million while retaining the talent that drives our success."
- Justin Wiser, MBA, Vice President, Chief Financial Officer Hospital Enterprise, INTEGRIS Health
INTEGRIS Health will continue to use its data platform and applications to improve labor-management effectiveness.
