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Health Care

California Health Systems Join Collaborative to Improve Efficiencies, Care Quality

Group will compare participant labor expenses and productivity levels

Published: Wednesday, July 14, 2010 - 17:15

(Premier: Charlotte, NC) -- To help reduce costs without negative effects on quality, hospitals and health systems in California are joining a labor-related management collaborative managed by the Premier health care alliance.

Hospitals stand to lose almost $200 billion in reimbursement during the next decade as a part of health care reform, and additional reimbursement dollars will be tied to their ability to improve quality and prevent harm.

Premier’s California Labor Management Collaborative (CLMC) aims to help participants improve efficiencies while maintaining care quality by comparing participant labor expenses and productivity levels to peer hospitals, as well as state and national top performers.

CLMC participants will use OperationsAdvisor, Premier’s web-based labor benchmarking and productivity solution. With customer-validated savings exceeding a 14:1 return on investment average, OperationsAdvisor has helped hospitals reduce costs through more efficient labor management. For example, a New Mexico health care system achieved $10 million savings and a Maryland health care system saved more than $5 million, both in one year, using the solution.

CLMC hospitals will also benefit from an on-site labor management engineer expert who will evaluate the effectiveness of participant labor management programs. The engineer will also assist with the installation, training, and orientation of appropriate employees to OperationsAdvisor and the incorporation of labor benchmarks into budgeting processes.

“With labor costs comprising more than half of provider operating budgets, it is imperative that health care executives deploy effective labor management programs to not only contain rising costs but also battle diminishing margins, all without negatively impacting patient safety,” says Susan DeVore, Premier president and CEO. “The ability to benchmark and compare against local and national top performers and to learn from their successes is an integral first step toward driving these results.”

“Our more than 40 years of experience in this area has shown that organizations that effectively deploy a sound labor management program have more efficient operations, which leads to stronger bottom lines,” says Eric Kammer, national director of LaborConnect for Premier. “As hospitals share productivity data and best practices around process improvement as a part of this collaborative, we believe that the collective whole of health care delivery within the state will improve and become more efficient.” 

The CLMC will use Premier’s collaborative methodology, a disciplined, measured and organized performance improvement mechanism that has demonstrated impressive results through projects such as the Hospital Quality Incentive Demonstration (HQID) value-based purchasing project and the QUEST: High Performing Hospitals collaborative.

With more than 500 subscribing facilities, OperationsAdvisor integrates a productivity measurement system with quarterly and annual benchmarking. It offers a unique combination of productivity monitoring, assessment, and comparative data so that hospitals can confidently compare operational performance, identify attainable performance improvement opportunities, and achieve a rapid return on investment.

OperationsAdvisor is part of Premier’s LaborConnect program, an integrated product and service offering that combines productivity, benchmarking, management engineering, and executive consulting. The program is aimed at addressing the pressing labor challenges facing hospitals and health care organizations today.

CLMC recruitment continues through September 2010.


About The Author

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Premier is a performance improvement alliance of more than 2,500 U.S. hospitals and 80,000-plus other health care sites working together to achieve high-quality, cost-effective care. Owned by hospitals, health systems, and other providers, Premier maintains the nation’s most comprehensive repository of clinical, financial, and outcomes information and operates a leading health care purchasing network. A world leader in helping deliver measurable improvements in care, Premier has worked with the Centers for Medicare & Medicaid Services and the UK National Health Service North West to improve hospital performance. Headquartered in Charlotte, North Carolina, Premier also has an office in Washington.