Effectively Minimize Medical Staffing Costs

October 8, 2014

The most common concern raised about medical practice staffing is cost. I would argue that other factors should be looked at first.

The most common concern raised about medical practice staffing is cost. It is a legitimate concern, but I would argue that the factors to be looked at first are the number, type, and scheduling of staff. Unless those are right, staffing costs will always be too high. Getting them right will lead to higher net income, which is the real financial goal for practices.

1. Right number of staff

Having too few staff is a false economy. While it decreases hard dollar costs (salary, benefits, taxes, etc.) it increases soft costs by leading to more errors, omissions, rework, and turnover, as well as lower morale and patient satisfaction. It also tends to increase overtime costs.

Hiring too many staff unnecessarily increases direct costs. What's not as obvious is that excessive staff is as detrimental to productivity and morale as too little. People will keep themselves occupied, one way or another. Three of the best indicators of surplus staff are gossip, turf wars, and people interfering with each other's work.

When it comes to right-sizing staff, think of a bell curve: the X-axis equals number of staff and the Y-axis equals productivity. The closer your staffing numbers are to the middle of the curve, the better you are optimizing the value of your labor costs.

2. Right type of staff

For the purposes of this discussion, I am talking about skills and experience, as opposed to personality.

When hiring a nurse, do you want an LVN or a RN? If you choose a RN do you want one with a diploma or a degree? Why? What are you gaining by hiring a more expensive employee? What are you giving up by hiring a less expensive one?

For any position, ask yourself "What is the value of experience?" A medical assistant or receptionist with three years of experience is probably more valuable than someone with no job experience. But is 10 years of experience really worth more than five?

Only the practice can answer these questions for itself, because it all depends upon the way the practice works and what it values.  The point is to avoid paying for skills or experience that will not bring a commensurate advantage to the practice.

3. Right scheduling of staff

Is it most productive for everyone in the office to work 8 a.m. to 5 p.m., Monday through Friday? It might, but I doubt it. Some days of the week are heavier than others. Some tasks lend themselves to first thing in the morning; others to later in the day.

If a practice's registration is particularly efficient, at least some of the medical assistants may need to come to work 15 minutes earlier than the receptionists, so that they and the exam rooms are ready for patients to be roomed.

How many appointment reminders require staff to leave a message? Would it be more productive to have someone stay late and make these calls after normal work hours? The practice might even get additional economies of scale by asking workers on different schedules to share space and equipment. (I once needed extra capacity, but had no space for additional staff or equipment. We tried a 5 p.m. to 9 p.m., Monday through Thursday, back-office shift, and were amazed to have very good candidates and almost no staff turnover.)

The approach is not nearly as easy as having everyone on precisely the same schedule, but it can make more effective use of time and add resources when they are needed, without increasing costs.

Having the right number of staff with the right skills and experience, and scheduling them for work when they are most needed, is a surer path to lower labor costs than focusing on the hard dollar costs of salaries, benefits, and taxes.