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Growing Turnover Rates Wreck Healthcare Budgets

 improving care budgets. BHM offers a network covering the sub-specialties your organization needs to grow. 6 of the top 10 largest health plans entrust BHM for behavioral health peer reviews. CLICK HERE to learn more about how BHM helps your organization curb recruitment costs.

Growing turnover ratesHealthcare is a labor-driven service that depends on the talent and skills of every staff member, from the C-suite to nurses. Finding and keeping this talent is paramount to running a cost-effective organization that provides exceptional care was an observation from an article by Mackenzie Bean by Becker Hospital Review. Growing turnover rates significantly impact profitability.

Some studies indicate the cost of turnover can average 150% of the employee’s annual salary. Furthermore, when employees leave, their duties are shifted to the remaining personnel who feel obligated to shoulder the additional burden.

The financial burden of high turnover significantly impacts health systems. The turnover of a single physician represents at least a $200,000 loss for an organization, according to a 2016 report from B.E. Smith/AMN Healthcare.

“When you factor in replacement costs, recruiting costs — those hard costs associated with someone leaving — with the actual productivity, performance and impact on patients, that cost jumps considerably.” – Ted Kinney, PhD, director of research and development of Select International.

Growing Turnover Rates

As Brandon Hall Group pointed out healthcare organizations experience 16 to 30 percent of skilled worker turnover rates – more than 4 times the rate than any other industry. Each additional percentage point increase in turnover costs the average hospital upwards of $350,000.

According to Compensation Force the healthcare industry was second behind hospitality with the highest average total turnover in 2016: Hospitality (28.6%), healthcare (19.9%).

Many health care providers see employee turnover of physicians, nurses, and support staff as a necessary and inevitable cost of doing business. Seldom do health care executives make a rigorous attempt to measure accurately this hidden outlay. As executives’ plates overflow, stretching them beyond their limits, turnover suffers benign neglect. When an organization experiences consistently high turnover, especially among high-priced clinicians or hard-to-find nurses, the situation warrants another look. From The Shocking Cost of RN Turnover

Solutions from Providers

While most health systems seek to reduce turnover, many fail to understand its costs or causes and lack effective strategies to improve retention. In healthcare, retention becomes a swirling mess of variables, motivations, and options. Organizations look for less complex solutions and outsourcing seems the preferred choice.

“Hospitals must do more with less, even with the accelerating pressure to streamline claims processing efficiencies and maximize profitability,” said Doug Brown, Managing Partner of Black Book. “Outside vendors are providing hospitals with the scale necessary to optimize revenue from complex claims collections but there is room for improvement…far too few outsourcing firms fully understand the healthcare space.”

Black Book’s 2016 RCM survey responses of 1,309 hospital chief financial officers and business office leaders reveals that outsourcing of complex claims to a specialized provider climbed 19.4% from 20.4% of all US hospitals in 2013, to 39.8% in Q3 2016.

“Outsourcing complex claims allows hospitals to tap in to an infrastructure that can successfully recover this often lost source of revenue,” said Brown. Releasing in-house staff to focus solely on optimizing traditional claims also improved internal productivity according to 77% of all current hospital outsourcing.

81% of hospitals state they lack the specialized talent to resolve very difficult claims, including 92% of hospitals under 150 beds.

Solutions from Health Plans

Various methods of outsourcing – from complete outsourcing of all major pre-authorizations to partial/seasonal outsourcing based on an insurer’s internal workflow and bandwidth of full-time employees – may also give needed options to payers.

From a National Association of Independent Review Organizations (NAIRO) brief, Andrew Rowe, President of the NAIRO said, “Health plans are looking to focus on their core competencies and outsource whatever tasks they can achieve at a lower cost to other organizations.”

“A business process outsourced for physician review can do it faster, better, and cheaper than what a health plan can do it for,” adds Rowe.

While IROs originally came into being to provide unbiased and conflict-free third level external appeals on behalf of states and their eligible consumers, today they have become trusted providers of internal appeal decisions for insurers as well, and their growth in providing high-quality services continues to expand.

“The notion of taking these reviews and outsourcing them to URAC-accredited IROs is something that health plans are increasingly embracing,” says Rowe.

With review services organizations taking on more tasks, such as physician pre-authorization requests/reviews and other related duties, health plans can focus on their core strengths. For example, by outsourcing pre-authorization reviews/requests, health plans free up time for their medical directors to focus on higher value-added tasks like quality improvement, reviewing clinical trials and updating policy language, among others.

 improving care budgets. BHM offers a network covering the sub-specialties your organization needs to grow. 6 of the top 10 largest health plans entrust BHM for behavioral health peer reviews. CLICK HERE to learn more about how BHM helps your organization curb recruitment costs.

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