General Hospital

Productivity Policy

Effective March 31 2010

Introduction

Health care operates in a difficult economic environment in which revenues often are not keeping pace with expense growth. Even when patient volume grows, additional costs often consume all supplementary revenue. When patient volume is stable, revenue growth may be inadequate to offset rising overhead expenses. Whatever the case may be, expenses must match revenues, or deteriorating margins will jeopardize General Hospital’s primary mission of quality care.

Labor is by far the largest single expense in a service industry such as health care. The purpose of this policy is to ensure that General Hospital’s labor productivity continues to improve by effectively controlling our labor resources in a prudent, responsible manner.

General Hospital will use the money saved to fund the hospital’s mission. General Hospital will work to improve patient outcomes. Savings will provide General Hospital the means to expand existing services to reach more people, and facilitate the development of new medical technologies and life-enhancing services. More funds will enable General Hospital to strengthen its community outreach and education, and allow General Hospital the means to reward its deserving and dedicated staff appropriately.

Principles of Management Stewardship

  1. Stay on budget.
  2. Provide honest, accurate, and timely evaluations.
  3. Control productivity.
  4. Work relentlessly to satisfy patients.
  5. Create a work environment that lets employees thrive.
  6. Minimize worker’s compensation costs by designing a safe work environment.
  7. Strive to enhance retention and reduce turnover.

General Hospitaldirectors are responsible for meeting their departmental productivity standards (also referred to as labor budgets), as established by General Hospital. These standards are subject to change when circumstances warrant. For “variable” departments, those on a variable workload measurement, such standards consist of productive hours per unit of service and productive salaries per unit of service. In the case of “fixed” departments, those not on a variable workload measurement, such standards consist of total productive hours andtotal productive salaries. Consistent, long-term failure to meet these objectives may be grounds for dismissal.

General Hospitalwill make available resources and expertise that General Hospital considers adequate and within financial constraints to assist directors to meet their responsibilities. Nevertheless, meeting productivity standards is the responsibility of each director, who may employ such resources at his or her own discretion.

Public Information

In order to reinforce the strategic importance of maintaining control of costs, General Hospital is committed to regular, open, and public discussion of labor standards.

Directors and senior managers may review productivity performance in the monthly Department Leadership meeting. As part of its regular reporting, the Finance department will provide productivity performance reports to each director.

When Labor Budgets Are Not Met

In addition to the monthly review of productivity in the Department Leadership meeting, senior management will monitor compliance to productivity standards in a quarterly review through the Administrative Council, whose function is oversight and setting productivity policy. The Council’s job is to follow up and ensure compliance by the end of the next quarter, as specified below.

VariableDepartments

For those departments whose staffing varies with workload units of service, General Hospital will measure performance to productivity standards against the monthly cost center reports, under the “Standard” or “Flex Budget” category. If directors’ performance against either their hours or salary standards is unfavorable by more than 1% for the quarter, they will submit written explanations and action plans to their Vice Presidents. If performance against both hours and salary standards is unfavorable by more than 1% for the quarter, Vice Presidents will discuss their action plans with the Administrative Council with or without the affected director present.

Fixed Departments

For those departments whose staffing does not vary with workload units of service, General Hospital will measure performance to productivity standards against the fixed budget section of the monthly cost center report.

If directors’ performance against either their hours or salary standards is unfavorable by more than 1% for the quarter, they will submit written explanations and action plans to their Vice Presidents. If performance against both hours and salary standards is unfavorable by more than 1% for the quarter, Vice Presidents will discuss their action plans with the Administrative Council with or without the affected director present.

All Departments

The Vice President’s role is to develop action plans, monitor progress, and counsel directors on performance improvement. If performance lags behind standard in one quarter, directors are required to make it up in the following quarter, so that their two-quarter performance is within 1% of standard.

Extended Non-Performance

Financial planning and performance are essential elements of management jobs for achieving General Hospital’s patient care mission. As a general practice, if performance has not improved as deemed necessary by General Hospitalafter two quarterly reviews, directors may be subject to corrective action in compliance with policy. Where serious concerns are identified, however, General Hospital, in its discretion, may act immediately at any time regarding employment termination. Section x.xx of Administrative Policies, Human Resources, deals with voluntary resignations and Section x.x with involuntary resignation.