How Should KPIs Be Employed to Increase Your Healthcare Organization’s Non-Salary Savings, Quality, and Outcomes?

How Should KPIs Be Employed to Increase Your Healthcare Organization’s Non-Salary Savings, Quality, and Outcomes?

Targeted Savings While Improving Quality and Outcomes Can Be a Reality

We are all looking for the “magic bullet” that will generate more non-salary savings for our healthcare organization while improving quality and outcomes. The answer is quite simply key performance indicators (KPI), or a quantitative measure used to identify savings, quality, and better outcome opportunities that are hidden from our view. However, before you can make this happen you need your KPIs to be:

Requirements for KPIs

  • Specific: Always identify the specific activity you want to measure vs. a general description, e.g., orthopedic bone cement/orthopedic cases, instrument repair expense/surgical procedures, or postage per adjusted patient days.
  • Measurable: You must make sure that you are employing a metric that can be compared to other healthcare organizations with the same or similar operating characteristics. Therefore, your KPI must be consistent with industry standards, such as linen pounds processed per patient day. Otherwise, you won’t be able to measure apples to apples.
  • Time-Based: We would also like to have a database of at least one quarter of historical data (one year is even better). Since things change and people change over time, you want to make sure your data is current.
  • Relevant: Is it truly a savings or is it a onetime event? Is it caused by faulty data? It is due to changes in policy or procedure? Is the process an outlier? For one hospital we worked with, we identified savings in their disposable bath kits only to find out that they had only one shower per floor, thereby necessitating the use of multiple disposable bath kits daily for patient baths.
  • Attainable: Even though you might have identified a non-labor savings utilizing KPIs, you must ask the question, is the savings obtainable? For example, if your linen/laundry contract isn’t up for two years, can you renegotiate your contract at this time? Be realistic about your savings goals!

Identifying new savings, better quality, or better outcomes requires operational excellence of the highest order. The only way to reach this goal is to target your savings, quality, and outcomes with advanced tools and techniques that include KPIs to measure, monitor, and control your non-labor expense forevermore.

About Robert T. Yokl, Founder & Chief Value Strategist for SVAH Solutions
Robert T. Yokl is President and Chief Value Strategist at SVAH Solutions. He has four decades of experience as a healthcare supply chain manager and consultant, and also is the co-creator of the Clinitrack Value Analysis Software and Utilizer Clinical Utilization Management Dashboard that moves beyond price for even deeper and broader clinical supply utilization savings. Yokl is a member of Bellwether League’s Bellwether Class of 2018.

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