• Industry: Healthcare
  • Type: Survey report
  • Date: 10/8/2012

Enhancing the productivity of healthcare providers 

While ‘solving’ the workforce problem by raising overall costs to unacceptable levels is not a viable solution, pushing hard on productivity also carries clear dangers.

Healthcare providers could simply slash their costs, as many businesses do in times of economic shortfall. But this is not advisable for two reasons. First, research shows that cost reductions made during financially difficult times are often not sustainable. On average 93 percent of costs cut are believed to return when businesses refocus on growth after a period of cost cutting (KPMG, 2011). Indeed, sustainable cost-efficiency programs tend to require businesses to engender a clear focus and vision, increase transparency and enhance employee engagement: capabilities that are lacking in many businesses and particularly difficult for healthcare organizations.

Second, blunt cost-cutting measures are often shown to have a negative impact on both the quality of care and the engagement of professionals and other workers. Simply put, asking employees to work harder is not a proven recipe for success. Requiring professionals to see more patients per day could lead to diminished quality and a higher risk of medical errors. What is more, such measures generally decrease workforce satisfaction, leading to increased levels of absenteeism and decreased employee retention rates (see the red arrow in Figure 5). Clearly, if the healthcare sector were to lose focus on quality and attractiveness, then the significant potential of labor supply will be lost, leading to a downward spiral that we cannot afford.

The challenge therefore, is to close the potential workforce gap in a new and radical way: by enhancing the productivity of healthcare personnel while at the same time improving the quality of care and improving the attractiveness of healthcare work. Our research clearly shows that this approach can result in cost savings, quality gains and a more satisfied workforce (as illustrated by the green arrow in Figure 5).

figure 5

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The five successful habits for improving workforce motivation and productivity

As we examined the world’s healthcare systems to find best practices, we identified many providers that had successfully increased the productivity of their professionals while also achieving gains in quality and enhanced attractiveness of healthcare work.

What we found was that, while providers vary in structure, resources and culture, there were a number of commonalities that characterized the systems that had found a recipe for productivity, quality and attractiveness gains. We call these the five successful habits for improving workforce motivation and productivity.

The first characteristic is that successful organizations tend to exhibit a strategic focus on value for patients, accompanied by empowered professionals who are responsible (often jointly with line management) for the organization of the care delivery process. Successful organizations also demonstrate strong capabilities in intelligent task and business process redesign. This means that care tasks for patients are re-allocated in a way that allows the different skills of professionals to be maximized in an environment where no task is seen as ‘out of bounds’ for some professions because of boundary disputes. As a result, decisions and responsibilities are handed to those who are best equipped for the task regardless of ingrained customs. This empowerment of different professionals goes hand in hand with the fourth habit of successful organizations which sees the control of these professionals over the outcomes of their work enhanced through increasingly sophisticated ways of steering on outcomes by leveraging available management information.

Indeed, with the proper information, professionals are often able to monitor their own work processes and improve quality and productivity performance. In addition, access to management information has been shown to help create greater levels of accountability between the professionals and organizational leadership. Finally, successful organizations also tend to actively manage staff performance in a way that empowers staff to flourish through the adoption of a variety of policies such as developing clinical leadership and accountability, training and education, intelligent absentee management and so forth.


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