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Hospital Cost Reduction Depends On Productivity Management


Because labor costs are the largest operating expense for hospitals, managing staffing is a critical day-to-day process. Unfortunately, rural and community hospitals often lack the tools to monitor workload and measure productivity. As a result, labor expenses become a larger proportion of operating revenue and a key target for hospital cost reduction.

The productivity tool helps executive leadership to effectively manage labor resources and fulfill organizational goals.

The goal of productivity management is to make staffing appropriate and effective for high quality patient care. The good news: CHC Consulting’s Productivity Management services are customized specifically for rural and community hospitals to achieve this goal.


CHC Consulting, the consulting and management arm of Community Hospital Corporation, has created the CHC Productivity Tool™. All CHC-owned and managed hospitals use it, resulting in efficiencies and significant hospital cost reduction savings. The CHC Productivity Tool™ stands out among IT-driven labor-management solutions because of its affordability and ease of use. It is designed to help smaller hospitals quickly see benefits while avoiding costly add-ons they don’t need and are unlikely to use.

In addition to the CHC Productivity Tool™, hospitals working with CHC Consulting get expert assistance maximizing productivity. Experts use data from comparably sized hospitals to establish benchmarks and then set department-specific and hospital-wide productivity targets.

CHC Consulting’s team includes clinical experts who make sure quality of care remains the primary focus, along with hospital cost reduction.


We offer Productivity Management as a standalone service or as part of a comprehensive hospital cost reduction analysis, such as an Operational Assessment.

The process starts with a desktop analysis and onsite review. During this time, CHC experts meet with senior management as well as each department. An onsite assessment of each cost center (clinical and nonclinical) provides an understanding of the operational challenges that could impact management of labor resources. Existing time-management capture processes also are evaluated in order to identify any potential hospital cost reduction opportunities.

CHC Consulting then provides input on best practices, productivity target ranges, and areas for improvement with the greatest potential for impact.

The process continues with onsite and long-distance interviews to guide the development of department-specific productivity targets. The targets are loaded into the CHC Productivity Tool™ and a target Employee Equivalent per Occupied Bed (EEOB or FTE/AOB) is calculated.

At this stage, CHC Consulting makes recommendations for operational changes and organizational structure. At all times, hospital leadership makes the final decision on productivity targets using CHC’s data, analysis and recommendations.


Next, recommendations translate into action and implementation. CHC Consulting provides Productivity Tool™ training to the hospital board, leaders and managers. Education helps reinforce the importance of accurate and timely data gathering and reporting.

Once you install CHC Productivity Tool™ and start using it, CHC Consulting follows up in 90 days. This ensures productivity management is in full swing as a day-to-day process. Senior management has ongoing access to CHC Consulting experts for the contracted period. In addition, CHC Consulting provides an annual review and uses that information to update standards. This way, hospitals see ongoing improvement and get the most out of the tool.

About Community Hospital Corporation

Community Hospital Corporation owns, manages and consults with hospitals through CHC Hospitals, CHC Consulting and CHC ContinueCARE, with the purpose to collaborate with partners and bring innovative solutions to support the vibrancy and accessibility of community healthcare. Based in Plano, Texas, CHC provides the resources and experience community hospitals need to improve quality outcomes, patient satisfaction and financial performance.

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