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The value of productivity standards

June 1, 2007
by SCOTT C. LLOYD
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Staff will probably react negatively at first, but managers can help them see their value

In our work with hundreds of community behavioral health organizations (CBHOs) over the past 12 years, my colleagues and I have found that, if allowed, CBHOs choose not to focus on costs as part of their decision-making process. We work with our clients to help them see the importance of costs. CBHOs' tendency to not incorporate costs into their decisions has led to a growing trend of closures; competition from private, for-profit providers; buyouts; and spin-offs for traditional government-funded CBHOs across the country.

So what has led to this lack of focus around costs? Our experience has shown us an industry-wide misconception around costs: namely, that the only way for a CBHO to focus on its cost per service delivered is to sacrifice the quality of care it's delivering. When staff believe that, they must choose between cost and quality, and subsequently cost is ignored. This belief then is translated into other areas staff believe are driven by cost, making cost a taboo subject.

Nowhere is this more readily apparent than when CBHOs work to establish productivity standards for their direct-service staff. Since most CBHO staff members believe that the only reason to have a productivity standard is to manage their cost per service delivered, they offer strong resistance to productivity standards' creation and implementation. They believe that establishing a productivity standard goes against their core belief that they must choose between cost and quality. Yet organizational leadership must help staff see that not only can the standards be achieved without destroying quality service delivery but, when used correctly, productivity standards enhance timelier access to services, increase client satisfaction with wait times, bolster service capacity, and shift organizations from a surviving to a thriving model.

To help staff who struggle with the concept of productivity standards, it is important to help them understand that although cost is a major factor in the creation of productivity standards, there are several other important factors to consider, as well (figure 1). Beyond cost, we have to consider how our direct-service staff's productivity affects the quality and the compliance of our system, as well as the quality of life of our direct-service providers. Without sufficient service delivery productivity standards, a CBHO will continue to be challenged by:

  • long waiting lists for intake and/or first appointments;

  • direct-service staff overwhelmed by documentation, meetings, and clerical duties;

  • service over- and/or underutilization issues tied to the organization's target population;

  • high no-show and/or cancellation rates; and

  • low staff morale.






Figure 1. Image from Using Data to Drive Your Service Delivery Strategies: A Toolkit for Healthcare Organizations.

Reproduced with permission


These challenges came out of the grant-funded era, which embraced extensive, repetitive, and time-consuming documentation, travel, meetings, etc. These processes were created and implemented in a time of financial immunity due to capacity grant funding support without long-range thought to how they would affect the organization's overall productivity levels/service capacity. As organizations look to increase their direct-service staff's productivity, they first must address the processes that surround service delivery, or they will burn out their staff, who will revert to practices such as completing documentation at night and/or on weekends to keep up.

To adopt a productivity standard, an organization must find a common data point (such as cost) to drive its efforts. Without a common data point, most CBHOs' change efforts start with a clear vision and the best intentions, but their efforts falter as the change encounters emotional resistance from staff nostalgic for the past. Staff are used to totally focusing on qualitative-based decision making without the awareness of how those decisions will impact the cost of services.

I suggest tying the data point to cost because the concept around cost is simple: An organization's cost per direct service hour delivered is directly related to the productivity standards of the CBHO's direct-service staff, and directly related to whether reimbursement is adequate to cover the cost. My book Using Data to Drive Your Service Delivery Strategies: A Toolkit for Healthcare Organizations illustrates several Microsoft Excel-based strategic-planning tools to calculate how an organization's direct-service staff productivity standards relate to the cost of services delivered, overall organizational service capacity, and the ability to get potential consumers into care in a timely manner.

By using these tools we have learned that organizations with low direct-service staff productivity standards experience a higher cost per direct-service hour delivered that, in most cases, exceeds the reimbursement rate. This holds true regardless of the funding source. Contrary to most people's belief, we have found that organizations are more prone to overserve their grant-funded contracts more often than any other funding source.

Let's take a look at one of these tools (figure 2), and how a simple costing worksheet like this can answer the three most common questions we hear from CBHO staff.

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