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Running head: HEALTHCARE WORK FORCE COST










Healthcare Workforce Cost
Jasser A. Gonzalez
University of Phoenix (Online)

Healthcare Workforce Cost
This article will evaluate the cost of the healthcare workforce and identify three key drivers of labors costs within medical treatment facilities. In addition, industry solutions will be evaluated to address labor costs associated with medical treatment facilities. Finally, a prediction will be made concerning future changes that may accelerate the proposed solutions.

Three Key Drivers of Labor Costs in Medical Treatment Facilities

According to Becker’s Hospital CFO Report (2014), in 2012 costs associated with health were around $9,000 per individual in the US with total spending capping at $2.8 trillion; in comparison from 2007 where healthcare costs per individual was around $7,600. The increase from 2007 until 2012 was partially due to increased labor costs for services, products, and administrative requirements (Operating Expenses). Becker’s Hospital CFP Report (2014), provided the following three of a grand total of nine labor cost drives in medical treatment facilities:

1. Expensive technological services- In the US it is common practice for the most expensive available procedure for diagnosing and treating to be the principle course of action rather than considering alternative more cost effective measures. For example, the US has almost double the usage of MRI services than other first world countries.

2. Provider, facility, and prescription costs- The US has the highest unit costs for physicians, hospitals/facilities, and drugs in the world and this is documented by the Organization for Economic Cooperation and Development (OECD).

3. Lack of patient education- In the US there is a massive misconception that the more expensive the service the better the quality or outcomes. However, there is no empirical data supporting this and costs have no correlation with quality.

Industry Solutions Addressing Labor Costs

As mentioned previously, operating costs are a significant driver in increased costs associated with the labor force of medical treatment facilities. While currently it would appear that cost problems are spiraling out of control, healthcare systems can take advantage of new approaches to their operational, clinical, and financial businesses. Brown & Hansmann (n.d.), provide the following techniques and measures to control operating expenses:

1. Hospitals can increase productivity by refocusing the labor force. By matching resource demands, and ensuring that right staff with the right skills are employed.

2. Managing the physician staff to maximize productivity and reduce redundancy. By providing the right amount of support staff, costs can be reduced and money saved through a reduction of unrequired ancillary staff.

3. Taking advantage of cost effective technological advances. For example, the patient encounter environment can be one of telemedicine which is cost effective, convenient, and can be used for less serious consultations.

4. Reducing variation in services and standardizing practices and procedures has shown to significantly impact clinical care delivery costs.

5. Improving patient management services in efforts to reduce length of stays and visits to the ER.

Prediction of Changes that may Accelerate Solutions

I would predict that the usage of technology and statistics would become more important as costs associated with the workforce of healthcare and healthcare in general are concerned. Methods such as predictive analytics (PA) will become common applications in efforts to control the spiking costs associated with medical treatment facilities as operations and staffing is concerned. Winters-Miner (2014), provides the following benefits of the usage of PA for reducing associated costs of the healthcare and the labor force:

· Predictions are based on individuals not groups

· There is no bell curve involved when using PA

· Increased accuracy of diagnosis

· PA will enhance preventative medicine and public health

· PA provides answers for doctors for a specific patient not a trend of patients

· PA can reduce costs associated with insurance products

· Increases empirical accuracy through collection of data

· PA can aid in meeting the needs of the public for medications

· PA allows for better patient care and aligning proper needs of services and required staff, thus reducing associated costs.



References
Becker’s Hospital CFO Report. (2014). 9 Drivers of High Healthcare Costs in the US. Retrieved

from https://www.beckershospitalreview.com/finance/9-drivers-of-high-healthcare-costs-in-the-u-s.html

Brown, B., & Hansmann, J. (n.d.). Five Soulutions to Controlling Healthcare’s Cost Problem.

Retrieved from https://www.healthcatalyst.com/healthcare-cost-problem-how-to-control-it

Winters-Miner, L.A. (2014). Seven Ways Predictive Analytics can Improve Healthcare.

Retrieved from https://www.elsevier.com/connect/seven-ways-predictive-analytics-can-improve-healthcare