Monday, November 26, 2007

Jobs, jobs, jobs

To provide more of a context for the theme below about the work environment in our hospital, I offer some statistics about jobs at BIDMC.

I recall seeing a chart somewhere that showed BIDMC to be the sixth largest private employer in the city of Boston. Indeed, many of the city's largest employers are academic medical centers, and they have all been growing. As has been noted on many occasions, the health care industry is the greatest engine driving Boston’s economy.

But the picture at BIDMC was not always so rosy. When I arrived in early 2002, BIDMC was in financial straits. The previous administration had already eliminated hundreds of positions, and I had to eliminate 600 more (over 10%) of the jobs (some filled, some unfilled) to enable the hospital to survive. That was truly an awful period -- not only for the staff who were laid off, but for those left behind.

Fortunately, in the months and years that followed, we engaged in a successful turnaround and have now been able to restore those jobs -- and more. Here is a summary of the average FTEs (full-time equivalents) on staff year by year.

FY2002 -- 4,562
FY2003 -- 4,694
FY2004 -- 5,013
FY2005 -- 5,353
FY2006 -- 5,635
FY2007 -- 5,792

But that increase of over 1200 jobs in five years doesn't tell the whole story. While employment at BIDMC has grown by 27% during this period, the actual payroll has grown by well more than that -- 63%. Why? Because the market for health care workers in Boston is extremely competitive. If we don't offer salaries and benefits comparable to other hospitals, we will not be able to attract enough of the best people to serve our patients. Remember, if people don't like it here, they can literally walk across the street and go to work at another great medical institution or college or biotech firm or pharmaceutical company.

For fiscal year 2008, we are budgeting another increase, this one in the range of 10%. Part of this is due to further expansion of staff -- almost 450 new positions. Most of these are related to increased patient activity on our floors, clinics, and in the ORs. A significant number, too, are being added to enhance customer service and to meet safety and regulatory requirements. The other part of the budget increase is for salary and wage increases. Like other places, we have a general pay increase about 3%, but we also add in significant amounts of funds for targeted market adjustments to keep up in highly competitive fields.

4 comments:

Mark Graban said...

Paul, I know you have written before about using Lean methods at BIDMC. Can you comment on how you would expect productivity improvements to slow the need for hiring growth in certain areas? I'm not talking about working people harder, but eliminating the waste you described in your last post. You're right that reducing waste (rework, searching for supplies, etc.) will free up time for nurses to spend more time on direct patient care. So, as patient volumes grow, you'd need more nurses, I understand that. Service and employee sat will improve.

But, what about ancillary areas, like the lab, pharmacy, perioperative services, areas where Lean has allowed hospitals to shrink headcount through attrition, as a follow up to productivity improvements?

I've written more about this over at my Lean Blog if you are interested. I'm sorry we butted heads in the past, I think we have more common ground than we realized before.

Paul Levy said...

Many thanks (on all counts), Mark.

Thus far, our Lean activities have improved patient flow and made life more pleasant for the staff. As in, "Gee, I have time for lunch now!" or "I am not stressed out all day long."

As we get better at this and fold in the Value Capture methodology, there is clearly the potential to reduce the need for new staff, allow people to do more interesting and valuable work, or even allow some reductions by attrition.

However, I expect, first, to see improvements in quality and safety of patient care, along with enhanced working conditions for the staff. Those values are the ones that are most motivational in a place like BIDMC. I do believe, though, that cost savings will be a derivative benefit, as has been the case in the many cases described on your blog and elsewhere.

Mark Graban said...

Thanks for responding. I didn't mean to imply, of course, that Lean is only about costs. As I often write about, Lean is primarily about safety and quality first. I'm glad you're making progress and have those goals.

Paul Levy said...

We are in total accord!