Recovering Your Therapy Margins
Home health leaders often think of “efficiency” and “productivity” as synonyms, two sides of the same coin, not correct.
Recovering lost “therapy margins” requires increases in productivity, not efficiency.
Let me explain.
The definition of labor efficiency is: “the number of labor hours required to bring an OASIS assessment to a RAP ready state. When compared with industry standards this is 10-12 days on average.
Efficiency is about doing the same with less. HHA’s improve labor efficiency by finding ways to reduce the number of labor hours required to produce the same level of output. Efficiency translates into savings because the HHA spends less on wages and other labor-related costs.
Efficiency, then, is about shrinking the denominator — inputs (headcount, labor hours) — to improve profitability.
At first glance, the definition of productivity appears remarkably similar.
The definition of labor productivity is: “the ratio of completed OASIS assessments each day to the labor hours devoted to the production of a billable RAP.” Productivity is thereby measured by comparing the number OASIS started and Billed the during the same work-day with the processes used in production.
Productivity is about doing more with the same labor force. Growth in OASIS productivity is measured by the change in output per labor hour during the course of each day.
OperaCare’s QA system increases each clinician's OASIS productivity to 2-4 billable OASIS assessments per day while eliminating after-hours documentation.
This allows you to recruit and retain nurses, increase your margins, and accelerate your cash flow.
