Defining Productivity – Part One

by | Aug 8, 2011

The term “productivity” can mean a lot of things to a lot of people. In fact, ask anyone in any industry and you’ll get a different definition for what it is.

But that’s not to say that a good definition can’t be reached – at least for this healthcare blog. And, for starters, it’s safe to say that there are a few universal concepts that hold true about productivity:

  • It deals with dollars. Specifically, the dollars you spend on your workforce.
  • It deals with the output of your business, whatever that is.
  • It is important.  Ok, that’s not exactly earth-shattering. But why is it important? You did read that we said it deals with “dollars,” right?!
  • It is something to be measured. You want to keep track of important data!

So whatever the definition of productivity is, it is going to start with your workforce and talk about the intersection of the work they do and the money you pay them them to do it. And you are going to want to define it in such a way that you can measure it, because it is important to you. Finally, you are going to want to see if your tracked measure indicates that things are bad or good, so you can either fix what’s broken or refine and make good processes better.

The easiest productivity definition to understand is a simple manufacturing model: You pay your employees to build widgets. If one person making $20/hr. builds 20 widgets an hour, then their productivity can be measured in terms of one widget per labor dollar. To get a better productivity, you either pay the employee less for the same output or you get the employee to output more widgets. Either way, you want to maximize the number of widgets you are generating for the least amount of labor dollars.

An entirely different kind of productivity model exists in the educational system. Here, the widget is student learning, with the goal being that students have acquired the knowledge that they are being taught. And although dollars go to both the teachers—the workforce—and to the resources that help them be effective, managing productivity is a art form that focuses on how to make best of use of the set bucket of dollars. It is much more difficult to define success and cutting budget dollars is typically counterproductive (e.g. paying for less teachers or resources hinders learning, not helps it).

Now let’s talk healthcare: We fit into neither of these molds. Productivity in healthcare is something to be balanced. This is because the “widget” of healthcare is “patient care.” We could talk for days (and post lots of articles!) about what patient care really is, but for our purposes, we’re just going to say:

Patient care means that “sick people get better in a hospital because they are being taken care of.”

Nothing crazy or technical to define. It is hospital staff taking care of patients.

Why does that need balance? That’s what we will talk about in “Part Two” of this topic. (Hint: It will involve the workforce!)

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