The Challenge of Proving ROI for Scheduling

by | Aug 8, 2011

In today’s economy, projects do not get capital funding and the green light to move forward without some work up front to show the expected ROI. This is just as true in healthcare as it is in any other industry and sometimes is easier to prove than you’d expect.

Even for projects that are required for compliance must show an ROI first. Of course, for compliance projects, ROI becomes a factor of “all revenue will cease because we will get shut down if we don’t implement XYZ system” or a formula that shows risk mitigation and the savings of reduced legal funds.

For WFM systems in healthcare, and especially scheduling, the expected ROI usually focuses around reduced OT, reduced overpayments to staff, and reduced overstaffing. Occasionally the expected ROI for scheduling will cast a wider net (like improving NHPPD) – because scheduling is more than just telling staff when to show up to work – but typically the ROI is shown pretty easily without getting too complex.

After the project is over, when the time comes to go back and measure data to show improvement and ROI, things get a little more challenging. Here are two major reasons why:

1. Post-Project Measurement Is Not Required

Post-project measurement isn’t always a leadership requirement nor does the project team ever get freed up enough before the next big project starts to go back and take a look the improvements that were made. And if it’s not a priority to leadership AND no one has time to do it, it’s not going to happen.

This is unfortunate because there are some measurable statistics that are just waiting to be queried out of the system and used as indicators of success. In fact, if success measures are not defined before the project starts and researched after completion, it is hard to show, both to leadership and to the employee population, that the project was a “win” for the hospital and that it was worth the investment and the pain of the change.

2. Hard To Measure A Moving Target

In every hospital I’ve ever set foot in, there were multiple projects going on affecting more than one aspect of patient care or productivity. And there are frequently initiatives targeted at reducing costs in some specific area (like utilizing PTO in low census months) or interruptions in normal operations (construction projects!).

These all can affect the ROI measures that scheduling projects use to justify the system implementation. So that means that when post-project measurement is carried out, it is difficult to isolate ROI proofs that can specifically and uniquely traced to the scheduling implementation.

Why does any of this matter?

Measuring success is a foundational tenant of project management and proving ROI after the fact contributes to the success and validates the project and team for leadership while paving the way for the next WFM project or “Phase II” of the implementation.

Understanding these challenges up front puts the team in a position to create ROI measures that are valuable for post-project measurement and are unique enough to the scheduling project to show the specific improvement obtained.

One example of this done right is an ROI study that Banner Health did in 2009. Over a two year period at one hospital, they showed a $1.2M ROI savings.

Two good things about this:

1. They actually did a study to show the ROI.
2. They measured the difference in exception hours paid – a metric directly attributable to scheduling.

Okay – three things: $1.2M in savings! At one hospital! That gives them the kind of momentum to move on to their next project with a proven record for showing success.

Our takeaway from this: Understanding the two inherent challenges in proving ROI before the project even starts is a great way to put yourself into show success after the fact.

 

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