CONTRIBUTOR

Jen Swensen
Essential Insights contributor; Communications Manager, Cardinal Health
Featured expert

Kerry Watson
President and CEO, Watson Healthcare and Management Solutions
Financially pressured hospitals face many obstacles in their quest to remain viable. Over his 20-plus years as an executive healthcare professional, Kerry Watson, president and CEO at Watson Healthcare and Management Solutions, has developed a unique insight into how staffing can impact the success of a hospital. In this article, Watson talks to Jen Swensen about how to identify hidden opportunities for success.
Swensen: Are there any common threads among hospitals struggling to stay afloat?
Watson: While all hospitals are unique, something that most struggling hospitals have in common is a level of unhappiness among their staff. Employee satisfaction scores and the underlying staff concerns are the first thing I study. It’s been shown that when the work culture is poor, people don’t step up and do what they have to do. As a business, you can lose as much as 25 to 35 percent of operational efficiency if both the physician and non-physician staff is unhappy and not working at peak performance. Their attitude is such that many of those people just take a salary and go home. I have never seen a financially struggling hospital move from a negative financial situation to a positive one without addressing staff issues. You cannot get to happy patients and efficient operations with an unhappy staff – it will shut you down every time.


Swensen: What aspects of staff performance should be examined?
Watson: Aside from the happiness of the staff, staff efficiency and effectiveness must also be taken into consideration. Hospitals should ask themselves: “Do we employ too many physicians and ancillary staff? Too little?” Many hospitals, especially smaller hospitals, do not have the IT platform and the infrastructure to support technology that can effectively maintain staff and inform, in real time, whether their staff is operating in the most effective and most efficient way. Sixty-five to 75 percent of a hospital’s expense is in staffing. If a portion of the staff is working overtime and working below peak efficiency, there’s room for improvement.
Swensen: How can a hospital balance the challenge of providing outstanding patient care with the need to adhere to a tight budget?
Watson: For a struggling hospital, operating on a tight budget can make it difficult to deliver optimal patient care. I suggest hospitals examine their core competencies. Once those competencies are determined, the hospital may find that it’s in their best interest to outsource. A small hospital may need a neurosurgeon, but they may not have the volume of complex surgeries to justify hiring one full-time and absorb the responsibility of keeping their skills at peak efficiency. Contracting or partnering with another entity can be a solution. The hospital would only have to pay for a portion of that specialist’s salary, paying them only for the work they need done, when they need it, eliminating the need to support the high salary associated with keeping that specialist on staff full-time.
Taking the time to address staffing issues can greatly increase the chances of a hospital remaining viable. Relationships between clinicians, care providers and partners can make or break a hospital’s success. Those relationship need to be working at peak performance in order for patients to receive the best care possible, and providing outstanding care is every hospital’s primary goal.
Kerry Watson is a seasoned operations management executive with more than 20 years of experience in the leadership, direction and management of major hospital and healthcare organizations generating up to $900 million in revenue and employing up to 3,000 professionals. He applies an extensive expertise in healthcare systems and business processes to ensure superior healthcare services, strong organizational learning and a positive, forward-thinking organizational culture - while driving operational performance to record levels of success.
More articles from Kerry Watson

The changing culture of healthcare delivery
How hospitals are moving from a hospital-centric care delivery model to a patient-centric one.

6 tips for hospitals on moving toward financial stability
Financially pressured hospitals face an uphill battle to remain viable. Kerry Watson, president and CEO at Watson Healthcare and Management Solutions, offers some advice on how to move from struggling to successful.