Maryland healthcare system saves more than $5 million

March 12, 2010

CHARLOTTE, N.C. (March 11, 2010)Frederick Memorial Healthcare System, of Frederick, Md. achieved more than $5 million in labor cost savings with the Premier healthcare alliance through the use of LaborConnect™, Premier’s labor management program.

Under Frederick’s previous internal productivity system, management was not convinced the organization was operating as efficiently as possible. Frederick chose LaborConnect to address its labor issues with a minimum goal of $500,000 in savings or cost avoidance.

Through Frederick’s implementation of LaborConnect, combined efforts led to a validated savings of $5,181,560 in FY2009. As a part of the program, a Premier Performance Partner, an on-site performance improvement expert, provided six days per month of consulting services that helped develop, refine and better manage their labor management program. The Performance Partner return on investment alone was nearly 5-to-1.

“Investing in Premier’s LaborConnect was definitely a timely decision – one that has resulted in significant savings and return on investment,” said Michelle Mahan, chief financial officer of Frederick.

The Performance Partner helped install OperationsAdvisor® (OA), Premier’s Web-based labor benchmarking solution, as well as:

  • Trained and oriented managers and directors to new products and reports.
  • Monitored “watch lists” to help underperformers develop action plans.
  • Incorporated FY2009 labor benchmarks into the FY2010 labor budget process using OA.

Continued Mahan, “OA is an excellent benchmarking and productivity tool, but the real savings have been the result of the work of our Premier Performance Partner, who not only helped us develop and implement our labor management program, but helps us manage it effectively. She has filled the role of labor coach beautifully, helping both department and executive leaders get the most benefit in a very short time frame. I definitely recommend LaborConnect.”

Ratings of staffing levels on Frederick’s annual employee engagement survey improved; mean score was 3.39 on a five-point scale, nearly halfway between “somewhat” and “strongly” agree. 

With more than 500 subscribing facilities, OA is the only labor management solution that fully integrates a productivity measurement system with quarterly and annual benchmarking, along with comparative data analysis. OA offers a unique combination of productivity monitoring, assessment and comparative data so that hospitals can confidently compare operational performance, identify attainable performance improvement opportunities and achieve a rapid return on investment.