Staff are the largest ongoing operational expense in healthcare and of course, we want to get the most from this investment in human capital.  Often, this takes the form of a high utilization target in order to maximize revenues per staff member.  However 100% utilization is not a realistic – nor desirable – outcome.

So how do we set an optimal utilization target?  It depends on your market, your patients, and your goals – and you can use simulation to pinpoint the right target for your facility.  Let’s take an example of an outpatient rehabilitation center that provides OT and PT services to patients recovering from a stroke.

Let’s assume that:

• The optimal time period between appointments is 2-3 days.
• If you can’t see a patient within that window, the patient will have slow progress and will need more appointments in order to achieve the same clinical outcomes.
• If they have a limited number of visits, the delays in care result in poorer outcomes.

The question is – How many staff do I need in order to:

• Serve a certain number of patients,
• Achieve optimal clinical outcomes,
• Maximize patient satisfaction, and
• Minimize cost.

With the variability in demand due to cancellations, clinical delays, and patient factors, it is impossible to maintain a strictly perfect utilization level – and if we do, this will cause delays in care and patients will end up simply going without or shifting to a competitor.

With a simple model, you can run many scenarios in order to understand the trade-off between total cost and the number of staff.  Assuming a consistent mix of skills (PT and OT), here are the results for a clinic that sees on average of 375 patients per week:

With these results, you can identify how many staff you need, understand what utilization targets should be (to include on your executive scorecard) and anticipate your annualized staffing costs.