My last post highlighted the cost today of a PA and the cost per hour of consultant activity. But these are budget costs with a baked in assumption that every PA delivers four hours of consultant activity. Given the cost per "average" PA is £15,819, it is important to ensure that PAs deliver these expected hours. If not, mismatches between the expected and actual hours of delivery drive up the "real" cost of consultant activity.
The table below shows how the real cost of delivery increases as the job plan match between expected hours and actual hours decreases.
For example, the real cost of activity rises to £134 per hour if the match between actual and expected hours of activity is only 70% i.e. the service only delivers 118 hours of annual activity per PA rather than 168.
It is critical therefore to monitor the match between your job plans and actual delivery to keep the real cost of delivery as low as possible.
But in addition to the rising real costs of service delivery, a mismatch has further implications. The difference between the expected hours and actual hours can be thought of as a capacity leak or "lost hours". These lost hours of activity result in fewer patients being treated. As a result, the backlog or PTL will grow beyond service planning expectations or additional activity needs to be bought to plug these leaks but with unexpected costs.
Let's use the imaginary example of a gynae department that has calculated it needs to operate on 3,500 patients next year to keep its PTL from growing. This equates to 50 PAs of surgical activity, assuming 168 hours of surgery per PA. Our planned total cost is therefore £790,965 with every hour of activity expecting to cost £94.
However, during the year the match between actual and expected hours is only 70%. This means the real cost per hour of activity rose to £134 and the department lost 2,520 hours of expected activity. If we did not address these capacity leaks, the PTL would have grown by more than a thousand patients. However, we bought in additional activity to cover these lost hours (WLI's at £175 hour) which added an additional cost of nearly £450K.
In total, our actual cost of frontline activity was £1,232K, £441K more than expected. This example highlights the double whammy of job plan mismatches and lost capacity. Departments suffer both the increase in the real cost of an hour of activity but also the additional financial penalties of having to buy in expensive, additional and avoidable activity.
To discuss how to monitor your job plan match don't hesitate to get in touch with me at angus@staffingscience.co.uk.