UTHCPC Procedures - Cost Reduction Program

Cost Reduction Program

Introduction

Date of Last Review 5/3/07
SME: Director of Personnel Systems Management

UTHCPC continuously strives to cut operational expenses in an effort to function efficiently. Administrative staff strongly believe that employees at all levels can assist in providing suggestions and ideas for operational cost reductions in all aspects of hospital functions. As a reward to employees for providing such suggestions, UTHCPC Administration will provide a financial award.

Benefits of participation

The benefits of participation by employees in the program include:

Promotion of teamwork

Improved employee motivation and morale

Recognition of employees

Financial incentives

Administrator duties

The UTHCPC Administrator has the following duties regarding the Cost Reduction Program:

Must review and evaluate the program at least annually to ensure that the program's goals are achieved

Determine whether the program will be changed or continued

Reserves the right to change or terminate the program at any time

Financial incentives

The following table illustrates the cost reductions realized and the amount of award that is possible:

Cost Reduction Realized	Amount of Award
$1,000	$50.00
$2,000	$100.00
$3,000	$150.00
$4,000	$200.00
$5,000	$250.00
$5,001-$7,500	$350.00
$7,501-$9,999	$450.00
>$10,000	$500.00

Criteria for suggestions

The following are criteria for cost reduction suggestions:

Specified goals and performance measurements must be substantiated and measurable to determine the cost savings to hospital operations

Suggestions must be clearly detailed, defined, and documented on the Cost Reduction Suggestion form and submitted to the Achievement Award Program Committee (AAPC) for consideration
Note: No retroactive payments can be made for any previous suggestions prior to the beginning of this program.

Suggestions cannot be something the employee is already responsible for reducing based on their job responsibilities.
Example: Managers are responsible for staffing their departments efficiently based on their approved budgets and are accountable for reducing overtime cost.

Attainment of program goals cannot adversely impact other areas

Criteria for reducing costs must be clearly communicated and met prior to payment

Cost reduction examples

The following are examples of possible areas of cost reduction. This is by no means an exhaustive list:

Reduction in overtime, consultant fees, travel expenses, printing and mailing expenses, payments for advertising, membership dues or subscriptions

Increase efficiency in energy use

Improve office procedures and systems

How to make your suggestion

Follow these steps to make a cost reduction suggestion:

Step	Action
1	Obtain a Cost Reduction Suggestion form.
2	Propose a reasonable method to achieve savings or increase efficiency.
3	Describe how your suggestion will save money, increase revenue or increase efficiency.
4	Complete the entire form. Be sure to write neatly and legibly. Sign the form and make a copy for yourself.
5	Submit the original form with any attachments to the AAPC in care of Personnel Systems Management, Room 3A04.
6	A Program Coordinator will notify you with an update as to the status of your suggestion within 60 days.
7	After final determination, payment will be included in your payroll check on the next available payroll. Note: Any award money paid to non-exempt employees must be included in overtime calculations under the Fair Labor Standards Act.

Related standards

The Joint Commission Human Resources Standards

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