|
AHCCCS Virtual Office Pilot
(From Business Case for Virtual Office
at AHCCCS)
Theresa Ditton
AHCCCS Virtual Office Project Manager
AHCCCS Assistant Director Human Resources & Development
Background:
The Arizona Health
Care Cost Containment System (AHCCCS) is a public-private
partnership that uses federal, state, and county funds to provide
health care coverage to the State’s acute and long term care
Medicaid population, low-income groups, and small businesses. AHCCCS
is a managed care system that mainstreams recipients, allows them to
choose their providers, and encourages prevention and the
coordination of quality care. Currently, more than one million
individuals, approximately 18% of Arizonans, receive health care
coverage through AHCCCS. Arizona is one of the fastest growing
states in the nation, with a changing population and a changing
economic climate. The increased population, coupled with a
proliferation of low wage jobs and increasing health insurance
costs, has contributed to significant growth of the AHCCCS program.
Moreover, this growth reflects a change in the AHCCCS population
from one comprised primarily of non-working welfare recipients to
one comprised of the working poor.
Along with the
increasing population, AHCCCS has experienced an increased
workload. Attracting and retaining a competent staff is critical to
ensure that the Agency’s goals are met with quality and cost
effectiveness.
Some key issues
related to the AHCCCS workforce include:
• Aging Workforce:
The average age of AHCCCS employees is 44 years, an age similar to
that of other state agencies. However, approximately 10% are nearing
or have passed their 80 points and are eligible for retirement.
These individuals will be leaving after long tenures and with
extensive knowledge of the Agency’s operations. Without attention
to employee retention and succession planning, the attrition of
these experienced employees could significantly impact the Agency’s
ability to fulfill its mission.
• Absenteeism and
Turnover: Similar to other state agencies, AHCCCS experiences
higher rates of absenteeism and turnover than the private sector.
The Agency’s turnover rate in SFY 2005 is over 20% and continues to
trend upward. The cost of this turnover involving covered positions
alone is estimated at $1.3 million. Absenteeism at AHCCCS averages
9 days per year. Nationally, according to the Bureau of National
Affairs, turnover is around 13.2% and absenteeism is 3.13 days per
year.
• Compensation:
AHCCCS membership and its programs continue to expand within the
context of budget constraints that limit full-time positions and
salaries and challenge recruitment and retention efforts. State
salaries remain at an estimated 22% below the market level.
Recruitments for critical professional level positions take upwards
of 9 months to a year in many cases. The responsibilities of these
positions are far greater than the compensation available. For
example, the division responsible for Health Care Management
experienced a 38% turnover in professional staff in 2005 with every
departing manager leaving for salaries that are tens of thousands
more dollars annually.
• Changes in Job
Complexity: As technology replaces the mundane and routine work,
a shift toward higher-skilled “knowledge worker” jobs is occurring.
Positions currently used as entry-level opportunities are requiring
more skill and yet are still paying at just under $11.00/hour with
little to no hope for salary increases as the complexity of the job
duties are learned.
These key issues
(aging workforce, absenteeism and turnover, compensation, and
changes in job complexity) call for new strategies. One such
strategy, Virtual Office, appears promising.
Virtual Office
provides an opportunity to take a fresh look at the roles and
responsibilities of employees and supervisors in work areas and to
determine if changes in job descriptions might result in the maximum
effectiveness of existing staff.
Virtual Office (VO)
can address an aging workforce by providing the flexibility to
continue to work part time from home to employees after retirement.
Additionally, VO technology gives the remaining workforce the
opportunity to connect with retiring AHCCCS employees, document
those interactions, and validate keeping them on payroll part-time.
Although key
attractions of VO is increased productivity and decreased costs,
employees see virtual office as a “pay increase” due to decreased
work related expenses (e.g., transportation, appropriate work
attire, after school care and dependent care). This advantage
partially addresses employee compensation issues. The time savings
and reduced stress from eliminating the daily commute are also
valuable to the employee and the employer alike as wellness and
work-life improvements.
Virtual Office is a
strategy that addresses employee retention and absenteeism and
improves productivity. Research shows that an average increase in
productivity of 30% can be expected from full time work employees
that work from home. Additionally, reductions in turnover and
absenteeism have been noted by such employer giants as AT&T,
American Express, the Federal Government, and Los Angeles County, to
name a few. In fact, LA County has one of the largest Virtual
Office workforces in the country and documented a 20:1 benefit to
cost ratio in the fourth year of their program.
On average, a
company can save more than $1,000 for office space/utilities per
employee that no longer reports to a centralized office. Some
companies have been able to reduce “headquarters” to a minimal staff
with meeting facilities; the rest of their employees work from
home. These arrangements save incredible facilities costs over the
long term. For example, since 1995 AT&T reduced its office space by
50% and has saved $500 million in office lease costs. At AHCCCS,
Facilities estimates a savings approximately $5,000 per year.
Companies like
McKesson in Scottsdale Arizona have been able to attract a different
workforce by using technology to allow employees to work from home –
those with disabilities and those who are retired. McKesson
specifically targets those populations to increase the applicant
pool for its positions.
Results:
(from AHCCCS Strategic Plan 2008)
AHCCCS has transitioned 120 employees
(10% of its workforce) to full time from home employees, ended its
lease on one office building, and increased productivity in some
areas by 30%. In addition to the high employee satisfaction
and increased productivity, AHCCCS may be able to further reduce the
number of offices needed statewide and expects to be expand its
labor pool to include rural areas and persons with disabilities.
Materials:
|
