hfma article: 5 signs that you can reduce staffing costs and boost nurse satisfaction

labor costs

5 Signs That You Can Reduce Staffing Costs and Boost Nurse SatisfactionBy Samantha Platzke

Improving efficiency in care delivery improves healthcare quality and nurse morale while reducing costs from overtime, agency use, and turnover.

Our company recently posted a social media link to an article about how stress is overwhelming nurses. The post received many responses, mostly from exasperated care-givers imploring that providers “just hire more nurses.”

Finance leaders understand that sentiment but often feel pressure to maintain or reduce nursing headcount. Hospital leaders typically manage their nurse labor pools through schedule planning, daily reconciliation of time scheduled to time worked, staff deployment with automat-ed scheduling systems, and open shift filling.

However, these approaches do not always effectively predict and match nursing resources with patient clin-ical demand. That discrepancy can lead to undesirable outcomes—frustrated nurses, overstaffed or understaffed units, costly overtime and agency staffing, and possible lapses in care.

The following are five signs that your hospital can better match clinical demand with capacity to capture labor sav-ings while boosting morale.

Sign No. 1: Productivity And Efficiency ChallengesHas your hospital failed to reach peak productivity and efficiency in care delivery? Even asking this question can

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concern many nurses and clinical leaders because they regard efficiency programs as code for cutting corners and increasing workloads.

Not so, says Scott Wolf, DO, MPH, FACP, president, Mercy Medical Center, Springfield, Mass. Mercy embarked on a clinical transformation initiative in 2013 that has built efficiency and contin-uous improvement in care coordination from admission to discharge.

“It’s not about doing more with less,” says Wolf, citing an efficiency mantra that many have come to dread. “It’s about doing different with different.”

His hospital adopted a new, hub-and-spoke care model that has improved point-to-point communications, bottlenecks, and poor care handoffs. This foundation for efficiency may drive more accurate staffing and lead to happier nurses.

Sign No. 2: Agency Staffing UseDo you depend heavily on agency resourc-es and overtime? Overtime and outside nursing resources can be costly when used to meet unanticipated demand. Mercy Medical Center Chief Nursing Officer Jessica Calcidise, RN, believes the

remedy for this is better anticipation of that demand.

“When you make the operations and out-comes of care delivery reliable and predict-able, you also make patient clinical demand more predictable,” Calcidise says. “The whole system and the units know which patients are going where, for how long, and what the care path will be. It makes staffing more precise and attentive to the needs of all patients.”

When you make the operations and outcomes of care delivery reliable and predictable, you also make patient clinical demand more predictable.

Calcidise cites Mercy’s rapid, dramatic reductions in overtime and agency labor, which dropped from more than 17 percent to approximately 5 percent over three years from the launch of its care coordination initiative.

“We credit these results to our care coor-dination initiative,” says Calcidise. “By tak-ing a systemwide approach to care delivery, we can much more precisely predict and staff for patient demand. And the nurses are much more focused on patient care in-stead of wearing out shoes and phone lines tracking down information, test results, people, and equipment.”

The hub-and-spoke model at Mercy has contributed to an overall annual financial benefit of $7.8 million, driven by through-put efficiencies that have significantly reduced both inpatient and observation length of stay, increased case-mix index, and lowered rates of readmissions and leaving without treatment.

Mercy Medical Center’s new care model, along with other internal initiatives, has also contributed to an $858,000 reduction in costs for nursing agency and overtime labor.

A Hub-and-Spoke Care Model

The hub-and-spoke approach centralizes care, establishing a physical hub and technology that connects and coordinates people and care activities. Coordinators manage care activities and throughput across people and departments. Hospitals move from department-based care and services to care that focuses on the patient and hospital goals. The model establishes efficiency, predictability, and timeliness, improving throughput while serving patients and caregivers.

Source: Care Logistics, Alpharetta, Ga. Used with permission.

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Sign No. 3: Nurse SatisfactionAre you struggling to keep your best nurses happy—and employed? According to a 2016 research survey published by NSI Nursing Solutions, the average cost of turnover for a bedside registered nurse ranges from $37,700 to $58,400, resulting in the average hospital losing $5.2 mil-lion—$8.1 million at the 2015 turnover rate of 17.9 percent. So nursing turnover costs hospitals millions while disrupting care continuity, damaging morale, and creat-ing staffing challenges. Many factors lead to nurse dissatisfaction—understaffing, compensation, and lack of growth oppor-tunities (Teeter, K., “Relationship Between Job Satisfaction and Nurse to Patient Ratio with Nurse Burnout,” Nursing Theses and Capstone Projects, 2014, Paper 39).

But one of the core stresses for nurses is the fear that distractions and activities unrelated to care will create situations in which they could potentially harm pa-tients. A 2014 nursing survey by Jackson Healthcare highlights the concern that

chaos in care coordination robs nurses of time they should spend with patients (“Practice Trends and Time at Bedside,” Jackson Healthcare and Care Logistics, 2014). Specifically, poor care coordination can lead to the following problems.

> Poor communication among nurses, doctors, hospital leaders, and staff on units and service areas > Time wasted arranging, tracking, and following up on patient tests and procedures > Nurses needing to divide their time among more patients > Nurse fatigue from excessive overtime

To avoid these negative consequenc-es, healthcare leaders should focus on the efficiency of the system. “The value of streamlining nursing workflows and finding ways to make nursing care more efficient is immeasurable,” says Brittney Wilson, BSN, RN, an author and a blogger also popularly known as “the Nerdy Nurse.” “Nurses are tired of spending their time

communicating the same things multi-ple times. It takes them away from their patients and reduces their ability to provide well-rounded care.”

Bethesda Health, Boynton Beach, Fla., also adopted a centralized care model that connects and coordinates the right people and care activities, giving nurses the time back to spend at the bedside, not on the phones and running the hallways.

“The centralized care management model empowers the nurses,” says Mary McClory, RN, LHRM, CPHQ, vice president of quality, Bethesda Health. “For example, daily progression huddles on the unit gath-er nurses, doctors, and other caregivers responsible for ensuring that patient care plans and discharge targets stay on track.”

In addition, the optimized care mod-el gives nurses and other staff the tools, platform, and freedom to shine in their positions.

“We’ve seen some of our best nurses grow and flourish,” McClory says. “They identify challenges to care and throughput,

Nursing Overtime and Temporary and Agency Hours as a Percentage of Productive Hours

Leaders at Mercy Medical Center reduced nursing overtime and agency labor for direct care inpatient units from more than 17 percent to approxi-mately 5 percent over three years.

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Source: Care Logistics, Alpharetta, Ga. Used with permission.

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and apply problem-solving tools to coach hospital leaders during weekly rounding to improve all aspects of patient care and the patient experience.”

Sign No. 4: Patient SatisfactionAre patient experience scores lagging? It makes sense that understaffing would spread nurses thin across too many patients and diminish patient satisfaction. But it is about more than just numbers. It is about what the nurses are empowered and asked to do, and how much they are allowed to focus on patient care and treatment.

For example, some suggestions for improving patient satisfaction seem to have little to do with providing better care and a more satisfying experience. One example is encouraging nurses to say the word “always” frequently when interacting with patients because that is the desired answer to each of the HCAHPS survey questions.

Such attempts to finesse higher survey scores are aimed in the wrong direction. Hospitals should focus on processes and tools that allow nurses and teams to coordi-nate quality care for all patients. If hospitals reliably can get that right and keep improv-ing, happy and satisfied patients and nurses will likely follow.

Sign No. 5: Nurse-to-Patient RatiosDo nurse-to-patient ratios fail to closely match clinical demand with nurse capac-ity on the units? Nurse-to-patient ratios do not always accurately match clinical

demand with nursing capacity. This is an area where many hospitals are applying new technologies to improve staffing precision.

Holy Cross Hospital, Fort Lauderdale, Fla., adopted software that provides demand visibility across the units from a central hub, with a staffing coordinator continuously matching unit patient demand and nurse capacity for upcoming shifts.

“It makes real-time scheduling and staffing objective, rather than subjective,” says Brandon Charette, operational perfor-mance coordinator. “We can tell at a glance whether upcoming unit shifts properly match the clinical needs of the patients, and adjust assignments accordingly.”

He says the system looks ahead in one-hour increments, which helps them ac-count for continuous changes in workload, admissions and discharges, and patient clinical needs across the hospital.

“We used to track it on paper as best as we could,” Charette says. “Now the system tells us immediately: Are we flexing appropri-ately? Are we understaffed? Are we floating people appropriately? Is it affecting our dis-charge times? It’s really advancing the objec-tives of our care coordination initiative.”

Predicting and Planning“One of the most interesting things about working in a hospital is dealing with a fluctuating census,” author and blogger Wilson says. “With the feast or famine world in staffing needs, hospitals are throwing money down the drain if they are

not actively working to predict and plan for clinical demand.”

As you wrestle with reducing and forecasting labor costs, consider the five signs that your hospital may benefit from creating a better match between clinical demand and capacity. In addition, con-sider approaching the remedies not as isolated cost containment projects, but as opportunities to transform care delivery to continuously improve quality, experience, throughput, and flow.

Samantha Platzke is CFO and senior vice president of system perfor-mance, Care Logistics, Alpharetta, Ga., and a member of HFMA’s Northwest Ohio Chapter ([email protected]).

Interviewed for this article:

Scott Wolf, DO, MPH, FACP, is president, Mercy Medical Center, Springfield, Mass.

Jessica Calcidise, RN, is chief nursing officer, Mercy Medical Center.

Brittney Wilson, BSN, RN, is an author and a blogger popularly known as “the Nerdy Nurse” ([email protected]).

Mary McClory, RN, is vice president of quality, Bethesda Health, Boynton Beach, Fla.

Brandon Charette is operational performance coordinator, Holy Cross, Hospital Fort Lauderdale, Fla.

This article originally appeared in the December 2016 issue of Healthcare Cost Containment. Copyright 2016 by Healthcare Financial Management Association, Three Westbrook Corporate Center, Suite 6 00, Westchester, IL 60154. For more information, call 800-252-HFMA or visit hfma.org.
