C-suite executives are realizing the positive impact that a satisfied, engaged nursing workforce can have on clinical, financial and operational outcomes. Nurses are the most patient-facing part of the workforce, and nurse staffing variables have a significant impact on patient satisfaction and clinical outcomes. Nurse satisfaction also impacts the bottom line. With nurse turnover averaging 14%, the average turnover expense for a 300-bed hospital approaches $4.4 million annually.1,2 With so much at stake, it is important that C-suite executives understand how satisfied, engaged nurses can ultimately deliver better patient care and a healthier bottom line.
Using Technology to Empower Nursing
With the workforce accounting for 54.2% of operating expenses3, utilizing up-to-date workforce technologies to manage and optimize staffing makes fiscal sense. But, those benefits should extend beyond the budget. Research has shown that changes in technology may allow for substantial improvements in the use of nurses’ time and the delivery of safe patient care.4 However, technology that is not nurse-friendly can impede the work of the nurse. With workforce management technology, it’s important to focus on operational efficiencies that allow nurses to spend more time on patient care, not less. For example, solutions that harness analytics to match nurses and patients based on staff skills and preferences, patient care needs and budget constraints allow the organization to effectively flex the workforce. Nurse workloads are more balanced, and that can be a satisfier for both nurses and their patients.
In addition to helping nurses increase their daily effectiveness, workforce technology can also help manage broader job satisfaction. Research has shown that providing nurses with control over their work schedule can enhance their sense of control and predictability, as well as improve the quality of work life.5
A Collaborative Strategy Powered by Analytics
Health systems are in the business of delivering affordable, high quality patient care. However, when it comes to workforce management, different disciplines across the health system can have widely different strategies to reach that goal. For example, finance is focused on labor cost containment, nursing is measured on patient satisfaction and outcomes and the operations team is working to improve productivity. Those strategies can either complement or compete with one another. An overarching strategy that relies on analytics to drive decisions can help ensure that everyone within the health system is working collaboratively rather than in disconnected silos.
For example, labor cost containment can be achieved by more effectively utilizing internal staffing resources through tactics that engage front-line staff in the process of filling open shifts. Data transparency gives employees the ability to view open shifts that they are qualified to work, providing them with the opportunity to voluntarily pick up an available shift and eliminating the need for the organization to incur costly premium labor or overtime expenses. With this collaborative staffing approach, patient care needs are met, nurses achieve a better work-life balance and labor costs are contained.
The Far-Reaching Benefits of Work-Life Balance
The benefits of a work-life balance extend beyond nurse satisfaction. Fatigue and stress as a result of nurses working too much overtime can result in serious, costly medical errors. In fact, compared with nurses working shorter hours, nurses working greater than 12.5-13 consecutive hours report a significant decrease in vigilance on the job6 and unmanaged overtime can lead to medical errors and negative patient outcomes, including an increased risk of patient falls and hospital-acquired infections and an increased likelihood of medication errors.7 With experts estimating an astonishing 400,000 deaths caused by medical errors each year8 and the cost of medical errors topping $17 billion annually,9 reducing the number of medical errors is a clear priority for an industry driving towards improved outcomes and better quality.
However, for many hospitals, nursing overtime is the rule, not the exception. According to industry surveys, more than 50% of full-time nurses work an average of 7 hours of overtime each week.10 When left unchecked, 41% of a hospital’s nurses may work overtime. That’s not only an expensive proposition, but makes it difficult for nurses to have a work-life balance. Accounting for up to 7-10% of total worked hours, nurse overtime for a 300-bed hospital can cost some $3.7 million annually.11
While completely eliminating overtime is unrealistic, C-suite executives should question what amount of overtime is acceptable. For comparison, consider from an industry perspective that the 30th percentile performers average roughly 2.5% of overtime as a percentage of total work hours.12
Continuing C-Suite Involvement
Workforce and staffing management are critical components of any health systems’ go-forward strategy. A collaborative team approach that uses analytics to drive data-driven decision-making should be the foundation of the workforce management strategy. Recognizing the importance of staff engagement and leveraging the power of an engaged workforce helps ensure the organization can achieve the clinical, financial and operational goals they are seeking.
1. KPMG. “KPMG’s 2011 U.S. Hospital Nursing Labor Costs Study”. Accessed July 2, 2014.
2. Sage Growth Partners Analysis.
3. Becker’s Healthcare. 10 Statistics on Hospital Labor Costs as a Percentage of Operating Revenue. Accessed December 10, 2013. http://www.beckershospitalreview.com/finance/10-statistics-on-hospital-labor-costs-as-a-percentage-of-operating-revenue.html
4. Hendrich, Ann, et al. “A 36-Hospital Time and Motion Study: How Do Medical-Surgical Nurses Spend Their Time?” The Permanente Journal 2008
5. Kilpatrick, K., & Lavoie-Tremblay, M. “Shiftwork: What health care managers need to know. Health Care Manager” 25(2), 160-166.
6. Health Resources and Services Administration. “The Registered Nurse Population. September 2010.” Accessed July 28, 2014. http://bhpr.hrsa.gov/healthworkforce/rnsurveys/rnsurveyfinal.pdf, pgs. Xxviii, 3-27
7. Bae, Sung-Heui. “Presence of Mandatory Overtime Regulations and Nurse and Patient Outcomes.” Nursing Economics. March/April 2013: 31, no.2: 59-89.
8. Allen, Marshall. “How Many Die from Medical Mistakes in U.S. Hospitals?” ProPublica September 13, 2013. Available at: http://www.propublica.org/article/how-many-die-from-medical-mistakes-in-us-hospitals
9. Van Den Bos, et al. “The $17.1 Billion Problem: The Annual Cost of Measureable Medical Errors.” Health Affairs, April 2011, No. 4: 596-603. http://content.healthaffairs.org/content/30/4/596.full.pdf+
10. Bae, Sung-Heui. “Nursing Overtime: Why, How Much, and Under What Working Conditions?” Nursing Economics, 30, no 2 (March/April 2012): pg. 64.
11. Sage Growth Partners Analysis.
12. The Advisory Board Company. “Data and Analytics Nursing Productivity Benchmark Generator.” Accessed July 2, 2014. http://fac.advisory.com/2014_B_NUBI_BGFramework/Main/GetSession/?var=917910FF-D016-4149-BB43-DD6666801BC0