8.5 Budgets and Staffing

Economics and health care reimbursement models affect health care institutional budgets that ultimately affect nursing staffing. A budget is an estimate of revenue and expenses over a specified period of time, usually over a year. There are two basic types of health care budgets that affect nursing: capital and operating budgets. Capital budgets are used to plan and evaluate major projects and investments, such as new facilities or equipment. Operating budgets include personnel costs and annual facility operating costs.^[1] Typically 40% of the operating budgets of health care agencies are dedicated to nursing staffing. As a result, nursing is often targeted for reduced hours and other cutbacks.^[2]

What is the value of a nurse? Nurses are priceless to the clients, families, and communities they serve, but health care organizations are tasked with calculating the cost of delivering high quality nursing care in an affordable manner using safe staffing models. All members of the health care team must understand the relationship between economics, resources, budgeting, and staffing and how these issues affect their ability to provide safe, quality care to their patients.

As health care agencies continue to adapt to meet “Pay for Performance” reimbursement models and deliver cost-effective care to an aging population with complex health needs, many nurses are experiencing changes in staffing patterns.^[3] Strategies implemented by agencies to facilitate cost-effective nurse staffing include acuity-based staffing, team nursing, mandatory overtime, floating, on call, and off with benefits.

Acuity-Based Staffing

Historically, inpatient staffing patterns focused on “nurse to patient ratios” where a specific number of patients were assigned to each registered nurse during a shift. Acuity-based staffing is a patient assignment model that takes into account the level of patient care required based on the severity of a patient’s illness or condition. As a result of acuity-based staffing, the number of clients a nurse cares for often varies from shift to shift as the needs of the patients change. Acuity-based staffing promotes efficient use of resources by ensuring nurses have adequate time to care for complex patients.

Team Nursing

Team nursing is a common staffing pattern that uses a combination of Registered Nurses (RNs), Licensed Practical/Vocational Nurses (LPN/VNs), and Assistive Personnel (APs) to care for a group of patients. The RN is the leader of a nursing team, making assignments and delegating nursing care to other members of the team with appropriate supervision. Team nursing is an example of allocating human resources wisely to provide quality and cost-effective care. In order for team nursing to be successful, team members must use effective communication and organize their shift as a team.

Mandatory Overtime

When client numbers and acuity levels exceed the number of staff scheduled for a shift, nurses may experience mandatory overtime as an agency staffing tool. Mandatory overtime requires a nurse to stay and care for patients beyond their scheduled shift when there is a lack of nursing staff (often referred to as short staffing). Staff nurses across the nation have reported a significant increase in the use of mandatory overtime as a staffing tool, due to the nursing shortage and the COVID pandemic, which can have a negative impact on patient safety. Depending on state laws, nurses can be held liable for patient abandonment or neglect charges for refusing to stay when mandated.

The American Nurses Association recognizes mandatory overtime as a dangerous staffing practice because of patient safety concerns related to overtired staff. Nurses should be aware of state and organizational policies related to mandatory overtime.^[4]

Floating

Floating is a common agency staffing strategy that asks nurses to temporarily work on a different unit to help cover a short-staffed shift. Floating can reduce personnel costs by reducing overtime payments for staff. It can also reduce nurse burnout occurring from working in an environment without enough personnel resources.

Nurses must be aware of their rights and responsibilities when asked to float because they are still held accountable for providing safe patient care according to their state’s Nurse Practice Act and professional standards of care. Before accepting a floating assignment, nurses should ensure the assignment is aligned with their skill set and they receive orientation to the new environment before caring for patients. If an error occurs and the nurse is held liable, the fact they received a floating assignment does not justify the error. As the ANA states, nurses don’t just have the right to refuse a floating patient assignment, they have the obligation to do so if it is unsafe.^[5] The ANA has developed several questions to guide nurses through the decision process of accepting patient assignments. Review these questions in the following box.

On Call and Off With Benefits

When staffing projected for a shift exceeds the number of clients admitted and their acuity, agencies often decrease staffing due to operating budget limitations. Two common approaches that agencies use to reduce staffing on a shift-to-shift basis are placing nurses “on call” or “off with benefits.”

On Call

On call is an agency staffing strategy when a nurse is not immediately needed for their scheduled shift. The nurse may have options to stay at work and complete work-related education or stay home. When a nurse is on call, they typically receive a reduced hourly wage and have a required response time. A required response time means if a nurse who is on call is needed later in the shift, they need to be able to report and assume patient care in a designated amount of time.

Off With Benefits

A nurse may be placed off with benefits when not needed for their scheduled shift. When a nurse is placed off with benefits, they typically do not receive an hourly wage and are not expected to report to work, but still accrue benefits such as insurance and paid time off.

Advocacy by the ANA for Appropriate Nurse Staffing

According to the American Nurses Association (ANA), there is significant evidence showing appropriate nurse staffing contributes to improved client outcomes and greater satisfaction for both clients and staff.^[7]

Appropriate staffing levels have multiple client benefits, including the following:^[8]

• Reduced mortality rates
• Reduced length of client stays
• Reduced number of preventable events, such as falls and infections

Nurses also benefit from appropriate staffing. Appropriate workload allows nurses to utilize their full expertise, without the pressure of fatigue. A recent report from top nurse researchers thought leaders and managers indicate staff levels should depend on the following factors:^[9]

• Patient complexity, acuity, or stability
• Number of admissions, discharges, and transfers
• Professional nurses’ and other staff members’ skill level and expertise
• Physical space and layout of the nursing unit
• Availability of technical support and other resources

Cost-Effective Nursing Care

One of the Standards of Professional Performance by the American Nurses Association (ANA) is Resource Stewardship. The Resource Stewardship standard states, “The registered nurse utilizes appropriate resources to plan, provide, and sustain evidence-based nursing services that are safe, effective, financially responsible, and used judiciously.”^[10]

Nurses can help contain health care costs by advocating for patients and ensuring their care is received on time, the plan of care is appropriate and individualized to them, and clear documentation has been completed. These steps reduce waste, avoid repeated tests, and ensure timely treatments that promote positive patient outcomes and reduce unnecessary spending. Nurses routinely incorporate these practices to provide cost-effective nursing care in their daily practice:

• Keeping supplies near the client’s room
• Preventing waste by only bringing needed supplies into a client’s room
• Avoiding prepackaged kits with unnecessary supplies
• Avoiding “Admission Bags” with unnecessary supplies
• Using financially-sound thinking
  • Understanding health care costs and reimbursement models
  • Charging out supplies and equipment according to agency policy
• Being Productive
  • Organizing and prioritizing
  • Using effective time management
  • Grouping tasks when entering client rooms
  • Assigning and delegating nursing care to the nursing team according to the state Nurse Practice Act and agency policy
  • Using effective team communication to avoid duplication of tasks and request assistance when needed
  • Updating and individualizing clients’ nursing care plans according to their current needs
  • Documenting for continuity of client care that avoids duplication and focuses on effective interventions based on identified outcomes and goals