How many healthcare facility administrators are experiencing financial pressures and looking to cut costs?
The answer is likely close to 99.99 percent of them.
You are not alone.
The trail between nurse staffing and your accounting department is fraught with potential budget landmines that trigger with words like “overtime,” “travel nurses,” “low patient census,” “nurse vacancy,” and so on.These are very real pressures you’re facing, and although cutting staff may seem like a logical response, it is also a short-sighted one.
A better solution can be found by achieving staffing efficiency.
What does “staffing efficiency” mean in healthcare?
When we talk about staffing efficiency in healthcare, we’re referring to a perfect balance that involves having the correct number of nurses with the necessary skills at the right time.
Over or undershooting this balance can lead to all of the following:
- Wasted time and money
- Negative patient outcomes
- Reduced staff morale
- Additional staffing issues
So, what might staffing efficiency look like?
Here are some key characteristics of a facility that is achieving a balance:
- Analyzes historical patient census data and current trends to make projections for staffing needs
- Has an established protocol or staffing model in place to manage sudden increases and decreases in the patient census
- Fosters a shared governance style of collaboration between nursing staff and nurse leaders
- Maintains clear lines of communication and feedback with its nursing staff
- Has multiple sources to draw from for staffing needs
Common challenges to healthcare staffing
Staffing efficiency is a worthy goal, yet it’s easier said than done. The current nursing shortage is just one of several staffing challenges to overcome. High turnover rates, variability within the demands of staffing, and even organizational inefficiencies such as slow reaction times and rigid scheduling limitations are other common barriers.
In 2023, Nursa commissioned a research survey of 203 healthcare executives to examine how healthcare facility decision-makers view nurse staffing trends. The results highlighted that “the financial impact of relying on travel nurses and traditional staffing agencies has been—and continues to be—a top concern for these healthcare executives.”
Furthermore, a majority of respondents (69 percent of all health executives and 75 percent of CFOs) “shared that nursing shortages at their facilities have led to a significant increase in overall costs and remains one of the biggest drivers of margin pressure.”
Benefits of staffing efficiency
Simply reducing nurse staffing isn’t the answer to improving a healthcare facility’s finances. In fact, nurse understaffing can have negative implications for patient safety, patient outcomes, and continuity of care. Therefore, balance is important.
Achieving staffing efficiency will help facilities prioritize patient care without incurring unnecessary cost increases. Here’s how:
Lowered staffing costs and financial waste
Staffing efficiency helps lower staffing costs and reduce financial waste in the following ways:
- Reduce recruiting costs: When turnover goes down, so does recruitment.
- Reduce reliance on staffing agencies: Staffing agencies often impose expensive contracts and fees.
- Avoid overhiring: Having too many staff members means you’re paying too much in employee benefits.
- Reduce lengths of patient stays: Reimbursement rates often decrease with extended patient stays.
Research targeting the relationship between nurse staffing and a facility’s financial performance is sparse. However, the authors of “The Effects of Nurse Staffing on Hospital Financial Performance: Competitive Versus Less Competitive Markets” analyzed nurse and hospital data in Florida. They came to the following conclusions:
- There is a consistent positive relationship between a nurse-reported better work environment and hospital financial performance in all facilities.
- Registered nurse staffing levels have a significant positive impact on hospital financial performance in the more competitive markets.
Improved patient care outcomes
Understaffing of nurses can have dangerous implications on patient safety. Alternatively, maintaining safe levels of nurse staffing can help in the following ways:
- Reduce patient lengths of stay
- Reduce patient readmissions
- Improve patient satisfaction
Improving patient care outcomes can help your facility be competitive and build a solid reputation in the community.
Healthier staff culture
The wellbeing of your nursing staff can be seen in their capacity to be compassionate and thorough with their patients and reduce medical errors. Therefore, staff wellbeing affects patient safety and outcomes, as well as retention rates. Staffing efficiency will allow your nurses to have appropriate workloads, which can have the following impacts:
- Reduce levels of nurse burnout
- Improve job satisfaction among staff
- Contribute to a healthier staff culture
- Make resources available to invest in wellbeing programs and staff training and development
How to reach staffing efficiency at your facility
What’s the formula for achieving staffing efficiency?
While there’s no one-size-fits-all solution, the following tips can help light the path.
Set and track your key performance indicators (KPIs)
KPIs measure your progress towards a specific goal. Set staffing efficiency as your desired objective, and brainstorm ways to measure and track your staffing.
Hint: Look to data sets such as HPPD and HPRD, staff utilization rate (contingency staff, agency staff, internal staff, etc.), staff turnover rate, and recruitment and overtime costs.
Establish a custom staffing strategy
With leadership buy-in, multiple strategies can work cohesively towards the same goal.
Strategies should be customized to address short-term needs, such as last-minute coverage due to call outs and sudden unexpected spikes in patient census, as well as medium- and long-term needs, such as staff scheduled time off and position vacancies.
Many facilities find success by implementing a hybrid approach that combines internal staff and contracted per diem staff for a flexible staffing model:
- Maintains a healthy roster of internal nursing staff that work predictable part-time and full-time schedules
- Utilizes PRN staffing platform to fill gaps in coverage due to last-minute call outs, census spikes, and vacancies
Implement new tools and systems gradually
It can be tempting to rush the implementation of a new system that you are sure will make positive changes. However, leadership and nursing staff buy-in and support are essential to maximizing gains.
Engage with nursing staff for feedback and participation when testing and implementing a new tool. Staff members’ perspectives and understanding of the day-to-day operations can provide valuable insights for data-driven decision-making.
Furthermore, encouraging their involvement will pave the way for smoother and more widespread adoption among staff.
Reinvest in staff nurses
Don’t forget that the impact of nurse turnover spreads beyond staff morale and workload. It’s a financial loss as well.
Allocate resources to invest in your nursing staff to keep them engaged and increase nurse retention. Here are some ways you can invest in your nursing staff:
- Workplace mentorship programs: Support your less-experienced nursing staff and improve new-nurse retention rates.
- Continuing education and skills workshops: Invest in growing nurses’ capabilities so they feel valued.
- Career progression pipeline within the organization: Provide career growth opportunities that keep them from looking elsewhere.
- Wellness programs and campaigns: Acknowledge the physical and emotional strain of the profession and encourage nurses to prioritize wellbeing.
Solicit regular feedback from staff nurses
You’ve heard this a thousand times already and are likely to hear it a thousand times more over the course of your career. Feedback is important. It’s not enough to ask for feedback, though. You need to create opportunities for sharing feedback on a regular basis, and then take action on it when appropriate.
Consider implementing a shared governance model that invites your nursing staff to participate in conversations and decision-making. This is a key aspect of Magnet Recognition, but its advantages alone are really what should have you considering it.
Shared governance is associated with improvements in patient outcomes, higher nurse job satisfaction, lower nurse burnout, and lower nurse turnover. This translates to loyal nurses, higher retention, and better patient care.
The bottom line: Efficiency goes beyond cost cutting
Achieving staffing efficiency isn’t a simple goal. It’s a process that requires careful data analysis, thoughtful applications of tools, customized staffing strategies, and investment in your nursing staff. It is, however, a goal with significant benefits that will contribute to a healthier staff culture, lowered staffing costs, and improved patient care quality.
Nursa can help your facility stabilize its staff levels with customized per diem staffing solutions.
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