The Forum

5 things chief executives need to know about nursing

Global Intelligence Unit

by Carol Boston-Fleischhauer, JD, MS, BSN

In this Best of the Advisory Board post, the Global Centre for Nursing Executives' Carol Boston-Fleischhauer explains what chief executives really need to know about nursing.

1. 85% of near-term savings opportunities aren’t from labour

Nearly 80% of health system executives report they need to aggressively cut operating costs in the next three years. The default strategy for many leaders is to focus disproportionately on labour budgets—specifically nursing labour budgets. This isn’t surprising, given that 50% of hospital expenses are from labour, and nursing represents the largest segment of the labour workforce.

But when Advisory Board researchers identified the most promising opportunities for big, rapid savings, we found that even though labour represents a sizeable amount of hospital operating costs, it represents only about 15% of the cost-savings opportunity.

The other 85% is from three, often overlooked, opportunities: outdated care protocols, supply waste, and unfavourable contract terms.

2. Most frontline nurses aren’t working at the top of their license

The majority of health care organisations are over-relying on bedside RNs to complete work that support staff or other non-RN care team members can safely accomplish. This is costly.

According to an analysis of nursing activities on several medical/surgical units published in the Journal of Nursing Administration, the typical medical/surgical unit spends more than $750,000 USD per year paying RNs to perform support-staff level responsibilities, including searching for equipment, transporting patients, and even emptying the trash. To care for an increasingly complex patient population with current staffing resources, leaders must ensure nurses (and all other care team members) work at the "top of their license"—spending their time on responsibilities that rely on their training and expertise.

The Global Centre for Nursing Executives study, Achieving Top-of-License Nursing Practice, outlines 20 best practices for ensuring frontline nurses have the time and interprofessional support they need to practice to the full extent of their training and skills.

3. Nursing staff increasingly question executive actions because they don’t understand how they link to the mission

In a recent Advisory Board survey, less than 50% of nurses agreed with the statement, "The actions of executives within my organisation reflect our mission and values." Advisory Board researchers identified the reason so few nurses agree with the statement: Frontline staff lack the critical information they need to understand the linkage between executive actions and their organisation’s mission.

There are at least two consequences if frontline staff don’t understand the how executive actions support their organisation’s mission. First, data shows that staff who don’t see the link between executive actions and their organisation’s mission become alienated and disengaged. Second, external market forces are now requiring health systems to adopt new strategies—and if frontline staff don’t understand the reason behind these new strategies, they might not execute them well, or at all.

4. Your care transformation ambitions are overwhelmingly dependent on nurses

Nurses will play a critical role in care transformation. To successfully transition from to a system that increasingly rewards value, leaders will rely disproportionately on their nurses’ unique complement of skills to accomplish key goals, including improving interdisciplinary collaboration, integrating patient care across settings, better managing chronic disease, and supporting population health goals. It will not be possible to achieve these goals without a nursing workforce that is equipped to deliver continuous, coordinated care across multiple sites and settings.

To help nurses deliver continuous care for all patients, we’ve identified the most significant root causes of fragmented, episodic care—and strategies for overcoming them. You can read about them in the Global Centre for Nursing Executives' newest publication, Nursing's Role in Achieving Care Continuity: Building a System That Never Discharges a Patient.

5. Hours per patient per day is the wrong measure for optimising staffing resources

The current standard for measuring nursing productivity is "hours per patient day" (HPPD). This metric is commonly used to measure nursing productivity because it’s easy to benchmark across like units and sites of care.

But HPPD typically treats all nursing hours equally, even though there can be considerable variation among nurses in education, experience, tenure, certification, and performance.

As a result, organisations using HPPD as a measure of nursing productivity unintentionally inhibit nurse leaders from testing new models of care and determining how to best utilise nursing resources—including the best ways to deploy unlicensed personnel. Progressive nurse executives are striving to overcome this challenge by tracking total labour cost per patient day in addition to HPPD.

Read the Global Centre for Nursing Executives' study, Building the High-Value Care Team, for universal inefficiencies that plague care teams and strategies to achieve the right balance between money spent on staffing and quality.

Why nurses should drive value-based care efforts

The nurse workforce is uniquely positioned to lead the way in delivering cost effective care, excellent quality, and a superior patient experience.