NHS FPX 6008 Assessment 3 Business Case for Change

Business Case for Change

• Side 1

Hello, I’m _______ and I’m here to present a business case to you for the biggest financial, reputational and patient safety threat facing organisations today – severe nursing shortages and the ever-increasing need for extremely costly contracted staff. The study looks at how reliance on contract staffing has become an asset and a risk to financial strength and integrity of the organization. This study is intended to create financial and clinical viability for the facility by shifting from expensive recruitment cycles to a tried and trusted retention plan that will ensure our existing nurse workforce stays put; thereby reducing the need for the use of expensive contract labour.

The Economic Problem

• Slide 2

Nurses have many important roles in providing quality health care in health care systems. Studies, in fact, have shown that with the proper number of nurses in hospitals and other health care facilities, patient safety is further enhanced, and the death rates within the hospitals are negatively affected, directly affecting the patient. In the U.S., the nursing shortage is both an economic and a financial challenge and has a significant impact on the health care economy. In addition, the studies show that the lack of nurses puts operating budgets of hospitals and facilities at risk, damages their reputation, and, most significantly, compromises patient safety, particularly in regard to providing around-the-clock care. By carefully targeting the bottom line, organizations can not only keep their finances steady, but also keep their operating margins in positive territory while investing in their staff development and retention.

Impact at Macro Level

• Slide 3

There has been a large-scale destabilization effect throughout the entire health care delivery system as fewer numbers of nurses are available to work and over-capacity and burnout are experienced. Furthermore, the high turnover among nurses causes the hospital to be under severe financial pressure because of the use of expensive temporary nurse staffing agencies. In addition to the short-term financial burden placed on hospitals by having to pay for these temporary staffing agencies, hospitals continue to divert the majority of their resources toward providing necessary staff rather than toward enhancing patient services and investing in new technologies, which places additional burdens on community residents in terms of access to services, increased wait time for appointments, and an increased likelihood of receiving substandard care. This trend is systemic, meaning that there is a clear need to shift away from the current high-spending models of simply responding to problems that have arisen in the nursing workforce toward making proactive investments in programs that will ensure long-term stability and growth of the nursing workforce.

Feasibility Consideration

• Slide 4

From a solely reactive hiring approach to a nurse retention-based approach is not only financially sustainable, but it’s also a fiscal condition that is necessary. The key to enabling this shift lies within the reallocation of dollars from those of high cost (recruitment, contract labour, etc.) and low variable value (low value) to those of low variable cost (high value) through mentoring and continuing education. The evidence base is strong, showing that structured orientation/transition to practice is a basis for maintaining the nursing workforce. Furthermore, if healthcare organizations adopt an approach of mentoring and promoting their new employees, each one can realize months’ worth of productivity as soon as they step on the job, and that huge productivity cost will diminish margins. Structured, evidence-based residency programs have been shown to be a sustainable way to keep nurses in rural/community hospitals; enhance nurse retention; and enhance job satisfaction. Remember, moving money toward these strategic retention strategies will help refocus healthcare leaders’ attention from a very unpredictable financial burden to a solid foundation for quality patient care.

Cost-Benefit Considerations

• Slide 5

In hospitals with a registered nurse (RN) shortage, there is higher nurse turnover, overtime, contract nurses, adverse patient events, and lower quality of care costs. Rethinking and retaining nurses, however, have their economic and patient care rewards as well. There is evidence that each nurse turnover costs a hospital as much as 3x the annual cost, due to recruitment, onboarding, and orientation costs, as well as lost productivity and overtime pay. Among 1,501 RNs at 7 hospitals, a turnover rate of 24% equated to 360 turnovers at an average cost of $85,498 per nurse or almost $27.9 million lost organization-wide. A hospital that increased pay by $9,000 annually, to $150 million, decreased use of contract RNs from 1,370 to less than 300, returning the turnover rate to pre-pandemic levels. Evidence-based initiatives for nurse retention, like residency programs, have clearly demonstrated positive returns on investment (ROI) in terms of the positive impact they have on workforce availability and the resulting reduced use of high-cost contract nurses.

Strategies for Risk Mitigation

• Slide 6

Instead of expensive turnover and hiring and training nurses, organizations should, at least, establish nurse residency programs. These programs include clinical mentorship and systematic professional development that can help increase retention during the first year of practice – a time when turnover is particularly high, as well as lower new graduate turnover from more than 36 percent to less than 7 percent. Hospitals can save the expenses that go into replacing the nurse (currently, in excess of $60,000 per nurse) from being a recurring expense. By improving nurse retention, which in turn is tied to staffing stability and less nurse turnover, financial losses from nurse turnover can be drastically decreased, as can overtime requirements, recruitment costs, and the need for costly agency nurses. The high turnover rate of nurses results in higher operational costs and negatively affects the sustainability of the workforce, researchers concluded. On the other hand, nurses’ tendency to stay with an organization is increased as their job satisfaction, organizational commitment, and supportive workplace increase, which decreases the expenses of employee turnover. The use of effective financial controls and cost management can help to minimize additional spending and boost the sustainability of the organization. Monitoring staffing schedules, overtime, and resource allocation through healthcare data analytics can also save money. The focus of health care management research is on the importance of having the health care organization functioning efficiently to be able to sustain itself when the economy is going through tough times, and the staff is in short supply. Therefore, enhancing nurse retention, creating financial management systems, and nurse residency programs are necessary steps that each, in its own way, mitigates financial risk and promotes sustainable business in healthcare organizations.

Solution with Benefits

• Slide 7

This will be accomplished by offering nurses competitive wages, keeping a low patient-to-nurse ratio, offering nurses better opportunities for career advancement and development, and offering resources or services that will help improve the mental health of their nurses. Beyond these strategies to keep nurses, another way that healthcare organizations can recruit more nurses is to create intern or residency programs with local nursing schools. These actions will reduce the cost associated with recruiting new nurses as well as the need to work with agency nurses (who can be much more costly than hiring nurses with regular employment arrangements). One would expect that these activities would be effective in decreasing the burnout of their employees and increasing the morale of staff, thereby leading to better care for the patient and a better overall quality of care. The long-term effects of these will result in long-term financial savings to the organisation and improved productivity and financial stability. Healthcare employees will also experience benefits such as reduced stress, lower workloads, and reduced time spent on non-clinical activities. In addition, being able to establish positive relationships between people on the team also enhances cooperation and communication. Finally, more satisfied, healthy relationships between healthcare workers and the employer result in higher employee satisfaction. There are benefits to the community that come with ensuring that the safety and effectiveness of care is improved for every patient at all times (24/7), fewer medical errors are made every shift, patients stay in the hospital less due to better care before they are discharged, and overall better health outcomes are achieved.

Ethical and Cultural Sensitivity

• Slide 8

As health practitioners, it’s more than just about the bottom line when looking at those who receive care and the teams that deliver the care. The more representative the populations served and employed, the more likely the workforce will be to be reflective of the diversity of the populations. Apart from the moral argument for having a diverse workforce, there is also a clinical argument since a diverse workforce increases trust and can help to achieve improved quality of care (). This proposed policy is a pledge to patients and nurses’ ethical commitments. The values of beneficence and do no harm mean making our nursing staff safer, safeguarding them from avoidable harms and possible losses through the provision of safe staffing ratios. Meanwhile, the ethics of justice help to prevent any nurse having to make a decision between not being able to accept a task because of insufficient resources, and accepting it with an unnecessary level of risk.

Ensuring Equitable Access and Cost

• Slide 9

A focus on employee opportunities, growth, and development provides improved quality of patient care. Thanks to a standard and high-quality training and mentoring program for all new hires, they will receive equal opportunities to learn and grow. Making tuition contingent on employment, instead of it being considered as a disposable expense of education, will not be allowed to be treated as a disposable salary expense. Everyone employed will be given an opportunity to learn more at a collegiate level, regardless of their financial means of paying for the learning. This goes above and beyond development opportunities, and truly discusses how profits from organizations are distributed amongst the entirety of the workforce, irrespective of starting economic class. Therefore, it will be a culture where each nurse will be given the time required to flourish to his or her potential as a nurse.

Conclusion

The direct impact was on the financial viability and patient safety in this instance. Agencies fill the position at a premium price and replace/reorient nurses to a new role, which adds to the expense of the hospital. Institutions that concentrate on retention, like the implementation of nurse residency programs, the deployment of suitable staffing levels, and the installation of cost control systems, will inevitably save on expenses, achieve stable staffing, and facilitate the retention of nurses. The end result of these efforts is a reduction in staff turnover, better finances, better morale for staff, and ultimately, better patient care.