In my previous post I talked about the lack of preparation, in general, nurses receive when they are promoted to managerial positions. Even if they have completed a BSN and/or MSN program they still typically do not have the training to run their unit(s) like a business.
To clarify, I use the word “business” not because I’m trying to convey that the manager is not first and foremost a caregiver, but because a manager’s core responsibility is to supervise his or her staff and ensure the unit achieves its goals relative to quality metrics and productivity.
Without the wherewithal to do this, a manger will flounder; he or she will not hit their targets and will become inundated with inefficient processes, personnel issues, and other unnecessary complications.
Most Nurse Managers rely on their organization to help round out their managerial training, but in most cases this education is lacking, or rather, the training infrastructure/program does not exist formally.
Building the Culture
To establish an effective nursing leadership business training program, the first step is to embed and facilitate a culture of collaboration and mentorship. Depending upon the current state of the organization, this can be started by a shared team-building session which would include HR, Nursing and Finance in which executive leadership, or whomever appropriate, sets the stage and reminds the team of the company mission/vision.
Once all team members have a shared vision for the mission and goals the next step is to develop a cross-collaborative process to help engage all parties in identifying where current knowledge gaps exist across areas. Not to the extent in which nursing needs to learn GAAPs (Generally Accepted Accounting Principles) or Finance learns how to start an IV, but enough to understand what it is like to be in each other’s shoes.
As the specific business training for nursing leaders begins, it is important that fundamental principles around productivity are provided.
Productivity 101
Basic definitions around LHS, MHHPD, MHPS, etc., (whichever may be the name for the productive measurement of workload your organization uses) must be provided. Regardless of the acronym used, these methodologies provide a way to measure how much time or “work” it takes to care for each patient. Understanding this forms the fundamental building blocks upon which all other measures are based upon.
After understanding the concept of this as an indicator of workload, the next step is to understand what drives the department’s workload. For an inpatient unit, this is census.
It’s important to understand how, and more importantly why, certain pay codes are categorized and classified as productive time or not. Nurse Managers must know how all reports start with the staff punches and timecards, and the timing for when and how this information is provided to finance. Once these three fundamental definitions of information and understanding are in place, more complex discussions can begin.
The Business of a Unit
It is necessary to delve into the volumes of the department to begin to understand the business of a unit. The first step is to plot out and understand the trends of the department by shift. Seeing what shifts see the highest churn (admits and discharges in a short amount of time) and how that impacts the workload intensity for a particular unit is key. It’s also important to understand the types of patients and how different acuity levels impact or change the “work” associated with their care.
As the volume trends are analyzed, it is essential at this stage to select the data point that best represents the workload and collaborate with finance on data sources. Commonly, this comes from the system from which the patient billing and charges are generated.
But not everything is this simple. Sometimes a patient in observation status may be on the unit, but won’t be reflected in the charges because the unit won’t get the full revenue from this patient as they would a patient with a full inpatient status. Here is where the communication between nursing and finance can start to break down. Regardless of inpatient versus observation status, the unit must still provide the same nursing care to these patients.
The Budget? The Budget!
Understanding the patient types and typical DRG ranges leads the team to the conversation regarding the time or level of “work” needed. This is where you will define the unit’s Labor Hour Standard (LHS) – the actual numerical measurement of hours per 1 unit of measure/volume. Once the LHS is determined, this becomes the “budget” for the unit when applied against the projected volumes. Often, organizations will use internal and external benchmarking processes to compare a unit’s LHS against other like units across other organizations, and also against itself, to determine how it is performing. Goals will be set that take projections regarding future census growth or decline into account for finance to do revenue and budget planning, along with HR to set hiring targets.
Typically, a unit will “back out” of their budgeted LHS to develop a savings account of hours for abnormal staffing needs. Understanding historical census volumes and types of patients seen will tell the manager how often they needed to increase staff to cover off for a 1:1 sitter need for a combative patient, for instance, or how often the patient acuity changed that required a 1:1 RN to patient assignment. Instead of this being an immediate “hit” to their budget, backing out and putting some of this into a savings account provides the savvy manager assurance that they will be able to recover and stay on target throughout the year.
After the budget is defined and additional staffing needs understood, the next step will yield the benefit of the time invested in a nursing leader; taking the budget or LHS and operationalizing this into a grid. The staffing grid on a unit is the backbone for all scheduling, staffing, and resulting labor spend for a department. All staffing decisions made by the Charge Nurses, House Supervisors, and others related to labor will be based upon this grid. Thus, it is absolutely crucial for this grid to be productive at each census point.
Also, savvy leaders will leverage the census analysis to find the census mode or range of volumes that the department experienced most frequently. This is what we refer to as the “sweet spot” because these are the most common levels of staffing a unit will experience. It is critical that these are productive. As census increases efficiencies can be gained, and at lower levels these will be lost.
Living on the Grid
After training managers on the processes, methodologies, and strategies behind these steps the next action an organization needs to provide managers and finance are the right tools to manage this process. Providing managers with tools that allow them to enter the staffing needed for all skills at various census points with formulas embedded that highlight when they will be productive or not. Sometimes shifting the point at which one more nursing aide is needed a single census point can change how productive the department can become.
Beyond training the Nurse Managers, in order for organizations to truly ensure that labor waste is being effectively managed is the communication and adoption of these grids to all those who have a hand in staffing decisions. Applying similar training to Charge Nurses and House Supervisors on how deviation from the staffing grids, when not medically needed, will impact the unit and their ability to run efficiently. This training sets the foundation for understanding the fundamentals related to the business side of unit operations for future leaders within the organization and will positively impact the organization’s bottom line, both today and in days to come.
If you want to learn more now or talk about some of the enterprise tools needed to effectively manager labor, email me at jenny.korth@avantas.com.