NSG/451 Week 3: Managing Healthcare Resources, sample paper

Managing Resources Under a Flat Budget: Overtime, Agency Staffing, and Supply Waste on a 28-Bed Orthopedic Unit

[Student Name]

University of Phoenix

NSG/451: Professional Nursing Leadership Perspectives

Week 3 Assignment

[Instructor Name]

[Date]

The unit and its figures are a composite written for a model paper.

Every nurse manager eventually meets a year in which the budget does not grow but the demands on the unit do. On a composite 28-bed orthopedic unit, the personnel budget for the coming fiscal year was held flat at about $4.2 million after two years of increases, while the prior year had closed roughly $310,000 over budget. The manager's task was not to find money that does not exist; it was to decide which resources the unit could least afford to lose, and then protect those first. This paper examines how a nurse leader manages health care resources under that constraint, using the unit's own figures, the evidence on nurse staffing and a fairness test for the decisions that remain.

The Problem in Numbers

The unit budgets 9.0 nursing hours per patient day (HPPD) at an average daily census of 24, which comes to 216 productive nursing hours a day. Actual hours averaged 9.6 HPPD, about 230 hours a day, an overage of 14 hours daily or roughly 5,100 hours a year. The overage was not spread evenly. About 60% came from overtime paid at time and a half, about 30% from agency nurses billed at roughly twice the cost of an employed nurse's hourly wage, and about 10% from orientation hours for new hires who left within a year.

Supplies added a smaller but visible pressure. The unit's supply spending rose 11% while census rose only 3%, and a two-week audit found that disposable items pulled for patient rooms, such as dressing kits and compression sleeves, were often discarded unopened at discharge.

Marquis and Huston (2021) describe the personnel budget as the largest and least flexible part of a nursing unit's budget, which is why variance analysis matters. The numbers above say that the unit's problem is less the number of hours it uses than the price it pays for them, since overtime and agency hours cost far more than the same hours worked by employed staff at straight time.

Staff as the Resource With the Strongest Evidence

Cutting nursing hours is the fastest way to close a personnel variance, and the evidence says it is also the most dangerous. In Pennsylvania hospitals, Aiken et al. (2002) found that the odds of a surgical patient dying within 30 days rose about 7% for every patient added to a nurse's workload, and that heavier workloads also went with more burnout and job dissatisfaction among the nurses themselves. Griffiths et al. (2019), studying English hospitals, found that days when registered nurse staffing fell below the ward's mean were associated with a higher hazard of death, and that adding nursing assistant hours did not offset the shortfall in registered nurse hours.

For an orthopedic unit, where most patients are postoperative and many are older adults at risk of delirium, falls and venous thromboembolism, those findings rule out the simplest option. The manager therefore treated registered nurse hours at the budgeted 9.0 HPPD as a protected resource and looked for savings in how those hours were bought.

The same evidence shaped a second decision about skill mix. A tempting way to cut the personnel budget is to replace some registered nurse hours with cheaper nursing assistant hours, and the unit could have saved roughly $180,000 a year by converting four registered nurse positions to assistant positions. The finding by Griffiths et al. (2019) that assistant hours did not offset registered nurse shortfalls, and were associated with higher mortality when added in place of registered nurses, argued against the trade. The manager kept the existing skill mix and instead asked whether assistants were being used for work only they should do. A time study on two day shifts showed assistants spending a large share of their shifts on transport and supply runs, which were moved to the hospital's transport service at no cost to the unit, leaving assistants more time for mobility and toileting rounds that orthopedic patients need.

Buying the Same Hours at a Lower Price

Overtime was driven largely by call-outs on weekend night shifts and by two vacant positions. The manager took three steps. First, she moved the two vacancies to the top of the recruitment queue and, with human resources, offered a weekend option position that paid a differential for a fixed weekend schedule. Filling both positions converts roughly 3,700 hours of overtime and agency time a year into straight-time hours. Second, she joined the hospital's internal float pool program, which staffs call-outs at a lower cost than agency nurses because the float nurses are employees. Third, she changed the self-scheduling rules so that each nurse carried a fair share of weekend shifts, which reduced the pattern of weekend call-outs clustering among a few nurses.

Agency staffing was reduced but not eliminated. Xue et al. (2012) found that supplemental nurses were not associated with worse patient outcomes once the hospital's permanent staffing was taken into account, which suggests the cost of agency nurses, not their quality, is the main reason to limit them. The manager kept a small agency contract for the months when elective joint replacements peak and used it only after the float pool and part-time staff had been offered the shift.

Orientation losses required a different fix. Nurses who left within a year were costing the unit their full orientation hours with no return. The manager paired each new hire with a consistent preceptor for the full orientation period and scheduled a check-in at 90 days, because the cost of keeping a new nurse is small compared with the cost of replacing one.

Supplies Without Rationing Care

The supply problem was mostly waste rather than use. The manager worked with the unit's supply chain partner to replace preloaded room kits with par levels on a shared cart, so that items were pulled when needed instead of when the room was set up. She also asked two staff nurses to review the most expensive items with the orthopedic surgeons' preferences, and they found that two nearly identical dressing products were stocked because two surgeons preferred different brands. Standardizing on one, with the surgeons' agreement, lowered unit cost and freed shelf space. None of these changes reduced what a patient received; they reduced what the unit threw away.

A Fairness Test for What Remains

Even after these changes, the unit projected a smaller variance for the first two quarters, while vacancies were filled. The manager could not cover everything, so she applied a simple test drawn from the accountability for reasonableness framework of Daniels and Sabin (1997): decisions about limits should rest on reasons that staff and patients could accept as relevant, be made public within the unit, be open to revision when new information appears, and be enforced consistently. In practice, that meant explaining to staff at the monthly meeting why registered nurse hours were protected while education hours were delayed one quarter, posting the plan, inviting objections through the practice council and revisiting the plan when the vacancies filled.

Knowing Whether It Worked

The manager set four measures to report monthly to her director: HPPD against the 9.0 target, overtime hours as a share of productive hours, agency hours, and first-year turnover among new hires. She also tracked two patient measures that would show harm if the savings came at patients' expense: injurious falls and new pressure injuries acquired on the unit. If HPPD stayed near target while overtime and agency hours fell, the plan was working; if the patient measures rose, the savings were not worth keeping.

Conclusion

Managing health care resources under a flat budget is less about cutting than about choosing. On this composite orthopedic unit, the manager protected registered nurse hours because the evidence on staffing and mortality is strong, attacked the price of those hours through recruitment, float staff and fair scheduling, reduced supply waste without reducing care, and made the remaining trade-offs openly. The unit's budget problem was real, but most of it came from paying premium prices for hours it needed anyway, and that part was within the manager's reach.

References

Aiken, L. H., Clarke, S. P., Sloane, D. M., Sochalski, J., & Silber, J. H. (2002). Hospital nurse staffing and patient mortality, nurse burnout, and job dissatisfaction. JAMA, 288(16), 1987-1993. https://doi.org/10.1001/jama.288.16.1987

Daniels, N., & Sabin, J. (1997). Limits to health care: Fair procedures, democratic deliberation, and the legitimacy problem for insurers. Philosophy & Public Affairs, 26(4), 303-350. https://doi.org/10.1111/j.1088-4963.1997.tb00082.x

Griffiths, P., Maruotti, A., Recio Saucedo, A., Redfern, O. C., Ball, J. E., Briggs, J., Dall'Ora, C., Schmidt, P. E., & Smith, G. B. (2019). Nurse staffing, nursing assistants and hospital mortality: Retrospective longitudinal cohort study. BMJ Quality & Safety, 28(8), 609-617. https://doi.org/10.1136/bmjqs-2018-008043

Marquis, B. L., & Huston, C. J. (2021). Leadership roles and management functions in nursing: Theory and application (10th ed.). Wolters Kluwer.

Xue, Y., Aiken, L. H., Freund, D. A., & Noyes, K. (2012). Quality outcomes of hospital supplemental nurse staffing. Journal of Nursing Administration, 42(12), 580-585. https://doi.org/10.1097/NNA.0b013e318274b5bc