Business Case Analysis



Business Case Analysis

Clarke Krugman

Old Dominion University

Nursing Leadership

NURS490W

Business Case Analysis

Executive Summary

This paper is a Business Case Analysis that discusses the specific problem of insufficient nursing staffing occurring at a hospital. It explores the impact of the situation on the hospital's costs, quality of care, and its nursing personnel. Four suggested options for improving the situation will be listed, and two of them will be selected at the author's discretion and will be assessed for their merits. A suggested remedy to the problem will be proposed, perhaps but not necessarily directly from the two assessed options. A strategy for the approval and implementation of the selected remedy will also be discussed.

Background

Monarch Hospital is faced with the problem of an understaffed nursing unit for its second shift. Several possible solutions have been proposed to remedy the problem. They are: 1. Hire permanent personnel, 2. Hire short-term temporary personnel, 3. Pull personnel from other underutilized units, or 4. Pay overtime and bonuses to existing personnel. Finding a solution is a priority. The nature of nursing is such that even when fully staffed, the occupation is a difficult one. The American Nurses Association, from their website, states, 'Nurses often need to work long hours under stressful conditions, which can result in fatigue, injury, and job dissatisfaction. Nurses suffering in these environments are more prone to making mistakes and medical errors. Patient quality can suffer' (n.d., retrieved from ). An under-staffed unit such as Monarch Hospital's second shift, is at risk for experiencing the aforementioned troubles.

Business and Operational Impacts

Staffing shortages impact day to day business and operational operations in a number of ways. Three of the most important among them are the impact on the patient care, the impact on costs, and the impact on nursing personnel.

Patient Care Impact

The patient's quality of care is the priority in any healthcare setting, and high patient-to-nurse ratios that exist with staffing shortages directly impact the level of care. An article entitled, Nurse Staffing and Inpatient Mortality in the New England Journal of Medicine concludes, '...staffing of RNs below target levels was associated with increased mortality, which reinforces the need to match staffing with patients needs for nursing care' (NEJM, 2011, p. 1037).

Business Unit Cost Impact

Costs on the unit floor are directly impacted by the level of nursing staff. One very specific study published in the Journal of Nursing Administration titled, 'The Cost of Nurse-Sensitive Adverse Events' concludes that there is a direct relationship between staffing level and costs, and conversely savings:

[T]he he actual direct cost of an adverse event was $1,029 per case in the congestive heart failure cases and $903 in surgical cases. There was a significant increase in the cost per case in medical patients with urinary tract infection and pressure ulcers and in surgical patients with urinary tract infection and pneumonia. The odds of pneumonia occurring in surgical patients decreased with additional registered nurse hours per patient day (Pappas, 2008, p. 236).

Nursing Personnel Impact

Many substantive studies have been done with respect to nursing burnout. To paraphrase one of the significant studies, Nurse Burnout and Patient Satisfaction, understaffed nursing departments correlate directly with heavy workloads, exhaustion, and burnout of the nursing staff (Vahey, 2004). Further, '...more than 40% of hospital staff nurses score in the high range for job-related burnout, and more than 1 in 5 hospital staff nurses say they intend to leave their hospital jobs within 1 year' (Vahey, 2004). The point being made here is that under-staffing contributes to burnout which in turn leads to nurses voluntarily resigning their positions, which further contributes to under-staffing in a repetitive cycle. In this case study, Monarch hospital may be at risk for falling into this cycle.

Options and Cost Benefit Analysis

There were four remedies being debated in the Monarch Hospital. Two will be eliminated at the author's discretion. The two eliminees are: the paying of bonuses and overtime, and moving personnel from underutilized units. The author's opinion regarding both of these remedies is that neither address the underlying issue of Monarch Hospital being understaffed. For this paper, at the authors discretion, they are eliminated.

The remaining two will be compared as to pro's and con's, with the intent of one remedy being chosen, championed, and implemented.

Selected Remedies

The first of the selected remedies to pursue as a solution is the hiring of permanent personnel. The benefit is that it is a straightforward answer to the need for more nursing staff. Full time nurses are the vast majority of nursing positions held across all healthcare settings and are the standard long-term staffing strategy (n.d., retrieved from ). This remedy has some negative concerns that go with it. Paraphrasing an article from the Online Journal of Issues in Nursing (OJIN), hiring and training full-time staff is an expensive process. It involves considerable resources to entice prospective hires. Participation in job fairs, advertising, background screening, and the use of existing employees' time for interviews, as well as human resources', results in a hefty front-end cost to hire (Jones, 2007). There is a time lag from the interviewing process that does not solve immediate help needs. Additional costs include the benefits packages and other enticements that come with hiring for full time employment. Further, the article in OJIN puts a firm dollar range on the cost of hiring full-time employees, 'Recent studies of the costs of nurse turnover have reported results ranging from about $22,000 to over $64,000 (U.S.) per nurse turnover' (Jones, 2007).

The second of the selected remedies is the hiring of short-term temporary personnel. Using short-term nurses has the benefit of immediately solving the shortage of nurses for Monarch hospital's second shift. The use of temporary nurses is recognized as one of the standard short-term solutions, and there are a plethora of registries and agencies for hospitals to choose from. One downside of using temporary nurses is the cost. 'High costs were most often attributed to the two most common short-term strategies: use of temporary nurses and increased nurse salaries' (May, J., Bazzoli, G., Gerland, A., 2006). A second downside is that temporary nurses are not a long-term solution. '[E]xperts have suggested that the typical short-term solutions [of which temporary staffing is one] will likely not solve the long-term shortage' (May, 2006).

Conclusions and Recommendations

Quality patient care is the fundamental focus in the healthcare setting. There is a direct correlation between patient-to-nurse ratios and positive health outcomes (Needleman, 2006, p. 204). It is a correlation that necessitates staffing a unit appropriately. In this analysis, hiring full-time nurses and hiring temporary help were discussed as solutions. There are high costs associated with either measure. Hiring full time nurses will address the problem long-term, but Monarch's second shift will be understaffed until the hiring process is complete. Using temporary nurses solves the short-term need, but research has shown it to be an ineffective long-term solution.

This author recommends a blending of both solutions. Given that costs are going to be high in either case, and the focus of attention is fundamentally on quality of care, then short-term temporary nurses should be brought in to provide that quality care while the process of hiring full time personnel is conducted. In this way, patient-to-nurse ratios will be at a level that opportunes better patient outcomes.

Implementation Strategy and Approval Process

An analysis of cost will need to be put together which would be presented to all departments impacted such as Human Resources, Nursing Managers, and Administration, and Finance. A presentation with supporting documentation for improving patient-to-nurse ratios and resulting quality of care will be necessary, as will an in-depth cost/benefit analysis justifying the selected strategy. A review of current company hiring practices, policies and procedures will be necessary to ensure compliance with company approval processes and any oversight agency protocols.

Honor Code:

I pledge to support the Honor System of Old Dominion University. I will refrain from any form of academic dishonesty or deception, such as cheating or plagiarism. I am aware that as a member of the academic community it is my responsibility to turn in all suspected violations of the Honor Code. I will report to a hearing if summoned.

Clarke Carroll Krugman

References

1. (n.d.), retrieved from HYPERLINK "" nursingshortage

2. Needleman , J. (2011). Nurse staffing and inpatient hospital mortality. The New England Journal of Medicine,364(11), 1037-1045.

3. Pappas, S. H. (2008). The cost of nurse-sensitive adverse events. The Journal of Nursing Administration,38(5), 230-236. doi: 10.1097/01.NNA.0000312770.19481.ce

4. Vahey, D. C. (2004).Nurse burnout and patient satisfaction. Manuscript submitted for publication, Cedars Sinai Medical Center, Dept. of Nursing, , Available from Med Care. Retrieved from

5. Jones, C., Gates, M., (September 30, 2007) "The Costs and Benefits of Nurse Turnover: A Business Case for Nurse Retention" OJIN: The Online Journal of Issues in Nursing. Vol. 12 No. 3, Manuscript 4. DOI:10.3912/OJIN.Vol12No03Man04

6. May, J., Bazzoli, G., and Gerland, A. (2006) Hospitals' Response To Nurse Staffing Shortages Health Affairs,25, no.4 DOI: 10.1377/hltaff.25.w316

7. Jack Needleman, J., Buerhaus,P., Stewart,M., Zelevinsky, K., and Soeren, C (2006) Nurse Staffing In Hospitals: Is There A Business Case For Quality? Health Affairs,25, no.1 (2006):204-211, doi: 10.1377/hlthaff.25.1.204

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