The Nursing Budget Balancing Quality of Care with the Bottom Line 1 It s a Business Why this session? We felt that it was important to talk about the DON s role in budget and the importance of the working relationship between the Administrator and DON in managing the budget Having a passion for changing the world of long-term care is awesome BUT It is a business and for the executive directors administrators CFO s who tirelessly crunch numbers to make ends meet they must be ultimately accountable and good stewards of the $ 2 1
Objectives 1. Discuss the Importance of the Director of Nurse s Role for Financial Accountability in Managing a Nursing Budget 2. Define Key Aspects of a Capital, Supply and Staffing Budget in Long-Term Care 3. Provide Examples of Tools Necessary to Maintain Checks and Balances of a Nursing Budget 3 This is What We Learned in Nursing School 4 2
Nurse Executive s Reality 5 Director of Nurse s Role for Financial Accountability in Managing a Nursing Budget Balance patient safety and excellent care within the budget Manage existing budgets for supplies and labor Always know where you are with your budget- what you spent and what is left Be cognizant of want vs. need Communicate current needs if existing budget does not meet the needs Predict the needs for the future and be actively involved during budget time 6 3
Importance of Learning How to Manage Budgets Nursing labor budgets are often one of the largest budgets Nurse leaders control that budget Your effectiveness can mean the difference in your organizations financial stability You are the key between the nursing department and operations You need to have a clear understanding of your budget 7 Importance of Managing a Budget (Terms) Nursing budget - a plan used to ensure that quality and cost effective services are provided to clients Revenue-the money the organization will receive Expenses-includes the cost of staff, activities, supplies, services, etc Expenses cannot be greater than the revenue 8 4
Budgets Capital Budget Big item purchases usually planned for in advance Supply and Equipment Budget Small Equipment, Urological, Tube Feeding, Briefs, Cups.. Staffing Budget Labor Hours may be FTEs (Full time equivalents) or PPD (per patient day) 9 Examples of Factors that Negatively Impact Budget Unpredictability of long-term care-market changes that you can t control Census was 95% occupancy last year-new facilities open driving competition-suddenly you are running 85-90% when you budgeted for 95% Major equipment repairs/replacement that was not accounted for in the budget 10 5
Capital Budget (Higher Cost Items) 1. Keep a list of the items you know will need to be replaced 1. Keep a list of the items you want 2. Plan consistently to replace items you need for the resident population you serve 3. Submit this list to the Administrator when they are preparing next years budget 11 Supply and Equipment Budgets Medical supplies Central supplies Pharmacy Office supplies Small Equipment Travel Education Other categories you may be responsible for 12 6
Supply and Equipment Budget Usually the amount of money you have to spend is based on the average census and may also include the dollars spent the previous year plus the increase % Each category is assigned a dollar amount per patient day These are the usual categories and are assigned GL codes (General Ledger) 13 Staffing Budget Staffing Budget is usually based on PPD-per patient day 14 7
Working with PPD 15 Hypothetical Numbers for supplies Average Census is 100 Your supply budget is $0.50 per day June is 30 days 100 X $.50 X 30= $$ amount to spend on supplies for June 16 8
Hypothetical Numbers Average Census- 100 X days in month 30 3,000 X budget 0.50 $1,500.00 17 Staffing Budget Examples 18 9
Hypothetical PPD is 3.5 Example 1 Census is 100 100 X 3.5 = 350 hours of nursing staff per day 350 hours / 8 hour shifts = 43.75 FTEs 19 Example 2 Hypothetical Licensed Nurses PPD is 0.7 100 (census) X 0.7 (PPD) = 70 hours of licensed nurses 70 hours / 8 hour shifts = 8.75 licensed nurses 20 10
Example 3 All others PPD is 2.8 (CNAs, CMAs, Restorative Aides) YS5 100 (census) X 2.8 (PPD) = 280 hours of CNAs 280 hours/ 8 hour shifts = 35 FTEs or CNAs 21 Considerations for Budget Decisions 22 11
Slide 21 YS5 Staffing Budget is a very large budget and must be managed. Every nursing home has their own budgeted PPD. I wil use hypthetical numbers. Texas does not have requirements, so you need to make sure you are able to provide excellent care with the hours you have on your budget. Yvonne Seifert, 2/27/2017
Things to Consider for Staffing Licensed Nurse hours-rn vs. LVN Divide the staffing between Nurse stations and between shifts Considerations: Night shift Acuity of resident population The shift with the highest volume of admissions Requirements for certain payer types Staffing Patterns 23 Considerations for all Budgets A small neighborhood home vs. a 120 bed nursing home has uniquely different/varying needs Social model vs. medical model-environmental factors such as high-end chairs-equipment Person-centered care and a homelike environment is not free There are a number of considerations to be considered when looking at improving the environment for the residents and staff 24 12
Staffing Pattern Examples s for staff have to cover 24 hours and meet the needs of the resident population RN 8 hours are a requirement 24 hours of licensed nurses are a requirement s 8 hour shifts 12 hour shifts 25 Sample Staffing s Wednesda Wednesd ay Staff Sunday Monday Tuesday y Thursday Friday Saturday Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sunday Monday Tuesday Thursday Friday Saturday Sunday Sample for a 3 day weekend every third weekend. It takes 3 weeks to go through this rotation 1 O X X X O X X X X O O X X X X O X X X O O 2 X O X X X O O O X X X O X X X X O O X X X 3 X X O O X X X X O X X X O O O X X X O X X It takes 3 FTEs to fill 2 on an assignment. You take the number of persons needed to fill the shift and multiple by 1.5=FTEs needed If 6 CNAs are needed 6 X 1.5=9FTEs. This sample has 3 rotations, so 3 FTES per rotation. Sample 4 On 2 off rotation. It takes 6 weeks to go through this rotation 1 X X X X O O X X X X O O X X X X O O X X X X 2 X X X O O X X X X O O X X X X O O X X X X O 3 X X O O X X X X O O X X X X O O X X X X O O 4 X O O X X X X O O X X X X O O X X X X O O X 5 O O X X X X O O X X X X O O X X X X O O X X 6 O X X X X O O X X X X O O X X X X O O X X X This rotation uses the same math to calculate the FTEs needed. Note, only 1 wekend off every 6 weeks. Sample every other weekend off. 2 week rotation. 1 O X X X X O X X O X X X X O 2 X O X X X X O O X X X X O X 3 X X X X X X X X For every 2 assignments, 3 FTEs needed, one of them willing to work every Fri-Sat- Sun-Mon 26 13
DON Responsibilities Objective is to not exceed your budgeted PPD and meet the individualized needs of your residents Control your staffing budget Adjust staffing to census as needed Daily reports of actual hours worked should be reviewed Watch for clock in and out times Continually analyze your staffing patterns Control the overtime 27 Monitor staffing daily How to Control Overtime Reports for actual hours worked PRN Pool 28 14
Conclusion Your nursing department is your part of the business to manage. The nurse budget is the DON responsibility. Know what your budget is for all the categories (GL Codes) and labor hours. Know how much has been spent and what is left. Have a plan for the capital budget. Make changes and adjustments as needed. 29 References-Resources Handout-staffing pattern examples Handout-example of budget spend down 30 15