Planning, Organizing, Staffing Budgetary Issues

Budget Projected plan Translates operational plan into expenses Types Operating Capital Cash Expense

Operating Budget Salaries Must include indirect and direct cost 40 to 90% of budget Must include indirect and direct cost Productive and nonproductive time Data must be accurate and reliable Should relate to strategic plan, mission, and philosophy

Budgeting Volume measure Cost measure Based on standard measure such as acuity level, number of visits, HPPD Cost measure Salary figure such as average salary or wage

Planning and Budget: Management Responsibilities Benchmarking figures Nurse managers Decide which budget to be tracked and analyzed Communicate with management the trends System in place to “capture” important data 1. Money 2. FTEs 3. Activity (workload measure)

Personnel Budgets Factors determining FTE positions Patient volume Annual or monthly number of patient days Average daily census

Patient Volume Average daily census Annual patient days for the unit Depends upon last year’s statistics Does not account for patient acuity Annual patient days for the unit Average daily census multiplied by the number of days in fiscal year Can also be reported as an occupancy rate (if your bed capacity is 30 and your ADC is 20, your occupancy rate is 20/30 or 67%)

Patient Volume (cont.) May also use other measures Number of admissions Number of home visits Number of procedures May calculate according to diagnosis or other parameter (acuity level) DRG 410 X #admissions X Length of Stay = #Patient days

Bed Capacity vs. Occupancy Issues related to staffing If you staff for the discrepancy, there may be issues with overtime and productivity You must have budget for “float” staff If trends of occupancy remains constant for 2-3 months, evaluate the need to increase FTEs

Direct Care Hours per Patient Day Direct care refers to “hands on” care for 24 hours Uses patient classification system (time studies, formulas, etc) Determining FTEs Nurse/patient ratios Direct hours in FTEs

Direct Care Hours per Patient Day (cont.) Direct hours in FTE Determine the number of hours of direct care for your unit for total number of patient days in your unit for the year (annual patient days = ADC x number of days in fiscal year) For example, 16 hours x 5475 patient days / number of hours of FTE (2080 in year) = # of FTEs (42.1) Therefore, you would need 42.1 FTEs to provide 16 hours of direct care every day for the 5475 patient days

Weighted Census Take your average daily census and place in an acuity system Determine workload index by multiplying the acuity level by the census Take the weighted census / census and you get the average work load index for the unit WLI x hours in a day = hours of care per patient Hours of care x census x days in year / hours of FTE (2080 in full year) = FTE

Number of Patient Days by Diagnosis Determine patient days for each DRG Determine the acuity hours for each diagnosis Multiply the patient days x acuity hours for staff hours required Total all staff hours required for each DRG and divide by the FTE (2080) = FTE

Replacement Time Positions Must calculate to cover indirect care, nonproductive time (such as education, vacations, sick time, etc.). May use a standard percentage, such as 10%. May also calculate the average time for each nonproductive category and multiply x 8 (hour shift) and total. These hours x number of FTE /total FTE in year (2080) = number of FTEs needed for replacements.

Calculate Salaries Average Base Rate Job Classification Method For each classification determine the salary for each employee and cost of replacement Must also calculate specialty pay, merit, differentials, bonuses, overtime and supplemental staffing