By Rose O. Sherman, EdD, RN, FAAN
I am currently conducting research with Chief Nursing Officers to determine their perspectives on what is needed in emerging nurse leader development. A recurring theme from these seasoned nurse leaders is the increasing importance of leaders who both understand the business of healthcare and embrace the need to accept responsibility to help manage costs. The phrase No Money No Mission is sometimes overused in healthcare today but sound fiscal management is important in all healthcare environments whether they be for-profit, non-profit or publicly financed. The recent debates on health care reform have focused on the cost of care in the United States but this discussion is now a global discussion as countries throughout the world work to control budget deficits. This has placed increasing pressure on nurse leaders to operate organizations that are more efficient while improving quality and patient outcomes. Despite the need to become more financially savvy, current and emerging nurse leaders often gravitate to what they do best and rarely does that include fiscal responsibilities. Nurses and some nurse leaders sometimes fail to understand the impact of nursing activities and staffing on the revenue of a health care agency. If nurses are unable to see the financial ramifications and costs of decisions, they will be less successful in advocating for the resources needed to successfully staff and operate units.
Becoming More Financial Savvy
On most units, staffing will be the single biggest budget item and area of concern. As an emerging leader you can ask to be involved in analyzing staffing grids and productivity reports with your manager. Most hospital units today have targeted hours per patient day and outpatient centers have targeted time per procedure. When units or departments vary from these targeted hours, the managers are usually required to respond to why there are variances. When you take charge, decisions about whether to use overtime or bring in agency staff are key financial decisions and should be viewed as such. Another area to think about is the cost and use of equipment and supplies. Unfortunately in many settings, these costs are not well known to staff but they should be because nurses often have great ideas about how to save resources. With the growing trend toward hospital reimbursement for performance measures that are nursing sensitive, as an emerging leader you need understand how patient care outcomes impact the financial bottom line of their institutions. In US hospitals, there are now certain types of situations that are described as “never events” – things that should not happen while a patient is hospitalized such as a pressure ulcer, patient falls or hospital acquired infections. If these never events happen to a patient, the hospital is not reimbursed for any of the associated care.
In addition to asking good questions and seeking out experiences to help you to become more financial savvy, there is also a very good free resource. The Healthcare Financial Management Association (HFMA) and the American Organization of Nurse Executives (AONE) co-publish a nursing-business newsletter The Business of Caring. This newsletter can be downloaded for free and serves as an excellent resource to educate yourself about business and finance. The Business of Caring features a Business School for Nurses as a regular educational section of the newsletter. Examples of recent topics include the following: reducing hospital readmissions, evaluating staffing costs, determining return on investment, business writing tips, medical variation and the cost of care. This newsletter is a very rich source of business information and practical strategies that can be easily used by aspiring nurse leaders.
Read to Lead
Healthcare Financial Management Association Website. Business of Caring Newsletter.
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