3 Creative Ways to Cut Nurse Labor Costs

Karen Minich-Pourshadi, January 17, 2012

Because nurses comprise a huge chunk of labor costs, they often fall under the financial microscope. Reducing these caregivers, however, can truly be detrimental to your hospital's quality of care and the patient's overall experience—two areas that CFOs should strive to bolster, not undercut. That puts nurse labor costs somewhat in limbo. Though financial leaders want to reduce costs, they grapple with how to do so without the negative ramifications.

Well, there are ways to control and potentially reduce your nurse labor costs without hurting patient quality—it just requires creative staff management. In the January edition of HealthLeaders magazine I examine how financial leaders can address nurse labor costs. Here are some excerpts and observations from that article:

Though there may be excess cost in your nursing line item, it doesn't always rest within the wage, says Mary Nash, PhD, RN, chief nurse executive for the 932-bed Ohio State University Medical Center in Columbus, OH. The total cost of a full-time registered nurse averages $98,000 per year, or approximately $45 per hour, according to the 2011 U.S. Hospital Nurse Labor Cost Study produced by KPMG Healthcare & Pharmaceutical Institute. But base wages account for only about 57% of the total before factoring in premium pay and benefits.   

My reporting turned up three main strategies for trimming the cost of nurse labor without gutting their ranks.

Karen Minich-Pourshadi Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media. Twitter
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