3 Creative Ways to Cut Nurse Labor Costs
1. Reduce Overtime
Nash, a 38-year nursing veteran, was charged with the task of reducing overall nursing costs at her hospital. After some data analysis, it became clear that the excess use of overtime was inflating costs beyond the budgeted registered nurse average pay rate.
Getting the right staff at the right time was critical to controlling payroll costs, she told me.
At OSUMC, there are union requirements, such as giving overtime to senior nurses first. Although the organization couldn't change the nurse's union contract, managers could reduce the necessity for overtime.
This required a new staffing and scheduling system. In addition, Nash established a staffing pool to supplement staffing needs. She found immediate labor savings.
2. Use Supplemental Labor More Effectively
Pamela Hunt, MSN, RN, vice president of patient services and chief nursing executive at the Indiana Heart Hospital, told me that many healthcare leaders routinely budget for traveling or per diem nurses, but that much of that may be unnecessary. Although there are reasons to use supplemental nurse labor, daily census demands shouldn't be one of them, she says.
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