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3 Creative Ways to Cut Nurse Labor Costs

Karen Minich-Pourshadi, for HealthLeaders Media, January 17, 2012

Supplemental labor is costly, and should be used to address seasonal volume increases, medical leaves, or to fill in during large training initiatives such as ICD-10, she told me.

Hunt explains that hospitals and health systems that rely on supplemental nurses may be overlooking a greater issue—miscalculated productivity that is masking a full-time staff shortage.

3. Stop Nursing Staff Turnover
Nash told me that it's important to calculate the cost of the nursing search but also the subsequent training the nurse will need as part of the cost. Additionally, during the transition, a hospital may need to resort to using agency nurses.

"If you lose a nurse, you're talking huge premiums. And, interestingly, we know where there is turnover in our organization. But we know how to recruit, we're good at it," says Nash. OSUMC is not as good at retention, she says. "What we find is professional nurses are looking for more than a job, they're looking for ongoing learning, extensive in-service meetings, nursing grand rounds and they want to be treated well."

What other innovative tactics are you using to address labor costs without gutting quality?


Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.
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1 comments on "3 Creative Ways to Cut Nurse Labor Costs"


Jackie Larson - Avantas (1/27/2012 at 11:20 AM)
Great article, Karen. Reducing overtime, using supplemental labor more effectively, and reducing turnover should be high on any hospital's to-do lists. Reducing overtime and effectively using supplemental labor (contingency staff) are both invariably tied to reducing turnover and the related issues of staff burnout, decreased morale, etc. We have found that there are no clear cut, across the board answers or strategies that can be applied to everyone. One example being the frequently quoted Workforce Planning goal of 85%. We've found no evidence that the 85% core staff number is an appropriate or financially responsible resource management model. That being said, tailored department and unit specific strategies are effective. The key to any effective change, i.e., changing your organization's culture, is getting buy-in across the entire spectrum of the organization. In order for any initiative to be effective you need managers and the C-Suite to enthusiastically be on the same page.