Introduction
Shortage of nurses and various other quality and cost related issues have resulted in a boom of research and studies, related to staffing alternatives. In order to develop a workforce that can actually help to overcome the obstacles faced by the nursing industry and to ensure quality management in nursing practices, there are initiatives like supplemental staffing which are being accepted widely.
It is important to understand that addressing the nursing related issues will not only help to improve the quality of health care but will also help to increase the productivity and reduce the effect of shortage of nurses, hence there are efforts in place to ensure autonomy, coherent decision making practices, transparent communication and co-ordination.
Studies have proved that health care is at times related to the kind of incentives in play and affect the quality and sustainability by a marginal benefit. It is costly to manage nursing staff and there are various different aspects like infection control, post-operative care units, intensive care etc. which need specialized resources hence it is important to closely look at the cost that is incurred using different staffing solutions and resource management functions.
It is very clear that staffing solutions directly impact the costs and expenses of a healthcare unit and it is required to look into this very efficiently and reduce the administrative costs in maintaining the nursing staff, reduce cost by increasing productivity and use of agency nursing and create a balance between the full time regular staff and the temporary alternate staffing.
Considering the above, it makes sense to compare the cost of nursing setup in a hospital while keeping our focus on the positive aspects of using Agency Nurse (supplemental Staffing Nurse). We will take an example to compare between the cost and benefits of Agency Nurse Vs Full Time regular RN of a hospital, the analysis will be done on quarterly, half-annual and annual basis.
Agency Nursing: One solution to different problems. . .
Bloom, Alexander, & Beverley have mentioned in a research work that it is a myth that the staffing companies that provide nursing resources are expensive and moderately experienced. They have mentioned that planning is a very important aspect of using alternative staffing methods and with proper management of costing and contracts, not only the over costs can be reduced bt 10% but it is also possible to enhance the quality of healthcare and improve patient outcomes. Hence it is important to look at the role of agency nurses, and the kind of benefits that they bring to the healthcare industry.
Nursing forms the backbone of any healthcare unit and if the nursing staff is good then definitely the quality of healthcare will be better and patient mortality will be lower. In order to meet the customized needs of different branches of the medical science, even the nursing department has to be specialized and trained. Apart from the training and briefing even the employer has certain requirements in order to assess if the resource which is getting hired is competent enough to manage the role and expectations. The agency nurses are thoroughly checked for the relevant education, experience and licensure before they are hired; there is a detailed reference check that takes place in order to ensure that the hired resource meets the requirements according to the need.
The reference check is a three step procedure where the information related to experience and is verified from the current and past employers, secondly the quality of service is checked with the help of clinical references and documented evaluation of performance. The last step is to get the certifications validated and at times this is also followed by a physical examination to test the fitness.
Knowledge Retention, Training and Development
The agencies in order to maintain the knowledge levels of their employees ensure that that there are competencies and self-assessments for the nurses to understand and maintain their knowledge, these tests can be taken bi-annually and annually, the results are on the basis of a scale and it also tell the clients to select the staff which is better and has the required expertise.
In order to ensure that regular advanced training takes place and any new improvements in the area of nursing are duly captured and taught, the agencies develop centers for training and excellence. To ensure that all these trainings and certifications are accredited, these centers are affiliated to reputed bodies like the American Nurses Credentialing Center.
Agency Nurses: Benefits and Role in healthcare. . .
McCutcheon et. al , mentioned in his research work that in order to derive the best patient outcomes, it is important to ensure that the nursing staff has the right mix, he argues that on one hand where the permanent nurse may be well equipped with the hospital procedures and specific guidelines, on the other hand an agency nurse will bring an external experience which may prove really helpful.
Since agency nursing is a separate form of business altogether than running a healthcare unit, it is a requirement for them to ensure quality service and a robust managerial process, which helps to enhance the quality of patient care in a hospital taking the services of an agency.
All nursing agencies have a certain licensing procedure to follow which makes them aware of the kind of quality which is being expected out of them and therefore it is important for them to maintain regular standards of service and excellence as in case if the license is not renewed they would not be able to carry on with the regular operations.
Muller et al. suggests that nursing as a business is a very fruitful concept, however it requires the agencies to stick to certain ethical codes. Effective clinical governance is ensured to manage the risks involved with this business and quality is the only solution to sustain in the market hence quality assurance and programmes for professional development are the primary results of an agency.
Considering the very high expenditures that hospitals are making in order to ensure that the experienced nurses are retained, there are few researchers who are looking at the agency nurses from a cost benefit point of view as well. It is not only difficult to get nurses with desired experience but can also be beyond the budgets of a hospital to hire them even if they are able to find one.
Agency Nurses: An alternative or need. . .
In the first half of 1980, there was a major shortage of nurses and this was predicted to continue for the next few decades, there were various retention programs run by Hospitals to ensure that they are able to meet their staffing requirements. There was a study conducted by the American academy of nursing to find out the reason behind the success and failure to retain experienced nursing staff, and the results revealed the fact that the hospitals which are able to retain experienced nurses, run their operations with minimum hierarchical layers.
With the results of this study, it was clear that taking certain steps in the area of retention will at least make the resource availability better and hence magnet Accreditation program was introduced which was supposed to improve the quality of work environment for the nurses and nursing practice. Magnet accreditation is considered as the most recognized achievement for a hospital in the area of nursing and is not very easy to get, hence hospitals started depending on agency nurses for all the experience and expertise that they needed in order to provide satisfactory healthcare services.
Another noticeable factor which must be considered is related to critical care nursing, this is an area where the maximum shortage occurs as, it is very difficult to get certified nursing resources who have considerable experience in handing highly critical situations and in this case if such resources are available with a nursing agency, the hospitals are very comfortable to accept them as a part of their system and this really makes the agency nursing as a necessity at times rather than simply becoming an alternative solution.
There is a continuous increase in the use of supplemental staff and studies show that where in 2001, about 56% hospitals of the American Hospital Association reported the use of supplemental nurses, the same has gone up and has reached 76%. The business done by the supplemental nurses has reached to $6 billion in the past few years and is expected to grow rapidly in the coming few years. There is another survey conducted by the Patient Safety Culture which was in guidance of the agency of healthcare quality and research, this survey revealed that 67% of hospital management staff believed that agency staff is better than the permanent nursing staff.
Relative Costing and Benefit Analysis: Agency nursing
Several studies have been done in order to understand the kind of cost impact is there due to agency staffing solutions on hospitals. There are lots of views that support the argument mentioning the rise in cost due to the use of agency nurses; however there are some other views that talk about a well planned application of supplemental staffing in order to reduce the overall costs of nursing upto 10%.
There are several reasons that may enhance operations cost of a hospital if they do not use supplemental staffing, in order to meet the patient need at times the hospital may close beds, cancel elective surgery or may cancel surgery services for outpatients, however all these will result in a direct loss of revenue, there is no don’t that by taking these actions the requirement of nurses can be reduced temporarily but this cannot be considered as an ongoing option.
While we have already discussed various roles and responsibilities of staff and agency nurses, the comparison been their roles and value addition has already been done in the above sections, hence it will also be important for us to compare the two from a cost perspective to understand the difference between the relative applied cost of implemented service.
Objective: The objective of this case study is to determine and calculate the approximate relative cost of using an agency nurse against a full time staff nurse and the difference between the various cost variables which will be applicable for both of them during the provision of full time service.
Methodology: While studying about the cost of service delivery in both the scenarios as discussed above, we will consider that there is one nursing resource from an Agency with 5 years experience and full time services along with another resource who is basically a staff nurse with the same amount of experience working as a full time employee for the hospital. The analysis of costs will be done through case-by-case study method.
Staff Nurse Expense Summary and Comparison
Mentioned below is a summary of the total cost incurred during hiring, training, evaluating and sustaining a full time staff nurse along with the expenditure on providing fringe benefits, the one time costs incurred will be added to the final amount according to average renewal cost.
Hiring, Training and knowledge Management (HTKM): This is a very important requirement of any facility to hire, train and educate their full time staff nurses and therefore there is an amount which is invested to ensure that these three key functions of the nursing department are in place. The average amount spent per nurse on an annual basis for these three activities is about $10,000, in case of Agency nurses, they completely bear this cost and the hospitals do not have to spend anything on these functions.
Payroll Cost and Service Delivery Expenses (including paid time off) (PSP): The staff nurses with 5+ years of experience may draw $7000 per month on an average in a tier I facility where the allowance for education and paid time off may go upto $1500, at the same time a supplemental staff nurse from a reputed agency will come at a cost of $60.00 per hour including all expenses.
Fringe Benefits (FB): In case of full time staff nurses, the hospitals pay for fringe benefits like health insurance, life insurance and accident cover which can cost upto $24000.00 per annum, however on the other hand in case of agency nurses the hospital is not responsible to provide these benefits from their side and hence there is no such cost incurred.
Total average annual costs incurred by a staff nurse (8 hours working 5 days/week): $1, 18,000
Total average 6 monthly costs incurred by an agency nurse (8 hours working 5 days/week):= $1, 15,200
It is important to understand here that this is an average cost comparison, however the pricing for agency nurses is on hourly bases and therefore in case of less number of hours the cost will go down however the cost for a staff nurse will remain the same. Moreover, the agency nurse will most probably be used for critical care areas and hence will be involved with the most critical work in proportion to the cost which will be incurred by the facility.
Conclusion
It is important to understand that the shortage of staffing is not the only reason as to why the option of supplemental staffing is being preferred today, its actually the need of current healthcare industry and gives great comfort to the management as we have discussed in the earlier half of the above discussions. With the kind of flexibility, the availability of talent and quality of services, agency nurses are no more an alternate but are becoming the first choice of quality healthcare providers.
There was a very important myth as we have discussed about the costs and enhanced expenditure on nursing due to agency nurses, however with the case study that we have analyzed, it is very much evident that with active planning and creation of a genuine mix, the normal nursing operation costs can be reduced and not only this, if the cost reduction comes with quality enhancement and improved patient outcomes it will not be wrong to say that agency nursing is a blessing in disguise and must be considered as an effective tool to improve health care services while reducing operational costs.
Works Cited
Aiken, L. H., Chalke, S. P., & Solahe, D. M. (2007). Supplemental Nurse Staffing in Hospitals and Quality of Care. Journal of Nursing Administration Vol.37 No.7 , 335-342.
Barbara, M. A., Lindley, L., & Jones, C. B. (2009). Nurse Working Conditions and Nursing Unit Costs. Chapel Hall: University of North Carolina.
Bloom, J. R., Alexander, J. A., & Beverley, N. A. (1993). Staffing Patterns and Hospital Efficiency. UC Berkeley: Working Paper Series, Institute for Research on Labor and Employment.
Collier, V. (2011). Agency Nurses’ perceptions of job satisfaction within Critical Care Units in private healthcare institutions. Stellenbosch University .
Shaffer, F. A. (2006). Staffing Alternatives Research versus Perception. Boston: Nurse Leader.
Spetz, J. (2005). The cost and cost-effectiveness of nursing services in healthcare. Nurs Outlook Vol.53 No.1 , 305-309.
