Nursing Leadership and Management Case Study

Questions & Answers

How will you deal with the requests based on the budget printout?

The manipulation of a medical organization’s budget is a delicate matter that involves careful planning and forward-thinking. To accommodate all the issues and requests presented, one must first get a firm grasp on the present situation. In the given scenario, as of April 1st, the hospital has $125,000 remaining for personnel, $4,500 for supplies, $500 for travel, and $200 for staff development. No funds are remaining in the budget for overtime or equipment. The following table displays the hospital’s financial status before making any changes to the budget or accommodating requests from doctors, nurses, and patients.

Next, one must anticipate costs for future months until the end of the fiscal year (Table 2). Based on the annual budget of $300,000 for personnel and the fact that $25,000 was spent on personnel in March, we can budget $25,000 for expenses in April, May, and June. There are enough funds to cover the $350.00 deposit necessary for attending the National Orthopedics Conference in August. The remainder of the conference expenses will be paid in the following fiscal year beginning on July 1st. With future months’ expenses projected, one can begin to accommodate the requests of doctors, nurses, and other personnel (Table 2).

With the smaller expenses covered, attention can now be paid to the larger financial issues such as hiring a new nurse and adding additional shifts to the schedule. Unfortunately, one of the night shift nurses has become dissatisfied with working at the hospital and has decided to quit, putting in her two-weeks notice. Therefore, the hospital will need to hire a new nurse to replace the nurse who has quit. Additionally, the charge nurses have requested that an additional nurse be added to each shift due to the increase in acuity. As patient acuity in the hospital increases, patients are seeing fewer delays and better treatment. Acuity must continue to increase, and patients continue to see improvements in care since the hospital has received complaints recently regarding the care patients and families are receiving. It is crucial, then, to assist the nursing staff and build nursing staff morale as much as possible.

With personnel expenses projected at $25,000.00 per month until the end of the fiscal year, the budget allows for $50,000.00 of remaining personnel funds to be reallocated as needed. To accommodate the request of the nurses who are struggling with the burdens of care and to improve patient experiences, $15,000.00 will be added to the personnel budget for each month until the end of the fiscal year (Table 3). This modification will allow for one to two nurses to be added to each shift. The more demanding shifts will require two additional nurses to help maintain the workload while less demanding hours will require only one additional nurse to be on duty. The excess funds also allow for $1,500.00 to be allocated for overtime each month for the remainder of the fiscal year (Table 3). This modification to the budget will allow funds to cover emergency shifts in which extra help is required to help the hospital operate at optimal performance. The priority lies in providing excellent patient care. To achieve this, nurses must have adequate support and enough personnel on duty to handle the needs of patients. By allocating additional funds for nursing wages and overtime, the hospital can begin to see more efficient, supportive nursing for patients and their families.

What expenses can and should be deferred to the new fiscal year?

In the present scenario, there are excess funds in the Supplies category. While the doctor would prefer to order two new continuous limb movement machines, there are not enough funds to purchase both machines at this time. Instead, the doctor can purchase one machine now and can put in another request in the next fiscal year for the second machine. To accommodate the doctor’s request for purchasing equipment, $3,000.00 can be moved from the Supplies category to the Equipment category. Table 2 shows the new budget for the remaining months through to the end of the fiscal year, including the allocation of $350.00 for the conference deposit and $3,000.00 moved from Supplies to Equipment to accommodate the doctor’s request.

In what budgeting area were your previous projections most accurate and most inaccurate?

The original budget (Table 1) was successful in allocating proper funds for personnel, supplies, travel, and staff development. However, the original budget (Table 1) fell short in the areas of overtime and equipment. In the coming fiscal year, the budget should address the issues that arose in the present fiscal year and more funds should be appropriated for overtime and equipment. Also, if the hospital hopes to continue improving acuity and to reduce the incidence of dissatisfied patients and families, more funds should be appropriated for personnel, as well. Nurses have reported that they feel overworked and understaffed. The hospital will fail without proper nursing personnel and, therefore, these reports should be taken seriously.

What factors may have contributed to these inaccuracies?

Often when a new budget is created for a fiscal year, the budgeting and accounting personnel anticipate a year of fully-functional bliss for the organization. However, this is not realistic. Problems arise, equipment breaks down, and demand for services rises beyond the capacity of the staff on duty. Therefore, while staff may originally budget for a year that will see no problems or disruptions in operations, as usual, it is more prudent to plan a budget under the assumption that things will not go as planned. Planning for emergency expenses – such as hiring and training new personnel, adding extra shifts, approving overtime, purchasing or repairing equipment, for example – is a good way to ensure that a budget will be successful throughout the year. This can be done by setting aside a fund of roughly $20,000, which would be an appropriate amount in this scenario, that would be used for just such an occasion when the budget does not have the funds available for operations as usual.

What is the best approach to resolve the issue of patient acuity classification systems?

To avoid future issues of misappropriated funds, the administration office, and human resources should implement a system of open communication in which nurses can submit anonymous complaints and recommendations. The information supplied by the nursing staff will be invaluable in planning the next year’s budget. Another method to help the nursing staff in addition to adding extra shifts to the regular schedule is to have an effective patient acuity classification system. According to nurse researchers Harper and McCully, “patient classification systems (PCS) assist nurse managers in controlling cost and improving patient care while appropriately using financial resources” (Harper & McCully, 2007, p. 284). The patient classification system recommended by Harper and McCully utilizes five broad concepts – medications, complicated procedures, education, psychosocial issues, and complicated intravenous medications – which differentiate significant patient characteristics into four tiers (Harper & McCully, 2007). This patient classification system allows nurses to improve the quality of care, nurse performance, and equality of patient care. The classification system then improves the quality of nurses' notes and filing systems, which allows nurse managers and administrative personnel to better predict equipment and supply needs, as well as the demand for nurses during specific times of day or times of the year.

What strategies of motivation, communication, care delivery, etc. need to be implemented in order to retain staff?

Another serious issue faced by this hospital is the high level of dissatisfaction of the nurses. The disorganization of the hospital has already pushed one nurse to quit and seek employment elsewhere. Therefore, the hospital must work to improve nurse retention and satisfaction. Implementing the patient classification system is one way of improving the work experience for nurses, as it will allow nurses to better handle the increases in acuity. However, this action alone will not solve the problem. Researchers Chenoweth, Jeon, Merlyn, and Brodaty (2010) identified specific factors that would increase the level of satisfaction felt by nurses in their work in hospitals and with patients. The researchers recognized that individuals who become professional nurses enjoy “the intrinsic rewards of the caring role” (Chenoweth et al., 2010, p. 156). Therefore, to improve nurse retention, hospitals ought to provide staff development programs that satisfy the desire to be in the caring role and the intrinsic rewards of being a helping person. Researchers recommend that hospitals implement a careful selection of student nurse clinical placements, ongoing supervision that reinforces skills, team-building exercises to boost compassion and rapport amongst hospital personnel for one another, pay parity across different health settings, and family-friendly policies (Chenoweth et al., 2010). The nursing staff spends their time caring for others and, in return, the nurse manager should care for the nurses while also managing their stress and nursing performance outcomes.

Why is it important for staff to be involved in improving consumer satisfaction?

Finally, the hospital must improve the levels of consumer satisfaction. Thus far, the CEO of the hospital has received complaints from patients and their families about the care the patients are receiving. To rectify this matter and prevent the incidence of future dissatisfied consumers, the hospital must implement changes. Researcher Thomas Lowe and his colleagues conducted a study in which hospitals were asked to report whether they used consumer satisfaction data to improve the quality of care being provided (Lowe, Lucas, Castle, Robinson, & Crystal, 2003). The researchers found that while many facilities do collect consumer satisfaction data, the data is not being used most effectively and much can be done to improve the efficacy of collecting consumer satisfaction data (Lowe et al., 2003). The results of the study conducted by Lowe and his colleagues illustrate the same problem that is occurring in the current case study. Consumers are giving feedback to hospitals, but the feedback is not yet being utilized effectively. According to Woodside, Frey, and Daly, “consumer satisfaction is important… because it generally is assumed to be a significant determinant of repeat sales, positive word of mouth, and consumer loyalty” (Woodside, Frey, & Daly, 1989, p.5). The end goal, then, is to provide consumers with positive experiences so that they are satisfied with the hospital, convey a positive experience to peers, and return to the hospital for future needs.

What type of structure would be most effective to make a plan for improvement of consumer satisfaction?

To better utilize consumer feedback, the hospital must implement a streamlined system of acquiring feedback, conveying the feedback to nurses, and assisting nurses in improving in areas that consumers have reported as lacking. For example, upon checking out of the hospital, each patient should be asked to fill out a questionnaire rating the quality of care he or she received during his or her stay. Hospital personnel should be rated on levels of compassion displayed towards the patient, promptness of responding to patient needs, cleanliness of facilities used by the patient, promptness of receiving test results and other relevant information, and the overall experience the patient had at the hospital. The questionnaire should then ask for specific feedback – positive and negative – on the nurses, doctors, technicians, and administrators the patient encountered. If any personnel stood out as exceptionally pleasant or unpleasant to encounter, the patient should feel free to make note of this on the questionnaire. Nurse managers must then report the consumer data to the respective nurses. Positive feedback should be commended, and negative feedback should result in additional training or required participation in staff development programs.

Conclusion

Only with adequate information can a hospital and its personnel hope to improve the experiences of hospital staff and patients, alike. With a clear patient classification system, nurse managers and administrators can adequately predict hospital and staff needs for future months and budget accordingly. With proper training and attention to the need for appreciation, recognition and social support, hospitals can work towards a higher nurse retention rate. Finally, by utilizing consumer feedback most effectively and rectifying the inadequate performance of nursing staff, consumers can have a happier, healthier experience and direct other consumers to the care of the given hospital. All these practices combined will serve the hospital well in establishing a streamlined service of care and a useful budget with funds appropriated to the areas most in need.

(Appendices omitted for preview. Available via download)

References

Chenoweth, L., Jeon, Y. H., Merlyn, T., & Brodaty, H. (2010). A systematic review of what factors attract and retain nurses in aged and dementia care. Journal of Clinical Nursing, 19(1), 156-167.

Harper, K., and McCully, C. (2007). Acuity systems dialogue and patient classification system essentials. Nursing Administration Quarterly, 31(4), 284-299.

Lowe, T. J., Lucas, J. A., Castle, N. G., Robinson, J. P., & Crystal, S. (2003). Consumer satisfaction in long-term care: State initiatives in nursing homes and assisted living facilities. The Gerontologist, 43(6), 883-896.

Marquis, B. L., & Huston, C. (2012). Leadership roles and management functions in nursing: Theory and application. (7th ed.). New York, NY: Lippincott Williams & Wilkins.

Woodside, A. G., Frey, L. L., & Daly, R. T. (1989). Linking service quality, customer satisfaction, and behavioral intention. Journal of Health Care Marketing, 9(4), 5-17.