Nurses focus primarily on direct patient care and supporting overall health and well-being, embodying the essence of the profession. However, today's nurse leaders must also navigate the business aspects of their units, which requires having a breadth of business knowledge that was not historically essential.
Developing this knowledge for nurse leaders is a priority at Lifespan’s Rhode Island Hospital, a 719-bed Level I trauma, stroke and burn center and the state's largest academic medical center. The hospital’s nursing and finance departments created a program to enhance business acumen among nurse leaders, aligning with their evolving roles. This initiative, including leaders from Rhode Island and Hasbro Children’s Hospitals, focuses on data interpretation, cost-effective practices and financial stewardship, aiming to promote accountability in leadership.
Nurse leaders ensure the efficient management of their units by maintaining accountability for expenses and aligning them with productivity goals. This involves understanding the financial aspects of their units and committing to the following methods:
- Educating staff on cost-effective practices and financial stewardship.
- Empowering staff with fiscal management knowledge to foster accountability.
- Creating and overseeing budgets that meet operational and productivity goals.
- Allocating resources to maintain patient care quality and financial health.
- Tracking expenses and productivity metrics to identify and correct discrepancies.
- Collaborating with interdisciplinary teams on resource use and cost-saving strategies.
- Using technology and data analytics to understand expense patterns and productivity trends.
By embracing these responsibilities, nurse leaders can enhance the financial well-being of their units while upholding the highest standards of patient care. Balancing financial accountability with clinical excellence is crucial for the success and sustainability of healthcare organizations.
Taking a “Triple E” Approach
To achieve this balance at Rhode Island Hospital, we focused on what we’ll refer to as the “triple E” approach: education, exploration and execution.
Education
This is the first "E" in building today's nurse leader's financial toolkit. Assessments revealed varied business acumen among nurse leaders, from minimal to proficient, highlighting the need to bridge this gap. The educational solution was multifaceted.
Monthly forums covered business topics such as labor management, productivity, budgeting and expense variance reporting, fostering engagement and strengthening the finance-nursing relationship. These forums included leaders from various units, such as inpatient medical, surgical, critical care, perioperative services, emergency departments and specialty units.
Furthermore, the director of strategic business planning conducts monthly meetings with individual unit leaders to review key business metrics, enhance productivity and manage expenses, focusing on overtime, contract labor and supply costs. These meetings provide personalized coaching, mentoring and collaboration as a business dyad with nurse leaders.
Exploration
This second "E" involves using the business tools available to nursing leaders at Rhode Island Hospital.
- Labor control dashboard: Each unit has a dashboard that provides staffing insights, evolving from a data table to a predictive modeling tool assessing vacancy rates, leaves of absence, new hires and orientation statuses to inform staffing decisions.
- Monthly variance report: This tool examines volumes, revenues and expenses. Nursing leaders provide commentary on budget variances, analyzing supply utilization, contract labor and overtime, and offer strategies to mitigate these variances. Over the past year, this has become standard practice and enhanced leaders' proficiency in financial analysis.
- Financial reports: Leaders receive reports on overtime, incremental overtime, contract labor and supply utilization requiring them to provide commentary and corrective strategies for negative variances.
These tools enable nursing leaders to actively participate in the budget process and ensure their contributions are valuable in making financial decisions in their units that contribute to fiscal responsibility and quality care for the patients they serve.
Execution
The third "E" is where leaders apply their knowledge using the established toolkit. Effective execution is essential to achieving business goals. Rhode Island Hospital has seen noteworthy results from this plan, including a 21% reduction in incremental overtime and a 7% reduction in contract labor within four months. The inpatient nursing divisions have operated collectively 5% under budget for medical/surgical supplies from October 2023 to May 2024 through focused supply variance reporting. While education and exploration are important first steps, the execution phase of the toolkit is crucial for achieving business objectives.
The path to building the financial toolkit for today's nurse leader is dynamic and continually evolving. Our aim is to foster a culture in which nurse leaders are well-prepared to make informed business decisions using the data and steps provided in the toolkit. The team will consistently evaluate and enhance the financial tools to support the ongoing success of nurse leaders.
Cindy Danner, DNP, RN, NE-BC, is senior vice president/CNO, and Robert M. Weiss is director, strategic business planning analysis, Lifespan, Providence, R.I.