Question

As the nurse manager of the new 15-bed observation unit you are responsible for reporting to your nursing director and the finance department. Listed below is your monthly operating report.

As the nurse manager, you need to determine the staff mix based on budgeted full-

time equivalents (FTEs). Consider the formula below:

Actual Price per FTE x Actual Total Number of FTEs = Budgeted Cost

Nursing Labor

Actual $58,450

Budgeted $52,575

variance$ 5875

Using the figures above for nursing labor, calculate the Actual Cost and how you will divide the nursing labor expense based on skill mix. Consider safe staffing requirements, quality of care and operational needs to meet the demands of the new unit. Provide a detailed rationale of why and how you arrived at your decision.

Answer 1

PROPOSED NURSING STAFF PATTERN BASED ON THE GIVEN BUDGET

Nursing staff pattern

As it was an observational unit we can allocate the staff with the nurse patient ratio of 1:5. Hence total number of staff needed is 10, including one charge nurse and 9 duty nurses.

Duty shift and staff pattern

· Morning shift : Nurse in-charge 1 (Regular duty 10am to 5pm), duty nurses 3

· Evening shift : Duty nurses 3

· Night shift : Duty nurses 2

· Off duty : 1

Based on the qualification and experience staff could be divided into 3 tires of salary.

· Category I- Highly qualified and well experience staff should get ‘P’ amount of salary

· Category II - Qualified but Moderately experienced staff should get ‘0.8P’ (less than 20% of the ‘P’)

· Category III - Qualified but Less experienced staff (>5years) should get ‘0.6P’ (less than 40% of the ‘P’)

Total budgeted cost (52750) = 5x0.6P + 4x08P+P

Therefore P = 52750/7.2 = $7326 (ie the salary of Category I)

Salary of category II 0.8P = 7326X0.8 =$5860

Salary of category III 0.6P = 7326x0.6 = $4395