30 American Nurse Today Volume 12, Number 9 AmericanNurseToday.com

In this new, unpredictablehealthcare universe, chiefnursing officers (CNOs) and

chief financial officers (CFOs)are jettisoning preconceived no-tions of their individual rolesand finding innovative ways towork together to create betteroutcomes.

One goal that both CNOs andCFOs have in common is findinga way to calculate more effectivenurse staffing and scheduling.This intersection is where CNOscan build a case for acuity-basedstaffing and present the system’svalue to CFOs, not only for bet-ter clinical outcomes, but alsofor satisfactory fiscal outcomes.

Experts in acuity-basedstaffing discussed how CNOsand CFOs can come togetherover this shared goal duringthe webinar “CFO/CNO part-nership for workforce manage-ment outcomes: Benefits ofacuity-based staffing,” hostedon July 12, 2017, by AmericanNurse Today, GE Healthcare, andIntel. Lillee Gelinas, MSN, RN,CPPS, FAAN, editor-in-chief forAmerican Nurse Today, moderat-ed the program, which built on the 2016 webinar “Practicalsteps for applying acuity-basedstaffing: What nurse leadersneed to know.”

“Finance and nursing execu-tives face many uncertainties intoday’s healthcare environment,but one factor still under theircontrol is the cost of labor,” saidGelinas. “An investment in laboris an investment in quality, butlike any other transaction, hos-

pital leaders want the best re-turn from their dollars.”

Acuity-based staffing is avaluable tool for maximizingthose returns because it ensuresthe right staff are in the rightplace at the right time—essentialgoals as healthcare leaders facea worsening nursing shortageand continuing demands to domore with less.

“Acuity-based staffing is aninitiative that affects all areas ofimportance to the CFO, theCNO, and the entire organiza-tion,” said Karlene M. Kerfoot,PhD, RN, NEA-BC, FAAN, chiefnursing officer, GE Healthcare,Workforce Management. “It im-pacts financial outcomes, clini-cal outcomes, patient satisfac-tion, and staff satisfaction.”

Kerfoot’s copresenters, JackNeedleman, PhD, FAAN, Fred W.and Pamela K. Wasserman Pro-fessor and Chair in the depart-ment of health policy and man-agement at the UCLA FieldingSchool of Public Health and Syl-vain (Syl) Trepanier, DNP, RN,CENP, chief nursing executive forProvidence St. Joseph Health,California (LA Market), agreedthat acuity-based staffing is thebest tool available to calculatethe most accurate combinationof RNs needed to produce goodclinical outcomes while also con-taining labor costs.

Before CNOs can build thebusiness case for acuity-basedstaffing, however, they need tounderstand CFOs’ concerns andneeds.

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of acuity-based staffing How to build a case that creates improved patient outcomes.

By Janet Boivin, BSN, RN

Lillee Gelinas, MSN, RN, CPPS, FAAN (Moderator)Editor-in-Chief, American Nurse TodayInterim Chief Nursing OfficerMedical City Forth WorthFort Worth, Texas

Karlene M. Kerfoot, PhD, RN, NEA-BC, FAANChief Nursing OfficerGE Healthcare, Workforce ManagementMilwaukee, Wisconsin

Jack Needleman, PhD, FAANFred W. and Pamela K. Wasserman Professor and ChairDepartment of Health Policy and ManagementUCLA Fielding School of Public HealthLos Angeles, California

Sylvain (Syl) Trepanier, DNP, RN, CENPRegional Chief Clinical ExecutiveProvidence St. Joseph HealthCalifornia (LA Market)Torrance, California

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What CFOs want CFOs are spending time withnurses and physicians on hospi-tal units to better understandwhat it takes to prevent negativeoutcomes, such as hospital-ac-quired infections and preventa-ble falls, that government regu-lations tie to reimbursement.

According to a 2017 survey of75 CFOs by Becker’s Healthcare,CFOs’ top concerns are manag-ing labor costs (73%), monitor-ing the uncertainty surroundingreimbursements (71%), and stay-ing competitive in the health-care market (61%). “We knowthat anywhere from 40% to 60%of a healthcare organization’sbudget is labor cost,” Kerfootsaid.

Hurdles to workforce manage-ment identified in the survey in-clude:• flexing staff up and down

based on the number of pa-tients and their needs at anyone time (60%)

• managing overtime and pre-mium labor costs to preventbringing in outside staff (47%)

• leveraging staff across the or-ganization (45%)

• staffing productivity as a lag-ging measure rather than us-ing proactive scheduling (43%)

• managing staff turnover andthe cost of orienting new per-sonnel (40%).The survey also shows that

CFOs believe clinicians aren’tusing all the data that’s avail-able to them through the in-vestment of millions of dollarsin electronic health records(EHR). For example, data onadmissions, discharges, andtransfers; staff skill and compe-tency; and patient acuity, toname a few, aren’t being fullyused, Kerfoot said. (See Under-utilization of data.)

Failure to use that data mayresult in patient harm becausethe right number of staff withthe right qualifications mightnot be available to deliver thecare patients need.

The evidence: Missed careleads to bad outcomes Many studies have shown thatsufficient nursing staff leads to improved clinical outcomeswithout unreasonably increas-ing a healthcare organization’sbud get, Needleman said. Re-search also has shown that badoutcomes are caused in largepart by “missed care” or “careleft undone.”

“What we see in hospitalsstaffed at low levels that no oneshould be comfortable about isthat reported levels of missedcare are quite high,” Needlemansaid. “So, missed care representsone of the clear pathways bywhich inadequate staffing leadsto poor patient outcomes.”

Indeed, a measure of RN un-derstaffing is nurses’ inability toget their work done during anormal shift. Studies show timeand again that adequate staffingon nursing units allows RNs tocomplete all their work, not justmost of it. This includes the visi-ble physical tasks, such as takingvital signs and administeringmedication, and the unseen andless measurable cognitive nurs-ing responsibilities, such as:• interpreting changes in a pa-

tient’s condition and decidingon the appropriate response

• identifying incorrect physicianorders

• catching medication errors• coordinating patient care• educating and preparing pa-

tients and their families forself-care

• providing emotional support. Together, these actions reduce

infections and complications,prevent medical and nursing er-rors, help reduce readmissions,and lead to patient and staff sat-isfaction, Needleman said.

Needleman noted there are atleast three dimensions to accu-rate staffing: • patient characteristics and the

critical issues influencing theproper staffing level

• nurse characteristics • unit and organizational fac-

tors, such as turnover and effi-ciency of support services.If a CFO or chief executive of-

ficer asks if the institution canafford adequate staffing, the an-swer is that management needsto consider not only the directcosts of nursing but also the costoffsets of adequate staffing thatcome from shorter length of stay,reduced adverse events, reduced

Underutilization of data A survey of 75 chief financial officers conducted by Becker’s Healthcare identi-fied that many health systems aren’t taking full advantage of data in makingstaffing decisions.

EHR = electonic health record

readmissions, and missed care,Needleman said. (See Cost bene-fits of adequate staffing.)

One of the key messages of abusiness case analysis is that in-creasing RN staffing hours maycost a little more but will payfor itself by avoiding adverseoutcomes. Trying to save moneyby de-skilling the nursing staff,by reducing or replacing RNswith LPNs or other less-skilledstaff, is likely to increase thebudget’s net cost, not save mon-ey, Needleman said.

In summarizing a businesscase for an interoperable acuity-based system, he recommendedpointing out to CFOs that: • Nursing is a core service line

of hospitals, not just a costcenter, and should be assessedas a service line.

• Patients expect, and have aright to expect, that theirnursing care will be safe, reli-able, and effective.

• Nursing care depends onstaffing at adequate levels tomeet patients’ needs.

• Acuity-based systems, whe -ther commercial or locallydeveloped, can ensure moreappropriate levels of staffingmatched to patient acuityand needs.Hospital executives must un-

derstand that nurses completing“most of their work” is not ac-ceptable and certainly not worththe savings, Needleman empha-sized.

Developing effective CNOand CFO relationships Before presenting evidence suchas Needleman outlined, the CNOhas to build an effective partner-ship with the CFO. As challeng-ing as it may seem, a CNO mayneed to take the first step towardbreaking down traditional orga-nizational silos and establishinga relationship with a CFO, Tre -panier said. Here are some ideasto get you started:• Be thoughtful and intentional

when reaching out to your

CFO. Don’t make just a pass-ing effort. Show interest in theCFO rather than trying to bethe subject of interest. As inall effective relationships, behonest and avoid gossip or innuendo.

• Don’t ask for something atthe start of the relationship.Instead, as the relationshipbuilds, look for common areasof concern and then suggestan issue you could work ontogether.

• Be prepared to respondthoughtfully and not reactemotionally. Conversationswith CFOs may not always go as smoothly as you’d like.Think about how you emo-tionally feel about an issue

before you start a particularconversation with a CFO. Re-view your rationale. In otherwords, Trepanier said, don’t“shoot before you aim.”

• Ask if there’s an institutionalbusiness case model that youcan familiarize yourself with.As you feel more confident in

the relationship, approach theCFO about the need to imple-ment an interoperability acuity-based staffing system. Presentthe idea in chunks at differenttimes, not all at once. Ask if youcan work on it together and sug-gest that you start developingthe business case for the system,Trepanier said.

If you’ve never built a busi-

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Cost benefits of adequate staffing Increasing the proportion of RNs and their number of hours reduces adverseoutcomes and even patient deaths as the data analysis below shows.

Although these staff changes incur costs, those costs are clearly offset by thesavings achieved in improved outcomes, as noted below.

Source: Needleman J, Buerhaus PI, Stewart M, Zelevinsky K, Mattke S. Nurse staffing in hospitals: Is there a businesscase for quality? Health Aff. 2006;25(1):204-11.

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34 American Nurse Today Volume 12, Number 9 AmericanNurseToday.com

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ating a business case is a skillthat you need to develop as aCNO,” Trepanier said. Your insti-tution may have a model it rec-ommends. If not, search for out-side resources and tools, such as Build Your Business Plan atsba.gov/tools/business-plan/1?from_mobile=true, to help you learn.

Trepanier recommended in-cluding the following in thebusiness case: the connection tothe organization’s vision andmission, a clear description ofthe problem, a detailed explana-tion of the solution, expectedoutcomes and how they’ll bemeasured, and the value contri-bution, which also should tie into the vision and mission.

After a business case is devel-oped in collaboration with theCFO, Trepanier suggested identi-fying like-minded coworkers andtalking to them about your plans.Winning support from influen-tial stakeholders who can sup-port you during the official pres-entation to top leadership is anadvantage. They also may giveyou ideas to strengthen yourbusiness case.

Your business case should in-clude these tangible benefits ofan acuity-based system:• fulfills any regulatory require-

ments in your state• provides an accurate, objec-

tive picture of patients’ needsand the workload associatedwith them

• supports individualizedstaffing plans based on pa-tients’ needs

• promotes a budget based onactual patients’ needs as op-posed to the “historical” hoursper patient, per day now usedin many hospitals.

Selecting an acuity-basedstaffing system Your business case will includeone of two types of acuity-basedstaffing systems—commercial orlocal. Needleman said that both

have pros and cons. When choos-ing a system, keep in mind thatit should be able to formulatecorrect staffing mix with mini-mal additional work by hospitalstaff. To do so, the system shouldhave indicators that measure patient complexity, optimal re-quired nursing care, available re-sources, and relevant organiza-tional attributes. And it shouldtruly reflect nursing work.

Commercial systems comewith an existing algorithm andcan be calibrated to the organi-zation’s nursing model. In gener-al, commercial systems tend tohave a high data-entry burden,although this can be mitigated

by linkages to EHRs. Local sys-tems take into account the na-ture of the patients who are typi-cally on specific units, but thedata-entry burden also can behigh and most local systemsdon’t have links for tracking da-ta entry and storage.

Data plus automationequals better staffing The selected acuity-based systemneeds to be integrated into work-force management to facilitateeffective decision-making. “Wehave data absolutely every-where, but the problem is thatno human being can absorb allthe data and synthesize it into acoherent formula upon which tomake decisions,” Kerfoot said.Automated acuity-based staffing

systems support the transforma-tion of data into informationthat nurse managers and CNOscan use to determine appropriatestaffing levels. The system shouldincorporate patient data, staffdata, and operations data to de-velop a staff scheduling planthat CNOs and CFOs agree meetstheir needs and their patients’needs. Automated tools andprocesses help ensure that theright data (patient, staff, and op-erations) get to the right peopleat the right time to drive betterworkforce management systemsand clinical outcomes.

“Intelligent staffing,” as Ker-foot refers to it, depends onstaffing optimization, which isthe ability to fully leverage thenursing staff’s time and talent tomeet patients’ needs. It’s also theability to flex staff up and downbefore and during a shift as un-expected changes happen.

Having a more accurate as-sessment of your staffing needswill help eliminate chaos downthe road by not having to call ina staff member from home tohelp with a unit’s unexpecteduptick in census, Kerfoot said.Experience has taught nursesthat the kind of care patientsneed can’t be determined with acensus number alone. Each pa-tient is different. Some needcomplete care, while others arealmost self-sufficient. Some pa-tients have numerous lines andmedications, while others areready to go home. Informationabout individual variations fornursing care determines the ac-tual nursing time needed.

And just as each patient is dif-ferent, so too are the caregivers.Each nurse has his or her ownset of skills, education, experi-ences, preferences, and avail-ability.

Staffing needs also are affect-ed by unit dynamics, such as ad-missions, discharges, and trans-fers. And life is unpredictable.Patients crash, develop unpre-

Just as each patient isdifferent, so too are the

caregivers. Each nurse hashis or her own set of skills,

education, experiences,preferences, and

availability.

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or fall and break a bone. Staffmembers call in sick or need toleave because a child is ill.

When data about patientneeds, individual RN characteris-tics, and unit dynamics are con-sidered together, a complete pic-ture of staffing needs is revealed.

Building optimization Optimizing staff consists of creat-ing the schedule, fostering openshift management, making in-trashift adjustments, and con-ducting a postshift analysis. (SeeOptimizing staff.)

Creating the schedule shouldstart 4 to 8 weeks out. Base theschedule on a staffing matrixthat is, in turn, based on thebudget. The more accurate thestaffing matrix is, the sooner anaccurate schedule can be creat-ed. Be sure to look at availablepredictive information. This mayinclude seasonal acuity, such asthe start or end of the flu season,summer in the city when vio-lence increases, or an upcomingholiday.

Equity rules also are impor-tant, ensuring that employeesare all treated fairly and consis-tently when it comes to factorssuch as working holidays andhaving access to self-scheduling.Fairness in patient assignmentsis important for patient out-comes and staff engagement.

A comprehensive schedulecreation process is essential be-cause the more complete and ac-curate the schedule is, the feweradjustments will be needed asthe schedule period gets closer.

Fostering open shift manage-ment promotes collaboration be-tween nurse managers and staffacross the enterprise so that pa-tient care needs are met withinbudget constraints, while mini-mizing the amount of effort re-quired to fill shifts. “We want tomake sure that we have visibili-ty across the system so that oneperson can look at what is avail-able on another unit to see if

sharing a staff member can re-lieve a shortage somewhereelse,” Kerfoot said.

By breaking down staffing si-los between units and depart-ments and expanding visibilityto use workforce resources moreeffectively, shifts are filled quick-ly and cost effectively, with thebest available resources. Staff be-come more engaged in theprocess because they have moreinput into their schedule, whichin turn boosts morale.

Making intrashift adjust-ments should occur just beforeand during the shift and bebased on evolving patient needs.As one health system CNO ex-plained to Kerfoot, “We use data,data, data. Information from ourEHR is fed into our acuity systemevery 2 hours and staffing is ad-justed every 4 hours based onthis data. Managers monitornurse-patient assignments andstaffing multiple times a dayand make adjustments.”

Conducting a postshift analy-sis is something CNOs are fam -iliar with, but optimization re-quires a more dynamic approach.In the past, most hospitals useddata compiled after the shift (oreven worse, data that’s availableonly after the end of the pay pe-riod) to take a retrospective lookat their organization’s productivi-ty, use of overtime, and other la-bor metrics. This is sometimes referred to as a rearview mirrorapproach—you can see whereyou’ve been, but it’s not helpful

for making decisions aboutwhere you need to go.

With a dynamic staffing mod-el, managers can focus on usingrelevant data before, during, andafter each shift to make proactiveadjustments that have a mean-ingful impact on financial andclinical outcomes. Retrospective-ly, it allows CNOs and CFOs toreview whether the staffing andacuity matched what was ex-pected compared to the allottedbudget. If it didn’t, they can de-termine what changed and why.

For example, by looking at theshifts a nurse has already worked,as well as the shifts he or she isscheduled to work, overtime canbe projected and changed beforeit is incurred. When the focus ison making the right adjustmentsbefore and during each shift, theafter takes care of itself, with nounpleasant surprises.

An effective process How can leaders ensure staffingmeets patients’ needs while bal-ancing the budget? The answeris clear: Understanding the valueof acuity-based staffing, forgingpartnerships between CFOs andCNOs to implement this form ofstaffing, and integrating it intothe organization’s workforcemanagement process will pro-mote patient safety and ensurefiscal responsibility. Janet Boivin is a freelance writer.

Editor’s note:Access a recording of the webinarat americannursetoday.com/cfo-cno-benefits-acuity-based-staffing/.

Optimizing staff Optimizing nursing staff requires looking ahead at anticipated needs, beingnimble during a shift, and reviewing past performance.

Creating theschedule

Fostering open shift

management

Making intrashift

adjustments

Conducting a postshift

analysis4-8 weeks out

OptimizingOngoing

Collaborative effort between managers

and staff

Just before andduring the shift

Real-time changes based onpatient needs

After the shiftHow did my unit or

organization perform?