Factors Impacting The Performance And Profitability Of Healthcare Organizations

The annual turnover rate among health care employees is startling. Some turnover is unavoidable: people get married, move away, go back to school or retire. However, other types of turnover are preventable. According to the Human Resource Management Association, 20.4 percent of health care employees (one in five) quit their jobs every year. The number easily exceeds the

There are many challenges facing today’s nursing leaders and managers. From staffing and scheduling, to budget cuts and reduced reimbursements, today’s nursing leaders must evolve to meet the ever changing health care environment. Constance Schmidt, Chief Nursing Officer at Cheyenne Regional Medical Center (CRMC), identified retaining experienced registered nurses (RN) as one of the biggest problems she faces as a nursing leader. She went on to state “Nationally, most hospitals have more than 60% of their nurses with at least 5 years of experience. At CRMC, it’s the reverse. We have more than 60% of our nurses with less than 5 years of experience” (personal communication, March 28, 2014). The two largest factors affecting those numbers are the nursing shortage and nursing retention. The first, the nursing shortage, was identified years ago and has been researched countless times. Some projections indicate the number representing the gap between available registered nurses, and the positions needing to be filled, could be over a million before the end of the current decade. The latter, retention of nurses, is a problem in every health care facility in the nation. Nursing turnover results in both a significant financial cost to hospitals, and a significant impact on the community through its effects on patient outcome.

The nursing shortage in healthcare has been a highlighted issue for many years. With the ever-growing health care system, hospitals and healthcare facilities often find themselves searching for ways to acquire new nurses and retain their very own. Throughout the years, the number one solution to this problem remains the same: decreasing nurse turnover, and increasing nurse retention. This paper discusses the causes of high nurse turnover rate, the negative effects on health care, and ways to improve the turnover rate.

The expense of losing an experienced nurse can be costly to the hospital. Not to mention the nursing knowledge and skills. Estimates of the actual dollar amount incurred by nurse turnover range from 10 to 20 thousand dollars per nurse to as much as well over the nurse’s yearly salary. According to Anderson (2004), Nurse Executives estimate that “…visible costs represent only 24 percent of total costs for medical/surgical nurses and only 18 percent for specialty nurses. A true total cost of $42,000 per medical/ surgical RN and $64,000 per specialty nurse is more close to reality.” Turnover costs, average approximately $47,403 per medical/surgical RN and $85,197 for specialty RNs. “A 400-nurse hospital with a 20 percent turnover rate is replacing 80 nurses per year. The direct costs might average $800,000 per year, but

Increasing Hospital Nurse Retention A healthcare facility has known for many decades for the continuously assistance of nurses, facilities around the world an encounter an increase of nursing shortages. Nurse Executives also have in mind the financial impact nurse retention and nurse turnover have on the organization. End result, nurses cost tens of thousands of dollars to recruit and train. A better-quality hiring and recruiting process possibly will result in not only enhanced retention and reduced turnover; however include also several constructive benefits including financial, patient satisfaction and quality of care.

The financial cost of losing a single nurse has been calculated as equal to double the annual salary of a single nurse. Various studies reveal that each hospital in America is losing almost $300, 000 per year because of nurse turn-over. Nurse turn-over can negatively impact the health care system in many ways such as poor quality of patient care, increased medication error, hospital acquired infection, prolonged patient stay at hospital, and increased staffing cost. Many factors contribute to nurse turn-over such as workload, absence of career opportunities, poor work recognition, and lack of communication with management about issues (Hunt, 2009).

Retaining a stable and sufficient supply of nurses is an important hospital and nationwide concern. Numerous factors affecting retention of registered nurses comprises of practice autonomy, managerial respect, workload, and inclusion in decision making, flexible schedules, education, and pay (“Recruitment”, 2013). Hospitals not capable of retaining qualified registered nurses may result in the loss of experienced and knowledgeable staff. Additionally this will lower hospital productivity during this transition. High turnover rates for registered nursing staff may also impact job fulfillment and nursing moral altogether. Retaining qualified registered nurses will enhance patient care quality and satisfaction.

Nurse retention for this company is of utmost importance for multiple reasons. According to Forest and Kleiner (2011) replacing an RN can cost as much

With the ongoing changes in the healthcare field, nursing workforce retention presents itself as one of the greatest challenges facing healthcare systems today. According to the American Nursing Association, nursing turnover is a multi-faceted issue which impacts the financial stability of the facility, the quality of patient care and has a direct affect on the other members of the nursing staff (ANA, 2014). The cost to replace a nurse in a healthcare facility ranges between $62,100 to $67,100 (ANA, 2014). The rising problem with nursing retention will intensify the nursing shortage, which has been projected to affect the entire nation, not just isolated areas of the country, gradually increasing in its scope from 2009 to 2030 (Rosseter,

The nursing shortage is no longer a projected problem in the healthcare industry in the United States, this problem is present and is not phasing out anytime soon. Addressing this challenge would improve job satisfaction, reduce burnout in the profession and ultimately improve retention.

Hospitals nationwide are experiencing nurse shortage and increased workloads because of shorter hospital stays, fewer support resources and higher acuity in patients (Vahey, D. C., Aiken, L. H., Sloane, D. M., Clarke, S. P., & Vargas, D., 2004). Higher nurse workloads are directly associated with job burnout and job dissatisfaction which in turn causes more voluntary nurse turnover and relates to the increased nursing shortage. According to the Missouri Hospital Association the turnover rate of nurses has increased by fourteen percent in the last five years (Browning M., 2012). Nursing shortage is a real threat to the patient population. According to the Quality Health Outcomes Model by the American Academy of Nursing by Donabedian, effects of the healthcare interventions are characterized by the environment the staff works in (Vahey et al., 2004). Donabedian describes that quality metrics can be divided into three broad categories, structural, process, and clinical.

Nurse turnover is defined as “the number of nurses changing jobs within an organization or leaving an organization within a given year” (Baumann 2010). Retaining nurses is one of the most important issues in health care as its effects range from challenges in human resource planning, to high costs in financial and organizational productivity (Beecroft et al, 2008), to workgroup processes and morale, to patient safety and quality of care (i.e. patient satisfaction, length of patient stay, patient falls, and medication errors) (Bae et al, 2010). Nursing Solutions Inc (NSI) reported the national average turnover rate for hospitals increased from 13.5% in 2012 to 14.7% last year. Nurses working in Med/Surg had more turnover

High turnover rates can be very expensive for any healthcare facility, especially when it comes to training new employees. Nurse turnover cost can consist of recruitment and advertising; training and orientation; and the cost to fill the vacancy with overtime. Even though nurse turnover rates has been on the rise, however, it can bring benefits like paying lower rates for new employees or eliminating poor performers.

The employee turnover in health care industry is very high. In fact in some of the US states, it is double the national average of 15.6%. The statistics related to employee turnover rate are highly alarming and are growing even worse day by day. While on the one hands it would appear that the chief reason behind this phenomenon is the relatively short supply of talented individuals or workers(Jones, 2000). But over time research has identified another important factor behind this phenomenon which is the mismanagement of human resources in health care sector. Limited talent supply coupled with poor human resource management have led to compounding the problem. Due to poor health care workforce management the turnover rate in this sector has remained high. An aging talent pool which is not being replaced at the rate it is depleting has compounded the problems being faced by the health care industry.

The global nursing shortage is resulting in the need to find multiple solutions to providing adequate numbers of nursing personnel. The shortage is exacerbated by nurses leaving the profession and their current positions. Globally, nursing turnover rates range from 10–21% per year, with countries such as the USA and Australia reporting turnover rates of over 20% per year. Retaining nurses in their current positions will reduce the magnitude of consequences associated with the nursing shortage (Cowden and Cummings, 2012).