NR533 Week 5 Budget Development Assignment: Background Information

 

Proposed Salary Budget for Cardiac Unit at SLMC
To develop a budget, you would take the following steps:
1. Establish Hours Per Patient Day (HPPD) on the cardiac unit

a. Calculate the total care hours required for the year:
# Of Patient Days X Average Care Hours per 24 Hour Period = Total Care Hours
10,000 8.0 = 80,000
Total care hours required for the year

b. Calculate the hours of care per patient day (HPPD):
Total Care Hours Required for the Year / Number of Patient Days
80,000 / 1,000 = 8.0 care hours

(Note: Midpoint for care hours in a med-surg unit = 7.4; midpoint for patient care hours in an ICU = 14-16.)
2. Determine the Cardiac Unit’s Expected Census

a. Determine daily census and occupancy rate of unit:
Patient Days / 365 days per year
10,000 / 365 = 27.4 patients per day
Total beds in cardiac unit = 20
Occupancy = 17.5 patients per day / 20 beds X 100 = 87.5%
3. Apply HPPD to Census and Determine Full-Time Equivalents (FTEs)

a. Determine FTE requirements for number of expected patient care hours:
Total Care Hours / 1,768 productive hours per FTE
(1,768 = 85% of 2,080;
40 hours per week X 52 weeks per year = 2,080;
Less vacation, sick, education time)

80,000 / 1,768 = 45.25 FTEs
The other way to calculate FTE would consist of:

Average Daily Census X HPPD X 365 day/year
Number of Productive Hours per Employee

27.4 X 8.0 X 365 = 45.25 FTEs
1,768

4. Determine Your Needed Positions by Type and Shift

a. Calculate how many staff members are required per 24-hour period:
Divide total care hours by 365 days per year
80,000 / 365 = 219 hours of care per day

(Alternative approach: 27.4 patients per day X 8.0 HPPD = 219)

Assuming employees work 12-hour shifts:
219 / 12 = 18.25 shifts per 24-hour period .

b. Assign staff by type:
80% RN staff; 20% aides
.80 X 18.25 = 14.6 RN shifts
.20 X 18.25 = 3.7 aide shifts

c. Assign staff by shift:
Day Shift Night Shift Total
50% 50%

RNs 7.3 7.3 14.6
Aides 1.85 1.85 3.7.
18.3

Modify to determine the actual number of staff members on duty each shift—i.e., 7 RNs on days; 7 RNs on nights; 2 aides on days; and 2 aides on nights.

7 7 14
2 2 4
18

5. Incorporate All Fixed Cardiac Unit Staff Members

a. Add in fixed staff:
Nurse manager and two secretaries (one per shift)

Day Shift Night Shift Total

Manager 1 1
Secretary 1 1 2

RNs 7 7 14
Aides 2 2 4

Total 11 10 21

6. Convert Staff Positions to FTE Positions

a. Calculate FTEs by type and shift:
Divide total FTEs required by the 18.25 daily staff shifts
45.25 / 18.25 = 2.5

Each shift calls for employing 2.5 FTEs. An adequate number of FTEs are needed to provide coverage for the other 3–4 days out of the week, vacation, sick time, and education time.

Multiply 2.47 by the staff type needed per shift.
RNs days = 2.5 X 7 = 17.5
RNs nights = 2.5 X 7 = 17.5 (35 RNs)
Aides days = 2.5 X 2 = 5.0
Aides nights = 2.5 X 2 = 5.0 (10.0 aides)
Secretary days = 2.5 X 1 = 2.5
Secretary nights = 2.5 X 1 = 2.5 (5.0 secretaries)
Nurse Manager = = 1.0 (1.0 manager)
51 Total FTEs

(Note: When manager and secretaries were not included, the FTE equaled approximately 45 FTEs.)

7. Design a Template for Full-Time and Part-Time Positions on the Cardiac Unit
Note: The staffing office or finance department may already have templates or a previous copy of a budget you may use to assist with this process.

8. Calculate Labor Costs

a. Prepare Personnel Cost Budget:

On the basis of hours by type of employee, a cost budget can be prepared. You can use a spreadsheet to prepare the labor-cost budget. Incorporate hourly rate of employees (based on years of experience, full-time versus part-time, per diem), shift and weekend differentials, overtime hours accrued by employee (due to heavy workload shifts), and fringe benefits.

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