September 6, 2006
Building a close, collaborative relationship between nursing and finance pays off in the long run, say CFOs and nurse executives. When finance understands some of the intricacies of patient acuity and volumes, it is much easier to set realistic productivity targets or hire additional RNs. On the flipside: when nursing cooperates with finance to reduce costs--without harming quality--the hospital is more likely to have additional dollars that can be reinvested in important patient care programs.
The September 2006 issue of The Business of Caring newsletter offers suggestions on how nursing executives and chief financial officers can collaborate on patient care.
Create a Bond Based on Mission
All the clinical directors and managers at MultiCare Health System in Tacoma, Wash., meet with financial analysts to develop budgets and staffing models that reflect actual patient care activity--rather than pre-determined targets. "Collectively, we establish what work-hours, patient volumes, and expenses are going to look like," says Kathy Smith, RN, CNA, BC, MBA, administrator of clinical finance.
MultiCare's budgeting process is built on a foundation of collaboration between nursing and finance that stretches back 13 years. "Very early on, we established a relationship where we didn't feel like there was an agenda," says Forrest Ehlinger, administrator and controller. "When Kathy and I sit down, we know that we're not going to be dealing with a turf battle, and we're both going to listen to each other."
When differences in opinion arise, nurses and finance managers at MultiCare return to the mission of the organization. "When we're making decisions, we ask each other 'Is this is a patient care-related issue?' Once we put the focus on the patient, it allows us to make decisions for the right reasons," says Smith.
Show the Business Case for Quality
"It all goes back to quality," says Cheryl Hoying, PhD, RN, CNAA, BC, senior vice president of patient services at Cincinnati Children's Hospital Medical Center. "If you deliver quality care, chances are you will be cutting down on costs, too. For instance we were able to reduce our ventilator-assisted pneumonia rates. By doing that, we were able to reduce length of stay and cut down on patient infections, both of which affect overall costs."
Hoying is lucky to have a CFO who understands the business case for quality. She offers some tips for nursing executives who are just beginning to have these types of dialogs with their finance executives:
For example, try identifying examples that demonstrate how improving a clinical practice saves costs over the long term, says Hoying. "You might have a team of nurses who perform more frequent mouth care on ventilator patients. In the short run, that's an increased cost because you use more supplies. But when you use those supplies you are cutting down on the infection rate because patients' mouths are cleaner."
Make Decisions Based on Fact
"A lot of time nursing is viewed as always coming to ask, ask, ask for more. As we do that, we have got to show the value of why we're asking," says Trish Anen, RN, MBA, vice president of operations and chief nursing officer at Edward Hospital in Naperville, Ill.
At Edward, nursing directors automatically reach out to finance when ideas for improving clinical care are raised. For instance, a few years ago, human resources noticed an increase in staff injuries from lifting patients. "A hospitalwide team was put together to develop a plan for preventing injuries. The team proposed buying lifting equipment as one strategy," says Anen.
Together, team members worked with finance staff to assess the cost of injury, lost work, and other relevant data. They also looked at best practices for patient lifting, and went on site visits to find out what other organizations did. Then, the team developed a business proposal for purchasing lift equipment and training staff.
"This made it a very easy decision for senior staff," says Anen. "We made a commitment of more than $500,000 because the finance person helped us show how the investment in equipment and staff training would reduce our worker's compensation expenses by x amount."
SOURCE: Have You Hugged Your Financial Executive Lately? September 2006 issue of The Business of Caring
Additional Resources
If you have questions or comments about HFMA Wants You to Know, contact editor Maxine Harrison.
HFMA Wants You to Know ISSN: 1540-0697. Volume V, Issue 18. Copyright 2006, Healthcare Financial Management Association. All rights reserved.