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OCR for page 190
CHAPTER VII
Improving the Use of
Nursing Resources
Prompted by a concern that the working conditions of many nurses
were driving them out of the profession, or at least out of certain
health care settings, Congress asked this study to suggest actions
that would encourage retention of nurses. In its review of possible
reasons for nurses leaving their jobs, the committee found that
management decisions strongly influence the supply of and demand for
nurses. Such decisions are major determinants of whether a nurse can
expect opportunities for career advancement, and whether the work
environment can accommodate the demands of nursing responsibilities
In light of its charge to determine the future need for nurses, the
committee was concerned that hospitals might not be doing all they
could to maximize the use of the existing supply.
The emphasis in this chapter primarily is on hospitals, the
largest employment setting. Because nursing homes and same kinds of
hospitals--particularly those located in inner cities and rural
areas--face the fundamental financing and other constraints described
in the previous chapter, their flexibility in implementing innovations
is severely hampered. Nevertheless, they may find the discussion
helpful.
i
The Effects of Management Decisions on Supply and Demand
The decisions health care institutions make about the nature and
volume of their services shape the demand for nurses. These decisions
are influenced by technology development, the flow of reimbursement
dollars, consumer demand, and the exercise of professional
prerogatives in the practice of medicine and nursing. To illustrate,
the decisions of many hospitals to open or expand intensive care
units, which have high nurse staffing requirements, greatly increased
the overall demand for nurses during the 1970s.
Planning of future needs for nurses requires consideration of the
variety of skills and knowledge that should be represented in the
nurse supply. We have observed that many hospitals appear to be
moving gradually toward a greater proportion of registered nurses
(RNs) in relation to other types of nursing service personnel (see
Chapter II, Table 10) and that the nation's supply of RNs with
190
OCR for page 191
191
baccalaureate and advanced degrees is gradually increasing. These
developments, coupled with the trend toward educational advancement
and recruitment into nursing schools of nontraditional students with a
variety of educational and experiential backgrounds, suggest that
employers face ever more complex personnel and staffing decisions. In
establishing policies that take into account the growing specialization
and differentiation among various nursing roles, employers have an
important share of the responsibility for creating career opportunities
and policies encouraging educational advancement that could be
important in keeping nurses in the labor force. Employers also have a
strong influence in whether nursing is viewed by potential candidates
as a desirable lifetime career.
Because financial constraints probably will limit expansion of
nursing education during the remainder of the 1980s, managers must
examine how to adapt to local supply conditions without simply calling
for additional education slots. This may mean developing strategies
to increase the number of hours that part-time nurses work, encouraging
inactive nurses to reenter the field, adjusting staffing patterns to
make more effective use of current staff, or reducing excessive
turnover.
By directing this study to develop recommendations to encourage
nurses to remain in or reenter the nursing profession, "including
actions involving practice settings conducive to the retention of
nurses," the congressional mandate clearly broadened the audience for
this report to include not only federal and state governments but also
the private sector. Many remedial actions can be carried out only by
those who set organizational, management, and personnel policies in
hospitals, nursing homes, health maintenance organizations, public
health departments, and all other agencies that employ nurses. The
activity of the National Commission on Nursing between 1981 and 1983,
with its broad representation of health care industry and professional
leaders, indicates a heightened awareness among national health
organizations of their responsibilities to provide leadership in
solving the problems of nursing and nursing education. There is no
lack of examples of individual institutional innovations to be
explored; the question now is what kind of supporting groundwork must
be laid to ensure that important issues remain on the agenda and
workable ideas are widely disseminated.]
Job Turnover and Attrition in Nursing
It has been commonly accepted that job dissatisfaction among
nurses has resulted in large numbers leaving the profession. It is
also asserted that many nurses change jobs frequently, causing
excessive turnover in hospitals. Recent national aggregate data do
not support these generalizations.
Although approximately 388,000 RNs are not now employed in
nursing--about 24 percent of the total 1.6 million licensed RNs--they
appear to have dropped out largely for family or other personal
reasons, not because of dissatisfaction with their profession. Figure
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192
14 depicts the composition of the pool of inactive nurses. Many of
those not employed nor seeking employment appear to have concentrated
on raising families or to have retired because of age. Less than 5
percent of the total supply of RNs who are working are employed
outside the health field.2
Turnover rates, indicating attrition from a particular place of
employment, are lower now than they have been in the past. Early
studies of nonfederal general hospitals in 1954 and 1962 found RN
turnover rates to average 50 percent (a level 3 times that of teachers
and 1.5 tomes that of social workers during the same period).3
Recent studies estimate that by 1982 the turnover rate had on average
fallen to between 20 and 30 percent per annum for full-time RN
staff.4,5,6,7
For the average RN today, turnover rates do not appear to be any
higher than for women in many other occupations. Among all working
women, the average tenure per job in 1978 was about the same in the
health industry (2.7 years) as in all industries (2.6 years). It was
even higher (3.5 years) among professional women in health (presumably
mostly nurses) than for women in the nonprofessional occupations (1.6
years).8
Nurse recruiters from more than 400 hospitals responding to the
annual surveys of the National Association of Nurse Recruiters (NANR)
/ Employed in
~ Non-nursing F laid
/ 69,185
| Seeking Nursing
l Employment 32,784
| 60 Years Old
\ ~and Over
~ \ Less Th ;=
40 Years Old
~I 94,394
Ma tried
With Children ~
Under 6 Years Old ,' - \
60,322 ,' ~<~c`\ \
" 44a rr' ~40 to 49
I ma> Years Old
' / / 44,479
50 to 59 '` / /
Years Old by /
55,397 / \ /
~ 50 and Over
14 1 ,220 /
. .... .
Not Employed
~ and Not Seeking
/ Employment
216,568a
FIGURE 14 Characteristics of registered nurses not employed in
nursing, November 1980. SOURCE: From DHHS, HRA. The registered
nurse population, an overview. From national sample survey of
. . . . _
registered nurses, November_1980. Chart 2, p. 7.
OCR for page 193
193
report a steady 3-year decline in annual turnover rates: 30 percent
in 1980, 27 percent in 1981, and 23 percent in 1982. These self-
selected hospitals may be ones with the most difficult recruitment
and/or turnover problems, and thus cannot be said to represent a
reliable sample of the nation's community hospitals. They nonetheless
constitute a sizable group, and they spend an average of almost
$100,000 per year on recruitment.9
A trend of moderating turnover seems to be confirmed by
information from several states. A Maryland Hospital Association
survey, for example, shows a drop in turnover of 12 percent over 2
years in the Washington, D.C., metropolitan area, from 36 percent in
1980 to 20 percent in 1982.1O Recent reports from California
indicate a turnover rate in 1981 of 37 percent, apparently higher than
the national average, but nonetheless the lowest in the state since
1977.11 In North Carolina, hospital turnover rates declined from
23.2 percent in 1980 to 22.1 percent by September 1982.12
Although poor retention and high turnover in nursing may be less
severe than commonly believed, the committee concludes that serious
problems exist in the management of nurse resources. National data
may mask the problems of individual localities and health care
institutions. These problems possibly could be relieved by attention
to basic human resource management principles that often are absent
from nurse employment and that hamper quality of patient care,
productivity, and the attractiveness of nursing as a profession.
The exact reasons for the lessening of nurse turnover rates are
unknown. The state of the economy may contribute to it, as may
improved management practices in some segments of the hospital
industry. In any case, the average turnover rate for hospital staff
nurses now appears to be approaching those of non-manufacturing and
nonbusiness industries (tax exempt organizations and government
agencies), which have average monthly rates of about 2 percent, or an
estimated 24 percent annually.13
Nothwithstanding these indications of improvement, the committee
views turnover as a continuing problem. First, it is difficult to
determine whether turnover will continue at current rates once the
economy begins to improve and the general reluctance to change
employers during a recession dissipates. Second, the costs of
turnover to hospitals can be appreciable in terms of the loss of
investments in orientation and recruitment, because substantial costs
are associated even with a relatively low turnover rate. The American
Hospital Association (AMA) estimates that the median yearly costs of
recruiting a staff nurse are $526, plus $1,300 for orientation.l4
These costs mount considerably when they are multiplied by the numbers
of nurses that must be replaced when turnover is high.
Although the costs of avoiding turnover by paying higher salaries
can at times outweigh marginal investments in reducing turnover rates
for a hospital, it is difficult to quantify the effect of excessive
turnover on quality of care. For example, the resignation of one
experienced surgical nurse can seriously diminish the safety and
effectiveness of an entire surgical unit. In light of the changing
case mix, intensity of service, and growing complexity of hospital
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194
organization, managers must learn to recognize, as many successful
business enterprises do, the value of experience and thus the
importance of low turnover.
Researchers interested in developing a causal model of professional
turnover have recently focused their attention on nurses.l5,l6 At
this stage, the research points to the need for managers to examine
more closely their policies with respect to opportunities for
continuing education, career advancement, staff assignments, channels
of employee communication, workload, and organizational
characteristics. All of these factors can affect nurses' perceptions
of autonomy and appropriate collegial working relationships with
physicians and other hospital personnel.
The importance of these factors also was apparent in testimony and
anecdotal evidence received at both the open meeting of this Institute
of Medicine committee and the regional hearings of the National
Commission on Nursing. Many nurses described a variety of work-related
frustrations that affect their attitudes toward their work. Even when
they do not result in turnover, high-quality patient care and optimum
productivity cannot be achieved if nurses are discontented. Other
than for newly licensed nurses, there are no national survey data to
delineate the important qualitative aspects of nurses' professional
and role dissatisfaction, its nature, and its extent. Available
studies often are limited to particular geographic areas, and many
have insufficient response rates.
Nonetheless, these studies are useful in that they suggest the
types of frustration many nurses experience in their work situations.
A review of recent surveys identified factors most frequently cited by
nurses: attitude and behavior of nursing managers; limited
professional growth, advancement, achievement, and intellectual
environment of the practice setting; salaries; schedules;
relationships with other nurses; and working conditions characterized
by understaffing, lack of recognition, too much paperwork, poor
relationships with physicians, an oppressive organizational hierarchy,
and little job security.17 In her critical review of the literature
on nursing job satisfaction conducted for the study, Stuart notes that
every major study of this issue since the 1960s has pointed to the
factors of autonomy, interpersonal relations, and job status as
critical components of overall job satisfaction.*
Data on newly licensed RNs, however, indicate that there is no
widespread job dissatisfaction among these younger nurses. In 1980,
among 47,143 newly licensed RNs who reported to the National League
for Nursing annual survey 6 months after initial licensure, 82 percent
said they were satisfied and 81 percent believed their skills were
adequately utilized. These responses varied only slightly according
to the type of educational program in which the respondents had been
prepared, and by geographic region.l9 In a study of turnover,
* For detailed discussion, see Ge We Stuart e Nursing role
satisfactions Background paperers
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195
Weisman similarly found that younger nurses in their first year of
employment were less likely to resign than midcareer nurses. She
concluded that these more experienced nurses might be persuaded to
remain if they had greater promotional opportunities and salary
increases.20
Improving Career Opportunities and Working Conditions
Although this study committee cannot find convincing evidence to
support the perception that the retention of nurses in the profession
or the high turnover rate are problems beyond remediation by the
industry, there nonetheless are problems of national importance in the
work environment and lack of career opportunities of many nurses.
These problems, whether or not they lead directly to high turnover and
dropout rates, contribute to the inefficient utilization of the nurse
supply and diminish the attractiveness of the nursing profession.
Hospitals in the forefront of change are beginning to respond to
nurses' aspirations and the increasing diversity and differentiation
of their jobs.21 However, in general, career opportunities, salary
structure, and work environment for nurses are slow to change.
This committee believes it is not in a position to draw
conclusions about the relative emphases the industry should place on
the criteria of educational credentials, performance, length of
experience, and special talents in assigning nursing job
responsibilities or making promotions. Even if the research evidence
were more convincing than it is at present, the nursing profession and
employers of nurses have the primary responsibility to develop
staffing standards and implement organizational changes.
There are three problem areas that employers cannot afford to
ignore: (1) lack of opportunities for clinical career progression
with differential salaries and responsibilities, (2) relatively low
salaries except at entry levels, and (3) working environments that
limit participation in patient care and institutional decision making
and that are characterized by poor interprofessional relationships.
Lack of Opportunities for Career Progression
Many nurses have had little to lose by changing jobs frequently or
by dropping out of work for periods of time, because rewards for
continuous job tenure, especially in clinical nursing, appear to be
minimal.
Multiple regression analysis of data from the National Sample
Survey of Registered Nurses, November 1980, confirms the perception
that employers do not pay a premium for experience (Appendix 7~. RNs
employed full time received on the average only about $140 per year
for each year of additional experience (controlling for other
variables including educational background, job position, geographic
region, race, and sex). However, again holding other variables
constant, attaining a graduate degree or pursuing a career path in
OCR for page 196
196
administration does lead to significant salary differences--average
annual salaries are about $2~200 and $6,500 higher, respectively.
Also, the rapidly growing number of nurses with positions as clinical
specialists are being rewarded with high salaries; controlling for
educational background, experience, and other variables, the clinical
specialist title is on average worth an additional $3,500 per year.
These determinants of wage differences among nurses with different
characteristics are germane to this discussion, but the variables
included in the 1980 National Sample Survey do not account for most of
the variation among nurse salaries. Other factors, such as the
condition of local labor markets and detailed characteristics of
employers not revealed by the broad categories of the survey, may
explain why same nurses earn more than others.
Too many institutions still view nurses primarily as "job
fillers." However, although some nurses may only want jobs, many want
careers. Friss identifies three groups of nurses in hospitals. The
first, or core group, are committed careerists for whom managers must
design an incentive structure that takes into account long-term needs
for earnings, tenure, and professional stimulation. The second group
consists primarily of part-time nurses who often are perceived as
unmotivated transients, but may also be viewed as career negotiators
seeking to achieve balance among competing demands in their lives. A
third group are potential careerists who may benefit from learning
about existing career paths or training opportunities.22
Career-oriented nurses present difficult challenges to health care
managers but important opportunities as well. They demand educational
opportunity for professional advancement and more authority to make
decisions about patient care, to develop their own operating policies,
and to influence the larger institutional resource allocation
decisions that ultimately affect nursing practice. Health care
executives should not respond to these pressures merely to pacify
nurses on the staff but should take the opportunity to create nursing
service departments that reflect the differentiated responsibilities
and expertise inherent in managing what sometimes are multimillion
dollar nursing enterprises that deliver an impressively wide range of
services.
The matching of varieties of expertise to specific jobs in a large
health care facility is not easy. It begins with an institutional
commitment to incorporate nurses into the senior executive team and
continues down the supervisory ladder with nurses who can manage staff
effectively. Advanced clinical knowledge is required to manage
differing patient needs in most average-sized hospitals. A new
combination of management and clinical talents is required to assure
accountability for patient care and warrants recognition with new
rewards along clinical as well as administrative paths. In many
areas, such as long-te`-~ care, opportunities exist for members of the
nursing profession to take administrative as well as professional
leadership.
In summary, nurses, like everyone else, prefer to work in
well managed, fairly predictable environments where they know they can
advance in their careers and feel that their professional skills
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197
contribute significantly to the institution's mission. By providing
an environment where this sense of career can be developed, employers
will benefit in the long run. A certain amount of turnover is
inevitable, because not all nurses are interested in long-term career
progression. However, the committee strongly believes that a cadre of
well-qualified nurses committed to institutional objectives can help
to improve productivity and quality of care.
Employers are experimenting with a number of techniques to engage
and retain career nurses in addition to the salary changes discussed
in the following sections. One set of strategies involves
restructuring the workplace, not only in schedules and incentives to
work less popular shifts or positions, but also in reorganizing the
delivery of nursing services in the institution so that patient needs
based on severity of conditions are more closely matched to the
ability level of the staff.
A second set of strategies is to improve interprofessional
relationships. The place of nursing in the management structure can
be given a larger voice in resource allocation decisions and in
setting hospital policies and procedures. Restructuring in some
institutions has decentralized authority and accountability in order
to free nurses to have greater autonomy in fulfilling patient needs.
Also, attention has been given to physician-nurse relationships both
to discover approaches to reducing conflicts and, more positively, to
develop collaborative approaches to patient care.23 Finally, there
appears to be an interest in sorting out functional relationships with
other hospital workers--nursing assistants, unit clerks, pharmacists,
and technicians--to differentiate more clearly the scope of nursing's
contribution so that nurses can be employed efficiently.
A third set of strategies is a retention-oriented approach to
recruitment that seeks to develop for the nurse a commitment to the
institution as well as a career in nursing. Whether a new or an
experienced RN is being recruited, opportunities that will enhance
clinical expertise and develop other nursing interests could be
effective. Management can help RNs realize their short- and long-term
professional goals and develop their institutional loyality by
assessing each nurse's capabilities, employing them appropriately, and
developing individually tailored plans for educational and
experiential opportunities. This may include helping nurses with
financial support and released time to pursue continuing, certificate,
and graduate education. These nurses can also be enlisted by the
hospital as an educational resource to stimulate and act as mentors to
less experienced nurses.
Salary
Between 1972 and 1981, earnings of general staff nurses in
hospitals did not keep pace with inflation. In real terms (adjusted
for changes in the cost of living), salaries declined at an average
rate of almost 1 percent per year over the 9 years. The rate was not
constant, however. From 1972 to 1975, real earnings declined by 4
OCR for page 198
198
percent; between 1975 and 1978 the decline was only 1.6 percent, but
steepened to 2.1 percent from 1978 to 1981.24,25,26 For example,
between 1978-1981, although nurses' salaries in dollars increased by
35 percent, their real earnings (i.e., purchasing power) decreased.27
However, nurses' earnings grew slightly more rapidly between 1978
and 1981 than the salaries of other hospital employees (Table 30~.
Table 31 illustrates that staff nurses have improved their salary
position in relation to most other hospital workers, but remain below
electricians, social workers, and pharmacists. Over this period,
nurses in administrative positions have made minimal gains relative to
the staff nurses they supervise.
Observers also have questioned the extent to which nurses'
salaries fully reflect education, responsibility, and work
environment.28,29 In 1978, general staff nurses working in
hospitals earned approximately the same amount per year (814,270) as
did school teachers ($14,200~; about $4,000 per year more than all
female professional, technical, and kindred workers; and about $1,200
per year more than production workers in manufacturing
industries.30~31 In general, earnings in occupations with a large
number of women are lower than in occupations whose incumbents have
similar educational backgrounds and age distributions, but who usually
are men.32~33 Data from the 1970 census showed that RNs who worked
full tome earned $5,603; a person with equivalent educational
attainment and median age in a comparable occupation--mathematical
technician, in which 95 percent of employees are men--had earnings of
$10,331.34
In 1981, RNs ranked 15 among the 20 occupations with the highest
median earnings for women employed full time. RN earnings of $331 per
week followed the highest earners, operations researchers ($422),
computer systems analysts ($420), and lawyers ($407~--all of whom
lagged behind the top 20 male-dominated occupations.35
Recent court cases have raised the issue of equal pay for
comparable work. One of these cases involved nurses employed by the
city of Denver who brought a lawsuit under Title VII of the Civil
Rights Act alleging that male-d~minated professional occupations were
classified separately from nonprofessional positions, the result being
~ n determining how wages or compensation were
classified together regardless of training,
. This case was lost, but the issue of equal
discrimination by sex
paid. Nurses were all
education and Practice
pay for comparable work remains alive.36
Although this discussion does not prove that nurses are underpaid,
the question remains whether they receive fair remuneration, and
whether nursing will be able to continue to attract enough qualified
new members to the profession.
Work Environment
Surveys over the years have identified many reasons for discontent
among nurses, often involving features of the nurse's work
environment--internal relationships, scheduling problems, and physical
OCR for page 199
199
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204
are important is widespread and has encouraged responses by some
employers.45~46~47 For example, some employers have taken into
account the problem of overlapping fringe benefits in dual-earner
families (over 70 percent of nurses are married) by allowing nurses to
choose cash or selected benefits.
Indicative of both nurses' and employers' interests in seeking new
hiring arrangements is the growth of temporary service agencies, which
now appear to have peaked at placing about 37,000 nurses.48 Through
these organizations, nurses can earn higher salaries, choose their
schedules, and not be subjected to the organizational stresses imposed
on a permanent employee in a particular hospital or on a particular
floor. Hospitals use temporary service agencies to put nurses in
hard-to-fill positions, temporarily paying a higher wage but avoiding
salary increases to permanent employees; to circumvent personnel
freezes; to adjust staff size to occupancy levels; and to make up for
planned and unplanned absences of the permanent staff.49
Whatever the merits or disadvantages of temporary agencies, concern
about their overuse and their costs has led to other arrangements.
Some hospitals have developed flexible work arrangements that resemble
in-house temporary agencies. In these, part-time nurses can work as
regular employees of the same hospital on an on-call basis or in a
"float" pool, and full-time employees can increase their earnings by
moonlighting at their own hospital rather than through an agency.
A further barrier to reentry into the nursing labor force is
out-of-date knowledge and skills. This problem increases with the
amount of time away from nursing. Feldbaum reports that when nurses
in her survey left the labor force, most of them remained out for 5 to
5 1/2 years, generally during the time they rear children to school
age.50
The more rapidly health care technology changes, the more difficult
it will be for many inactive nurses to remain current with the advances
in their profession. Hunt found that middle-aged RNs returning to work
after childrearing were likely not to accept the challenge of hospital
employment. However, he estimated that the probability of working in
a nursing home increased about eightfold with the accumulation of 20
years out of the labor force.51
An insufficient aggregate supply of nurses is not at the heart of
many employers' problems; rather some nurses are unwilling to work on
particular shortage shifts and units under the conditions currently
offered them. Clearly, paying the shift differentials sufficient to
fill these vacancies may require hospitals and their boards to
determine whether they wish to make the necessary trade-offs.
Ultimately employers must bear a large part of the responsibility for
meeting their own nursing service needs.
Historical trends favor the improved utilization of the existing
supply. Labor force participation by RNs has been steadily improving.
In 1949 only 59.3 percent of the total RN population was employed in
nursing; the rate rose to 67.5 percent in 1966 and 76.4 percent in
1980~52 Also, the average number of hours RNs worked per week rose
slightly between 1977 and 1980, both for full-t~me and part-time
nurses.53
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205
Although it is difficult to distinguish the contributions of
management practices to these trends of chanting Professional.
economic, and social values, the committee
actions offer the greatest possibility for _ ~ i__
staffs. The specific measures listed below merit serious
consideration, especially by those health care institutions with
severe recruitment and retention problems:
believes that employers'
maintaining adeanate nurse
· child care facilities and arrangments for the care of other
dependents, especially during hours when private care is
difficult, such as nights and weekends
· work schedules adapted to the personal needs of nursing staff
· improved salary structures in the context of an overall
strategy to improve productivity and rationalize the use of the
hospital's nursing resources
· fringe benefit options so that nurses can select those most
appropriate to their needs
· special educational opportunities for nurses wishing to prepare
themselves for reentry into active practice.
After reviewing numerous published descriptions of innovative
projects that health care institutions have undertaken, the committee
believes that the kinds of actions listed above hold the greatest
promise for enhancing labor force participation. This does not
signify that there are no other useful incentives available, nor that
the strategies identified do not have drawbacks. Rather, they appear
to lower the most prevalent barriers to employment.
Child Care
Among a sample of RNs who received their first licenses in 1962
and who were not working 10 years later, the great majority (77.6
percent of associate degree (AD) nurses, 85.4 percent of diploma
nurses, and 83.4 percent of baccalaureate nurses) cited as a reason
responsibilities for raising children.54 A substantial portion of
the inactive and part-time supply of nurses had children at home under
the age of six. Although the federal tax law currently provides
deductions for child care, the amount may not be sufficient to make a
meaningful difference for nurses, given their salary levels and
special requirements for day care. Traditional day care may not meet
the needs of nurses who often work other than traditional office
hours. Both the AHA and the National Association of Nurse Recruiters
(NANR) report that only about 6 percent of hospitals offer child care
facilities.55~56 To the extent that family responsibilities act as
a barrier to greater labor force participation, employers should
consider the potential costs and benefits of establishing child care
facilities singly or in concert with others in the community. Factors
of cost include the scope of operation, contracting with local
centers, transportation systems to community facilities, in-hospital
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206
versus adjacent facilities, extent of subsidization by the employer,
and allocation of priorities among types of nursing service personnel.
Benefits to the institution could include enhanced ability to
recruit and retain nurses (particularly during shifts difficult to
staff), reduction in absenteeism, and Improved morale. However, no
careful evaluation has been made of the degree to which child care
benefits contribute to influencing reentry into the market. It is
conceivable that the major effect in any particular community would be
to entice nursing personnel from other institutions rather than
attracting back to the labor force nurses who had become inactive.
Flexible Scheduling
Hospitals are experimenting with various ways of staffing that
permit nurses to work schedules adapted to their personal needs.
Examples include three 12-hour shifts per week; optional 10-hour
shifts for evening and night shifts--4 days one week, 3 the next; and
"mothers' hours"--shifts ranging from 4 to 7 hours with reduced
weekend commitments. The NAN R reports that a majority of its members
(79 percent) in 1982 offer some form of flexible scheduling--an
increase of 11 percent from the previous years.57
Although use of flexible scheduling alone may encourage reentry or
increased work hours, hospitals often are combining these incentives
with compensation packages, such as a full week's wages for reduced
hours on the weekends. In these instances, managers may be faced with
a trade-off between fulfilling their most pressing staffing needs and
incurring increased costs and possible overall reductions in total RN
hours worked.
Institutions should monitor these effects to determine whether
such measures attract more reentrants or reduce the effective nursing
service supply.
Improved Salary
Employers should consider increasing salary levels in order to
attract inactive nurses into the labor force and to encourage
part-time nurses to work more hours. Economic research has shown
consistently that nurses' rates of labor force partipication increase
with salary levels.58~59~60 Thus, higher salaries could be expected
to bring some inactive nurses into the labor force, with an increase
in the effective supply.
Nurses who already are working may also increase their hours of
work in response to higher pay, as has been found by same
researchers.61 However, when salary levels become high enough, some
individuals may decide to reduce their hours of work in order to spend
more time with their families or to enjoy more leisure time, a
phenomenon characterized by labor economists as the "backward bending"
labor supply curve.62 One recent study has detected this phenomenon
in nursing.63
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207
The higher a nurse's earnings, the greater the cost of not
working. Thus, in general it can be expected that salaries can be one
of employers' most effective ways of encouraging nurses to remain in
the labor force. In addition, salary levels serve as signals of
potential earnings to persons considering a career in nursing, and
thus play a role in recruitment and long-term supply as well.
Fringe Benefits
In the process of reexamining salary structure policies, employers
also should take into account the potential of creative fringe benefit
packages in attracting nurses into the labor force. For example, by
offering a program of so-called "cafeteria benefits," various segments
of the inactive supply may be reached. These could include married
nurses whose husbands already are entitled to family coverage for
health insurance, or nurses who might value educational benefits more
highly, as well as those who would prefer to take their benefits in
cash. Again, employers must weigh the administrative costs--both in
teems of dollars and personnel management issues--against the presumed
benefits.
Reentry Education Opportunities
The National Commission on Nursing noted in its 1981 Preliminary
Report that, although surveys have indicated that a lack of refresher
courses is often cited by inactive nurses as a reason for not returning
to the labor force, such programs have not proved cost effective in
some settings and do not result in a high rate of return to employment.
Carefully targeting programs to those who drop out of nursing during
childbearing years and basing programs in the college-level system are
factors that could improve their success.64
The Special Problems of Nursing Homes
As was mentioned in the beginning of this chapter, nursing homes
face many of the same management problems as hospitals. However,
because of the weak financial revenue position of many of such homes,
nurses must work for 20 percent lower pay and fewer fringe benefits
than are offered by hospitals. While opportunities for professional
satisfaction can often outweigh the lure of higher wages, nursing
homes--with their reputation for the isolation that understaffing
produces and limited freedom to control the kind of nursing practice
in the institution--are, not surprisingly, viewed as low-status work
settings by many registered nurses.65
Until there is more progress in addressing the financing and
educational issues of care for the elderly, discussed in Chapter VI,
there will be low effective demand by nursing homes for nurses.
Nursing homes will continue to have difficulty offering quality
professional nursing services. In the interim, nursing home managers
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208
who wish to enhance their ability to retain the nurses they currently
employ should take note of a recent survey of nurses in North Carolina.
Availability of Innovative scheduling plans permitting predictable
work schedules was a major factor cited by nurses for remaining in the
inst itut ion' s employ. 66 Although reimbursement constraints may
prevent managers from addressing the major reason c ited for
resignation--low salaries--attention to the employee's personal needs,
such as in scheduling, may yield improvements in retention.
Conc fusion
Although nurses in the aggregate neither leave their profession in
greater numbers than other women nor leave their jobs more frequent ly
than people in other professions, there nevertheless are large numbers
of employers wi th chronic nursing vacanc ie s and a high turnover rate .
These managers can act to make their hospitals more attractive to
nurses. First, they should look to some of the traditional management
practices that detract from nursing, such as lack of career and pay
advancement. Employers should develop new practices that will act as
incentives for nurses to stay. Second, employers should investigate
whether the introduction of flexible scheduling, novel benefit
packages, child care assistance, or other measures would persuade
inactive nurses back to work and part-time nurses to increase their
hours. Ef forts of this sort will, the committee believes, both
improve the quality of nursing care by addressing sources of
d i sc ant ent, and e nhanc e the image o f the pr of e s s i on, thu s at trac ti ng
greater numbers of good candidates into nursing.
RE OOMME:NDATION 16
The proportion of nurses who choose to work in their profession is
high, but examination of conventional management, organization,
and salary structures indicates that employers could improve the
supply and j ob tenure by the f ol lowing:
· providing opportunities for career advancement in clinical
nursing as well as in administration
· ensuring that mer it and experience
rewarded by salary increases
· assessing the need to raise nurse salaries if vacancies remain
unf tiled
· encouraging greater involvement of nurses in decisions about
patient care, management, and governanc e of the inst it ut ion
· ident if ying the maj or deterrents to nurse labor force
part ic ipation in their own localities and responding by adapting
conditions of work, child care, and compensation packages to
encourage part-time nurses to increase their labor force
partic ipation and to attract some inactive nurses back to work.
in direc t pat lent care are
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209
Accounting for Nursing Services
The committee is well aware that its recommendations for
management reforms have associated costs. There are several ways in
which increased costs could be met. First, they may be reflected in
higher costs to patients and third party payers, but that is becoming
more difficult in the present climate of cost containment. Second,
allocation of resources in the hospital could be shifted, under the
assumption that the institution is willing to favor the nursing
service department. Finally, nursing service departments could
rearrange patterns of staffing and assignments to raise productivity
without claiming a greater proportion of the hospital budget.
Nursing services in health care institutions, particularly
hospitals, traditionally have been treated as an undifferentiated
component of a daily cost or charge that covers room, board and other
expenditures, as contrasted with other services that contribute to
revenue generation. As a result, there has been little incentive to
devise accounting systems, payment formulas, and management structures
that attempt to identify the true value of bedside and other
identifiable nursing services.
In the present period of rapidly rising costs, new methods of
payment will be adopted to force greater institutional efficiency and
effectiveness. Although it is unclear how hospitals will respond, the
current structure of accounting for nursing services in a provider's
budget does not permit any rational basis for arriving at allocations
of expenditures or revenues that take nursing into account as a
distinct, major component of the hospital's activities. Without such
useful management information, hospitals will be in a poor position to
bargain with rate-making authorities or with purchasers of care over
appropriate payment levels, and cannot make the most effective
resource allocation decisions.
Because very few experiments have been conducted with new
accounting or payment methods that account separately for direct
nursing service costs, the organizational effects and possible
unintended consequences of such changes are unknown. At least three
presumed benefits can be mentioned. The first is that nurse autonomy
will be enhanced. The second is that such an approach would permit
sophisticated managerial analysis of approximately one-third of
hospitals' costs and would facilitate managerial changes to place
responsibility upon the professional staff that provides the
services. Finally, the acceptance of such an approach would permit
the examination of the effect of reimbursement or payment patterns on
nursing practices and particularly on the quality of nursing services.
Although there is reason to believe that these benefits will be
realized, there are potential pitfalls. The allocation of resources
to nursing could be reduced once costs are identified and rates
negotiated on the basis of such data. Specific measures to overcome
turnover, enhance career opportunities, and make other positive (but
costly) innovations could be inhibited.
New cost contai,u~ent approaches such as the diagnosis-related
group (DRG) hospital reimbursement method implemented in New Jersey
and in some other states and localities, and now being proposed for
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210
Medicare, are calling attention to the need for nursing service
administrators to understand resource allocation issues better. The
management team representing nursing, the medical staff, administration,
and ancillary departments are encouraged to establish less costly
combinations of services to treat specific medical problems. During
this process, nurse managers are being asked questions for which
present management information and accounting systems are inadequate.
These include the following:
· Is the skill mix of the staff too rich in the number of
professional nurses employed?
· Is the department overstaffed for the patients treated?
· Do professional nurses devote too much time to indirect
duties?
· Does the nursing budget carry expenses incurred by
housekeeping, dietary, and other departments?
· Can RNs be freed from some tasks by well-trained LPNs or
technicians?67
A method for accurately assigning costs to different nursing
functions, units, and even specific patients would help in answering
many of these questions. In the absence of some greater operational
experience and evaluation of effects, the committee conditionally
endorses the concept of separate cost/revenue centers for nursing, but
strongly recommends additional experimentation and assessment.
Conclusion
As cost containment pressures force hospital management to become
more skilled at using resources productively, it becomes important that
managers have the tools to allocate nursing costs accurately and to
develop a system whereby people at all levels of management are
responsible for using the nursing staff most effectively. To achieve
these goals, management needs information on methods of measuring
patient severity of illness and associated nursing costs, which today
are not sufficiently refined for widespread implementation.
REOOMMENDATION 17
Lack of precise information about current costs and utilization of
nursing service personnel makes it difficult for nursing service
administrators and hospital managers to make the most appropriate
and cost effective decisions about assignment of nurses.
Hospitals, working with federal and state governments and other
third-party payers, should conduct studies and experiments to
determine the feasibility and means of creating separate revenue
and cost centers for direct nursing care units within the
institution for case lapis costing and revenue setting, and for other
fiscal management alternatives.
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211
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Price, J.L., and Mueller, C.~. Professional turnover: The case
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of nurses. New York: SP Medical and Scientific Books, 1981,
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4. American Hospital Association. Preliminary data from nursing
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5. Maryland Hospital Association. Nursing vacancy and turnover
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6. North Carolina Area Health Education Centers Program. North
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. ~
Chapel Hill, N.C.: University of North Carolina AHEC Program,
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National Association of Nurse Recruiters. Recruitment survey
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8. Sekscenski, E.S. The health services industry: A decade of
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15. See Price, J.L., and Mueller, C.W.
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17. Governor's Task Force on Nursing. Final report and
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19. National League for Nursing. Registered nurses licensed in
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_ _ . . . ~ . _
School Report Service on newly licensed nurses, 1980. New York:
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Nat tonal League for Nurses, 1980.
20. Weimnan, C.S., et al. Op. cit., p. 151 and 157.
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2 1-28 .
23. National Joint Practice Commission. Guidelines for establishin
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27. Ibid.
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~ Y
new look at the issues (DHHS Publication No. HRA-81-23~.
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32. Hartmann, H. Op. cit., p. 2.
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34. Hartmann, H. Op. cit., p. 8.
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Education. Available from Publication-on-Demand Program,
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37. Wandelt, M. Conditions associated with registered nurse
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of Nursing, University of Texas, 1980.
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38. Aydelotte, M. Professional and organizational structures. Paper
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39. Parlette, G. N., O'Reilly, C.A., and Bloom, J.R. The nurse and
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40. Sexton, P.C. The new nightingales. New York: Enquiry Press,
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42. Feldbaum, E.G. Registered nurses at work. A report to
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43. Roth, A., Graham, D., and Schmittling, G. 1977 national sample
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- _
and factors affecting their supply NTIS Publication No.
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44. DHHS, BRA. The registered nurse population, an overview. From
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53. Ibid., p. 26.
54. Knopf, L., and Vaughn, J. C. Work-life behavior of registered
nurses: A report of the nurse career-pattern study (Append ix,
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55. American Hospital Assoc Cation. Preliminary data from nursing
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57. Ibid.
58. Altman, S. H. Op. cit., p. 135.
59. Benham, L. The labor market for registered nurses: A
three-equation model. The Review of Economics and Statistics,
1971, 53~3~.
60. Bishop, C. E. Manpower policy and the supply of nurses.
Industrial Relations, 1973, 12~1~.
61 . Sloan, F.A., and Richupan, S . Op. c it., pp. 241-257.
62. Scholar, C. J. Economic perspectives on the nursing shortage. In
L. Aiken (Ed.), Nursing in the 1980s: Crises, opportunities,
challenges .
p. 42.
Link, C.R., and Settle, R.F. Op. cit., pp. 238-243.
National Commission on Nursing. Initial report and preliminary
Chicago, Ill.:
Educ at tonal Trust, 1981.
65. Shields, E.M,. and Kick, E. Nursing care in nursing homes. In
L. Aiken (Ed.), Nursing in the 1980s: Crises, opportunities,
challenges. Philadelphia, Pa.: J. B. Lippincott Company, 1982,
pp . 19 9-200 .
66. North Carolina Area Health Education Centers Program. North
Carolina AHEC: 1982 nurse manpower survey (final report).
.
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6 7 . Grimald i, P. L. DRGs & nurs ing admini strat ion. Nurs ing
Management, 1982, 13(1 ), 30-34 .
63.
64.
Philade lphia, Pa .:
J. B. . Lippinc ott Company, 1982,
rec ommendat ions .
The Hospital Re search and
Representative terms from entire chapter:
nursing service