Nursing Variance Report

Set 2 Questions

Variances Reporting

Nurse leaders must have a thorough understanding of variance reporting because these reports provide information about the differences between an actual budget and a forecasted budget (Finkler, Jones & Krover, 2013). A nurse leader can use data gathered from these reports to better understand budgetary deficiencies, hence allowing him or her to develop more accurate budget forecasts in the future. Variance reports can also help a nurse leader identify the causes of variances. By recognizing the causes early on, nurse leaders can put appropriate actions in place to prevent further exacerbating existing variances. Nurse leaders can also use variance reports as a tool with which to gauge work center productivity.

For example, a nurse leader could identify an unfavorable variance in the unit’s supply budget. Perhaps the unit is ordering more disposable chux than expected. After further investigation, the nurse leader may learn that the staff has been using chux to wipe up spills from the floor instead of using paper towels. By examining variance reports nurse leaders can identify variance trends, determine contributing causes of variance, and implement corrective actions. This means that variance reports can also be used as a process improvement tool. Through examining variances nurse leaders can also help identify external causes such as a rise in vendor prices or unforeseen increases in patient acuities, which results in a higher demand for higher-skilled staff. External causes are out of a nurse leader’s control but are just as important to identify because they require attention from higher levels of management and can impact the entire organization as a whole (Finkler, Jones & Krover, 2013).
Useful Reports for Staffing Management
A nurse leader can use various reports to obtain staff resource utilization information.

An activity report can provide operational statistics such as occupancy rate, average daily census, and average length of stay (Finkler, Jones & Krover, 2013). Though these numbers are important and have a great influence on the operational budget, a nurse leader needs more information in order to justify staffing. Nurse leaders can obtain additional information from workload reports. Patient classification system measure workload by assigning each patient a classification level based on his or her unique care needs and then determine the number of care hours required per patient per day. Many organizations express this in hours per patient day (HPPD) or relative value units (RVU) (Finkler et al., 2013). Workload reports are useful because they can identify changes in patient mix that can increase or decrease the need for nursing personnel. Bi-weekly fulltime equivalent (FTE) reports are also useful because they convey to nurse leaders exactly how many man-hours were used by each FTE (Liberty University, 2015). Furthermore, the report provides a breakdown of productive time; contract hours, paid time off (PTO), and overtime. It also accounts for nonproductive time such as time spent on education, training, and orientation (Liberty University,

2015).
Another report that can be used to assess the costs of staffing is the monthly report of salaries. Like the bi-weekley FTE report, this monthly report of salaries categorizes salaries and compares actual costs to expected costs and to previous costs. It also reflects the percentage of salary variance per category. A nurse leader can gather information from various reports to obtain greater understanding staffing utilization. For example, a nurse leader can compare the percentage of salary variance to the to total inpatient days to obtain a clearer picture of nursing demand.

Tracking Education, Meeting, and Orientation Hours
It is important for a nurse manager pay special attention to the number of hours spent on education, meetings, and unit orientation because this is nonproductive time. Nonproductive time is an important part of an FTE calculation. The more time allotted toward for non-patient care functions the more personnel is needed to cover direct care activities. If one FTE is expected to provide 2,080 patient care hours but each nurse is allotted 240 nonproductive hours per year, then the nurse manager must understand that each nurse is only available to provide 1,840 hours of direct care (Liberty University, 2015). Therefore, 1.13 FTEs are actually needed to fulfill the 2,080 patient care hours (Liberty University, 2015). If a nurse manager does not appropriately account for nonproductive time in his or her budget forecasts and productivity estimates it can lead to understaffing, unfavorable patient outcomes, as well as increased turnover and nurse burnout (Liberty University, 2015). Anticipating the number of meeting per year, educational requirements, and number of staff on orientation are therefore highly important to maintaining operational efficiency on the unit.
Reimbursement Resources for Nurse Leaders
In addition to soliciting help from the organizations finance department, nurse leaders can use the Healthcare Cost Report Information System (HCRIS) available on www.cms.gov to better define unit or organizational benchmarks (Liberty University, 2015).

This system provides annual statics on Medicare payment amounts for institutional providers. A nurse leader can use HCRIS to find other similar institutions with whom to compare reimbursement rates and use this information to make necessary adjustments (“Healthcare Cost Report”, 2016). Lastly, nurse leaders can also use cost-to-charge ratios, volume-based measures, per diem rates, and balanced scorecards to gain better insight of unit reimbursement (Liberty University,

2015).