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The Business of Caring: The CNO's Perspective

One means of enhancing your organization’s recruitment efforts that isn’t always front and center, is through a really strong partnership between the chief nursing officer and the chief financial officer. Too often, and primarily because the nursing labor budget is such a large component of an organization’s labor budget, it's the first place where cost cutting initiatives are focused. But a new report, “The Business of Caring: Promoting Optimal Allocation of Nursing Resources” by the American Nurses Association, the American Organization for Nursing Leadership, and the Healthcare Financial Management Association describes the value of the chief nursing officer (CNO) and the chief finance officer (CFO) creating a strong partnership. Why? Because a better understanding between these two sometimes very different perspectives tends to result in what's best for patients, what’s best for nurses, and what's best for the organization.



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The report discusses one fundamental requirement of a collaborative, positive and productive partnership between the CNO and CFO: a shared understanding of terminology and definitions. Following are a few examples. When nurses hear the term “ratio” they tend to think how many patients are assigned to an RN, whereas finance executives tend to think more of ratios as being related to liquidity or profitability ratios, to name only two.  When it comes to labor budgeting purposes, Finance uses the Average Daily Census (ADC) at midnight. Yet every nurse knows the midnight census has no relation to the actual number of patients that “churn” through a unit on any given day; churn compares the number of patients expected based on the data to the actual number of patients cared for. 

Without a strong partnership, nursing and finance definitions of things like “non-productive” time can be markedly different. Finance considers non-productive time to be any RN time away from the bedside. So technically, nursing staff development time is considered as non-productive time since it is time spent away from the bedside, but it is time of critical importance for RNs to develop and hone their skills through their attendance at conferences, inservice or workshops. Similarly, hours-per-patient-day (HPPD) captures and explains only those hours required to complete patient care tasks, and does not account for the cognitive (or thinking) time nurses need to communicate, care coordinate, document, teach patients, and to prepare patients and families for discharge. Beginning with a respect for the other partner’s understanding of terminology helps in a better appreciation of the other’s perspective. 




The report also suggests that the CNO and CFO engage in mutual goal setting since quality of care and the costs of care are inextricably linked. Although the CNO and CFO may have different perspectives on how cost and quality are linked, or how to best achieve an affordable balance, both executives are responsible for these outcomes. While there are still some CFOs who remain skeptical that high quality care is also the most cost effective care, the nursing research is clear that high quality nursing care (that is achieved by the proper staffing) is indeed cost-effective (e.g. fewer patient falls, hospital acquired conditions, and readmissions; lesser length-of-stay, lower rates of morbidity and mortality). In the event the finance team is not up-to-date on the latest nursing research, it behooves the CNO to bring this information to the CFO. Shared goals should include mutual respect and a collaborative relationship, with a healthy respect for one another’s knowledge and expertise. While the Finance team is not the expert in how best to properly staff a nursing unit, the required skill mix or ratio, it is the expert in determining this is what we can afford or this is what the budget will allow for the nurse staffing budget.

“The Business of Caring: Promoting Optimal Allocation of Nursing Resources” describes a more collaborative approach that is beneficial for patients, and certainly beneficial for nurses, because it helps create a greater awareness between the finance team and the nursing team; everyone just needs to be willing to try to get on the same page, look at a particular situation a little differently, and to appreciate each other's perspective.

Check out this episode on our educational series, On the Horizon in Healthcare, on YouTubeFor more information on how to effectively attract talent, schedule a demo


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Dr. Beth A. Brooks

Dr. Beth A. Brooks

Dr. Brooks is an accomplished health care executive who has a unique blend of leadership experiences from three distinct sectors of the health care industry: for-profit companies, academic administration, and nursing operations within health care systems. She is an internationally recognized expert in quality of nursing worklife, having designed a questionnaire that has been used in 45 countries and translated into 10 languages.

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