NEW GRADUATE REGISTERED



Similar documents
South Carolina Nursing Excellence Conference Sherlock Holmes: The case of the enigmatic nurse residency program.

for New Graduates krn Residencies

The U.S. Department of Labor, Bureau of Labor

E-Learning to Ease the Nursing Shortage: A New Model for Transitioning Licensed Vocational Nurses (LVNs) to Registered Nurses (RNs)

Running head: NURSE RESIDENCY PROGRAMS 1

Senate Finance Committee. Transforming the Health Care Delivery System: Proposals to Improve Patient Care and Reduce Health Care Costs.

Topic: Nursing Workforce Snapshot A Regional & Statewide Look

Mentoring Program. Susan Taylor, MA, RN

Rationale: Increasing the supply of RNs in Texas is of paramount importance. Although both enrollment and completion rates have been

Survey of Nurse Employers in California 2015

How Accelerated Nursing Students Learn

Members Why it was needed Work of the task force Survey Outcome

IN 1999, CHILDREN S HOSPITAL

Successful Practices to Support Academic Progression in Nursing in the Employer Setting

College Quarterly. A Simulation-based Training Partnership between Education and Healthcare Institutions. Louanne Melburn & Julie Rivers.

HealthStream Onboarding Series: Essential Best Practices in Preceptor Training

New Jersey Action Coalition. RN Transitions into Practice Residency Model for Long Term Care

Curriculum Critical Thinking Program Evaluation Conclusion

How To Know The Nursing Workforce

Development of Health Career Pathway for California. Psychiatric Mental Health Nurse Practitioner/Clinical Nurse Specialist Career Pathway

NIVERSITY of COLORADO HOSPITAL S. CELLENCE in LINICAL CARE DUCATION, VIDENCE EADERSHIP. Professional Nurse Practice Model and Program, creating.

California Board of Registered Nursing

California New Graduate Hiring Survey January 2014

ASPECIALIZED CRITICAL CARE

Nursing Supply and Demand Study 2008

This research explored the investigation of influences on transition to practice outcomes

Arizona State Board of Nursing CLINICAL FACILITY UTILIZATION BY ARIZONA NURSING PROGRAMS

Nurturing Future Nursing Leaders: Strategies for Improved Transition and Retention of New Graduate Nurses. Cherry Pie de Veyra RN, BSN c NURS 558

IN RESPONSE to high turnover

Concurrent Session: F F- 1

A SHOT OF QSEN FOR NEW NURSES AT COMMUNITY MEMORIAL HEALTH SYSTEM

CINHC Optimizing Health

The Ottawa Hospital Nursing Internship Program for Novice nurses : A Proven Recruitment & Retention Tool

Dana Beth Weinberg, PhD AFSCME/ UNA Nurse Congress San Diego, CA May 5, 2015

North Dakota Nursing Needs Study

Workforce Development Programs

Source: Center for Health Workforce Studies. (2006). New York Registered Nursing Graduations, Rensselaer, NY: CHWS.

Iowa Legislative Fiscal Bureau. Iowa's Nursing Shortage. This Issue Review provides a comprehensive overview of the current nursing shortage in Iowa.

80% BSNs by 2020: How periop leaders can help meet this goal Increase the proportion of RNs with a BSN or higher to 80% by 2020.

GAO NURSING WORKFORCE. Multiple Factors Create Nurse Recruitment and Retention Problems. Testimony

Sincerely, Deana L Molinari PhD, RN, CNE

Running head: INTERPROFESSIONAL TEAMWORK 1

A Comparison of Leadership Development Interventions: Effects on Nurse and Patient Outcomes

Academic Consulting Group. Get the Grant: Writing a Powerful and Persuasive Grant Proposal EXAMPLES OF GRANT COMPONENTS

How To Write A Nursing Article

The Role of Simulation in Bridging the Preparation to Practice Gap

Southern Oregon Nursing

American Organization of Nurse Executives

An interview with Peter I. Buerhaus, PhD, RN, FAAN: on hopes and threats for nursing's future; Leadership Roundtable; Interview

Baby Boomer Workforce Cliff

E-Learning to Ease the Nursing Shortage: A New Model for Transitioning Vocational Nurses (LVNs) to Registered Nurses (RNs)

Progress Report Phase I Study of North Carolina Evidence-based Transition to Practice Initiative Project Foundation for Nursing Excellence

Nursing Workforce Competence in the State of Florida

Center for Rural Health North Dakota Center for Health Workforce Data. July 2004

System is a not-forprofit

Nursing Informatics Competencies:

The Robert Wood Johnson Foundation

Job Standardization: Helping Adaptation and Retention of Newly Graduated Nurses

Long-term Outcomes of a Postbaccalaureate Nurse Residency Program

Florida Hospitals Workforce Challenges: 2012 Workforce Survey Highlights

FOR YEARS, NURSING HAS BEEN

A NEW ERA FOR NURSING:

Subcommittee on Nursing Shortage. Nursing Shortage Statistics. Members of the Nursing Shortage Subcommittee

Florida Can Use Several Strategies to Encourage Students to Enroll in Areas of Critical Need

CALIFORNIA S LATEST NURSING WORKFORCE CHALLENGE: THE HIRING DILEMMA OF NEW GRADUATES

Arizona State University College of Nursing & Health Innovation. Dean Teri Pipe

Novice nurse perspective. Preceptor perspective 12/4/2014

Children's Hospital of Orange County

Vermont s Nurse Internship Project: an evidence-based transition to practice model.

The Baccalaureate Degree in Nursing as Minimal Preparation for Professional Practice

Running head: NURSE RETENTION 1

THE ULTIMATE RECRUITMENT TOOL : PROVIDING CLINICAL TRAINING OPPORTUNITIES TO HEALTH PROFESSIONAL STUDENTS

Initiatives to Promote the Nursing Workforce in Geriatrics

Partnering with Academic Partners to Enhance Student Experiences and Transitions into Practice

The State of the State s Nursing Education Programs 2012

Nursing Supply and Demand Study Acute Care

THE IMPACT OF A NURSING TRANSITIONS PROGRAM ON RETENTION AND COST. Rhonda R. Foster, Ed.D,MPH,MS,RN,NEA-BC Lynne A. Hillman, MEd,BEd,BScN

Healthcare Workforce Challenges and Academic Partnerships

Transition to Practice: The Facts. Thinking of being a Clinical Host?

The Relationship Between RN Job Enjoyment and Intent to Stay: A Unit- Level Analysis. JiSun Choi, PhD, RN, Faculty Advisor

Growing Tomorrow s Nurses and Clinical Leaders. For Audio Dial: Access Code: #

Mentoring Program Guide A program of the Alumni Association

The need for an effective transition-to-practice program

2014 Neonatal Nurse Practitioner Workforce Survey Executive Summary

The Case for Urgency in Addressing Staff Retention

Doctor of Nursing Practice (DNP) Programs Frequently Asked Questions

SUCCESSION PLAN FOR PUBLIC HEALTH NURSING. Applicant: Wyoming Public Health Nursing. Community and Public Health Division

WHITE PAPER. Remedy Your Scheduling Pains and Meet Financial, Clinical, and Operational Goals

Forging a path toward OR nursing education There is no OR nurse university. Nurses can t go away to college, pay tuition,

Addressing the Nursing Shortage: Business, Consumer, and Health Care System Perspectives

Career Satisfaction Among Oregon s Registered Nurses:

Nursing workforce issues and trends affecting emergency departments

VA Nursing Academic Partnerships. Request for Proposals

Title of project: Education to Nursing Practice: Graduation is Just the Beginning

Vicki Brzoza RN, MSN, MBA, CCRN Nurse Educator Thomas Edison State College/Capital Health

The Labor Market Effects of California s Minimum Nurse Staffing Law

Health Care Administration Program - Houston Center

The Ventura Nursing Legacy Project: Working Together to Solve Our County s Nursing Crisis

California s Other Healthcare Crisis The Clinical Laboratory Workforce Shortage

Texas Nurses Association Comments on Nursing Workforce of Texas

Transcription:

Sylvain Trepanier Sean Early Beth Ulrich Barbara Cherry New Graduate Nurse Residency Program: A Cost-Benefit Analysis Based On Turnover and Contract Labor Usage EXECUTIVE SUMMARY A cost-benefit analysis was conducted to assess the economic outcomes of a new graduate registered nurse (NGRN) residency program utilizing turnover rate and contract labor usage data from a multi-site health care corporation. Secondary data analysis of NGRNs (n=524) was conducted including descriptive and step-wise regression analyses. Findings indicated a new graduate residency program was associated with a decrease in the 12-month turnover rate from 36.08% to 6.41% (p<0.05) and reduction in contract labor usage from $19,099 to $5,490 per average daily census (p<0.05). These cost-benefit analyses suggest net savings between $10 and $50 per patient day when compared to traditional methods of orientation. A NGRN residency program offers a cost-effective innovative approach and should be valued as an investment as opposed to an expense. NEW GRADUATE REGISTERED nurses (NGRNs) face many challenges including role transition, high performance expectations in an increasingly higher-acuity environment, and an increased level of accountability as it relates to nursing quality indicators. New graduate registered nurses and nursing leaders have identified NGRNs as ill prepared to meet the demands of today s health care expectations (Reinsvold, 2008). In the face of such a serious problem, a residency program post-graduation offers a solution to both nursing leaders and NGRNs (Beecroft, Kunzman, & Krozek, 2001). The costs associated with a nursing residency program can seem prohibitive for community based-hospitals as compared with a traditional orientation program. The purpose of this study was to conduct a costbenefit analysis of a nursing residency program utilizing turnover rate and contract labor usage. Experiences of New Graduate Registered Nurses Today s health care environment is characterized by both a nur sing shortage (Buerhaus, Staiger, & Auerbach, 2008) and financial instability created by continuous declines in cost reimbursement (Zelman, McCue, & Glick, 2009). This environment may create pressure for nurse leaders to decrease the new graduate orientation and on-boarding period to address financial budgetary concerns related to the costs associated with non-productive time. The health care environment is also characterized by a decreas ed length of stay for patients, in creased patient acuity, and complex technology (Reinsvold, 2008). SYLVAIN TREPANIER, DNP, RN, CENP, is Senior Director, Patient Care Services, Tenet Healthcare Corporation, Dallas, TX. SEAN EARLY, PhD, is Assistant Vice President, Versant, Los Angeles, CA. BETH ULRICH, EdD, RN, FACHE, FAAN, is Senior Partner, Innovative Health Resources, Houston, TX. At the time of this study, she was Senior Vice President, Versant. BARBARA CHERRY, DNSc, MBA, RN, NEA-BC, is Department Chair for Leadership Studies, and Associate Professor, Texas Tech University, Health Science Center, Anita Thigpen Perry School of Nursing, Lubbock, TX. 207

Table 1. Nursing Residency Components RN Residency Component Didactic Direct Instruction, Case Studies Clinical Immersion and Competency Validation Process Looping Supportive Component: Mentoring Supportive Component: Debriefing Description RN residents spend approximately 15% to 20% of the RN Residency in didactic curriculum. Core and core concepts with specialty applications are provided for all RN residents. During these classes, RN residents receive the core content and case studies are provided to assist residents to understand how to apply the content within their specialty area. Multispecialty classes such as ECGs: 12 Lead ECG - Injury and Infarct Patterns are also provided for residents depending on the specialty in which they will practice. Specialty-specific classes for residents in the Adult Critical Care, Pediatrics, Medical-Surgical, Emergency Department, Pediatric Emergencies, Perinatal, Neonatal ICU, and Perioperative are also provided. The RN Residency is structured such that the residents focus on the clinical immersion in between the classroom didactics to promote the application of content with the guidance of a preceptor. During the clinical experience, new graduates do not hold primary responsibility for direct patient care, but work under the close supervision of an experienced RN preceptor. To maximize efficiency and promote critical thinking, the guided clinical experience is divided into two sub-components: home unit experience and looping (clinical experiences taking place outside of the home unit). Competencies, performance criteria, and sample clinical learning objectives are available to evaluate and validate an RN resident s clinical performance on the home unit and while looping. These competencies are reviewed and revised regularly to incorporate the latest regulations, core measures, and practice standards. Looping is an opportunity for the RN residents to gain guided clinical experience outside their home unit. These outside areas may be related to their home units or they may be areas in which the resident will encounter patient populations from his/her home unit. For example, residents hired into the Cardiothoracic Intensive Care Unit may spend a half-a-shift in the Emergency Department where their patients may come from, a 4-hour shift in the Operating Room where their patients may go, and a full-shift in the step-down unit where their patients may be discharged. The mentor component helps smooth the transition of RN residents from new graduate to nursing professional. RN residents are paired one-to-one with an experienced nurse or are assigned to mentor circle groups facilitated by two RNs. A mentor supports the career development of the RN resident and serves as a sponsor into the profession of nursing. Specific topics are discussed during mentor-mentee sessions such as career mapping. RN residents participate in scheduled, facilitated debriefing and self-care sessions, which provide them with the opportunity to voice their feelings about their experiences as new graduate RNs safely. These experiences may include caring for a dying patient, intervening with a family in crisis, or maintaining balance in one s own life. Recent studies have showed NGRNs make up approximately 10% of the nursing workforce in acute care settings (Berkow, Virkstis, Stewart, & Conway, 2009). They encounter serious difficulties with transition into their new role (Dyess & Sherman, 2009; Pellico, Brewer, & Kovner, 2009), although the phenomenon of reality shock has been acknowledged for decades (Kramer, 1974). These patterns suggest NGRNs require a comprehensive introduction into the registered nurse (RN) role. A NGRN residency program shows significant potential as a form of orientation (Krozek, 2008). Charac - teristics of a residency program include standardization of curriculum and competencies, practical application of knowledge, a support system, rigorous evaluation, and continuous improvement (Krozek, 2008). The NGRN residency program implemented for this study included didactic direct instruction, case studies, clinical immersion, structured mentoring and debriefing, looping to related departments, and competency validation (see Table 1). Patients require competent nursing care, and a residency program for NGRNs can produce NGRN competency (after 18 weeks of residency) equal to or higher than nurses in a comparison group with 17 months of experience (Ulrich et al., 2010; Versant, 2008). Previous studies indicate NGRNs are unprepared to assume multiple 208

professional responsibilities upon graduation (Del Bueno, 2005; Dyess, & Sherman, 2009; Pellico et al., 2009). Berkow and colleagues (2009) found only 10% of nurse executives believed NGRNs are competent to deliver care. NGRNs reported they would benefit from long-term support including development of clinical judgment and debriefing opportunities (Dyess & Sherman, 2009). NGRNs have also described a disconnect between what they were taught in nursing school and their personal experience in the profession; a feeling of being pushed into the role while not being ready; too much work, responsibility, and pressure; and perceived mistreatment by experienced nurses and physicians (Pellico et al., 2009). Financial Considerations The health care system has been characterized by an ongoing reduction in reimbursement since the introduction of Diagnosis- Related Groups (DRGs) in 1984 (Zelman et al., 2009). DRGs were followed by the Resource-Based Relative Value System in 1992, the Balanced Budget Act of 1997, the Ambulatory Payment Classifica - tion in 2000, the Medicare Modernization Act of 2003, Pay for Performance in 2003, and in 2009 the arrival of Medicare- Severity DRGs (Zelman et al., 2009). The recent Patient Pro - tection and Affordable Care Act also contains major pay-for-performance initiatives and revenue adjustments for acute care facilities. This ongoing reimbursement reduction requires expenses be scrutinized, and it is important to establish a return on investment for all programs and services to ensure fiscal viability of the health care organization. Provision of a new graduate residency program has varying direct and indirect costs based on the length of the program (e.g., nonproductive time) and costs of program development, preceptors, and educators. The non-productive time (cost of hourly wages and benefits for a NGRN) associated with the data used in this residency varies from approximately $21,571 per resident (for an 18- week medical-surgical residency in the Florida market) to $36,960 per resident (for a 22-week intensive care residency in the California market). The difference between the two is generated by the regional salary differences and the length of the residency. Residencies that are outsourced also contain per resident costs for services provided, which can be up to $5,200 per resident. This per-resident cost for the outsourced services is in addition to the cost of non-productive time described above. For example, providing an outsourced medicalsurgical residency program for 20 NGRNs per year in Florida can cost one hospital approximately $431,424 for non-productive time plus $104,000 for the outsourced residency for a total annual cost of $535,424. A nurse leader must be able to demonstrate a return on this type of investment, which can be significant in a communitybased hospital. The return on investment of a NGRN residency program can be determined through comparison of the costs associated with traditional preparation of NGRN and savings incident to a decrease in NGRN turnover and actual contract labor cost. New Graduate Turnover The historic nursing labor shortage in the United States has been well documented (Baggot, Hensinger, Parry, Valdes, & Zaim, 2005). Turnover of newly licensed nurses is also of great concern for nursing leaders (Hayes & Sexton- Scott, 2007). Turnover rates at 12 months post-hire for NGRNs have been reported to be between 13%- 75% (Kovner et al., 2007; Squires, 2002; Ulrich et al., 2010). In a multi-state study, Kovner and colleagues (2007) found 24% of NGRNs indicated they would resign by their second year of work due to the lack of preparation and the chasm between the NGRN s expectations and the reality of the work. The cost of replacing a NGRN is estimated to be between $49,000 and $92,000 per nurse (Beecroft et al., 2001; Contino, 2002; Jones, 2008; Robert Wood Johnson Foundation, 2006). Therefore, it is imperative for nurse executives to consider retention of the NGRN workforce as central to their staffing and financial efficiency. Studies have demonstrated a residency model can positively impact NGRNs through decreased turnover (Beecroft, Dorey, & Wenten, 2008; Fey & Miltner, 2000; Krugman et al., 2006; Ulrich et al., 2010), proper social support, which de - creases turnover intent by the residents (Beecroft et al., 2008); and better prepared skilled nurses (Beecroft et al., 2001; Beyea, von Reyn, & Slattery, 2007; Fink, Krugman, Casey, & Goode, 2008; Krugman et al., 2006). A large number of studies have been conducted in academic medical centers. There are no widely recognized studies of excellent quality identified by the authors that have examined the impact of a residency program on NGRN turn over and contract labor in community hospitals. It is important to study the impact of a nurse residency program in community hospitals because the number of community hospitals (more than 5,000) far exceeds the number of academic medical centers (126) (American Hospital Association, 2010; Deloitte Center for Health Solutions, 2009). Community hospital leaders may sense they do not have adequate funding to establish a nursing residency program for their NGRN workforce due to a perceived requirement to have an academic relationship, and an extensive research and/or a hospitalbased education department. Turnover and Contract Labor Usage Hospitals rely on premium contract labor or paying overtime 209

rates to current employees to compensate for high turnover and vacancy rates. Overtime work has the potential to increase burnout and can potentially have a negative impact on patient safety (Krozek, 2008). Because hospitals are facing serious financial constraints including decreased reimbursement, it is strategically wise to evaluate the effect of turnover on contract labor usage. Therefore, it is strategically important to investigate a NGRN residency program and its impact on turnover and premium contract labor costs as a measure of return on investment. Project Design and Methodology The effect of a residency program on turnover and contract labor costs was assessed through secondary data analysis of extant data collected by a national provider of a NGRN residency program and a multi-site health care corporation headquartered in the southwest United States. The participating health care corporation owns and operates 49 acute care hospitals across the nation. The health care corporation contracted with a NGRN residency program provider to offer its residency program in 15 of the health care corporation s communitybased hospitals. The project was deemed exempt from formal institutional review board approval as it included a retrospective analysis of de-identified data. Conceptual Model An adaptation of two models from the work of Beecroft et al. (2008) and Benner (1984) was used as the conceptual model for this study. The model offered by Beecroft and colleagues (2008) described new nurse turnover intent in terms of individual characteristics, work environment, and organizational factors. The model defined individual characteristics to be age, educational level, prior work experience, choice of unit/ward, nursing competency, and coping strategies. Work environment variables included empowerment, autonomy, decision making, and opportunity for advancement (job satisfaction). Finally, organizational factors were defined as workplace ties and relationships such as group cohesion, leader empowerment, and organizational commitment. Benner s (1984) model further defines the development of nursing competency whereby a NGRN passes through five levels of proficiency: novice, advanced beginner, competent, proficient, and expert. The model used for investigation (see Figure 1) takes into consideration individual characteristics (age, gender, highest RN education level, ethnicity), the work environment (NGRN residency program), and NGRN turnover. Database The databases were accessed electronically: the health care system Accounting and Human Resources (AHR) databases and the residency company (RC) database. The AHR databases offered actual contract labor dollars per hospital and per department, and Figure 1. Conceptual Model Individual Characteristics (age, gender, highest RN education level, ethnicity, competency) [Novice to Expert] Work Environment (job satisfaction, NGRN residency) Organizational Factors (group cohesion) Adapted from Beecroft et al., 2008; Benner, 1984. New Nurse Turnover Contract Labor Usage total visits per hospital and per department. The AHR databases are populated using actual ex - penses entered into the general ledger. The RC database provided de-identified facility level data on NGRN age, gender, highest level of nursing education, ethnicity, and NGRN turnover 12 months preresidency and 12 months to 24 months post-residency. Turnover was calculated by dividing the number of employed residents at 12 and 24 months by the total number of residents who completed the residency. Variables The following variables were analyzed for this project: individual characteristics, contract labor usage, and turnover. Individual characteristics included age, gender, highest level of nursing education, and ethnicity as reported by the individual nurse upon entry into the residency program. Contract labor usage was defined as labor dollars paid to an external entity (agency) to provide nursing care. Turnover was defined as the total number of newly licensed nurses leaving a hospital before 12 months post-nursing residency 210

Table 2. Average Daily Census of Participating Hospitals (N=15 hospitals) 2007 2008 2009 2010 Mean 161.90 161.50 154.70 150.60 Minimum 49.90 51.50 51.92 45.53 Maximum 328.00 325.90 290.60 281.20 Standard Deviation 90.60 95.10 92.00 89.30 Table 4. Contract Labor per Average Daily Census (N=15 hospitals) 2007 2008 2009 2010 Mean $19,099 $17,142 $12,033 $5,490 Minimum $1,236 $657 $188 0 Maximum $45,728 $43,330 $29,446 $16,071 Standard Deviation $13,530 $10,435 $8,745 $4,639 divided by the total number of residents who completed the nursing residency. Table 3. Turnover Pre and Post-Residency (N=15 hospitals) Pre-Residency (12 months) Post-Residency (12 months) Mean 36.08% 6.41% Minimum 17.20% 0.00 Maximum 85.80% 35.00% Standard Deviation 17.94% 10.26% Population and Setting The analysis included data from 15 hospitals in California, Florida, Georgia, Nebraska, Missouri, Tennessee, and Texas. All were considered community-based hospitals with the exception of one academic medical center. The average licensed bed count of all hospitals was 303 beds (range 73-519) and the average daily census ranged from 161.9 in 2007 to 150.6 in 2010 (see Table 2). Of the 15 participating hospitals, three were preparing for Pathway to Excellence designation. The sample of NGRNs participating in the residency program included a total of 524 nurses (87% female, 13% male). The majority of residency program participants were between 23 and 30 years of age (52%), White/ Caucasian (58%), and held a baccalaureate degree as the highest level of nursing education (54%). Findings A stepwise regression analysis was conducted to assess the relationship between a nursing residency program and turnover (T/O) controlling for the individual characteristics of new graduate nurses. The regression was completed using T/O as the dependent variable (DV), with the percent of NGRN resident penetration and individual characteristics as the independent variables. The percent of NGRN residents between the ages of 31 to 40 years of age explained 44% of the T/O variance at 12 months (F = 8, df 1,10, p<0.05). In addition, the presence of NGRN residents with a master s degree as the highest level of education explained 97.6% of the T/O variance at 24 months (F=69, df 2,4, p< 0.05). A stepwise regression was utilized to assess the relationship between a nursing residency program and contract labor usage controlling for the individual characteristics of new graduate nurses. The regression was completed using contract labor dollars per average daily census as the DV, and the percent of resident penetration and individual characteristics as independent variables. The presence of residents between 31 and 40 years of age explained 54.8% of the contract labor per average daily census in 2010 (F= 6.4, df 1,12, p< 0.05). The 12-month turnover across the 15 hospitals went from a mean of 36.8% pre-residency to a mean of 6.41% post-residency (see Table 3) and annual contract labor dollars per average daily census went from a mean of $19,099 pre-residency to $5,490 post-residency (see Table 4). Cost Benefit Analysis A cost-benefit analysis involv - es the assessment of expected benefits and costs associated with each choice (Santerre & Neun, 2010). The cost-benefit analysis of a NGRN residency program can be determined through the expected benefits and the costs associated with a residency program. If the expected benefits are greater than the cost, a hospital should seriously consider a residency program as a method of introducing newly licensed nurses into the workforce. The authors performed a cost-benefit analysis based on 211

Pre-Residency T/O (Absolute Number) Table 5. Pre and Post-Residency Data 12-24 months Post-Residency T/O (Absolute Number) Pre-Residency T/O Cost 12 Months Post-Residency T/O Cost Hospital Savings A 31 5 $2,185,500 $352,500 $1,833,000 B 15 0 $1,057,500 0 $1,057,500 C 8 3 $564,000 $211,500 $352,500 D 8 1 $564,000 $70,500 $493,500 E 14 2 $987,000 $141,000 $846,000 F 4 1 $282,000 $70,500 $211,500 G 43 5 $3,031,500 $352,500 $2,679,000 H 22 2 $1,551,000 $141,000 $1,410,000 I 9 0 $634,500 0 $634,500 J 8 8 $564,000 $564,000 0 K 12 0 $846,000 0 $846,000 L 54 0 $3,807,000 0 $3,807,000 M 5 1 $352,500 $70,500 $282,000 N 11 6 $775,500 $423,000 $352,500 O 11 5 $775,500 $352,500 $423,000 Total 255 39 $17,977,500 $2,749,500 $15,228,000 T/O = turnover turnover and contract labor dollars since we have already established a relationship between these two variables and the presence of a residency program. Turnover Turnover of NGRNs is defined as the number of NGRNs leaving a hospital before 12 months post-residency. Across the 15 hospitals studied, NGRN T/O before the residency was 255 NGRNs compared to 39 NGRNs post residency (see Table 5). Pre-residency T/O costs for this study are estimated at $17,977,500 and the post-residency T/O costs at $2,749,500. In other words, the decrease in T/O resulted in savings of $15,228,000 across the 15 hospitals studied or $18.50 per patient day (see Table 5). A residency program contains more up-front costs compared to a traditional orientation. Consider - ing all costs for the residency program (additional education time and the cost per resident when the residency is outsourced) compared to the traditional orientation model, an additional cost of $13,460 per NGRN was calculated when the residency model is used as a method of introduction into the workforce (see Table 6). This additional cost totals $7,053,040 for the 524 NGRNs across all 15 hospitals enrolled into the residency program. Taking into consideration the additional up-front cost, we determined a net savings of $8,174,960 ($15,228,000 - $7,053.040) across the 15 hospitals or approximately $10 per patient day, where the expected benefits are greater than the cost. Contract Labor Contract labor usage is defin - ed as labor dollars paid to an external entity (agency) to provide nursing care. Contract labor went from a mean of $3.04M pre-residency in the 15 hospitals to a mean of $797K in the 12 months post-residency. A decrease in contract labor dollars of $33.68M across the 15 hospitals was found (see Table 7). Although a relationship between the presence of a residency program and contract labor usage was identified, the impact of other potential confounding variables such as the economy were not included in the analysis. In essence, the decrease in contract labor associated with the presence of a nursing residency program could be as high as $33.6M across 15 hospitals or approximately $41 per patient day. Total Cost Benefit We estimated the total cost benefit of the nursing residency program to be between $8.1M and $41.7M combining the impact of turnover and contract labor usage for a total of 15 hospitals that introduced a nursing residency program. This savings translates to 212

Table 6. Cost Comparison Between a Residency Program and Traditional Orientation NGRN salary for Residency Program (18 weeks at $28.00 per hour) $20,160 Company cost per resident $4,500 Total cost per resident $24,660 NGRN salary for traditional orientation (10 weeks) $11,200 Difference between traditional orientation and a residency (per NGRN) $13,460 NOTE: Data provided by health care system. Current average hourly rate of NGRN (including benefits) based at $28.00 per hour. Hospital Pre-Residency Contract Labor Table 7. Contract Labor Savings Post-Residency Contract Labor Savings Between Pre and Post- Residency A $366,780 $315,381 $51,398 B $2,477,847 $801,384 $1,676,462 C $10,660,134 $2,537,112 $8,123,021 D $822,895 $219,785 $603,109 E $282,596 $0 $282,596 F $1,414,036 $87,171 $1,326,865 G $2,711,331 $1,171,165 $1,540,165 H $9,944,285 $2,726,720 $7,217,564 I $2,000,559 $90,044 $1,910,514 J $1,485,999 $731,727 $754,271 K $1,547,696 $710,042 $837,653 L $355,093 $505,928 ($150,835) N $1,028,728 $150,984 $877,743 M $4,000,313 $1,021,225 $2,979,087 O $6,531,392 $880,262 $5,651,129 Total $45,629,684 $11,948,933 $33,680,750 NOTE: Data provided by Accounting and Human Resources. The Contract Labor costs were not adjusted in 2011 dollars since the short-term interest rate was deemed insignificant over the last 4 years. between $10 and $50 savings per patient day. Limitations This study utilized secondary data analysis of a health care corporation s community-hospital database and may not be applicable to other health care settings. Additionally, associations identified within the 2010 database that could not be demonstrated in previous years were most likely due to either the lack of relationship or sample size. The unit of measure was the hospital as opposed to the unit level, thus creating a power issue when we conducted some of the statistical analysis. In addition, there are some important confounding variables that may have impacted the results of our findings such as the state of the economy in years 2008 to 2010. The overall economy in the United States was not favorable by 2010 and, for that reason, many hospitals saw a decline in volume which in turn required nursing leaders to close and eliminate positions. It is possible the closure of positions may have impacted as well the level of turnover and contract labor dollars. Discussion This cost-benefit analysis al - lowed us to determine the positive impact of a nursing residency program in community-based hospitals on NGRN turnover similar to prior studies (Beecroft et al., 2001; Fey & Miltner, 2000; Krugman et al., 2006). In addition, we demonstrated the positive impact on contract labor dollars spent for nursing services. To our knowledge, there have been no other studies documenting these relationships. When considering the difficult reimbursement environment hospitals find themselves in today, nursing executives should seriously consider a residency program to decrease the turnover of NGRNs. Further research is required to determine if the economy had an impact on turnover and contract labor and, if so, to what extent. Since it has been reported by previous researchers that a nursing residency program can accelerate the competency of NGRNs, we would recommend some analysis of patient safety and quality outcomes. For example, further research should assess the relationship between the presence of a residency program and nursing quality indicators such as falls, falls with injuries, and hospitalacquired pressure ulcers. 213

Conclusion To meet the needs of hospitalized patients, NGRNs must be competent, well prepared, confident, and knowledgeable. Both NGRNs and executive nursing leaders have observed that the traditional orientation process is not sufficient to prepare NGRNs to practice in today s health care system. Despite the consistent frustration experienced by NGRNs, few hospitals prepare NGRNs via a residency program approach. A residency program for NGRNs offers an innovative approach to better prepare them for their new role, and resulted in net savings between $10 and $50 savings per patient day when compared to the traditional method of orientation over a period of 24 months postimplementation. These results clearly demonstrate that a nursing residency program should be valued as an investment as opposed to an expense. Nurse leaders are invited to engage the board members of all community-based hospitals in offering a residency program for new graduate nurses. Nurse leaders of community-based hospitals can present the nurse residency for new graduate registered nurses as a cost-effective measure to provide an adequate transition into practice for all new graduate registered nurses. $ REFERENCES American Hospital Association. (2010). Fast facts on US hospitals. Retrieved from http://www.aha.org/aha/resourcecenter/statistics-and-studies/fastfacts.html Baggot, D.M., Hensinger, B., Parry, J., Valdes, M.S., & Zaim, S. (2005). The new hire/preceptor experience: Costbenefit analysis of one retention strategy. Journal of Nursing Admini - stration, 35(3), 138-145. Beecroft, P., Dorey, F., & Wenten, M. (2008). Turnover intention in new graduate nurses: A multivariate analysis. Journal of Advanced Nurs - ing, 62(1), 41-52. Beecroft, P., Kunzman, L., & Krozek, C. (2001). RN internship: Outcomes of a one-year pilot program. Journal of Nursing Administration, 31(12), 575-582. Benner, P. (1984). From novice to expert: Excellence and power in clinical nursing practice. Menlo Park, CA: Addison-Wesley. Berkow, S., Virkstis, K., Stewart, J., & Conway, L. (2009). Assessing new graduate nurse performance. Journal of Nursing Administration, 38(1), 468-474. Beyea, S.C., von Reyn, L.K., & Slattery, M.J., (2007). A nurse residency program for competency development using human patient simulation. Journal of Nurses in Staff Develop - ment, 23(2), 77-82. Buerhaus, P., Staiger, D., & Auerbach, D. (2008). The future of the nursing workforce in the United States: Data, trends and implications. Sudbury, MA: Jones & Bartlett. Contino, D.S. (2002). How to slash costly turnover. Nursing Management, 33(2), 10-13. Del Bueno, D.J. (2005). Why can t new registered nurse graduates think like nurses? Nursing Education Perspec - tives, 265, 278-282. Deloitte Center for Health Solutions. (2009). Academic medical centers: The tipping point. Retrieved from http://www.deloitte.com/assets/dco m-unitedstates/local%20assets/ Documents/us_chs_Academic MedicalCentersTheTippingPoint_06 2109.pdf Dyess, S.M., & Sherman, R.O. (2009). The first year of practice: New graduate nurses transition and learning needs. The Journal of Continuing Education in Nursing, 40(9), 403-410. Fey, M.K., & Miltner, R. (2000). A competency-based orientation program for new graduate nurses. Journal of Nursing Administration, 30(3), 126-132. Fink, R., Krugman, M., Casey, K., & Goode, C. (2008). The graduate nurse experience: Qualitative residency program. Journal of Nursing Admini - stration, 38(7/8), 341-348. Hayes, J., & Sexton-Scott, A. (2007). Mentoring partnerships as the wave of the future for new graduates. Nursing Education Perspectives, 28(1), 27-29. Jones, C.B. (2008). Revisiting nurse turnover costs: Adjusting for inflation. Journal of Nursing Admini - stration, 38(1), 11-18. Kovner, C.T., Brewer, C.S., Fairchild, S., Poormina, S., Kim, H., & Djukic, M. (2007). Newly licensed RN s characteristics, work attitudes, and intentions to work. American Journal of Nursing, 107(9), 58-70. Kramer, M. (1974). Reality shock. St. Louis, MO: C.V. Mosby. Krozek, C. (2008). The new graduate RN residency: Win/win/win for nurses, hospitals, and patients. Nurse Leader, 6(5), 41-44. Krugman, M., Bretschneider, J., Horn, P.B., Krsek, C.A., Moutafis, R.A., & Smith, M.O. (2006). The national post-baccalaureate graduate nurse residency program. Journal for Nurses in Staff Development, 22(4), 196-205. Pellico, L.H., Brewer, C.S., & Kovner, C.T., (2009). What newly licensed registered nurses have to say about their first experiences. Nursing Outlook, 57(4), 194-203. Reinsvold, S. (2008). Nursing residency: Reversing the cycle of new graduate RN turnover. Nurse Leader, 6(6), 46-49. Robert Wood Johnson Foundation. (2006). Wisdom at work: The importance of the old and experienced nurse in the workplace. Retrieved from http:// www.rwjf.org/files/publications/oth er/wisdomatwork.pdf Santerre, R.E., & Neun, S.P. (2010). Health economics: Theory, insights, and industry studies. Mason, OH: Cengage Learning. Squires, A. (2002). New graduate orientation in the rural community hospital. The Journal of Continuing Education in Nursing, 33(5), 203-209. Ulrich, B., Krozek, C., Early, S., Ashlock, C.H, Africa, L.M., & Carman, M.L. (2010). Improving retention, confidence, and competence of new graduate nurses: Results from a 10-year longitudinal database. Nursing Eco - nomic$, 28(6), 363-375. Versant. (2008). Quantifying the nursing residency advantage: The fast-track to nursing competence and confidence [white paper]. Los Angeles, CA: Author. Zelman. W.N., McCue, M.J., & Glick, N.D. (2009). Financial management of healthcare organizations. An introduction to fundamentals tools, concepts, and applications (3rd ed.). San Francisco, CA: John Wiley & Sons. ADDITIONAL READINGS The Joint Commission. (2009). 2006 Hospital national patient safety goals. Retrieved from http://www. jointcommission.org/patientsafety/n ationalpatientsafetygoals/05_hap_n psgs Kovner, C.T., Brewer, C.S., Greene, W., & Fairchild, S. (2009). Understanding new registered nurses intent to stay at their jobs. Nursing Economic$, 27(2), 81-98. 214

Copyright of Nursing Economic$ is the property of Jannetti Publications, Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use.