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Issues in nursing labor costs allocation.

D Y Barhyte1, G L Glandon

  • 1Graduate Data Base Project, American Association of Colleges of Nursing, Washington, DC.

The Journal of Nursing Administration
|December 1, 1988
PubMed
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Accurate nursing cost allocation is crucial for hospital efficiency. While ancillary costs correlate with nursing costs, they are not a reliable proxy, necessitating robust nursing cost systems.

Area of Science:

  • Healthcare Management
  • Nursing Economics
  • Hospital Operations

Background:

  • Prospective payment systems incentivize operational efficiency in hospitals.
  • Accurate identification of nursing costs is essential for achieving this efficiency.
  • Current advanced nursing cost allocation systems are often prohibitively expensive to implement.

Purpose of the Study:

  • To compare the effectiveness and cost-implications of different nursing labor cost allocation systems.
  • To evaluate the potential of ancillary costs as a proxy for nursing costs.
  • To provide guidance for nurse executives on implementing cost-effective allocation methods.

Main Methods:

  • Direct comparison of conventional daily nursing labor cost allocation with acuity-based systems.

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  • Statistical analysis to determine the correlation between nursing labor costs and patient ancillary costs.

    • Main Results:

    • Substantial differences were observed between daily and acuity-based nursing labor cost allocation methods.
    • A high correlation exists between nursing labor costs and patient ancillary costs.
    • Ancillary costs, despite the correlation, are not a sufficiently strong proxy for direct nursing costs.

    Conclusions:

    • Nurse executives should prioritize the implementation of effective nursing cost allocation systems.
    • Low-cost alternatives to complex systems are valuable but must be validated.
    • Accurate nursing cost data is vital for informed management decisions in healthcare settings.