Background: With demands to improve patients' clinical outcomes and decrease the escalating costs of inpatient care, nurse executives are focusing on how nurses spend their time rather than just raising staffing levels to positively impact patient outcomes. Because nursing wages constitute a high proportion of a hospital's budget, understanding the costs of nursing activities is critical to managing them.
Methods: An activity-based costing approach was used in 14 medical-surgical nursing units to study nursing activities and their related costs. Time use for 4 patient care activities (assess, teach, treat, provide psychosocial support) and 2 support activities (coordinate care and manage clinical records) including the percent of non-value-added (NVA) time for each of these activities was identified through focus groups, interviews, and timed observations. Annualized wage costs were assigned to these activities to determine average wage-related costs of each activity as well as NVA-related costs.
Results: More than one-third of nurses' time was considered NVA, averaging $757,000 per nursing unit in wage costs annually. Nurses spent more time on support activities (56%) than in providing patient care (44%), with the least amount of time being spent on patient teaching and psychosocial support.
Conclusion: Findings indicate a huge opportunity to both improve clinical outcomes in these units and, at the same time, reduce costs by focusing on processes to reduce the high amount time spent performing NVA and support activities and increase patient care time, particularly patient teaching and psychosocial support.