“HPPD” – Hours per Patient Day:

Calculating expected hours per patient per day assists nurse managers and administrators in creating realistic nurse schedules to ensure maximum productivity and adequate patient care is available. HPPD is calculated by using the total number of productive nursing hours worked with direct patient care responsibilities divided by the number of patients (census) in 24 hours. Keeping nursing and clinical staff informed about how HPPD is calculated on their units is considered best practice. Want to know more about calculating HPPD? Click here.

Variance Analysis:

Variance analysis is a process by which nurse leaders review monthly budgets comparing budgeted to the actual census, revenue, and expenses. Variance reports are monthly statements, similar to bank statements, that outline planned and actual revenue, and expenses. By reviewing variance reports, leaders explore the reasons for the discrepancies, determine appropriate actions to decrease or reconcile the difference or justify the increased expense.

Zero-Based Budgeting:

A budgeting method that starts over from zero, each budget cycle (monthly or yearly). This requires justification and analysis ensuring alignment with strategic goals. Every proposed expense must be critically examined and justified, rather than making a general budgetary increase. Zero-based budgeting is often more time-consuming because of its required attention to detail.

Budget Forecast:

Completing a budget forecast is an essential part of the budgeting process. Forecasting is a financial tool used to predict what your unit/hospital will achieve based on past and current data. Forecasting often includes several scenarios and modeling to help predict the most realistic model.  It is essential that all members of the clinical team are represented in forecasting conversations.  This is maximize accuracy of forecast. 

Capital Budget:

The capital budget is typically a separate larger budget and source of funds than an operating budget. Capital budgets are often used to designate funds for items that will provide long-term, significant benefits to the organization and have a high cost. Items typically included in a capital budget are high-cost equipment (ex: MRI machine), software, and systems (ex: new electronic medical record system). These items are often necessary rather than optional, either for functional reasons like replacing a piece of broken equipment or to meet specific regulatory or accreditation requirements.

Productive Hours:

Productive hours are the actual hours worked delivering patient care by all caregivers assigned to the call center. Hours that nursing staff spend on shift, working in their assigned roles within the organization, are considered productive hours.   It is important to determine what your organization includes anything additionally in productive hours.

Non-Productive Hours:

This type of hour encompasses hours paid that are not worked delivering patient care.  This type of paid hours may include vacation time, sick time and training/education, and orientation. Hours that qualify as non-productive can vary by organization.  Staff receives pay from the organization for all of these examples, but they are not on the unit performing their job duties.

Variable Staff Hours:

Clinical staff with variable hours are hours that fluctuate with patient census and/or acuity. Variable hours require that the team be flexible based on changing needs of the unit or department

Worked vs. Paid Hours:

It is not uncommon for clinical staff to work overtime. Worked hours include the actual time the nurse spent working on the unit. Paid hours reflect the total hours the nurse was compensated for and can include overtime or bonus hours.

For example, Shelly RN worked a 12-hour shift and 2 hours of overtime at time-and-a-half pay. Her worked hours equal 14 hours total. Her paid hours equal 15 hours, accounting for the two hours at time-and-a-half pay. That is the total amount the institution must pay her for; therefore, it must be accounted for in the budget.

Staffing Model (Position Control):

A staffing model, or staffing plan, is a process by which you determine the number of nurses (and other staff) needed to provide the appropriate level of and amount of care for each patient. A proper staffing model reduces variability and ensures maximum efficiency on the unit. Staffing plans also help to clearly communicate the needs of the team or department.