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FY10 Budget Planning Meeting January 22, 2009 By Kristin Ramsey, Director, Nursing Operations

Northwestern Memorial. Hospital. FY10 Budget Planning Meeting January 22, 2009 By Kristin Ramsey, Director, Nursing Operations Dina Pilipczuk, Business Manager, Patient Care Operations. Agenda. Overview of Patient Care Budget Process

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FY10 Budget Planning Meeting January 22, 2009 By Kristin Ramsey, Director, Nursing Operations

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  1. Northwestern Memorial Hospital FY10 Budget Planning Meeting January 22, 2009 By Kristin Ramsey, Director, Nursing Operations Dina Pilipczuk, Business Manager, Patient Care Operations

  2. Agenda • Overview of Patient Care Budget Process • Review of FY10 Productivity Improvement Guiding Principles • Review of Expectations / Timeline • Open Discussion

  3. Recent Economic Headlines • “Loyola Hospital to lay off 200 in 5% budget cut” • Crain’s Chicago Business, December 8, 2008 • “Edward Hospital cuts 100 jobs amid financial pressures” • Crain’s Chicago Business, May 22, 2008 • “University of Chicago Hospital to trim 7% of budget” • Chicago Tribune, January 10, 2009 • “Loyola Medical Center to cut 200 non clinical jobs” • Chicago Tribune, December 8, 2008

  4. NMH Cost per Equivalent Inpatient Day Comparison to Benchmarks ↓ (3.5%) ↑ 29% ↑ 11% ↑ 30% ↑ 53% ↑ 11% Source: COTH QUARTERLY SURVEY OF HOSPITAL OPERATIONS & FINANCIAL PERFORMANCE; excludes all neonatal and newborn cases

  5. NMH Nurse to Patient Ratios Are in the Top 15% Nationally for ICUs & Top 25% for M/S Units California Mandatory Ratios NMH Unit PSS* Med/Surg 1:5 1:5.1 1:4 Step-Down 1:4 1:3.7 1:3 Intensive Care 1:2 1:1.9 1:1.5 * Perspectives on Staffing & Scheduling 2008 Annual Survey of Hours

  6. Patient Care Budget Elements • Transparent • Guiding principles developed and shared across all practice areas • Benchmarked • Internal and external standards for ratios and education/orientation hours • California ratios • Local area ratios • Formula Based • Budget template incorporates Guiding Principles • Consistently Monitored • Ongoing reinforcement of fiscal accountability/responsibility

  7. Steps in Patient Care FY10 Budget Planning 1. Identify productivity improvement opportunities • Done by Patient Care Staff, Managers, and Directors • Proactively identify areas for improvements 2. Develop volume projections • Done by Finance, Business Development & Patient Care Directors • Anticipate planned program growth • Analyze trends in actual volume to predict future volume 3. Build the departmental budget • Based on guiding principles; incorporates productivity improvement strategies • Done by unit managers • Budget workbook includes FTE calculator & staffing planner

  8. Patient Care Staffing Budget ComponentsUnit Budgets reflect 83-87% Direct Hours & 13-17% Indirect Hours • Nurse to Patient Ratios • Core Staff: RN,PCT, US • Staff Development • Orientation/ CE • Unit Leadership: Mgr, CC, SE • Paid Time Off • Holiday • Vacation • Sick Direct HPPD Indirect HPPD Productive HPPD

  9. Over Hiring Case Study Unit • Unit currently 58% higher than budgeted volume through Q1 FY09 • Current RN budget = 18.6 FTEs • Unit needs 26.9 FTEs to accommodate additional volume (+8.3 FTEs) • 8.3 FTEs at supplemental wage rate = $1.1M (annual) • 8.3 FTEs at regular wage rate $571K (annual) • Savings generated from overhiring = $490K (annual)

  10. Exceptional Financial Performance • Facilitating success at the unit level w/ staff RN involvement Staffing Decisions • Flexing to volume and acuity appropriately • Appropriate safety aide utilization Scheduling System • Importance of data accuracy and integrity • Garbage in = garbage out! • Impact on DHPPD • Impact on FY10 budget projections Resource Management • Appropriate utilization of supplies • Continuously ensure Exceptional Financial Performance • Units are held accountable to their performance • Productivity reports are shared across departments

  11. Employee Cost Savings Initiative • NMH employees asked to submit 1 cost savings idea in FY09 • 3300 ideas were submitted: • Going Green (Utilities/Recycle) 44% • Supplies 26% • Productivity 10% • Purchased Services 8% • Other 12% • As of January 2009, 375 ideas were implemented through 18 projects • Projected cost savings of approximately $17M

  12. FY10 Productivity Improvement Guiding Principles 1. Staff nurses will be involved in formulating & monitoring unit budgets 2. Productivity improvement strategies should not shift costs to or negatively impact other areas 3. Productivity improvement strategies will be validated during current year to ensure success in FY10

  13. Tools/Resources • Managers will receive planning packets that include: • Copy of presentation to guide discussions • Specific FY10 budget targets by unit • Planning worksheet to track strategies • Helpful info such as average wage rates, FTE translation, etc.

  14. Example of Specific Unit Targets

  15. Example of Strategies Tracking Worksheet

  16. Think About….. • Who will be on your team? • representation from all shifts • How will the meetings be conducted? • Agenda, talking points, collecting ideas • Who is available for support? • Director/ Preceptor/Dina • Admins (copies, etc.) • How much time to allow? • Time to meet with staff • Time to translate ideas to planning worksheet • Time to discuss with director prior to submitting

  17. Time Line

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