1. CHAPTER 4: MEASURING NURSING
CARE
• Explain the importance of measuring all values
included in an indicator over the same time
period
• Calculate at least three indicators that measure
nursing performance
• Differentiate between capacity, utilization,
performance, and financial indicators used in
settings where nurses provide care
• Justify the measurement of HPPD related to
patient acuity levels
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
1

2. REPORTING RULES AND
CONVENTIONS
• Measure, calculate, and report indicators over
the same time period
• Use raw data
• Round your results using conventions in your
setting
• Percents, rates, and ratios are often used
• Benchmarks: internal or industry standards
• Use reporting methods and formats following the
policies and conventions in your setting
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
2

3. INDICATORS MEASURING NURSING
CARE
• Capacity indicators measure the extent to which a
health care setting can meet consumer demand
• Utilization indicators measure the extent of consumer
demand for services in a health care setting
• Performance indicators measure how well the health
care setting’s capacity operates in managing utilization
• Financial indicators may be attached to capacity,
utilization, or performance indicators to measure the
associated monetary values
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
3

4. CAPACITY INDICATORS
• Fixed: does not change
with volume
• Variable: changes with
changes in volume
• Structural
– Inpatient beds
– Potential patient days
• Staffing
– Outpatient: potential
patient visits per
provider
– Inpatient: N/P ratio
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
4

5. UTILIZATION INDICATORS
• Is utilization generally fixed or variable?
• Patient acuity
– Case mix index (CMI)
– Hours per patient day (HPPD)
• Patient volume or unit of service (UOS)
– Outpatient: referrals, self-referrals, visits
– Inpatient: admissions, census, average daily
census (ADC), occupancy rate
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
5

6. CASE MIX INDEX (CMI)
ADJUSTMENTS
• Developed by Medicare as part of the Prospective Payment System
(PPS)
• Inpatient CMI represents average diagnosis-related group (DRG)
weight for all Medicare patients treated at a specific hospital over a
specific time period
• CMI for an "average" hospital is 1.0
• The higher the CMI, the greater the complexity of cases requiring
more services and longer LOS
– Increases Medicare reimbursement for the same DRG across various hospitals
• Case mix values may also be calculated for home health, LTC, and
other settings including Medicaid
• CMI >1.5 is high and typical of teaching institutions that are
referred more complex cases
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
6

7. VOLUME MEASURES (SERVICE
UNITS)
Inpatient (IP) settings:
• Patient days
• Patient discharges
• Patient admissions
• Outpatient (OP) settings:
• Patient visits
Other volume measures:
• Procedures (IP or OP)
• Other products such as
medications or durable
medical equipment (DME)
Interpretation:
• Utilization
• Access
• Market share, consumer
preference
• Seasonal or cyclical changes
• Change in reimbursement or
regulations
• Other unusual events
• Some settings report
discharges, others report
admissions
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
7

8. PERFORMANCE INDICATORS:
STAFFING AND PRODUCTIVITY
• Staffing indicators
– Job positions
– Full-time equivalents (FTEs)
• Fixed FTEs: permanent or
indirect staffing
• Flexible FTEs: variable or
direct staffing
– FTE coverage factor: why
and where is it needed?
– Skill mix
• Productivity indicators
– Outpatient: visits
managed by the
provider
– Inpatient:
• Productive hours, direct
care hours, overtime,
agency nurse hours
• Nonproductive hours,
nonproductive percent
– Procedures: visits,
HPUOS
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
8

9. PERFORMANCE INDICATORS:
PATIENT FLOW
• LOS and ALOS
• Outliers
• Discharges
• Bed turns
• Bed turnaround time
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
9

10. FINANCIAL INDICATORS
Expense:
– Fixed expenses
– Variable expenses
– Operating expenses
– Nonoperating expenses
– Personnel expenses
– Nonpersonnel expenses
Revenue:
– Self-pay or out-of-pocket
payments
– Payer mix
– Global budgeting
– Gross revenue
– Net revenue
– Contractual allowance
– Bad debt
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
10

11. STAFFING AND PRODUCTIVITY
MEASURES
Full-time Equivalent:
• Paid hours
•1.0 FTE represents 40 hours of work
per week x 52 weeks for a year,
resulting in 2080 work hours per year
•1.0 FTE represents 260 work days per
year (2080 work hours per year ÷ 8
work hours per day)
•Hourly employment of health care
staff, especially nurses
– vs. scheduled hours
– Hours actually worked
– Overtime and agency hours are
important to measure and
monitor
• Interpretation:
– Case mix
– Staffing policies, management,
and regulations
– Staffing mix
– Efficiency
– Volume
• Annual Salary ~Hourly Wage x
2000
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
11

12. COST MEASURES
• Operating costs: expenses
related to the generation of
goods or services (operations)
• Salaries and wages: non-hourly
and hourly employees
• Benefits: health insurance and
other
• Supply costs
• Medication costs
• Charity care is treated as an
expense
• Other relevant sources of
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
costs
Interpretation:
•Change in costs
•Unexpected costs or cost
behavior
•Cost management
•Related to volume and revenue
•Other events affecting costs
12

13. Monthly Statistics Data or Calculation
Staffed Beds Department Data
Discharges (Admissions)
Department Data or Patient
Days ÷ LOS
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
Patient Days
Department Data or ADC x
days in time period
Average Daily Census (ADC)
Patient Days ÷ Days in Period
or Occupancy Rate x Staffed
Beds
Occupancy Rate ADC ÷ Beds in Service x 100%
Average Length of Stay (ALOS)
Total Patient Days ÷ Total
Discharges
13

14. RN Monthly Variance Report Data or Calculation
RN Direct Hours PPD
Policy, regulation, or RN Direct
Hours ÷ Patient Days
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
RN Direct Hours
Department Data or RN Hours
PPD x Patient Days
RN Overtime (OT) Hours
Department Data or Total Hours
x % OT
Total RN Productive Hours Direct Hours + OT Hours
RN OT as % of Total Hours
OT Hours ÷ Total RN Hours x
100%
RN FTEs RN Direct Hours ÷ (2080 ÷ 12)
RN FTEs per Occupied Bed FTEs ÷ ADC
14

15. RN Monthly Variance Report Data or Calculation
RN Direct Hours Cost @ $50.00
per hour wage Direct Hours x Hourly Wage
RN OT @ 150% of Wages OT Hours x Hourly Wage x 1.5
RN Benefits @ 30% of Wages
Direct Hours x Hourly Wage x
0.25
Copyright © Springer Publishing Company, LLC. All Rights Reserved.
Total RN Expense
Direct Hours Expense +
OT Expense + Benefits
RN Expense PPD Total RN Expense ÷ Patient Days
15