Description
You are the manager for 3 West, a medical/surgical unit. You have been given the following data to
assist you in preparing your budget for the upcoming fiscal year.
Patient Data
Average Daily Census (ADC): 55
Budget based on 6.2 Avg. Hours per patient day (HPPD)
(6.2 HPPD excludes Nurse Manager and unit secretaries)
Staff Data
Total FTEs 40 Variable FTEs
1 Nurse Manager
3 Unit Secretaries
44 Total FTEs
Staffing Mix
RN 75%
LVN 10%
NA 15%
Average Salary Scale per Employee
Benefits are 35% of annual salaries
Nurse Manager $90,000.00 per year
Registered Nurses (RN) $42.00 per hour
Licensed Vocational Nurses (LVN) $27.00 per hour
Nurse Aides (NA) $14.50 per hour
Unit Secretary (US) $12.50 per hour
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N4455 Nursing Leadership and Management
Financial Management Case Study VSU23(2)
Name:
Date:
Overview: Financial Management Case Study
One of the important duties of a nurse leader is to manage personnel and personnel budgets. In this
assignment, you will assume the role of a nurse manager. You will use given data to make important
decisions regarding budgets and staffing.
Some nurse managers have computer spreadsheets or software applications to help them make
decisions regarding budgets and staffing. You will only need simple mathematical operations* to
perform the needed calculations in this assignment because the scenario has been simplified.
Furthermore, some data have been provided for you that a nurse leader might need to gather or
compute in a real setting. Still, you will get a glimpse of the complexity of responsibilities nurse leaders
shoulder regarding financial management.
• To calculate the percent of the whole a given number represents, follow these steps:
Change the percentage to a decimal number by moving the decimal twice to the left (or dividing by
100).
Multiply the new decimal number by the whole.
Example: What is 30% of 70?
30%= .30;
(.30) × 70 = 21
• To find out what percentage a number represents in relation to the whole, follow these steps:
Divide the number by the whole (usually the small number by the large number).
Change the decimal answer to percent by moving the decimal twice to the right (or multiplying by
100).
Example: What percent of 45 is 10?
10 ÷ 45 = .222; so, 10 is 22% of 45.
* You will only need addition, subtraction, multiplication, and division.
©2020 University of Texas at Arlington
Page 1 of 6
N4455 Nursing Leadership and Management
Case Study
You are the manager for 3 West, a medical/surgical unit. You have been given the following data to
assist you in preparing your budget for the upcoming fiscal year.
Patient Data
Average Daily Census (ADC): 55
Budget based on 6.2 Avg. Hours per patient day (HPPD)
(6.2 HPPD excludes Nurse Manager and unit secretaries)
Staff Data
Total FTEs
40 Variable FTEs
1 Nurse Manager
3 Unit Secretaries
44 Total FTEs
Staffing Mix
RN
75%
LVN
10%
NA
15%
Average Salary Scale per Employee
Benefits are 35% of annual salaries
Nurse Manager
$90,000.00 per year
Registered Nurses (RN)
$42.00 per hour
Licensed Vocational Nurses (LVN)
$27.00 per hour
Nurse Aides (NA)
$14.50 per hour
Unit Secretary (US)
$12.50 per hour
©2020 University of Texas at Arlington
Page 2 of 6
N4455 Nursing Leadership and Management
Rubric
Use this rubric to guide your work on this assignment.
Criteria
Question 1
Question 2
Question 3
A. Table
B. Significance of
variance in
HPPD
Target
Acceptable
Unacceptable
Both % and FTEs column
totals within ± 2 of correct
answers
Either % or FTEs column
totals within ± 2 of correct
answers
Neither % nor FTEs
column totals within ± 2 of
correct answers
(13-16 Points)
(5-12 points)
(0-4 points)
All column (except Hours
and Salary) totals within ±
2 of correct answers
At least 3 column totals
within ± 2 of correct
answers
Less than 3 column totals
within ± 2 of correct
answers
(17-20 Points)
(5-16 points)
(0-4 points)
All six values within ± 2 of
correct answers
At least five values within
± 2 of correct answers
(6-8 points)
(1-7 points)
Less than five values
within ± 2 of correct
answers
Response is clearly stated
and explains some
potential details,
ramifications, and/or
solutions
Response states some
potential details or
ramifications
Response is unclear or
lacks potential details or
ramifications
(2–7 points)
(0-2 points)
Response shows some
knowledge of
responsibilities of the
nurse leader
Response fails to
demonstrate knowledge of
responsibilities of the
nurse leader
(2-7 points)
(0-1 point)
All columns (except Hours
and Salary) totals within ±
2 of correct answers
At least 3 column totals
within ± 2 of correct
answers
Less than 3 column totals
within ± 2 of correct
answers
(17-20 Points)
(5-16 points)
(0-4 points)
All columns (except Hours
and Salary) totals within ±
2 of correct answers
At least 3 column totals
within ± 2 of correct
answers
Less than 3 column totals
within ± 2 of correct
answers
(17-20 points)
(5-16 points)
(0-4 points)
(0-1 point)
(6-8 points)
C. Implications for
nurse leader
Response shows keen
understanding of
responsibilities of the nurse
leader regarding staff
budgets
(6-8 points)
Question 4
Question 5
©2020 University of Texas at Arlington
Page 3 of 6
N4455 Nursing Leadership and Management
Questions
Refer to the case study to obtain the data required to answer these questions. You calculate all the FTE’s
not a single FTE for each discipline.
1. How many RNs, LVNs, and NAs, by category, are on the staff of 3 West? (Round FTEs to
the nearest tenth.) Compute totals for each column.
Positions
Variable FTEs
% by Position
FTEs by Position
RN
40
0.75
30
LVN
40
NA
40
Totals
2. Compute the annual salary budget for 3 West.
Compute totals for appropriate columns.
Positions
FTEs
MANAGER 1.0
Salary
$ 90,000.00
Hours
2080
LVN
2080
NA
2080
Sec
2080
XXXXX
©2020 University of Texas at Arlington
Amount of
Benefits
Total
XXXX
RN
Totals
Salary
Subtotals
XXXXXX
Page 4 of 6
N4455 Nursing Leadership and Management
3.
Your hospital unit, 3 West, is a 60-bed general medical-surgical unit. Over the past year, the ADC
(Ave. Daily Census) was 53 patients.
Use the following data on 3 West during the last year to perform these calculations and answer
these questions.
A. Complete this table to calculate the actual average hours of care required per patient day
(HPPD) for the patients in 3 West. Round to the nearest tenth
Acuity Mix
Average Hours of
Care Required
Average Daily Census
(ADC)
Total Hours of Care
Per Day
I
1.4
8
11.2
II
3.9
21
III
5.6
19
IV
8.8
5
Totals
53
Hours per patient day (HPPD)
B. Remember that your established personnel budget for 3 West assumes a HPPD of 6.2. If your
calculated HPPD is different, explain the significance of the variance. (If your calculated HPPD
is different than 6.2, you must write more than, “We need more/less nurses.”)
What is the Significance of the variance? If you believe you need more staff, what will be your
rationale for making this requires? If you have too many staff, what would your proposal be for
bringing your staffing into a better balance? Your responses need to have detail and substance.
C. What are the implications for the Nurse Manager? As an example, based on your conclusions
in Section B, what other observations would you make as you review your total budget and what
would you expect to see as a result? (Ex: supply costs; overtime hours, average census of 50
on a 60 bed unit, etc.)
©2020 University of Texas at Arlington
Page 5 of 6
N4455 Nursing Leadership and Management
4. You have set two new goals for your unit for the next year related to personnel:
• Provide stronger unit management support on evening and night shifts and in the absence of the
manager.
• Correct unfavorable efficiency variances due to overtime.
To accomplish these goals, you plan to make these changes:
• Add 1.0 RN FTE position
• Eliminate 1.5 LVN positions
• Add 1.5 FTEs NA positions
• Add 1.0 Assistant HN position at $65,000.00/year
Calculate ONLY the cost of the proposed recommendations for 3 West. Compute totals for each
column. If the change represents a reduction in the budget for that category, record the total as a
negative number. If it represents an increase in the budget for that category, record the total as a
positive number.
Positions
FTEs
Salary
Hours
Salary
Subtotals
RN
1
LVN
-1.5
NA
1.5
AHN
1
65000.00
XXXXX
Totals
2
XXXXX
XXXXX
Benefits
Total
5. Assume your proposal was approved. Calculate the new personnel budget (You will use your
budget from question 2 and account for the changes you requested in question 4). Compute totals
for each column.
Positions
FTEs
Salary
Hours
Manager
1
XXXXX
AHN
1
XXXXX
Salary
Subtotals
Benefits
Total
RN
LVN
NA
Sec
Totals
XXXXX
©2020 University of Texas at Arlington
XXXXX
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