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March 9, 2017

How Vidant Medical Center invested in nursing, cut turnover—and saved millions per year

Daily Briefing

Editor's note: This popular story from the Daily Briefing's archives was republished on Dec. 11, 2019.

In an exclusive interview for the Daily Briefing, Advisory Board CNO Carol Boston-Fleischhauer spoke with Vidant Medical Center CNO Linda Hofler about how she sold her C-suite on investing nurse retention, helped nurse managers refocus on actually managing, cut new RN turnover in half, and improved the bottom line while ensuring quality and safety.

Linda Hofler, CNO of Vidant Medical Center

Carol Boston-Fleischhauer: Linda, at a time of constrained resources in health care, you were able to convince your board to back a pretty large investment in strategies to recruit and retain nurses. How did you make the case?

Linda Hofler: Our board and C-suite prioritize the stability of the nursing workforce as core to the stability of the organization. Fundamental to that is a decision we've made: If we don't have the employees to staff a bed safely, we won't put a patient in it. For us, a safe bed is one that is staffed right at or above the 50th percentile, depending on the benchmark—and we won't deviate from that, period.

I've demonstrated to our CFO the short-term tradeoffs: If our options are hiring temporary labor or closing a bed, what kind of effects would those moves have on revenue and market share? Our C-suite team initially came to the conclusion that even though temporary labor gives us a higher labor cost, it's still better than closing a bed.

But we don't want to have to chronically rely on temporary labor for all sorts of reasons, so we developed an aggressive plan to replace our roughly 80 travel nurses with core staff by the end of this calendar year, and we've been able to make the case for more investments in recruiting and retaining core staff.

We dug into our data and calculated that every one percent improvement in nurse retention adds about $1 million to our bottom line. So we've been able to impress upon everyone on our board that for us to be financially strong, to be strong in the marketplace, and for us to keep our patients safe and healthy, we've got to have a healthy nursing workforce.

Boston-Fleischhauer: What are some of those specific investments that you've made? And have you seen quantifiable results?

Hofler: I'll answer the second question first: Absolutely. For fiscal year 2016, we had a 4 percent reduction in turnover, which is a $4 million dollar improvement to our bottom line. Through the first quarter of this fiscal year, we're tracking at about an additional 2 percent improvement, which would be another $2 million. And we've also cut our rate of turnover in the first three years of employment from above 50 percent a number of years ago to below 25 percent today.

One key thing we've done is unburden our nurse managers. About three years ago we put them in a room and asked them, "How do you spend your day?" And they told us they didn't have time to talk to people and engage with staff because all they were doing was being in meetings and chasing paper and answering emails. Now we've reassigned some responsibilities—for instance, HR took back leave management and the paperwork process for onboarding and terminations. We needed to free up our managers' time to address the needs of their staff.

At the same time, we've put new expectations on managers to be present with their direct reports in a regular, scheduled way, rather than just doing what our staff called "shift-change drive-by's." We gave managers a one-page document with goals on quality and presence for the year, along with resources to help them get there. We also launched a nursing pride campaign with staff talking about their experiences and the hospital community giving thanks.

In terms of our strategy for new hires specifically, we've had a new graduate nurse residency program in place for a number of years, but more recently we've put more of an effort into ensuring we get new nurses in the right place for their very first job. Previously, we'd try to talk them into starting in a unit they weren't interested in, and we'd see that two months into the orientation they were dissatisfied.

Boston-Fleischhauer: What kind of changes have you made from a data analytics and organizational standpoint to complement those efforts?

Hofler: One big thing we've done is implement predictive modeling to better assess future workforce needs. There are certain cyclical patterns as to when people come and go, both overall and at the unit level. For instance, some nurses are going to come for two years and then go to CRNA school. That's not a bad thing; we just have to plan for it.

We're also able to gather data on factors like who among our nurses is having surgery, who is pregnant, who may take leave under the Family Medical Leave Act, and who's showing signs of flight risk to better assess our workforce needs.

About a year ago, we also moved an executive to a new role on my team—Anna Weaver, who is the vice president of nursing workforce. She's our key leader in mining the data, having constant conversations with unit-based managers, and interfacing with colleges and HR. She's available to go to nurse huddles and staff meetings. Every week, she meets with our administrator group to talk about our workforce needs. Anna makes sure the entire C-suite knows what's going on with the nursing workforce and the impact on broader operations.

Boston-Fleischhauer: As you've invested more in nursing retention, what lessons have you learned that you think other executives should know?

Hofler: One key thing we've learned is that you can never take your eye off the ball, like we did a few years ago. In the summer of 2013, we were sitting pretty. We had positions filled, our turnover at an all-time low of 10 percent, we didn't have any travel labor.

Based on the economy getting better and some retirements that were on the radar, we should have overhired new grads and experienced nurses, and we didn't. We ended up with a shortage, particularly of specialized experienced nurses. So that was a big catalyst for us to make some of the changes we've made.

Another lesson is to always consider how efforts to curb labor expenses can affect turnover. A few years ago, we had a two-year phase-out of a legacy benefit. And HR and nursing didn't do enough to project what that could mean for workforce turnover. So my words of wisdom are whatever you are doing to get your cost structure down, you've got to consider the effects on both finance and workforce in every decision..

Finally, as executives, be ever mindful that an unstable nursing workforce will impact your organization's potential to fulfill its mission, keep beds open to support the community, and will even affect market share over the long term. Nurse retention is not just a problem for the nurse executive; it needs to be a key priority for the entire executive team.

Millennial nurses are a third of our workforce—here’s how to retain them

In 2016, millennials surpassed Baby Boomers as the largest living generation in the United States. As more millennials have entered the nursing workforce, health care leaders have confronted a growing challenge: young nurses are turning over at higher rates than their older peers, especially early in their careers.

Use the strategies and best practices in this study to build a millennial-specific retention strategy for your organization.

Download the Report

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