Nurse 'productivity': not repeating mistakes of the '90s

1 November 2012

The past two decades have drawn on factory theory to measure and improve nurse productivity. FIONA CASSIE talks to Nicola North about the need to take a ‘big picture’ systems approach to ensure the mistakes of the 1990s are not repeated.

Over and over again, you can see the same pattern when health budgets tighten, says Nicola North. Nurses - as the single largest budget item on the hospital payroll - are seen as an easy target when a budget is squeezed.

Nurses are the ones that are often not replaced, substituted with cheaper alternatives, or encouraged to improve productivity using manufacturing innovations like ‘lean thinking’.

“Looking at our history, the last 20 years particularly shows that this does happen in a cyclical manner. Nursing as a workforce is put under considerable pressure to reduce costs, people become demoralised and leave, shortages come in, patient outcomes worsen,” says North.

North says in the 1990s, increasing ‘productivity’ by cutting nursing costs impacted negatively on patient safety, nurse outcomes, and morale. The more recently popular approach of improving productivity by increasing efficiency (like the “productive ward” or reconfiguring nursing teams) also has its limitations. A third and most recent approach to increasing productivity has been ‘healthy workplace’ approaches, which link good working environments and job satisfaction with improved patient outcomes.

With signs the cycle of the 1990s may be under way again, and the sector under increasing pressure to contain, if not cut, costs, North says it is time for nursing leaders to be seeking a dynamic, multi-faceted approach to measuring and promoting nursing productivity, because while nursing turnover may be low now as the recession lingers, the ageing nursing workforce remains “a little like a ticking time bomb”, ready to blow.

She believes nursing should be aspiring for a “big picture” systems approach model of nursing productivity that views nurses as intellectual assets not just labour units, that looks to the long-term implications for patient outcomes and nurse retention, and thinks beyond the acute hospital model to other sectors like aged care and mental health.

“Looking at it [nursing productivity] in its complexity rather than trying to simplify it.”

Mistakes of the past

Recently, North, an University of Auckland associate professor, was lead author of an article written with former New Zealand chief nurse and now Queensland chief nurse Dr Frances Hughes that looked at a systems approach to nursing productivity (see reference below).

In the article, the pair argue that nursing productivity strategies in recent decades have been driven by economic and management theories “and for nurse managers and clinical nurse leaders to understand and apply these theories is a particular challenge.”

Using the language of labour units, the health reforms and restructuring of the 1990s saw public hospital nursing productivity ‘improve’ because the ‘inputs’ (medical and surgical nursing hours) decreased at the same time as ‘outputs’ (patient turnover) increased.

But research reports also highlight the negative impacts of that decade with workloads increasing, pay stagnating, nursing leadership lost, and deteriorating working conditions resulting in a demoralised workforce, high turnover, nursing shortages, and a decline in interest in nursing as a career.

Pay was boosted again by the 2004 “fair pay” deal, negotiated by the New Zealand Nurses Organisation for public hospital nurses. But Treasury reported in 2005 its concerns that hospital efficiency had declined because while hospital ‘outputs’ had risen, so had the cost per labour ‘input’. And the ‘output’ per ‘input’ had declined.

So how can nursing productivity improve if the 1990s had shown that containing and cutting nursing costs is not the answer? North and Hughes say the next productivity focus was on using factory style “lean thinking” to redesign processes to ‘release’ nursing time to direct patient care. Or to ‘reconfigure’ nursing teams so they had the most ‘productive’ mix of nursing skills and unregulated carers. But these also have their limitations, and some research indicates that substituting nurses with unregulated staff can be counterproductive rather than more productive.

The latest research approach has been to look at the links between nurses’ working environment and productivity. Studies have shown that reducing nurse burnout and turnover and improving working conditions - for example, meeting the characteristics of a Magnet hospital - has a positive impact on patient outcomes and nurse retention, which improves productivity.

The pair say this shift – from regarding the nurse as a labour unit to the nurse as an individual professional interacting with their working environment – reflects a systems approach to increasing nursing productivity.

‘Big picture’ model for future

What North is advocating is building a broader systems approach to measuring productivity that does not focus on a single facet but recognises the complexity of nursing’s impact and influence on the rest of the health professional team, the organisation they work for, and the health of the patients they care for.

She says there is always a place in such a model for examining closely whether you are properly managing and allocating your nursing resources. “That’s responsible use of scarce resources.” It is also important to look at processes to ensure time was not being wasted.

But North and Hughes envisage a systems model taking a big picture approach with three broad elements.

The first element builds on the idea that nursing is knowledge-based work, so nursing is seen as a capital asset to an organisation not a labour cost. This would require developing a way of measuring the intellectual capital of nurses as a primary ‘input’ to both an organisation’s nursing workforce and the wider organisation.

The next element would be developing ways to best manage that nursing knowledge in the workplace. The pair see the Safe Staffing Healthy Workplace Unit as an innovative response by nurses’ union NZNO and public sector hospitals to looking at how the working environment can both support staff wellbeing and hospital efficiency. Also needed are ways to measure and make visible nursing’s ‘intellectual capital’ at work, including usually invisible nursing work like supervising other staff and working with patients’ families.

The third and final broad component of the proposed systems approach is measuring nurse productivity through nursing outcomes that are currently seldom included in productivity calculations. These include productivity loss through work-related illness and injury, absenteeism, ‘presenteeism’, and turnover. Also, the wide range of nurse-sensitive patient outcomes that can be measured and used positively, not punitively, to gauge if more support and resources are needed.

There are also more hard-to-measure outcomes like managing pain, cultural safety, improved self-management, and support to quit smoking. Even more elusive to measure is the impact of nursing on overall health systems, like reduced demand on health services and improved quality of care. This third broad component would also require a ‘feedback loop’ to enable managers to make informed decisions on nursing resources without “creating unintended consequences for the nursing workforce and patient outcomes”.

Leaders must advocate against downsizing

North is aware that developing a working model of such approach is aspirational. It not only needs more research and evidence but also a culture change in the health sector for nurses to be seen as a capital asset rather than a flexible and ‘downsize-able’ labour cost.

She believes taking a wider systems approach is the way to go, even if it takes time and the benefits are not fully felt until the next generation of nurses.

Meanwhile, as the pressure comes on once again for nursing management to contain or reduce the nursing payroll, she says it is very much the role of nursing leadership to remember the 1990s and advocate for the big picture, long-term impact of putting the squeeze on the nursing workforce.

She says the one thing that makes her more optimistic this time round is that there are actually directors of nursing – unlike the 1990s when a gutted nursing workforce was left without a voice at the top to advocate for them. “Nursing is in a much better place now to take on that [advocacy] role.”

Nicola Henri North & Frances Hughes, (2012),”A systems approach to nursing productivity”, Journal of Health Organization and Management, Vol. 26 Iss: 2