Nursing budget blow-outs

8 February 2017

Increased patient demand and untaken annual leave contributed to some district health board's nursing budgets blowing out last year, according to nursing directors. More at-risk patients requiring 1:1 watches and shorter patient stays were also contributing to pressure on nursing budgets, the directors of nursing told Nursing Review.

Their comments were in response to a Ministry of Health report showing that nursing hours had been under-budgeted by the equivalent of 474 fulltime equivalent (FTE) nursing personnel across the 20 DHBs, according to the boards' interim financial results for 2015-16. (N.B. Nursing personnel FTEs and budgets include nurses, midwives and health care assistants.)

The report also showed that total staff costs across all the 20 DHBs were $144 million higher than budgeted for, with higher than expected patient volumes and/or nursing costs reported to have contributing substantially to that blowout.*

Nursing Review approached seven district health boards (including the six largest) for more details and comment on their 2015-16 nursing budgets in September, shortly after the release of the Ministry report on the DHBs' unaudited financial performance. The sixth of the seven DHBs approached, Canterbury DHB, has just released the information to Nursing Review under the Official Information Act (OIA).

Margaret Dotchin, chief nursing officer for Auckland DHB's nearly 3,500 FTE nursing staff, says its nursing personnel budget was overspent by six per cent last year for a number of reasons but was largely driven by higher patient volumes than budgeted for. She says matching the "right nursing resource to the right place at the right time" has been met through balancing its permanent staff with nursing bureau staff where required.

The Ministry report said that Auckland reported that "high usage" of bureau nurses was one of the primary reasons for ADHB's total personnel costs (including medical, allied health and other staff) being overspent along with reevaluating employee entitlements like long-service leave.

Overtime due to increased presentations at ED, high acuity admissions and shorter length of stays was one contributing factor to Waikato DHB overspending its nursing budget by $1.8 million in 2015-16, says chief nursing officer Sue Hayward. "There was an increased number of discharges against planned which is an indicator of the increased throughput of patients in the wards."  She says it is still examining its acuity data but acuity levels seemed to be similar to the previous year and the shorter length of stay of patients appeared to having more of an impact on the nursing HPPD (hours per patient day) required than the patient acuity.

Hayward says that Waikato had also budgeted and expected for more annual leave to be taken by its nursing staff then had eventuated and the budget had also assumed that vacancies would not be filled as quickly as they had. "While the nursing budget is overspent, what should be acknowledged is the amazing work the charge nurse managers do to ensure that the nursing resource is matched in a timely way to patient need and demand," she says.

Higher patient volumes and the greater use of 1:1 patient watches contributed to Counties Manukau Health's nursing personnel FTE being 3.5 per cent above budget in 2015-16.

Director of nursing Denise Kivell says it had set an "ambitious but considered" nursing budget and, while overall the DHB had delivered on budget, the nursing FTE was 92 above the budgeted for 2589 FTEs. She says the increase is mainly due to higher patient volumes and acuity requirements together with growth in new models of care, particularly in community. Kivell adds that the changing profile of the population and resulting increase in emergency care visits is impacting on staffing levels along with people now presenting with multi-factor diseases, for example diabetes, obesity, renal and skin infections.

A significant factor in higher bureau demand for health care assistants (HCAs) was the greater use of 1:1 patient watches for older and frail patients at risk of harm or disorientation.

Accumulated annual leave and an increased usage of patient watches also contributed to Capital & Coast DHB's nursing budget being $5.4 million (3.2 per cent) over budget in 2015-16. Andrea McCance, executive director of nursing, says that factors include annual leave balances being higher than the previous year, NZNO MECA pay increases, and increased penal costs due to statutory holidays (including the Monday-isation of Waitangi Day), along with increases in overtime and patient watches.

Waitemata, Waikato, Wairarapa and West Coast DHBs were the only DHBs to have budgeted for more nursing personnel FTEs than they actually employed in 2015-16.

Waitemata DHB director of nursing Jocelyn Peach says the DHB's overspend for total personnel costs were due to exceeding elective surgery targets and higher than anticipated acute demand volumes. "Despite this, Waitemata DHB was actually under budgeted FTE overall and for nursing we were 12 FTE under across the year," said Peach. A DHB spokesperson also adds that the nursing personnel expenditure is within budget and the DHB is one of only a few around the country to post a surplus in 2015-16. 

The biggest variance between budgeted and actual nursing personnel is 8.8 per cent at Bay of Plenty DHB, which ended up with 95 FTE above its budgeted for 1,069 FTEs. The Ministry report said that the DHB reported that its overall personnel costs (not just nursing) were above budget due to higher than budgeted levels of both personnel and "outsourced" (bureau) personnel, which had been driven primarily by a very high acute workload at both Tauranga and Whakatane hospitals.

Carolyn Gullery, the planning and funding general manager of Canterbury DHB, says in the DHB's OIA response that the interim results for 2015-16 show that the DHB slightly underspent its $273 million budget for nursing personnel. The DHB, which employs the highest number of nursing personnel of the 20 DHBs – did employ 49 more FTEs (1.3 per cent) more than the budgeted-for 3,639 FTEs, which Gullery says could be attributed to a different staff mixed used for setting the budget. It has slightly overspent its bureau/temporary nursing staff budget of $2.8 million by $0.48 million but, when combined with the slight surplus in the nursing personnel budget, that had lead to a small overspend of 0.08 per cent. 

*N.B.: All but one of the boards overspent their personnel budgets but overall eight of the 20 DHBs looked likely to manage a break-even or better result for the 2015-16 year. The combined bottom line for all 20 DHBs was estimated to be $54 million in the red – $35.2 million worse than budgeted for.


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