Magazine article Nursing Economics

New Graduate Nurse Residency Program: A Cost-Benefit Analysis Based on Turnover and Contract Labor Usage

Magazine article Nursing Economics

New Graduate Nurse Residency Program: A Cost-Benefit Analysis Based on Turnover and Contract Labor Usage

Article excerpt


* A cost-benefit analysis was conducted to assess the economic outcomes of a new graduate registered nurse (NGRN) residency program utilizing turnover rate and contract labor usage data from a multi-site health care corporation.

* Secondary data analysis of NGRNs (n=524) was conducted including descriptive and step-wise regression analyses.

* Findings indicated a new graduate residency program was associated with a decrease in the 12-month turnover rate from 36.08% to 6.41% (p<0.05) and reduction in contract labor usage from $19,099 to $5,490 per average daily census (p<0.05).

* These cost-benefit analyses suggest net savings between $10 and $50 per patient day when compared to traditional methods of orientation.

* A NGRN residency program offers a cost-effective innovative approach and should be valued as an investment as opposed to an expense.

NEW GRADUATE REGISTERED nurses (NGRNs) face many challenges including role transition, high performance expectations in an increasingly higher-acuity environment, and an increased level of accountability as it relates to nursing quality indicators. New graduate registered nurses and nursing leaders have identified NGRNs as ill prepared to meet the demands of today's health care expectations (Reinsvold, 2008). In the face of such a serious problem, a residency program post-graduation offers a solution to both nursing leaders and NGRNs (Beecroft, Kunzman, & Krozek, 2001). The costs associated with a nursing residency program can seem prohibitive for community based-hospitals as compared with a traditional orientation program. The purpose of this study was to conduct a costbenefit analysis of a nursing residency program utilizing turnover rate and contract labor usage.

Experiences of New Graduate Registered Nurses

Today's health care environment is characterized by both a nur sing shortage (Buerhaus, Staiger, & Auerbach, 2008) and financial instability created by continuous declines in cost reimbursement (Zelman, McCue, & Glick, 2009). This environment may create pressure for nurse leaders to decrease the new graduate orientation and on-boarding period to address financial budgetary concerns related to the costs associated with non-productive time. The health care environment is also characterized by a decreas ed length of stay for patients, in creased patient acuity, and complex technology (Reinsvold, 2008).

Recent studies have showed NGRNs make up approximately 10% of the nursing workforce in acute care settings (Berkow, Virkstis, Stewart, & Conway, 2009). They encounter serious difficulties with transition into their new role (Dyess & Sherman, 2009; Pellico, Brewer, & Kovner, 2009), although the phenomenon of reality shock has been acknowledged for decades (Kramer, 1974). These patterns suggest NGRNs require a comprehensive introduction into the registered nurse (RN) role. A NGRN residency program shows significant potential as a form of orientation (Krozek, 2008). Charac - teristics of a residency program include standardization of curriculum and competencies, practical application of knowledge, a support system, rigorous evaluation, and continuous improvement (Krozek, 2008). The NGRN residency program implemented for this study included didactic direct instruction, case studies, clinical immersion, structured mentoring and debriefing, looping to related departments, and competency validation (see Table 1). Patients require competent nursing care, and a residency program for NGRNs can produce NGRN competency (after 18 weeks of residency) equal to or higher than nurses in a comparison group with 17 months of experience (Ulrich et al., 2010; Versant, 2008).

Previous studies indicate NGRNs are unprepared to assume multiple professional responsibilities upon graduation (Del Bueno, 2005; Dyess, & Sherman, 2009; Pellico et al., 2009). Berkow and colleagues (2009) found only 10% of nurse executives believed NGRNs are competent to deliver care. …

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