Discussion 04.2: Indirect and Direct Cost
crtshhill58
9781284118308_SLID_CH10.pptChapter 10: Staffing: Methods, Operations, and Regulations
Staffing Requirements
- In Health Care, many positions must be filled, or covered, 7 days a week, 24 hours a day.
Productive and
Non-Productive Time (1 of 3)
Why annualize?
- Employees are paid for more hours than the hours they are on duty (vacation days, etc.)
- Annualizing allows the full cost of the position to be computed through a “burden” approach.
Productive and
Non-Productive Time (2 of 3)
- Productive Time: Represents the employee’s net hours on duty when performing the functions in his/her job description.
- Non-Productive Time: Represents the paid-for time when the employee is not on duty and not performing his/her job description functions.
- Includes paid-for vacation days, holidays, personal leave days, and/or sick days
Productive and
Non-Productive Time (3 of 3)
Exhibit 10-1 illustrates:
- Productive Time—net days when on duty
- Non-Productive Time—additional days paid for but not worked
FTEs for Annualizing
Staff Positions (1 of 2)
FTE Definition for purposes of understanding annualizing positions:
- The equivalent of one full-time employee paid for one year, including both productive and non-productive time
- Two employees working half-time for one year would be the same as one FTE
FTEs for Annualizing
Staff Positions (2 of 2)
- The calculations to annualize staff positions is a two-step process:
Compute the net days worked.
Convert the net paid days worked to a factor.
(See Exhibit 10-2 as an example.)
Number of Employees Required to
Fill a Position (1 of 3)
- Why calculate by position?
- Computing by position is used in controlling, planning, and decision-making.
- The scheduled position method is often used when forecasting new programs and services.
- You will also find scheduling software using this method.
Number of Employees Required to
Fill a Position (2 of 3)
FTE definition for purposes of filling a scheduled position:
- A factor expressing the number of employees required measured against, or the equivalent of, one full-time employee’s standard work week.
Number of Employees Required to
Fill a Position (3 of 3)
The calculation to fill scheduled positions is as follows:
- Compute the number of hours for a full-time position filled for one year. This measure is the baseline.
- Compute a factor representing the position to be filled for the required number of days (a required seven-day week to cover, for example, versus a five-day work week equals a factor of 1.4).
(See the cast room example in the text.)
Tying Cost to Staffing (1 of 6)
- In the case of the annualizing method, the cost of nonproductive days is already in the formula.
So…
- Multiply the factor times the base hourly rate to compute cost.
(Study the example in the chapter.)
Tying Cost to Staffing (2 of 6)
- In the case of the scheduled position method, the base rate must be increased, or burdened, by the nonproductive time.
- First, increase the hourly base rate by a percent or factor that represents the nonproductive time. Then multiply the burdened based rate by the factor to compute the cost.
- Then, multiply the factor times the base hourly rate to compute the cost.
(Examine the examples in the chapter.)
Tying Cost to Staffing (3 of 6)
- The actual cost is attached to staffing in the books and records
- Using…
- a subsidiary journal and
- a basic transaction record
(Both of which are more fully described in another chapter.)
Tying Cost to Staffing (4 of 6)
- An example of a subsidiary journal is the Payroll Register illustrated in Exhibit 10-5.
Tying Cost to Staffing (5 of 6)
- An example of a basic transaction record is the time card illustrated in Exhibit 10-6.
(Of course this time card format will probably be computerized.)
Tying Cost to Staffing (6 of 6)
- In summary, hours worked and pay rates are essential ingredients of staffing plans, budgets, and forecasts
- Appropriate staffing is the responsibility of the manager.
Staffing Regulatory Requirements
- The IMPACT Act’s Staffing Report Requirements:
- Regulatory specifics about staffing reports
- Additional reporting requirements
- Funds provided for report implementation
Staffing Regulatory Requirements
- State Certificate-of-Need (CON) Laws and Requirements:
- Health planning background
- Certificate-of-need programs
- How CON-related regulations affect staffing
Courtesy of J.J. Baker and R.W. Baker, Dallas, Texas
Calculation for Annualizing
Master Staffing Plan Example
| Step 1: Compute Net Paid Days Worked Total Days in Business Year Less two days off per Week Number of Paid Days per Year | RN 364 104 260 | LPN 364 104 260 | NA 364 104 260 |
| Less Paid Days Not Worked: Holidays Sick Days Vacation Days Education Days Net Paid Days Worked | 9 7 15 3 226 | 9 7 15 2 227 | 9 7 15 1 226 |
Calculation for Annualizing
Master Staffing Plan: Example
Step 2: Converting Net Paid Days Worked to a Factor
RN
LPN
NA
364
226
=
1.6106192
364
227
364
228
=
=
1.6035242
1.5964912
FTEs to Annualize Staffing:
Assignment Exercise 10-1
| Compute Net Paid Days Worked | Laboratory | Medical Records |
| Total Days in Business Year Less Two Days off Per Week Number of Paid Days Per Year | _________ _________ _________ | ________ ________ ________ |
| Less Paid days Not Worked | ||
| Holidays Sick Days Education Days Vacation Days Personal Leave Days | _________ _________ _________ _________ _________ | ________ ________ ________ ________ ________ |
| Net Paid Days Worked | ________ ________ | _______ _______ |
| Covert Net Paid Days Worked to a Factor: For the Lab. Total days in business year divided by net paid days worked = factor _______________ For Medical Records Total days in business year divided by net paid days worked = factor _______________ |
| Compute Net Paid Days Worked | Laboratory | Medical Records |
| Total Days in Business Year Less Two Days off Per Week Number of Paid Days Per Year | 364 104 260 | 364 104 260 |
| Less Paid days Not Worked | ||
| Holidays Sick Days Education Days Vacation Days Personal Leave Days | 9 7 3 15 0 | 9 0 0 0 21 |
| Net Paid Days Worked | 34 226 | 30 230 |
| Covert Net Paid Days Worked to a Factor: For the Lab. Total days in business year divided by net paid days worked = factor 364/226 = 1.610619 For Medical Records Total days in business year divided by net paid days worked = factor 364/230 = 1.582609 |
FTEs to Fill Position
Example (Exhibit 10-4): 8-Hour
| Emergency Department Scheduling for Eight-Hour Shifts: | |||||
| Shift One Day | Shift Two Evening | Shift Three Night | = | 24-Hour Scheduling Total | |
| Position: Emergency Room Intake | 1 | 1 | 1 | = | Three Eight-Hour Shifts |
| Staff needed to cover position 7/24 | 1.4 | 1.4 | 1.4 | = | 4.2 FTEs |
| One full-time employee works 40 hours per week. One eight-hour shift per day times seven days per week equals 56 hours on duty. Therefore, to cover seven days or 56 hours requires 1.4 times a 40-hour employee. |
FTEs to Fill a Position:
Practice Exercise 10-2: 8-Hour
| Scheduling for Eight-Hour Shifts: | |||||
| Shift One Day | Shift Two Evening | Shift Three Night | = | 24-Hour Scheduling Total | |
| Position: Admissions Officer | 2 | 1 | 1 | = | Four Eight Hour Shifts |
| FTEs to cover position equals | 2.8 | 1.4 | 1.4 | = | 5.6 |
| Position Clerical | 1 | 0 | 0 | = | One Eight Hour Shift |
| FTEs to cover position equals | 1.4 | 0 | 0 | = | 1.4 |
FTEs to Fill a Position:
Assignment Exercise 10-2: 8-Hour
| Scheduling for Eight-Hour Shifts: | |||||
| Shift One Day | Shift Two Evening | Shift Three Night | = | FTEs Seven Day Week | |
| Position: Nursing Supervisor Technician Nurses Clerical Aides | 2.8 2.8 4.2 1.4 1.4 | 1.4 2.8 2.8 0 0 | 1.4 1.4 2.8 0 0 | = | 5.6 7.0 9.8 1.4 1.4 |
| Total FTEs needed to cover all shifts | 25.2 |
FTEs to Fill a Position:
Example: 12-Hour Shifts
| Emergency Department Scheduling for Twelve-Hour Shifts: 36-Hour Week | ||||
| Shift One | Shift Two | = | 24-Hour Scheduling Total | |
| Position: Emergency Room Intake | 1 | 1 | = | Two Twelve Hour Shifts |
| Staff needed to cover position 7/24 | 2.33 | 2.33 | = | 4.66 FTEs |
| One full time employee works 36 hours per week. One twelve-hour shift per day times seven days per week equals 84 hours on duty. Therefore, to cover seven days or 84 hours requires 2.33 times a 36-hour employee. |
FTEs to Fill a Position:
Assignment: 12-Hour Shifts
| Scheduling for Twelve-Hour Shifts: 36 Hour Week | ||||
| Shift One | Shift Two | = | FTEs Seven Day Week | |
| Position: Nursing Supervisor Technician Nurses Clerical Aides | 4.66 2.66 7 1.4 2.33 | 2.33 4.66 4.66 0 0 | = | 7 9.33 11.66 1.4 2.33 |
| Total FTEs needed to cover all shifts | 31.75 |
FTEs to Fill a Position:
Example: 12-Hour Shifts
| Emergency Department Scheduling for Twelve-Hour Shifts: 48-Hour Week | ||||
| Shift One | Shift Two | = | 24-Hour Scheduling Total | |
| Position: Emergency Room Intake | 1 | 1 | = | Two Twelve Hour Shifts |
| Staff needed to cover position 7/24 | 1.75 | 1.75 | = | 3.5 FTEs |
| One full time employee works 48 hours per week. One twelve-hour shift per day times seven days per week equals 84 hours on duty. Therefore, to cover seven days or 84 hours requires 1.75 times a 48 hour employee. |
FTEs to Fill a Position:
Assignment 12-Hour Shifts
| Scheduling for Twelve-Hour Shifts: 36-Hour Week | ||||
| Shift One | Shift Two | = | FTEs Seven Day Week | |
| Position: Nursing Supervisor Technician Nurses Clerical Aides | 3.50 3.50 5.25 1.4 2.33 | 1.75 3.50 3.50 0 0 | = | 5.25 7 8.75 1.4 2.33 |
| Total FTEs needed to cover all shifts | 24.73 |
