Complete a cost-benefit analysis to determine the best course of action in a scenario for a staffing shortage.

INTRODUCTION :Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.

In this assessment, you are going to look at decision making in healthcare and explore the cost-benefit analysis of making certain decisions. You will explore the concept of opportunity costs and the consequences of our decisions by identifying what we must sacrifice to choose alternate options. You will examine potential long-term solutions to address staffing shortages and consider how local labor markets and other market factors influence staffing and budgeting. You will weigh all of those variables against the needs of our organization and our patients working in a real-life exercise indicative of problems faced by every healthcare leader currently working in healthcare.

SCENARIO: For this assessment, assume you are the executive director for a for-profit home care agency and you are experiencing a shortage of staff in nursing. You are having to turn away clients because you are not able to provide staff to make the visits. Your task is to complete the cost-benefit analysis to determine what your best course of action is. You are currently short of four full-time nurse positions to meet your current client load. Each full-time nurse position equates to 20 clients per week, with one hour for a visit and one hour for travel and documentation time for each client. This means you will need to reduce by 80 clients per week or add staff. Your current client load for the agency is 160 clients. You have two management nurses that process intakes, manage quality, ensure compliance, and perform audits for pending federal surveys. They are salaried and do not see clients in the home currently.

Your task is to find a long-term solution to your staffing problem. Pick from one of the four categories to focus your efforts:

• Staffing.
• HR benefits.
• Technology/wearable healthcare technology.
• Telehealth.

You have a surplus in a budget line of $1,000,000 dollars to address this issue. You may review the articles in the suggested reading list for this assessment to give you a start. Please offer at least one solution that you would recommend, and the cost-benefit associated with it. Also, please note the solution’s opportunity cost.

PREPARATION: To prepare for this assessment, review the instructions and rubric and the Cost-Benefit Analysis Template [DOCX]. As a best practice, conduct individual research to identify options and academic resources you will use in your cost-benefit analysis document. To help you get started, here is an example of an option in the format of the template.

Example

Option 1: Loan Repayment

Proposal: Offer loan repayment for 3 years of service.

Benefit:

• Increase pool applying for positions.
• Reduce turnover with signed contract of three-year commitment.
• Immediate ability to fill open positions as nurses are already licensed.

Cost:

• 4,000 dollars per nurse over a three-year period adding current loan payment to first paycheck of the month.

Opportunity Cost:

• To recruit the four nurses needed would cost 16,000 dollars total. That would then preclude the purchase of the telehealth option as that option would utilize the entire 100,000 dollars surplus budget; however, this option would allow for a combination of other solutions to be used as well, as there would be money left over.

Detailed Explanation:

My reason for choosing scholarship repayment is because it allows for the immediate recruitment of nurses to our organization. This option can be handled as bonus payment, so as not to require extensive contracts with universities or community colleges themselves. It fills our immediate need quickly, but also commits the employee to a minimum term of three years with our organization that will also reduce our turnover and give us a chance to get ahead of the nursing shortage. There are several drawbacks to this plan however.

One is that our current nurses may also have outstanding loans and may feel slighted that their loyalty is not being rewarded with the loan repayment option. This could lead to a morale and company culture issue, ultimately resulting in the turnover of current nursing staff due to hard feelings. This may require the option to repay loans of the current staff, which may cost an additional 50,000 dollars depending on how many current nurses would wish to participate. This option also could be difficult to enforce should the new recruits decide not to stay. Obtaining repayment may prove burdensome and cost more in legal fees to recover than would actually be recovered. However, based on our research, this is something that new nurses are seeking in their employment and is a benefit that other organizations are not offering, which sets us apart and makes us an attractive place to work. That benefit coupled with the option to use the balance of surplus budget for other recruitment efforts makes this an option that we would like to pursue.

References

McGurran, B., & Young, J. (2022). Student loan forgiveness for healthcare workers. Forbes Advisor. https://www.forbes.com/advisor/student-loans/loan-forgiveness-healthcare-workers/

Fox, A. (2022). Student loan forgiveness for healthcare IT workers. Healthcare IT News. https://www.healthcareitnews.com/news/student-loan-forgiveness-healthcare-it-workers

ADDITIONAL REQUIRMENTS: Your assessment should also meet the following requirements:

• Written communication: Be sure that your document is clear, logical, and succinct. It also needs to be free of errors that detract from the overall message.
• Length: 3–4 typed, double-spaced pages as noted in the template
• Font and font size: Use Times New Roman, 12 point.
• Title page: Include a title page in APA format as part of your summary.
• Citations and references: Include references to a minimum of two current scholarly and/or authoritative sources. Current means no more than five years old.
• APA format: Use APA format for the title page, summary, citations, and references. For an APA refresher, review the Evidence and APA section of the Writing Center.

COMPETENCIES MESURED: By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and rubric criteria:

• Competency 1: Develop financial strategies to address dynamic environmental forces.
  • Summarize a potential solution for stakeholders to consider for a given issue or need based on a cost-benefit analysis.
• Competency 2: Analyze the cost and revenue implications for organizational changes due to environmental forces.
  • Analyze the cost and benefits, and opportunity cost to address a staffing shortage in a healthcare organization.
  • Explain how the concept of opportunity cost is applied in a cost-benefit analysis.
  • Explain how a cost-benefit analysis aligns with organizational needs and future growth.
• Competency 4: Communicate in a manner that is scholarly, professional, and consistent with expectations for professionals in health care administration.
  • Write content clearly and logically with the correct use of grammar, punctuation, and mechanics.
  • Format citations and references using the APA style.