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THE COST OF TURNOVER : Advancing Excellence Campaign Washington, D.C. (September 27, 2011)

THE COST OF TURNOVER : Advancing Excellence Campaign Washington, D.C. (September 27, 2011). Nicholas G. Castle, Ph.D. CastleN@Pitt.edu. INTRODUCTION:. Introduction From ivory tower (in PA) Tell you what you already know! Resident-to-resident abuse Patient Safety Culture

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THE COST OF TURNOVER : Advancing Excellence Campaign Washington, D.C. (September 27, 2011)

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  1. THE COST OF TURNOVER: Advancing Excellence Campaign Washington, D.C. (September 27, 2011) Nicholas G. Castle, Ph.D. CastleN@Pitt.edu

  2. INTRODUCTION: • Introduction • From ivory tower (in PA) • Tell you what you already know! • Resident-to-resident abuse • Patient Safety Culture • Agency staff use • Worker injuries • Quality of care • Deficiency citations • Leadership • TURNOVER (TODAY)

  3. INTRODUCTION: Introduction / Conclusion Bottom line Need less turnover Turnover influences quality (Men’s Health: Research stating the obvious!) More “refined” message(s) Others need to understand importance of turnover Many costs associated with turnover

  4. INTRODUCTION: What to expect! Research (what we know about turnover) Format (information) No formula No prescription Some advice AND Thank You! >20,000 surveys (10 years) Provide Some Feedback

  5. INTRODUCTION: Research Sponsor The Commonwealth Fund Staff Assist http://www.crhc.pitt.edu/StaffAssist/ CAHPS Survey (Satisfaction) U. Pitt Research Network

  6. TOP MANAGEMENT TURNOVER: How Much Turnover? (Study 1): TOP MANAGEMENT TURNOVER Administrators, average turnover rate of 43% per year. Directors of Nursing, average turnover rate of 39% per year. In most facilities one member of top management leaves every year. Some facilities had 6 NHAs or 6 DONs in one year. Primary data from surveys of approx 3,000 top managers (2005, 2007, 2009)

  7. TOP MANAGEMENT TURNOVER: How Much Turnover? (Study 1): TOP MANAGEMENT TURNOVER More Details NHA / DON probability of remaining in same position for 3 years < 33% Administrators, average turnover rate of 43% per year. Facilities with stable (>2 year tenure) NHA and DON = 23%. Facilities with “excess” turnover (>4 NHA and/or DON) = 19%

  8. Retired 23 (3%) Retired 28 (4%) Retired 33 (4%) Retired 37 (5%) OTHER NH 86 OTHER NH 91 OTHER NH 106 OTHER NH 90 NHAs NHAs (12%) NHAs (12%) NHAs (14%) (12%) SAME FACILITY SAME FACILITY 357 SAME FACILITY 272 SAME FACILITY Cohort of 748 NHAs 618 NHAs (82%) 502 NHAs (67%) NHAs (48%) NHAs (36%) NOT WORKING IN NOT WORKING IN NOT WORKING IN NOT WORKING IN LTC 27 NHAs LTC 21 NHAs (3%) LTC 23 NHAs (3%) LTC 20 NHAs (3%) (3.6%) Time 0 6 months 1 year 1.5 years 2 years Setting: 6 states, randomly chosen participants TOP MANAGEMENT TURNOVER: Where do you go?

  9. TOP MANAGEMENT TURNOVER: Where do you go?

  10. TOP MANAGEMENT TURNOVER: Where do you go? • Some questions of importance: • Retire • Reasons • Other nursing homes • Why • Other LTC facilities • Same facility • Why • Not working in LTC • Why • Good / bad

  11. TOP MANAGEMENT TURNOVER: Why do you leave? • Able to answer some important questions • DEFICIENCY CITATIONS? • Some association • (fired or quit?) • Stronger over time (performance matters) • Not so much with NHC QMs • DON • Less able to work in acute care? • Not true, frequent moves • Influence of age

  12. TOP MANAGEMENT TURNOVER: Why do you leave? • Examine: • Levels of job satisfaction • SAME FACILITY • Most satisfied with rewards, work skills, coworkers, work load • Least satisfied with work demands • OTHER NURSING HOME • Most satisfied with rewards and work skills • Least satisfied with work demands, coworkers, and work load • NOT WORKING IN LTC • Most satisfied with rewards • Least satisfied with work skills, work demands, coworkers, and work load

  13. TOP MANAGEMENT TURNOVER: • What Helps? (Study 2): • THE EFFECTS OF TOP MANAGEMENT PROFESSIONAL DEVELOPMENT ON ADMINISTRATOR TURNOVER • Examines characteristics associated with professional development of the top management team and administrator turnover. • Primary data from 406 nursing homes. • Professional development lowers turnover rate (assumes lower top management turnover is important).

  14. Impact of Education of Nursing Home Administrators on Quality Jessica Furnier & Nicholas CastleDepartment of Health Policy and Management, Graduate School of Public Health, University of Pittsburgh. Objective Results Discussion To determine the relationship between education level of Nursing Home Administrators (NHAs) and quality of care. A total of 4,003 NHAs returned the demographics and job characteristics survey, giving a response rate of 67%. The response rate varied little across the states, and in general, most items on the questionnaire were answered. Four Quality Measures were examined in this investigation (restraint use, inadequate pain management, and two measures for pressure sores). Prior research identified these Quality Measures to be sensitive to top management characteristics. We find ALL four of these measures to be positively associated with NHA education.  As the average age of the elderly increases, the complexity of care provided in nursing homes will rise, and additional educational preparation may prove to be critical to meet these ever increasing demands. Introduction As noted in the Institute of Medicine’s 2001 report, nursing home quality is poor. Research indicates an association between organizational performance and characteristics of top management in a variety of industries, including healthcare. The influence of top managers of nursing homes (i.e., NHAs), has been demonstrated by recent research linking high NHA turnover to deficiency citations and poor resident quality of care (Castle, 2005). Research in other industries has shown that education is positively associated with organizational commitment. Higher levels of education have also been associated with increased performance (Chevalier, 2004). We hypothesize that a higher educational background of NHAs will be associated with better quality of care. Table 1 shows increased education is positively associated with better quality of care. Table 1: Results Examining the Influence of Education on Nursing Home Quality Indicators Public Health & Policy Impact  3.5 million elders per year receive care in nursing homes.  Much of this care is sub-standard and can cause harm (Almost all facilities received citations in 2008).  Each state has minimum requirements for licensure (which includes education levels). States have extensive latitude in their licensure requirements.   Increasing minimum education levels may improve management and in turn, improve quality. Significantly, the point estimates show that moving NHA education levels from a High School Diploma to a Bachelors degree would be associated with:  45% reduction in Physical Restraint Use.  40% reduction in residents with Moderate to Severe Pain.  27% reduction in incidence of Pressure Sores in Low-Risk Residents.  24% reduction in incidence of Pressure Sores in High-Risk Residents. Methods and Materials Educational data: Collected via mail survey with follow-up reminder postcards. (6,000 mailed; 4,003 returned) Additional data collected: gender, age, race, and tenure. Quality data:  Obtained from Nursing Home Compare  Measures included: restraint use, inadequate pain management, and two measures for pressure ulcers. Analysis: Linear regression analyses used to examine the association of education with quality measures. Future Directions Examine the impact of:  Minimum state training requirements on quality NHA and Director of Nursing Experience on quality Continuing education on quality References Abt Associates Inc (2004). National Nursing Home Quality Measures: User’s Manual. Cambridge, MA: Abt Associates. Retrieved August 25, 2010 http://www.cms.hhs.gov/NursingHomeQualityInits/35_NHQIArchives.asp#TopOfPage Chevalier, A., Harmon, C., Walker , I. and Y. Zhu, 2004, “Does Education Raise Productivity, or just Reflect It?”, Economic Journal, Vol. 114, F499-517. Castle, N.G. (2005). Turnover begets turnover. The Gerontologist, 45, 186-195.

  15. TOP MANAGEMENT TURNOVER: So What? (Study 3): ADMINISTRATOR TURNOVER AND QUALITY OF CARE IN NURSING HOMES Study Administrator turnover is associated with a higher than average proportion of residents who were catheterized had pressure ulcers were given psychoactive drugs and with a higher than average number of quality-of-care deficiencies. Repeated with DON Similar findings (different QMs)

  16. Quality Turnover

  17. Quality Turnover

  18. Quality Turnover

  19. TOP MANAGEMENT TURNOVER: • So What? (Study 4): • TURNOVER BEGETS TURNOVER • Association between turnover of nursing home administrators and staff turnover. • 419 nursing facilities and the 1999 On-line Survey, Certification, and Reporting System (OSCAR) • 10% increase in top management turnover • 21% increased turnover of Nurse Aides • 30% increased LPN and RN turnover • Confirms interviews with nurse aides • “If management does not want to work here, why should I?”

  20. The Quality Porcupine Type: Structure, process, Outcome Real-time information Parsimony vs. Completeness Data Sources QUALITY Quality Orthogonal Degree of “adjustment” Population Scale used Understandability

  21. STAFF TURNOVER: • High levels of staff turnover in nursing homes? • Nurse Aides = 71% • Licensed Practical Nurses = 49% • Registered Nurses = 50% Source: Decker at al. (2003)

  22. STAFF TURNOVER: • So What? • GAO (2001): turnover among nurse aides working in nursing homes is: • 13-18% percent higher than the overall labor force • 20% higher than other service workers. • 100,000 FTE vacancies at nursing homes ½ this post recession? • Does vary by state

  23. NOTE: data from 8,023 nursing homes collected in 2004 (Castle, 2005)

  24. NOTE: data from 8,023 nursing homes collected in 2004 (Castle, 2005)

  25. STAFF TURNOVER: So What? Data used in this investigation came from surveys of nursing home administrators (N=6,005), Nursing Home Compare; Online System for Certification and Administrative Reporting data, and, the Area Resource File. From the 18 turnover variables of interest (i.e., 6 quality measures and NA, LPN, and RN turnover) 11 coefficients were statistically significant.

  26. STAFF TURNOVER:

  27. STAFF TURNOVER (2): Causal Analysis? Registered Nurses, Licensed Practical Nurses, and Nurse Aides were measured quarterly from 2003 through 2007, and come from 3,939 facilities. Generalized method of moments (GMM) estimation was used to examine the effects of a change in staffing levels on change in four quality measures (physical restraint use, catheter use, pain management, and pressure sores).

  28. STAFF TURNOVER (2): Causal Analysis? For staff turnover, 7 of the 12 coefficients were significant, and in all cases increasing turnover was associated with decreasing quality. Castle, Medical Care, 2011

  29. STAFF TURNOVER (2):

  30. COST Study: IS THERE A BUSINESS CASE FOR LOWER TURNOVER? • Caudill and Patrick (1991) • Replacing CNA = $2,000 • Replacing RN = $7,000 • Seavey, D., “The Cost of Frontline Turnover in LTC.” (2004) • Replacing CNA = $2,500 • Better Jobs Better Carehttp://www.bjbc.org/content/docs/TOCostReport.pdf • $3,500 per employee • Employee turnover's nationwide cost is roughly $4.1 billion annually

  31. COST Study: • Data • Primary data (2010) • Random sample Nursing Homes (N=2,344) • Nationwide sample • Cost Questionnaire • Nursing Turnover Cost Calculation Methodology (NTCCM) (Jones, 1990, 2005). • Used in business and nursing professions

  32. COST Study: • Includes Pre-Hire and Post-Hire costs • Pre-hire = advertising and recruitment • post-hire = orientation and training • Include both direct costs (newspaper advertisements) and indirect costs (time spent interviewing)

  33. COST Study: Replacement Costs Pre-employment administrative expenses Cost of attracting applicants Cost of entrance interviews Pre-employment information gathering

  34. COST Study: Results CNA Cost per replacement $3,940 Range $1,056 -- $5,530 RN Cost per replacement $5,901 Range $2,306 -- $8,921

  35. Overall Costs Cost Per CNA ($) Average Turnover

  36. Overall Costs Cost Per CNA ($) Average Turnover

  37. Termination Costs

  38. Implications / Further Research: • Cost “savings” for high turnover • Even cheaper to “fire” someone • Business of high turnover • Learning curve for high turnover • BUT • Does not include lower Quality • Does not include occupancy (loss) • Does not include NHA/DON turnover • Does not include absenteeism

  39. Including Top Management Turnover Costs

  40. Including Top Management Turnover Costs and Absenteeism Costs

  41. Implications / Further Research: • Additional analyses • By region (some differences) • By chain (less than expected) • Union (less than expected, some less turnover) • Use median values • Weight by larger facilities • Influence of fluctuations in turnover over time • More than 50% are stable (consistent)

  42. Implications / Further Research: • Next step • Assisted Living (n=>3,000) • Similar turnover levels • Somewhat less expensive • For reference • Hospitals 1% > turnover $300K costs • RN turnover $60,000 • But $42,000 = bed loss

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