Nursing workforce planning formulas may carry a structural error embedded since at least 1960, one that has quietly caused hospitals to systematically underbudget nursing staff across decades of textbooks, credentialing programs and government frameworks. The finding raised a pointed question for health system leaders: how confident can you be that your own nursing budget formula is producing the right number?
At Children’s Hospital of Philadelphia, Paula Agosto, RN, system chief nursing officer, works out of what she calls the hospital’s mission control center, where a wall of data shows patient locations, staffing levels and unit status in real time. That’s the tool CHOP leans on to see whether its nursing budget formula is holding up in practice, not just on paper, a question three health systems are answering in different ways.
Building the formula
At CHOP, the budget is built on hours per patient day, multiplied by patient volume and average hourly rate, plus a replacement factor to cover leave and turnover, Ms. Agosto told Becker’s. CHOP recently standardized hours per patient day across three ICUs, neonatal, cardiac and pediatric, at 20 out of 24 hours, after noticing the units had been budgeted at different rates despite similarly high-acuity patients.
At VCU Health’s Children’s Hospital of Richmond, the nursing budget is built on benchmark data and a system-established productivity index, Karen Webb, DNP, RN, associate CNO, told Becker’s. Nursing leaders partner with finance and operations teams to weigh projected patient volumes, productivity targets and staffing requirements, with the formula set annually during the budget cycle.
Meanwhile, Clearwater, Fla.-based BayCare Health System skips the single annual budget in favor of quarterly forecasting, Jennifer Ransford, MSN, RN, regional CNO, told Becker’s. The system tracks discharges, adjusted discharges, patient days, length of stay and case mix index alongside total and productive full-time equivalents, feeding master staffing plans that calculate hours of care needed by unit based on average daily census.
Auditing and adjusting
CHOP checks its formula against real data every month, not once a year. If a unit budgeted for 20 hours of care per patient is running at 22, nurse leaders log a rationale, whether that’s higher acuity, a trauma surge or a larger share of new-to-practice staff who need extra support. If a unit is running below its budgeted hours, that’s the more uncomfortable finding, since it means care isn’t being delivered as planned. CHOP keeps an internal flex pool of about 200 people to close those gaps without waiting for the next budget cycle.
The habit started 10 years ago, Ms. Agosto said, when she asked a finance partner to “start at the bottom and teach us, including me, how our budget’s built.” That practice has since spread to nurse managers, vice presidents of nursing and frontline shared governance staff.
VCU Health reviews staffing plans formally once a year, but nursing leaders can present a business case through the labor management process to request additional funded positions if volumes or operations shift midyear, Dr. Webb said.
BayCare reviews staffing plans annually and revisits them whenever bed capacity, patient volumes or care delivery needs change. “Healthcare is constantly changing,” Ms. Ransford said, “so it’s important that our staffing models remain flexible enough to adapt alongside it.”
What gets missed
All three leaders pointed to patient acuity, and the workload it creates, as the hardest input to capture. Ms. Agosto called it surveillance. “I wasn’t always doing something physically, but I was always watching,” she said, describing her years in critical care. “You could turn your head for one second, and something can go wrong really quickly.”
Dr. Webb said budgeting models built on historical staffing patterns or average census can understate how complex patients have become, and flagged nonproductive but essential time, such as education, precepting and shared governance work, as commonly underfunded. Ms. Ransford said staffing needs are often assumed to be more predictable than they are, since recruitment, retention, burnout and market competition all move the numbers alongside acuity.
The cost of getting it wrong
CHOP found out directly during the COVID-19 pandemic. Low pediatric volumes led leaders to cut positions like preceptors and safety specialists, reasoning the hospital had managed without them during the surge. The data told a different story: staff comfort and practice quality had slipped, and CHOP restored the roles.
Dr. Webb said reducing staffing costs elsewhere can create downstream expenses through falls, hospital-acquired conditions, readmissions and lower patient experience scores, calling nursing “a strategic investment” rather than a cost center. Ms. Ransford said forecasting is as much about people as numbers, since retaining an engaged, experienced workforce is what makes the rest of the formula hold up.
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