Your hospitals Emergency Department (ED) consistently sees about 30,000 patients per year. The department was recently rebuilt and redesigned with a grand opening six months ago. Since the opening of the new space, productive FTEs have been approximately 12 productive FTEs over what benchmarks would suggest. Initially, ED leadership explained this as staff getting accustomed to the new space but staffing overages have continued and even worsened. As part of a presentation to the ED leadership and ED physicians, you are tasked with showing the financial impact of the staffing variance.

Benchmark: 2.85 productive hours per ED visit

Annual budgeted patient days: 30,000

Average hourly wage/hour $45.25

Last six-month actual hrs/ED day: 3.67

Productive FTE/Total FTE: 88%

1) Calculate the extra productive costs incurred over the last six months because of the excess staffing.

2)Calculate the projected annual savings by moving the staffing level to the benchmark. Remember to include non-productive costs.