It's a Myth that it takes thousands of dollars to train a new Grad RN

classicdame, MSN, EdD · Oct 16, 2012

What does it matter? You have a job.

As a hospital educator I can tell you that much more money was spent than in your salary and benefits. The salaries of all the people who helped train you in every class, the amount it costs to buy equipment for training, the many hours of planning---my budget is highest in areas of new nurse training. But the point is - so what? You have a job.

dudette10, MSN, RN · Oct 16, 2012

One of the top financial executives at a very large integrated health system in our vicinity told our nursing faculty (during a seminar on new graduate nurses) that it costs his organization between $40,000 and $60,000 to adequately train one new graduate RN. I think this executive would know. He had no reason to lie or skew the figures to us.

Someone told him that, I'm sure, but the difference between $40K and $60K is pretty large. Which one is it? Asking him to break down the cost probably wouldn't elicit a specific answer.

The post by NRSKaren is informative, but it also includes things that would have to be paid anyway. Also, it sounds more like the cost of a residency program, which most hospitals do not offer. To me, one needs to look at the cost for when the new grad is not included in staffing and those expenses associated with classroom work and orientation that are specific to a new grad, i.e. not provided for everyone who is hired.

--The preceptor would be paid, regardless of having a new grad to train or not. Where I work, precepting does not get a differential. Why is that included in the cost of training a new grad?

--Benefits and taxes? Only during orientation. As for myself, I was probably the cheapest new grad around as my husband carries all benefits. Plus, at a lower hourly rate of pay, the taxes are lower on a new grad compared to an experienced nurse.

--That $10K indirect cost? What is that?! That's nearly 10% of the total calculated, without one iota of specificity.

Other people are mentioning the liability to the hospital for new grads. I have to wonder about that because Liability Insurance for first year RNs is considerably less than the renewal premium in the second year. The professional liability actuaries can't be wrong in determining that there is actually less liability for a new grad than for a more experienced nurse. They are literally banking on it.

Although the attitude in the OP's posts rubs me the wrong way, I have to agree with him. (Just because I don't like someone doesn't mean they are wrong!) Some people are deriding his posts based on his tenure as a nurse. His months of experience in nursing have absolutely nothing to do with how valid his opinion is on this topic.

If you read the first year after licensure section, most new grads have 6 to 8 weeks in acute care. I would agree with him that length of orientation is the rule, not the exception. Residency programs are the exception.

dudette10, MSN, RN · Oct 16, 2012

But the point is - so what?

It's just something to talk about. Five pages of "pointless" discussion to rile up the natives. :laugh:

netglow, ASN, RN · Oct 16, 2012

Haven't read the extent of all the replies yet, but andywolf if that is your real name? or hopefully just a screen name ... regardless, just wanted you to know that it's pretty easy for anyone to figure out just which hospital and unit you work for from the info you have posted.

And if any of your co-workers/managers hang on this site, your butt is gonna be a little sore.

allnurses Guide · Oct 16, 2012

. . .So the way I look at it, this hospital has spent about a maximum of 10K (wages that my preceptor received during the training) training me. If I wasn’t there, the same number of pts would still be cared by an RN. The only difference is those pt were cared by a rookie RN rather than a veteran RN. Also again my preceptor was usually helping out other nurses during this training. It wasn’t like she was hovering over me while I was providing care to the patients. Since very few hospitals will hire a new grad, for providing me 10K worth of training for 6 weeks, I will be working for this hospital for at least a year and the hospital will be saving about 20-30K in wages paying me instead of a veteran RN. So for this scenario in the end, the hospital comes out making a profit of at least 10k-20K.

Perhaps you can submit your findings to the Healthcare Financial Management Association. They aren't calculating their labor costs the way you are. According to KPMG’s 2011 U.S. Hospital Nursing Labor Costs Study it costs $100,000 a year in labor costs for a full-time RN across the board, representing anywhere between 55-75% base pay. You included none of the costs making up the remainder in your calculations, making further calculations based on those numbers faulty. You just can't add up someone's pay rate in a column, ignore factors that affect that cost, guess the wages and benefits of the "expensive nurses" and make up criteria about what might be saved by your preceptor helping other nurses.

In the larger sense, if hospitals make a profit from hiring new grads why aren't they hiring new grads? Their accountants didn't notice? Why would anyone make up a story like that? Anyway here's the link. It's possible that you may discover something in it that you don't already know.

KPMG’s 2011 U.S. Hospital Nursing Labor Costs Study

netglow, ASN, RN · Oct 16, 2012

About the insurance thing, I also am a second degree nurse. I have worked extensively in the corporate world, long ago had cobra for a while after a lay-off, have had my own business for many years and purchased my own health insurance for years and used it in a serious way (had major surgery) while on it. While taking my prereqs for nursing, I did all interactions regarding insurance for a private practice. I have dealt with congressional contacts to force insurance to honor contracts. Yes, it's funny about how it's only about who you know ...suddenly things are different.

So, I am an authority on the subject.

Look, the whole insurance industry (like most other businesses) will set prices randomly - what ever is in their best interest. Usually those (corps) who they know can pay more, will. Yes risk is a factor, sure, but it's just really about how much they can get. Lets be simple about it, because it is. Same with "the rules" regarding policy, it's a dirty business.

Also OP, the whole orientation thing is often a joke. Sure it is for most orientations. Some hospitals (very few, a handful) actually do have extensive educational resources that are dedicated resources for nurse orientation and continued training. There were more of these years ago. Pretty much, I'd say nurses are the bane of any hospital's existence. Nobody wants to pay us. Administration can't sleep at night because they just ruminate on how great it would be never to have to spend another dollar on nursing.

I liken it to the olden days where new settling farmers out west on the prairie had a gazillion kids. If they couldn't have kids they bought poor orphans from the east and had 'em shipped out for labor. You didn't have kids for the love of them, you had them as free labor. These kids were of course, constantly reminded of the burden it was to train and feed them. This even though the farm would not exist without their hard work. The cattle however, were treated better as money could be made from them ...nurses are treated like they should be grateful for the crumbs they get. I see no difference.

KelRN215, BSN, RN · Oct 16, 2012

For my first job, my orientation was 20 weeks long and that was pretty on-par with the new grad programs at the academic medical centers in my city. During this 20 weeks, I had a preceptor who was paid her full salary plus a precepting differential. I was also paid my full salary. When you are training a new grad, you are paying 2 nurses to take one patient assignment. At the beginning of orientation at this hospital, you started with one patient when a fully trained nurse takes 3-4 on days or 4-5 on nights. So to pay two nurses to care for ONE patient is unarguably an expense to the institution. At the end of my 20 weeks of orientation, I had earned over $20,000. My preceptor had arguably earned close to $30,000 as her salary was much higher than mine. It is true that she would have earned her salary regardless of whether she'd been training me (minus the precepting differential which wasn't much) but she would have also been taking a full patient assignment on her own- which she wasn't. During my 20 weeks of orientation, there was also one classroom day (at least) per week. PTO at this institution started accruing immediately and was considered earned after the 90 day probation period and other benefits kicked in immediately.

So, let's say you have a new grad who completes orientation ($20,000) and in the course of that 20 weeks, accrues approximately 90 hrs of PTO (close to 9 hrs per pay period at this hospital). If said new grad leaves shortly after completing orientation, that's another $2,000-$3,000 that the hospital needs to pay out to her in PTO cash out. So now, the hospital has spent close to $23,000 on this employee and got no return on their investment. When I accepted my new grad position, the offer letter I received requested a 2 yr commitment so that the hospital could get a return on their investment.

OP, you admit that your hospital spent close to $10,000 to train you- $10,000 is still ThousandS of dollars.

Training nurses costs money and money is often the bottom line in hospitals... money is most definitely the reason why my former hospital is choosing to just overwork their current staff (who never get overtime) and not fill any of their vacant positions. I don't agree with my former hospital's positions on many things but that it costs a lot of money to train a new grad- can't argue with that.

netglow, ASN, RN · Oct 16, 2012

I know lots of you would not like to hear this stuff because it makes you sad. Healthcare is a pretty sleazy business, and it matters not how old you are when you realize this. Matter of fact, if you've been in it for years and you still don't know ...I gotta wonder about you just a bit.

It's easy to lie to a group of people who don't ever want to acknowledge that they fit the description of the type of person who is easily targeted.

Guys, MOST of what you've been told has been heavily spun just for your little ears. Heck part of what I used to do for a living was help promote spin for your bosses or anybody actually. Basically a lot of you are similar to a group of kids who still believe in the Easter Bunny, actually - much to the continued pleasure of everybody I used to work for.

mappers · Oct 16, 2012

To me COBRA statement is like a hospital bill if you don't have insurance "HIGHLY INFLATED" Not real at all. About a year ago when I was attending nursing school and I received a quote of about $380.00/month for the similar plan that I currently have. Mind you that in the individual insurance marketplace, the consumer has no power what so ever, while the corporations can negotiate and do negotiate discounts all the time. It's the same as hospital charging $5.00 for 1 81mg aspirin, that I can get 30 at the grocery store for a buck or two!!!!!!

You are wrong. By Law, a business cannot charge more than the cost of the insurance. It is not inflated. They are allowed to charge a small percent over the cost for administration. (It costs money to administer COBRA because instead of a nice electronic payroll deduction feed for a thousand employees, they must individually bill and process each payment.) That fee is also limited by law to only 2%.

Fact Sheet: Celebrating 25 Years of COBRA

elkpark · Oct 16, 2012

It's great that the OP is so enthusiastic about using his "critical thinking" skills, but a big piece of critical thinking is at least glancing casually at the literature and info that is already available, and not just looking around your own little plot of earth and seeing what seems to make sense to you based on your personal observations. A formal "orientation" of 2 weeks, 4 weeks, 8 weeks, whatever, is not the total of a new employee orientation. Typically, one isn't formally off orientation until the 6-month mark, and there are costs involved in that ongoing process. Also, however much new grads would like to think differently, they are not as productive as an experienced RN, and remain a financial cost rather than benefit to the emloyer, for quite some time. Are all the figures quoted in the literature just made up? For what purpose?

"Because 20% of the 42 new graduates in the Lindy and Reiter study were not retained, the estimated cost to orient each of these 42 new graduates was between $39,000 and $65,000." (The article breaks down specifically how these figures were calculated)

Nursing Center - Journal Article

"Recent studies of the costs of nurse turnover have reported results ranging from about $22,000 to over $64,000 (U.S.) per nurse turnover (Advisory Board, 1999; Jones, 2005; OBrien-Pallas et al., 2006; Stone et al., 2003; Waldman et al., 2004)." (This refers to general nursing staff turnover, not new graduates specifically.)The Costs and Benefits of Nurse Turnover: A Business Case for Nurse Retention

Cost of Hiring New Nurses on ADVANCE for Nurses (This article includes the chart referenced earlier in the thread, breaking down the specific costs involved in getting a new graduate RN from the hiring process to "competency" and showing those costs add up to nearly $100k at one NY hospital)

"The hospital did a study 3 or 4 years ago and came up with $35K-$38K to orient a new grad nurse. That figure has probably changed or gone up since then. She has seen figures of $50K-$90K for all bed size hospitals in orienting these nurses." (Please note this data is from 2008)

LISTSERV 15.5 - MEDLIB-L Archives

llg, PhD, RN · Oct 16, 2012

OP, you admit that your hospital spent close to $10,000 to train you- $10,000 is still ThousandS of dollars.
.

Exactly. Using his own figures (which are probably grossly underestimated in my expert opinion), the OP's orientation cost his employer "thousands" of dollars.

Obviously, the exact figure varies a lot from hospital to hospital. But even with a short, minimal orientation such as the one described by the OP, the number is in "the thousands." Hospitals with more thorough orientations pay more. And note that he conveniently chose not to count a lot of the indirect costs of his orientation -- the cost of interviewing, of maintaining the recruitment department, the application process, the pre-hire paperwork, the pre-hire physical and labwork, etc. The salaries and costs incurred by the educators and managers who invest time and resources in the new employee. The costs of maintaining a large education department to run the educational programs. The costs of benefits (all benefits, not just health insurance). etc. etc. etc.

It's convenient for the OP for him to say, "I said I wasn't counting those things." But unfortunately, his employer cannot choose to ignore those indirect costs. They have to pay the bill.

NutmeggeRN, BSN · Oct 16, 2012

So many of the posts and rebuttals were so long my eyes started to glaze over but two things I did not see (please forgive me if I am repeating what someon else said)

~Workers Comp Cost mandated

~Local, State and Federal Taxes mandated

and even if the low threshold is $10,000 and the high is $60,00, that would make the average cost $35,000 mulitplied by say 10...$350K, not chump change in any budget. For those whose revenues are ever dwindling, to invest that kind of money for someone who may leave at the drop of a hat, or worse, in their ignorance/naivete make a costly (read -large financial impact) medical error......Yes the insuror will pick up a lot, but then the rates maybe increased and so on....

Just my own 0.02