On July 1st, Cloverdale Hospital implemented a new procedure for discharging patients. Nurses have a strict set of steps they must adhere to in order to prepare a patient for this discharge. The hospital administration determined what they believed would be the cost of this new program, per patient. Now, six months later, costs are running 25% higher than was expected. You have been asked as a nurse manager of the out-patient clinic to review the discharge process in your unit and determine the cause of the overspending.
To prepare:
• Consider possible causes for the overspending.
• Analyze why variance analysis is important in determining the causes.
• How could you use the information from the variance analysis to determine the best course of action?
The Assignment
WRITE a description of the value of variance analysis in decision making. Assuming you have performed a variance analysis for the scenario above, what would be the next steps you would need to take?