What is the historic budgeting method for staffing in hospitals?

• A. Use last year's actual FTEs, adjusted for any projected increase or decrease in patient days.
• B. Create a staffing matrix for all shifts, add up hours, and divide by 2,080.
• C. Apply a 10% replacement factor to all staffing.
• D. Measure labor productivity as FTEs per AOB.

Answer: (A)

The main idea here is incremental budgeting for staffing, which anchors the plan to what was actually used previously. In hospitals, a common historic method is to take last year’s actual full-time equivalents (FTEs) and adjust them for expected changes in patient volume, typically measured by patient days. If patient days are forecast to climb, staffing increases proportionally; if they’re expected to fall, staffing is scaled back. This approach is grounded in real, observed demand and provides a straightforward, defendable path for budgeting cycles.

Using last year’s FTEs keeps staffing levels aligned with what the hospital actually delivered, and adjusting for patient days ties those levels to the scale of care that will be needed. It’s simple to implement, familiar to administrators, and tends to be stable from year to year, which helps in planning and negotiations.

In contrast, options that rely on a fixed staffing matrix or a blanket percentage replacement factor don’t tie staffing to actual demand in the same way, and measuring labor productivity per occupied bed is a performance metric rather than a budgeting method. Those approaches can lead to misalignment between staffing and patient care needs if volumes or acuity shift.