NUR 631 Module 7 Negotiation Memo Example

Memorandum

To: Chief Financial Officer, Brookfield Regional Medical Center (composite)

From: [Student Name], Chief Nursing Officer

Date: [Date]

Re: First-year funding for the internal float pool and virtual nursing pilot: a proposal built on our shared interests

Purpose

Ahead of our meeting on the fiscal year budget, I want to set out what I am asking for, what I understand your concerns to be and several ways we might meet both. My request is $3.9 million in first-year funding: about $3.57 million in annual salary and benefits for a 24-nurse internal float pool, $288,000 for recruitment and orientation and the first year of a virtual nursing pilot on two units. I expect your starting position may be to fund half. Rather than meeting in the middle of two numbers, I would like us to work from what each of us actually needs.

Our Positions and Our Interests

Fisher, Ury and Patton distinguish positions, the specific demands each side brings, from interests, the needs and concerns behind them, and argue that agreements built on interests are wiser and more durable (Fisher et al., 2011). My position is full funding. My interests are fewer short-staffed shifts, a stable workforce that knows our units, lower first-year turnover and evidence I can take to the board that nursing is managing its costs. Those interests have research behind them: the multihospital clinician wellbeing survey linked nurse burnout to turnover of nurses and physicians alike, and staffing was the fix nurses ranked highest (Aiken et al., 2023).

I understand your position may be half funding. I believe your interests include protecting the operating margin in a year when our Medicaid share is 38%, avoiding a commitment to permanent salaries that will outlast uncertain savings, seeing proof before paying for technology and being able to show the board that any new spending pays back. Those are reasonable interests, and several of them are also mine.

Where Our Interests Overlap

We both want lower agency spending, which reached $9.8 million last year. We both want a result the board can see within the fiscal year. We both want to limit risk if hiring falls short. And we both have an interest in reducing turnover, which our finance office estimates costs about $58,000 per departing nurse, a figure consistent with published methods for calculating and updating turnover costs (Jones, 2008). On these points, the question is not whether but how fast and with what safeguards.

Options for Mutual Gain

I propose three options for discussion. Option A is phased hiring tied to savings: fund 12 float pool positions immediately and release funding for the next 12 once agency spending on the medical-surgical units has fallen by an agreed amount, for example $1 million over two quarters. This protects the margin while allowing the pool to grow as it proves itself. Option B is a reinvestment agreement: fund all 24 positions, with a written commitment that agency budget lines are reduced by the same amount each quarter and that any shortfall in savings triggers a joint review. Option C is a pilot-first approach for virtual nursing only: fund the virtual nursing pilot at $1.03 million for 12 months, with continuation contingent on a one-third reduction in first-year turnover on the pilot units, while funding the float pool in full. These can be combined; for example, Option A for the float pool and Option C for virtual nursing would reduce first-year spending to about $2.9 million.

Objective Criteria

I suggest we judge any option against criteria neither of us controls: the business case figures, which show float pool savings of about $1.6 million a year at full staffing and break-even in the eighth month; the sensitivity tests, which show savings remain positive if only 16 positions are filled or agency rates fall to $95 an hour; the market rate for agency staff in our region; and our board's safety measure, the proportion of night shifts that meet the one-to-five budgeted ratio. Using agreed criteria lets us disagree about forecasts without disagreeing about how to decide.

Our Alternatives

It helps to be clear about what each of us does without a deal. My best alternative is to continue using agency staff, with the costs we both dislike, and to bring the staffing and turnover data to the board's quality committee. Your best alternative may be to hold spending flat and absorb continued agency costs of about $10 million. Neither alternative is attractive, which suggests that an agreement serves us both.

Next Steps

I would welcome your reactions to these options before our meeting and would be glad to ask our finance analyst to model Option A in more detail. I would also suggest we agree now on the format of a quarterly joint report to the board, showing agency spending, float pool fill rates, first-year turnover and the night staffing measure side by side, so that whichever option we choose is judged on the same evidence by both of our divisions.

If it would help, I am prepared to present the plan to the finance committee with you rather than separately. A joint presentation would show the board that nursing and finance reached the proposal together, and it would give your team a direct role in deciding the savings thresholds that release additional funding under Option A. I would rather share credit for a plan that works than win a budget line that finance does not believe in. My aim is an agreement that the nursing division and finance can both defend to the board a year from now.

References

Aiken, L. H., Lasater, K. B., Sloane, D. M., Pogue, C. A., Fitzpatrick Rosenbaum, K. E., Muir, K. J., & McHugh, M. D. (2023). Physician and nurse well-being and preferred interventions to address burnout in hospital practice: Factors associated with turnover, outcomes, and patient safety. JAMA Health Forum, 4(7), Article e231809. https://doi.org/10.1001/jamahealthforum.2023.1809

Fisher, R., Ury, W., & Patton, B. (2011). Getting to yes: Negotiating agreement without giving in (3rd ed.). Penguin Books.

Jones, C. B. (2008). Revisiting nurse turnover costs: Adjusting for inflation. Journal of Nursing Administration, 38(1), 11-18. https://doi.org/10.1097/01.NNA.0000295636.03216.6f