Maintaining Strategic Awareness in Challenging Times

By Rose O. Sherman, EdD, RN, NEA-BC, FAAN

I have been surprised over the last few weeks, in my conversations with nurse leaders, by how little strategic awareness many frontline nurse leaders have of the grave implications of the Big Beautiful Bill (HR – 1)  for the financial viability of their own organizations. Some are also unaware of the impact of rapid demographic changes in the US population, coupled with declining immigration. Consider the following story from a Director of Women and Children’s Health:

Our health system just announced the closure of several OB units in our geographic area along with the consolidation of pediatric beds. The nurse managers whose areas have been affected seem stunned, but they should not be. The cuts to Medicaid alone are huge, and no area is impacted more than mine. Couple that with declining births, and the announcements of unit closures should not be shocking. I have been talking about the volume declines and economic losses for several months, but I guess I was not effective in preparing them for what might be ahead. 

This director is not alone in her observations. I, too, have found that many nurse managers don’t know their current payer mix or how changes to the Health Insurance Exchanges, Medicaid enrollment cuts, and Medicare reimbursement changes could affect their units and organizations. They are, of course, operating in a “heads down” mode, trying to survive the day-to-day staffing challenges that are now common in so many organizations like a game of Whac-A-Mole.

Yet, honing your strategic thinking skills is essential to your leadership development and career advancement. Frontline leaders need to be strategic translators, not just operational firefighters. Many nurse managers today are detail-oriented doers, which is necessary, but understanding bigger system issues and having strategic awareness is also essential – especially now. It is frontline leaders who will discuss with staff the significant changes that may result from budget cuts or volume declines.

In health systems, every leader should be able to look beyond one’s work unit or department and consider how different parts of the organization work together to achieve outcomes. Strategic leaders understand that minor changes in one area can have unanticipated consequences in other parts of the system if not carefully considered. Nurse leaders often attempt quick fixes to problems without considering the longer-term implications or the impact on different parts of the organization. They lack strategic awareness. To help our nurse manager develop strategic awareness about what may lie ahead in terms of health system changes, I would recommend the following:

• Begin conversations about the payer mix at both the hospital and unit levels, with special attention to potential shortfalls under the new legislation.
• Talk about the decline in enrollment on health exchanges in your state and how the loss of insurance is already impacting the scheduling of elective procedures.
• Review the demographic information for your geographic area and discuss how changes could affect volumes in specific specialty areas.
• Explain EMTALA to nurse managers, including how the loss of insurance likely means even greater ED overload and challenges in moving patients across the continuum of care.
• Evaluate the workforce trends in your community and talk with frontline leaders about how cuts in reimbursement might impact future salary negotiations and ability to hire for nonessential positions.
• Promote discussion about where you could cut up to 5% from your nursing budget if necessary.
• Talk about the criticality of reducing supply, equipment, and pharmaceutical expenses.
• Ask what nurses within your facility could stop doing because it does not add value yet consumes staff time.

Nurse leaders today need to be proactive rather than reactive. Frontline nurse leaders are the framers of the conversations that happen with nursing staff at the front lines of care. It is they who explain the WHY behind organizational decisions. In turbulent times, staff seek stability and clarity. A strategically aware leader shields their team from unnecessary noise while keeping them informed on macro-level priorities that directly impact their work.

Strategic awareness is a key leadership skill set today. Have your frontline nurse leaders assess their strategic awareness with this instrument I developed to begin the discussion. Strategic Awareness Assessment