Improving Patient Care While Decreasing Costs: The Benefits, Barriers, and Student Perspectives on Nurse Residency Programs

Submitted by Yaira Kurtzman, BSN RN

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Improving Patient Care While Decreasing Costs: The Benefits, Barriers, and Student Perspectives on Nurse Residency Programs

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Glenn Javelona and Yaira Kurtzman
MCPHS University

Due to the increased acuity and complexity of patients in the average hospital, it is no longer realistic or safe to expect new graduates to transition from student to nurse without additional assistance. Other professions have long since realized that a vast divide exists between the classroom and real-world practice and, thus, have mandated transitional programs to provide a smooth changeover. Nurse residency programs [NRPs] fulfill the same purpose but lack any official requirement. Medical doctors, pharmacists, optometrists, physical therapists, clinical laboratory scientists, and public health specialties all require residencies to complete their professional training (Huston, 2014). However, nurses, although being at the bedside and directly responsible for the majority of patient care, lack such an intermediate step as part of their professional training, even at the baccalaureate level. Consequently, in the absence of a transitional program to build confidence and skills, new graduates are pressured to provide safe and competent care to increasingly complex patients without the support afforded to many of the other professions (Pittman, Herrera, Bass, & Thompson, 2013). Even though NRPs vary in both length and curriculum, they remain, across the board, successful transition-into-practice programs post-licensure to assist new nurses from didactic into practice (Caramanica & Feldman, 2010; Goode et. al., 2009; Pittman & Herrera, 2013; Ulrich, Krozek, & Reinsvold, 2009; Zinn et. al., 2012).

Due to the program’s ability to help transition new graduates into practice, the use of new nurse transition programs is supported by the National Council of State Boards of Nursing [NCSBN], American Association of Colleges of Nursing [AACN], National Student Nurses Association [NSNA], American Nurses Association [ANA], the Institute of Medicine [IOM], and the Joint Commission (Huston, 2014). Although NRPs are recognized as benefiting new graduates, employers, and patients (Goode et. al., 2009), the current number of transition programs is inadequate to meet new graduate demand. Since not all institutions have such transition-into-practice programs to meet this growing demand, barriers clearly must exist. In order to increase the number of nurse residency programs, investigating the benefits and barriers that hinder facilities from developing and incorporating these programs as standard training is critical.

Benefits of the Program

Nurse residency programs impact the delivery of healthcare in numerous ways. One of the most dramatic demonstrations of their significant effect is a NPR’s ability to influence turnover rates and costs. Jones (1990) as cited in Hayes et al. 2006 reports ‘turnover’ as a process in which a member of the nursing staff leaves or transfers in the hospital environment. However, turnover rates for new nursing graduates are better described as the number of new graduate hires who leave their position within 12 months (Ulrich, Krozek, Early, Ashlock, Africa, & Carman, 2010). The literature reports nurse turnover rates for new graduates ranging from 13% (Kovner, 2007) to 35-60% (Beecroft, Kunzman, & Korzek, 2001; Krugman, Bretscneider, & Horn et al, 2006; Williams, Good, & Kresek, 2007). Although turnover will always exist, new graduate nurses are, statistically more likely resign than newly hired experienced nurses within this 12 month period (Zinn, Guglielmi, Davis &, Moses, 2012).

However, when transition-into-practice programs are implemented, turnover rates for new graduates have been shown to drop dramatically. As cited in Pittman and Herrera (2013), in one hospital alone new graduate turnover, originally at roughly 27%, dropped to 7.1% after a nurse residency program was implemented and in another hospital turnover dropped to 4.3% after the fifth cohort of the program was completed (Ulrich, Krozen, Early et al., 2010). These dramatic results substantiate the premise that new graduates face significant difficulty transitioning into professional practice; otherwise, turnover rates would be similar to traditional nursing turnover rates. New graduates can face numerous obstacles as they move from pre-professional programs into autonomous practice such as horizontal violence described as humiliating and demeaning treatment and passive aggressive behavior (Curtis, Bowen, & Reid, 2006). Horizontal violence consequently establishes hostile and oppressive environments negatively affecting retention rates (Longo & Sherman, 2007). A nurse residency program cannot eliminate such behavior; instead the program creates a unique supportive network of peers, preceptors, and managers that lead to reduction in new nurses resigning (Zinn, Guglielmi, Davis, & Moses, 2012).

Facilities and patients can also reap significant benefits in decreased turnover. In the case of facilities, high turnover comes with a high financial cost. If a new graduate resigns within 12 months, the facility’s financial burden can range from $22,420-$77,200 (Welding, 2011). Providing initial orientation to a new employee alone can cost between $8,000-$50,000 and, subsequently, new graduate nurses usually receive additional training which only serves to further drive the cost up (Zinn et al., 2012). Part of the accrued financial cost is not only from training and orientation but also from having to rely on premium contract labor or paying overtime to compensate for the vacancy (Krozek, 2008). Lindsey and Kleiner (2005) report it takes between 60 and 90 days to recruit and replace a nurse (as cited in Zinn et al., 2012). In turn, for each of these days the facility must pay an agency or current employees overtime that only furthers expenses. Therefore, from a cost perspective, ways to lower turnover should prove invaluable to hospitals that often have razor-thin budgets. Although nurse residency programs also have up-front costs to implement the programs, Trepanier, Early, Ulrich, and Cherry (2012) found that even when including the initial costs, an annual average net savings of $8,174,960 across the 15 hospitals was determined. This translates into roughly $10 to $50 per patient day in savings. In other words, by preventing turnover, hospitals spend less on overtime and premium contract labor, along with the fact that fewer resources are required to train new hires. Thus in the long run, nurse residency programs, by drastically reducing turnover, yield net savings to facilities as the expected benefits outweigh the costs.

Another impact of high turnover is patient safety. When turnover rates are high the ability of patient care teams to ensure quality patient care outcomes is significantly weakened leading to poorer outcomes for patients (Zinn et al., 2012) due to staff inconsistencies and nurses asked to work overtime. Bae, Mark, and Fried (2010) report that units with low levels of nurse turnover rates reported fewer patient falls and decreased occurrences in severe medication errors. Another contributing factor is the correlation between increased overtime and increased burnout that can potentially negatively impact patient safety and satisfaction (Krozek, 2008, as cited in Trepanier et al., 2012). What is more, burnout itself can lead to increased turnover, which simply aggravates the situation both for hospitals and patients as quality of care is compromised.

Just as nurse residency programs benefit hospitals, facilities, managers and patients by improving retention by lowering turnover so, to, can new nurses also benefit. As mentioned earlier, NPRs provide supportive environments to help combat challenges such as horizontal violence. However, these programs can help new graduates do more than just combat workplace conflicts. These programs help build confidence and combat stress. It is estimated that it takes roughly one year for an individual to master a job in healthcare due to the fact that the culture of the field emphasizes specialization, technology, and perfectionist standards which reflects Benner’s 1984 nursing level theory (as cited in Goode et al., 2009). On Benner’s novice-to-expert continuum, new nursing graduates are advanced beginners who, due to lack of experience, lack confidence in caring for patients with complex problems (Goode at al., 2009). Leaders in healthcare believe that this lack of confidence and the resulting stress are the main contributors to rising new nurse turnover rates (Pittman & Herrera, 2013).

Building confidence in newly graduated nurses is a complex task for the level of confidence a new graduate experiences follows a pattern. This pattern has been described as a “V” pattern in terms of confidence according to UHC and AACN research (Goode et al., 2009). New nurses typically begin with a positive attitude and are confident in their abilities. However, between the three and six month mark, nurses experience a form of reality shock and self-perceptions concerning their skills and abilities; a realization of both the true demands of their profession and the inadequacy of their current knowledge level.

Ultimately, by the end of the first year, nurses begin to regain confidence. Transition-into-practice programs assist in this confidence-building process by creating supportive environments (Zinn et al., 2012) structured around colleagues, both peer and preceptorship alike. This gives new nurses in residency programs the support and assistance they need to survive the observed “trough” in their confidence levels around the sixth month. Nurse residency programs have been shown to be builders of confidence with residents showing statistically significant increases in confidence in their clinical skills, ability to communicate with patients and patient’s families, and in their clinical leadership (Goode et al., 2009). As confidence builds, stress declines and, thus, residents experienced significantly less stress when compared to their peers with the same clinical experiences who were not involved in a residency program (Goode et al., 2009). Confidence is an essential attribute for nurses (advanced beginner and expert alike) for, without self-efficacy, individuals have less incentive to act or persevere in the face of difficulty (Bandura, 2001). Therefore, competence without self-confidence is insufficient in an environment that demands quick and timely decisions (Ulrich, 2009).

Perhaps, unfortunately, new nurses have reasons to be wary about their abilities. The National Council of State Boards of Nursing (as cited in Goode et al., 2009) found that only 41.9% employer respondents surveyed felt newly graduated registered nurses were prepared to give safe and effective care. Another similar finding by the Nursing Center (as cited in Welding, 2011) found that employers felt only 41% of their baccalaureate graduates were competent to care for patients. Lastly, a recent survey of nurse executives felt that only 10% of new graduate nurses were fully prepared to practice safely in the hospital setting (Twibell et al., 2012).

Both new graduates and employers, alike, identified the need for (1) further development of the technical skills required to provide safe quality care to acutely ill patients, (2) competence to provide care during emergency situations, and (3) the ability to organize and prioritize their work (Beecroft et al., 2001; Beecroft, Kunzman, Taylor, Devenies, & Guzek, 2004; Goode et al., 2009). Additionally, new nurses reported that their general nursing education did not provide them with the necessary skills in order to successfully transition into practice (Pittman & Herrera, 2013). Clearly, a vast divide exists between success in the classroom and the NCLEX exam and caring for patients autonomously; to address these discrepancies is the reason numerous hospitals have created nurse residency programs.

The nurse residency program concept grew out of an interest in improving patient care by providing additional training and support to new baccalaureate graduated (Caramanica & Feldman, 2010). Although more experienced nurses still benefit from orientation programs, both recent graduates and executive nurse leaders observed that the traditional orientation process is not sufficient to prepare new nurses to practice in today’s modern healthcare world (Trepanier, Early, Ulrich, & Cherry, 2012). Numerous studies in the literature show clear evidence that NRPs appear to accomplish their goals to bridge the gap between practice and classroom in ways that traditional orientation programs cannot. For example, results from a 10-year longitudinal database from Children’s’ Hospital of Los Angeles, demonstrate that when new grads complete a one-year RN residency they achieved the same level of skill found in non-resident new grads after an average of 17.1 months (Ulrich et. al., 2010). Fink, Krugman, Casey and Goode (2008) reported that new graduates who completed a nurse residency program have significant improvement in core competencies (as cited in Ulrich, Krozek, & Reinsvold, 2009). The National Council of State Boards of Nursing (2007), in addition, reported that new graduates make significantly fewer errors when residency programs addressed specialty care. This demonstration of a NRP’s ability to increase skills in new graduates in a fairly short amount of time with the right curriculum and environment is also reported by Overlake Hospital in Washington State. In a period of 18-22 weeks new graduate nurses were found to have the same skill set and competency level as new nurses without a residency program after 18 months. This dramatic improvement is accomplished by providing a supportive network and a consistent and constant education relevant to a nurse’s daily clinical practice. This system also allows education to occur in the same setting as it will be applied but with individualized attention and support (Zinn et al., 2012).

Barriers to Nurse Residency Programs

Despite the numerous and profound benefits of nurse residency programs barriers clearly must exist since such programs are not universal. Even though nurse residencies lower long-term costs to hospitals, considerable amount of resources are still required in order to implement these programs. Pittman and Herrera (2013) cite these initial financial costs as one of the considerable challenges hospitals face in implementing NRPs. Depending on the length of the program, the cost of program development, and hourly wages, costs can vary from $13,460 per resident to $36,960 per resident (Trepanier et al., 2012). This financial burden quickly multiplies due to the fact that most nurse residency programs consist of roughly 20-50 students spread across different nursing units. What makes this situation more daunting is the lack of sources of funding available for nurse residencies. Unlike the physician, pharmacy, and pastoral care residency programs, whose funding is provided from the Centers of Medicare and Medicaid Services, the costs for nurse residency programs are the sole responsibility of the hospital (Goode et al., 2009). Thus, unless the administration is convinced that these NPRs are, overall, cost-effective, (assuming the level of patient care is satisfactory) the incentive to create these programs is decreased.

In addition to funding issues, hospitals also create barriers to nurse residency programs through a reluctance to hire new nurses; many positions that used to attract new nurses to hospitals in the past now require one to two years of experience. Facilities have turned to this strategy as a direct result of the higher costs associated with hiring new graduates such as increased turnover and the need for additional orientation and training (Goode et al., 2009). Therefore, if a facility is not looking to hire new graduates it is logical to conclude that a new graduate nurse residency program is unwarranted. However, just like outsourcing vacant positions and asking staff to work overtime, this too is only a stopgap measure since, as mentioned earlier, a large part of the current nursing population soon will be retiring. Once this exodus of experienced nurses occurs, hospitals will be forced to look to new graduates to staff their facilities (Goode et al., 2009). By having new-graduate nurse residency programs already in place before this shortage materializes, facilities have the opportunity to streamline programs and already usher in a new generation which will lessen the impact, both financially and in patient care, felt by a substantial staffing change. Such a proactive approach, instead of a reactive one, allows the facility to plan, implement, evaluate, and modify their programs, policies, and staff.

Even though direct barriers such as cost clearly exist in preventing the establishment of more nurse residency programs, less obvious indirect barriers exist as well. Despite evidence-based research regarding residency benefits, transition-into-practice-programs are shrouded in confusion, false perceptions, and concerns that also hinder their implementation. At times, NPRs, themselves, can add to this through their lack of consistency in their labeling, definition, and length which makes comparisons across programs sometimes difficult (Anderson, Hair, & Todero, 2012). T his lack of congruency prevents the formation of a consistent identity for these transition-into-practice programs.

Without having a strong informational foundation, misconceptions about the programs are able to propagate with greater ease. Wierzbinski-Cross, Ward, and Nicholson (2013) reported that a negative perception of the NPR’s implementation costs, cost per patient day, and return on investment is a major problem. Despite the evidence saying otherwise, this preconceived notion of financial burden and lack of monetary reward prevents residency programs from even being discussed at many hospitals. Additionally, facilities also worry that implementing a program will shift senior staff away from more critical tasks and a lack of faculty who can supervise the new graduates as they learn (Pittman et al., 2013). At the same time, nursing schools worry that nurse residencies will reduce the number of clinical placements available to their students as it would create staff conflicts (Hutson, 2014). This clear disconnect between the evidence and perception demonstrates that information regarding nurse residency programs is muddled - for both hospitals and to nursing schools.

Informational Limitations

There were several limitations found during the process of researching the benefits and barriers of nurse residency programs. The first is a need for more current, up-to-date data. A considerable effort was put forth to try and procure peer-reviewed articles published within the past five years. For the most part this was successful. However, there are some articles that fell outside of the target year range. They were included for such reasons as: (1) either these articles describe core concepts that have remained unchanged such as Bandura’s definition of self efficacy, (2) were the most recent article, or (3) reinforced other research findings. Data regarding new graduate turnover rates were particularly difficult to locate.

The second limitation encountered was the presence of inconsistent statistical data. Although a unanimous theme was an overall general improvement due to nurse residency programs, different articles for the same time period reported different numbers. This also held true for locating certain key baseline data such as turnover rates and the number of nurse residency programs currently available throughout the country. In order to present an accurate account of the available data, the researchers (when there were discrepancies) chose more conservative numbers when choosing between two options or the authors listed a range.

The third limitation addressed briefly in the ‘barriers’ category is the lack of uniformity amongst nurse residency programs. Despite the general consensus of nurse residencies providing benefits to new nursing graduates these programs can vary state to state, or even hospital to hospital. These inconsistencies exist in length of program, curriculum used, specialty areas, unit floating, classroom hours, number of students, and proven results. Although some programs like one created by Versant exist across numerous states such as Texas, Florida, California, Oregon, and Washington, others are created and exist only at one specific hospital such as at Cedars Sinai Hospital in Southern California. What is more, after a review of the available literature it was found that the efficacy of smaller programs was under represented when compared to multi-state residencies. This hinders a direct comparison amongst all nurse residency programs in terms of their effects on new nurse confidence, competence, retention, and so much more. This then adds to confusion and exacerbates the misconceptions about transition into practice programs and possibly hinders their implementation into more facilities.

Student Perspective

Even though nursing students are only a piece of the residency puzzle they also represent one of the largest influential factors. Nursing student perspectives present a unique opportunity for new graduates to change the residency landscape. If the majority of nurses and nursing students demand and look for nurse residency programs more pressure would be on facilities to implement them. Even though nurse residencies are too few in number to meet the current demand, the vast majority of nursing students do not seek out residency opportunities. Students cited numerous reasons behind their reluctance to seek program positions. To many students these programs are seen as a negative reflection upon their skills and confidence or a form of clinical remediation. Despite the programs advertising that they are paid positions, students are also under the impression that they are unpaid internships, similar to clinical rotations and consequently do not seek out further information. Academic fatigue is another factor; after having finished a nursing degree, new graduates want to simply go out into the world and work and not want continued academics.

However, the largest student-centered issues surrounding nurse residencies is a lack of information. Many nursing students report that their program either failed to mention nurse residency programs or what information provided was inaccurate. What is more, if information about residency programs was provided and accurate it was often delivered at inappropriate times such as a few weeks before graduation or the very start of the nursing program. This makes the information less potent and uninfluential for it is easily forgotten or many students have already decided that they simply wish to work.

A disconnect exists between the evidence and the perception of nurse residency programs. Many nursing school faculty members openly voice that nurse residency programs are not needed due to orientations, despite the evidence in the literature stating orientation for new graduates are not sufficient. Ironically, BSN programs which emphasize research, leadership, and utilizing evidence based practice have glossed over compelling evidence in the literature for over twenty years. In BSN programs which strive to empower future nurses to advocate for their profession and to be treated equally amongst healthcare providers it is surprising that leaders and educators within the community would not welcome changes in policy which would help nursing strive towards equal footing. The unintentional propagating of new graduate orientations serving as successful transition programs only fuels false new graduate confidence, prevents the pursuing of residency programs, and in the end negatively affecting patient care. Need us not forget that the Nursing Center found that only 41% of BSN graduates were competent to care for patients (Welding, 2011). Therefore clearly current transitional programs such as extended orientations are not adequate to successfully transition nursing students into competent independent nurses.


Clearly barriers exist ranging from implementation costs to false perceptions. Although no one solution or recommendation exists, there are steps that could be implemented to help influence nurse residency program implementation. Based on a thorough review of the literature and speaking with peers the first recommendation proposed by the authors is to have nursing schools include accurate and evidence based residency information incorporated into the school curricula at the start of the first year. This should help dissipate false perceptions about the programs and help eliminate confusion. The second suggestion is to lobby for standardizing nurse residencies as entry into practice. This will allow for Medicare and Medicaid funding, help elevate nursing as equals amongst other health care professionals, and most importantly improve patient outcomes. The third suggestion is to have schools of nursing coordinate with health care facilities to help strengthen glaring clinical weaknesses.

Nurse residencies have found to benefit all stakeholders involving ranging from nurses to managers. In an environment where patients are being admitted with higher acuity, being able to provide competent patient care has never been more important. It is unrealistic to place the burden on schools or nursing alone. Other health care professions have realized that a clear divide exists between academic and clinical practice. Therefore, in order to provide safer care on the same level as other professions, nurse residencies can help bridge the gap, increase retention, lower costs, and improve patient outcomes.

The authors wish to thank Tammy Gravel of Massachusetts College of Pharmacy and Health Sciences’ Worcester Campus for her support and guidance during the construction of this manuscript.


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