By Brian Reeves, BSN, RN, Nursing Laboratory Manager, Loewenberg College of Nursing, Lambuth Campus & Dawn Hovas Kallaher, MSN, RN Director of Simulation & Clinical Assistant Professor, Loewenberg College of Nursing, Memphis Campus

As the Director of Simulation and Nursing Lab Manager at the Loewenberg College of Nursing, we’re living through a transition many of you may recognize. Our university recently adopted a Responsibility Center Management (RCM) budget model.

If you’ve experienced this shift, you know the impact it has on day-to-day operations. Instead of depending on broader university funds to help cover costs, each college is now responsible for generating its own revenue and managing its own expenses. That means every choice we make in the simulation lab, whether it’s investing in equipment, replacing consumables, or expanding access, has to fit the budget.

In the past, our simulation department enjoyed a degree of financial flexibility, with university-level funds often covering additional costs. This support gave us the freedom to grow, experiment, and innovate without watching every penny. Today, under the RCM model, every expense must now be carefully planned, justified, and aligned. The margin for error is much narrower than before.

This new environment has pushed us to think differently about how we allocate resources, especially when it comes to balancing traditional manikin-based simulation with newer virtual reality (VR) tools.

The Budget Pressures We Face

This new budgeting model arrived at a time when several external challenges were also taking shape affecting student enrollment which in turn directly affected our budget:

• Admissions standards are rising, narrowing our applicant pool.
• The national “demographic cliff” is beginning to show its effects, with declining enrollment forecasts.
• As enrollment drops, tuition-driven revenue declines too, shrinking what’s available for simulation growth.

Strategic planning is no longer optional; it’s essential.

Why We Ran the Numbers

When I (Brian) was hired as the Lab Manager at the Lambuth campus, I had no idea one of my first assignments would be building a virtual reality nursing lab—one of the first in our area. We had just received a grant for this purpose, and because the Lambuth campus was awarded those funds, I was tasked with launching it.

After getting the VR lab up and running successfully for a couple of years, we began asking the natural next question: how could we extend VR access to our main campus? And more importantly, could we actually afford the expansion under RCM?

That’s what prompted us to compare the real costs of traditional manikin-based scenarios with those of VR. We already had detailed records of the expenses tied to traditional simulation—equipment, maintenance, consumables, space usage, faculty time. With a fully operational VR lab at Lambuth, we were able to collect similar data for VR. 

Some clear differences quickly emerged.

In-House Cost Analysis: Manikins vs. VR

1. Upfront Costs

If you’ve ever priced manikins, you know the sticker shock. They can cost up to $100,000 for a single manikin. Beyond the manikin itself, you need beds, monitors, and supporting equipment. VR requires less upfront investment: headsets and software. And unlike physical equipment, VR offers multiple types of clinical scenarios in one platform without additional purchases.

2. Ongoing Maintenance

This is where traditional simulation adds up quickly. Manikins break down. They require constant upkeep. Some of ours need $8,000–$10,000 per year in warranties alone. In contrast, VR maintenance is much lighter—software updates and the occasional hardware refresh. That frees resources for other priorities.

3. Staffing Demands

Running back-to-back manikin simulations is a heavy lift. You set up the space, run the session, debrief, reset—and do it all over again. VR lightens that load with minimal setup, allowing our staff to focus less on logistics and more on supporting learners.

4. Scalability

Physical space limits how many learners we can serve at once. VR removes many of those barriers. Multiple students can train simultaneously—even remotely—which opens new doors for access across campuses. 

5. Flexibility & Customization

Traditional simulations are tied to specific rooms and setups. VR is portable, adaptable, and customizable to different learners and objectives. That flexibility has been hard to ignore in our planning.

Why It Matters

We are hopeful the results of this cost analysis will help drive our budgeting decisions, justify funding requests, and potentially open the door to more scalable and sustainable simulation solutions. In an RCM-driven environment, data-driven decisions are essential. Having clear, detailed cost comparisons strengthens our case when advocating for investments that truly align with both educational goals and financial realities. One of our current projects is to develop virtual scenarios that would help to train preceptors working with our students.  This would not only be beneficial to us but would also benefit our clinical partners by strengthening their workforce.

What We’d Tell Our Peers

We’re not suggesting VR should replace traditional simulation altogether. Both have unique strengths. But if your college is under financial pressure (and whose isn’t right now?), our biggest takeaway is this: don’t wait to run the numbers. Compare the full costs—equipment, maintenance, staffing, scalability—side by side.

That analysis will give you the clarity you need to advocate for resources and make informed choices about where to invest next. For us, it’s not about choosing one tool over the other. It’s about using both wisely, in ways that strengthen learning and keep simulation sustainable.