Fix Staffing Ratios by Monetizing the Value of Nurses

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by LeChele Mack LeChele Mack, BSN, RN (New)

Specializes in Corrections, Psychiatry. Has 5 years experience.

Insufficient staffing is a significant contributor to nurses leaving the bedside. Creating monetary value for nurses through Medicare and Medicaid reimbursement could be a way to incentivize increased hiring of nurses.

Have you heard the adage that doctors are income generators and nurses are an expense?

Fix Staffing Ratios by Monetizing the Value of Nurses

This is not just a saying, it is reflected in the business of healthcare. Let’s look at one of the largest healthcare corporations in the United States, HCA healthcare. Evidence of this physicians generate income, nurses cost money idea can be seen in HCA healthcare’s financial statements. Their discussion of physicians compared with nurses and ancillary staff in their 2021 financial statements when discussing labor matters perfectly illustrates this point. “Physicians are an integral part of the success of our hospitals in delivering quality care to our patients (HCA Healthcare, 2022, p. 33).” Here doctors are viewed as an asset contributing to corporate success. “In some markets, nurse and medical support personnel availability and retention have become significant operating issues to healthcare providers (HCA Healthcare, 2022, p. 33).” Here retaining and hiring nurses is not “integral to success” but an expensive labor cost and operational issue. This point is further driven home by a recent article that reports that HCA healthcare is among several hospital operators looking to increase rates to offset labor costs, especially for nurses (Lokuwithana, 2022). This drive to increase rates has little to do with any actual need or lack of funds. For HCA healthcare, revenue increased 14% from $51.533 billion in 2020 to $58.752 billion in 2021 and net income increased from $3.754 billion in 2020 to $6.956 billion in 2021 (HCA Healthcare, 2022, p. 66). As we know, in corporate, for-profit system money is the driving factor for decisions made within that system.

Nurses are an expensive labor cost that corporations want to decrease, minimize, and offset.

From that view, there is no motivation for any healthcare corporation to increase nursing staff. That is a problem central to the nursing shortage. Insufficient staffing is a major factor that drives nurses to leave the bedside and/or the profession. A survey conducted in November of 2021 found that 32% of respondents (a 10% increase in less than ten months) reported thinking about leaving the bedside (Berlin et al., 2022).  One of the major driving factors reported was insufficient staffing (Berlin et al., 2022). While several states have adopted legislation to adopt mandatory nurse-to-patient ratios, it isn’t enough. State-by-state legislation is cumbersome and complicated. What is needed is a federal standard. This could be accomplished by tying nurse-patient ratios with either reimbursements or increased payments from the Centers for Medicare and Medicaid (CMS).

This would change nurses from an expensive labor cost to a means of financial savings or income generator. Nurses already add value and decrease costs to healthcare facilities. Research has shown that increased nurse staffing improves the quality of care. Increased nurse staffing levels lead to decreased rates in healthcare-acquired infections (Mitchell, Gardner, et al). Healthcare-acquired infections (HAIs) are a significant cost to facilities. According to the CDC costs from HAIs in U.S. hospitals exceeds $28.4 billion annually. Additionally, research shows that increased nurse staffing and having higher proportions of bachelor’s degree nurses are associated with lower patient mortality (Haegdorens et. al. 2019). It is clear that nurses add value, but right now that value is not translated into dollars on a balance sheet. 

CMS Value-Based Programs

The precedent has already been set for incentivizing quality care through reimbursement and/or increased payments. CMS value-based programs do just that. For example, one CMS value-based program, that many nurses are familiar with, is the Hospital-Acquired Condition (HAC) value reduction program. This program reduces reimbursement for such conditions as pressure ulcers, and post-operative sepsis acquired during the hospital admission ((CMS’ Value-Based Programs | CMS, n.d.)) Another, CMS value-based program, that fewer nurses may be aware of, is the Quality Payment Program. This program is designed to reward high-quality Medicare clinicians with payment increases (Quality Payment Program Overview, n.d.). 

If these programs are about quality care it is the logical next step to add safe nurse staffing to CMS.

The evidence is available to show that increased nursing staff leads to safer, higher-quality care, and linking safe staffing ratios to reimbursement or to increased payments would incentivize healthcare corporations to increase nurse staffing levels. This would relieve one of the factors driving nurses away from the bedside.


References

Berlin, G., Lapointe, M., & Murphy, M. (2022, February 18). Surveyed nurses consider leaving direct patient care at elevated rates. McKinsey & Company. Retrieved June 1, 2022

CMS’ Value-Based Programs | CMS. (n.d.). CMS.Gov. Retrieved June 1, 2022

Haegdorens, F., Van Bogaert, P., De Meester, K. et al. The impact of nurse staffing levels and nurse’s education on patient mortality in medical and surgical wards: an observational multicentre study. BMC Health Serv Res 19, 864 (2019)

HCA Healthcare. (2022, February). 2021 Annual Report to Shareholders. 

Lokuwithana, D. (2022, May 9). Hospitals seek price hikes to offset rising nursing costs - WSJ. SeekingAlpha. Retrieved June 1, 2022,  

Mitchell BG, Gardner A, Stone PW, Hall L, et al. Hospital staffing and healthcare-associated infections: a systematic review of the literature. Jt Comm J Qual Patient Saf. 2018;44:613–22. 

Quality Payment Program Overview. (n.d.).  Retrieved June 1, 2022

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9 Comment(s)

SmilingBluEyes

Specializes in Specializes in L/D, newborn, GYN, LTC, Dialysis. Has 25 years experience. 20,949 Posts

This is not a new concept; nurses and other staff are just an expense to corporations; this we know. It's also not a new idea to "charge" for nursing services. I have heard this for years.

They can add in what nursing care costs to the bill but I DOUBT SINCERELY they will increase safe staffing accordingly. There is no end to the greed in healthcare today, HCA or otherwise.

Color me a cynic.

Nurse Beth, MSN

Specializes in Med Surg, Tele, ICU, Ortho. Has 30 years experience. 147 Articles; 2,611 Posts

Nurses are included in the room rate.

As long as nurses are employees, this is not likely to change.

DallasRN

DallasRN

Specializes in ICU/ER/Med-Surg/Case Management/Manageme. 225 Posts

When I entered the profession 40 years ago it was the same.  Doctors generate, nurses are an expense.  Nothing has changed other than the workload on nurses has increased.  At the same time, articles are published about mortality rates associated with staffing ratios, education, etc. Go figure.  While the nurse is receiving a water cup with the hospital logo and a "free" cateteria turkey dinner served in a styrofoam container while working Christmas day, the hospital CEO's and doctors/wives/SO's are celebrating with big parties at posh hotels...dinner, dancing, open bars, gifts.  I know. I've seen it.

subee, MSN, CRNA

Specializes in CRNA, Finally retired. Has 50 years experience. 3,925 Posts

Some brave nurses will have to get all he nurses in the hospital to quit and then come to work for a newly created agency that would supply nurses to that hospital.  Let the market rule in this case.  Of course  nurse's value will rise or fall.  It would be up to our profession to decide how to regulate our numbers.....or not.  

Wuzzie

4,812 Posts

You can bet the farm that if we were billed for like every single other provider the staffing issues would go "poof"! Sadly right now we are billed with the furniture. 

subee, MSN, CRNA

Specializes in CRNA, Finally retired. Has 50 years experience. 3,925 Posts

2 hours ago, Wuzzie said:

You can bet the farm that if we were billed for like every single other provider the staffing issues would go "poof"! Sadly right now we are billed with the furniture. 

It's up to us to change to model but I'm not business savy enough to know how this could be accomplished except for private funding by the nurses themselves.  This wheel has already been invented by other practitioners BUT at the same time I realize that hospitals have gobbled up private practices to the point that hospitals are being scrutinized for monopolization of big chunks of geography.  Check out National Nurses in Business.  I'm sure this could be done but it would cause angina in the nurses who aren't interested in becoming self-employed and the extra work that comes with it.

Wuzzie

4,812 Posts

I think I wasn't clear. I didn't mean individually I meant as a department. For example, where I work if a patient is seen by a dietician they get billed a fee for that visit which is just a generic "dietician eval" but there is no such charge for nursing. If hospitals billed for nursing care separate from the room charge and could tailor it to what level of care was provided  we would never be short staffed again. 

DallasRN

DallasRN

Specializes in ICU/ER/Med-Surg/Case Management/Manageme. 225 Posts

1 hour ago, Wuzzie said:

I think I wasn't clear. I didn't mean individually I meant as a department. For example, where I work if a patient is seen by a dietician they get billed a fee for that visit which is just a generic "dietician eval" but there is no such charge for nursing. If hospitals billed for nursing care separate from the room charge and could tailor it to what level of care was provided  we would never be short staffed again. 

You probably aren't old enough to remember (old in nursing years!!) but way back in the early 1980's hospitals started doing all these "time studies". They hired consulting firms to come in "and literally time us as we went about our jobs...how long to put in an IV? drop a NG tube? make a bed? give a bath? do an assessment?  Tons of stuff.  And from what I understand, after terrorizing the nursing staff with stop watches (literally), nothing came of it.  Allegedly these studies were going to be used to cost out the value of nursing services.  We all know there are millions of factors that go into providing even very basic nursing care to an almost well patient.  That doesn't encompass really sick/injured patients and the time spent with families, etc.  We also run the risk of becoming like doctors in the sense you have an appointment, you're allowed 10 minutes, you walk out more confused than when you walked in, and try to reschedule to get a second concern addressed.  

Personally, I think where nurses should focus in a private practice type of arena is on patient ED. Contract with doctors/hospitals to provide excellent education - not cut and paste garbage - but personalized.  Contract with Medicare/Medicaid.  Nurses could drastically reduce the cost of healthcare if utilized properly.  Anybody can be trained to place an IV but it takes education to educate.

Wuzzie

4,812 Posts

Oh I’m plenty old enough to remember those (😩) but I still think if we were billed as a separate specialty (which we are) we would be seen as an income generator not an expense and hospitals would see the benefit of hiring enough staff. It’s not likely to happen but a girl’s gotta dream.