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The Business Case for Magnet® in an International Hospital

February, Tracy MBA, MCur, RN; Holmes, Sandra PhD, RN

Author Information
JONA: The Journal of Nursing Administration: October 2020 - Volume 50 - Issue 10 - p 533-538
doi: 10.1097/NNA.0000000000000930


The American Nurses Credentialing Center's (ANCC's) Magnet Recognition Program® is the “premier international acknowledgment of nursing excellence in healthcare organizations.”1 Despite the reported improved patient outcomes of Magnet®-designated hospitals,2 the financial expenditure to pursue this accreditation can be a deterrent. Outside the United States, there are currently only 12 hospitals with Magnet designation.

The healthcare environment for an international hospital and the context within which these hospitals function bring their own challenges in implementing Magnet standards. International hospitals may not be in control of their own budgets, and financial decisions may be made at a centralized board rather than relying on the hospital executive team or corporation. In pursuing Magnet accreditation, the support of the entire decision-making team is needed. In the past, there has been some debate as to whether the pursuit of Magnet designation, given the financial investment required, is really of value. The aim of this article is to provide nursing executives outside the United States with evidence of cost savings from a non-US hospital that embarked on the Magnet journey.

Drenkard3 wrote about building the business case for Magnet in a large facility (~500 beds); Higdon et al4 wrote about the business case for Magnet in a small hospital (<100 beds). Both these articles described the business case from the perspective of a hospital functioning in the United States. Several hospitals from the Middle East, specifically the Kingdom of Saudi Arabia (KSA), attended the International Forum event at the 2019 Magnet Conference. This shows a growing interest in Magnet accreditation from KSA. Nurse executives and Magnet project directors from international hospitals will find it valuable to present data relating to a peer hospital when presenting the business case to the hospital executives and other decision-makers.


King Fahad Specialist Hospital–Dammam (KFSHD) is a 360-bed Ministry of Health (MOH) hospital. The MOH is the major government agency committed to providing healthcare services for the Saudi population. Other governmental agencies that deliver healthcare are targeted for security or the armed forces industries such as the Ministry of National Guard, the Ministry of Defense and Aviation, and the Ministry of Interior.5 The MOH governs decisions regarding legislation, regulations, budgeting, and financing for hospitals under its jurisdiction. It is interesting to note that the 2 (current) Magnet-designated hospitals in Saudi Arabia (King Faisal Specialist Hospitals in Riyadh and Jeddah) are not affiliated with the MOH, and together they are an independent general organization.

There have been global shifts to health systems recently, most notably the establishment of corporate hospitals; the introduction of 3rd-party payers (insurance companies, governments, companies, etc.); increasing awareness among patients due to availability of information through the internet; and higher expectations of patient care. Hospitals in KSA have not been exempt. King Fahad Specialist Hospital–Dammam is set to become an Accountable Care Organization (ACO). An ACO is an organization that is accountable to patients and 3rd-party payers for the quality, appropriateness, and efficiency of the healthcare provided.6 This is a new system for KFSHD, and budgeting, financing, and payment systems are being restructured, which impacts funding for projects.

More recently, KFSHD has started serving 3rd party payers. Given that KFSHD is a tertiary hospital, it offers a large number of specialized patient services. Chief among these are its oncology services, which are inclusive of radiation therapy. King Fahad Specialist Hospital–Dammam is the only oncology center in the Eastern Province, the largest province in KSA. This has led to an increased number of patients being served, on an inpatient and outpatient basis, at the hospital.

The fact that KFSHD is a tertiary hospital has increased expectations from patients on not only the type of care delivered but also the quality of the care. Being recognized as a Magnet hospital is considered a demonstration and outcome of this expectation. Agreeing and establishing support for the investment in nursing were the 1st step in this process. King Fahad Specialist Hospital–Dammam considered commencing the Magnet journey in 2012 when the executive director of nursing presented the business case of Magnet and convinced other executives of the value of Magnet to patients and the organization. It was agreed to create a position in nursing services for a nurse manager for Magnet accreditation (Supplemental Digital Content 1, This person would have overall accountability for implementing all Magnet-related processes and accreditation standards.7 The Nurse Manager: Magnet position was initially filled in October 2012.

The financial investment in the Magnet journey stretches well beyond the appointment of new staff. Magnet-related expenses include, but are not limited to, purchasing AdamPlus, the ANCC's online submission platform, subscribing to the National Database for Nurse Quality Indicators (NDNQI) in order to benchmark both the nurse satisfaction and nurse sensitive indicators, subscribing to an external vendor to collect patient satisfaction, and attending professional development opportunities such as the Magnet conference. It is against this background that the authors explored whether such an investment is truly of value for a public (MOH) hospital where access to funding, legislation, and regulations are centralized.

Return on Investment Opportunities

As part of the application for Magnet accreditation, the organization needs to submit a list of externally managed databases for nurse satisfaction, patient satisfaction, and nurse-sensitive indicators.8 During document submission, Magnet organizations need to show that they outperform the benchmarks for nurse satisfaction, patient satisfaction, and nurse-sensitive indicators (NSIs). A growing body of research has shown that Magnet hospitals have decreased RN turnover, improved clinical outcomes, and increased patient satisfaction.9-11 While these aspects are measurable, there are other aspects such as shared governance that allow for nurse autonomy and decision-making whose impact is more challenging to quantify. It is often these more difficult investments that impact other areas that generate the quantifiable return on investment.

Benefits of Magnet Journey

Nursing Satisfaction

Nursing satisfaction is conceptualized as the nurses' positive feeling response to the work conditions that meet his/her desired needs as the result of their evaluation of the value or equity in their work experience.12 Nurse characteristics, the environment, and the work setting all influence the level of satisfaction. The previous study identified several variables as essential to supporting an environment that is satisfying to nurses, including how happy they are, feelings of fulfillment, and how valued they feel. Objective measurements of these variables are available. King Fahad Specialist Hospital–Dammam subscribes to Press Ganey13 RN satisfaction to evaluate nurse satisfaction. We wanted to ensure that our survey was conducted by an impartial 3rd-party vendor and that our results were appropriately benchmarked against a peer group. This survey is conducted in October each year.

In the Press Ganey survey, KFSHD is benchmarked against other teaching facilities. The number of units surveyed has increased from 32 in 2015 to 35 in 2019 (based on changes in service areas); the response rate for the staff has increased from 79% (2015) to 94% (2019). The nurses at KFSHD report increased satisfaction from 2015 to date. In the RN-RN relationship satisfaction category where nurses are asked to rate the teamwork and support from other nurses in their unit, the score has increased from below the 25th percentile in 2015 to above the 50th percentile in 2019 in a comparison with 2566 other units in the comparison group.

The relationships between RN and MD have also improved, from below the 25th percentile in 2015 to the 90th percentile in 2019. Efforts have been made by nurses and physicians in KFSHD to improve relationships. The RN-MD satisfaction, similar to that of the RN-RN satisfaction, increased to above the 50th percentile in October 2017. The monetary savings from RN satisfaction is credited to the improved RN turnover rate.

Nursing Retention

Nursing shortage is a global concern. In the healthcare context of Saudi Arabia where employment is contractual in nature, it is important to hospitals to retain their staff. Hospitals benefit from the institutional knowledge that long-term employees contribute. The majority of patients in Saudi Arabia are Arab Muslim and the knowledge and experience of nursing this population while remaining respectful of cultural and religious values contribute to patient-centered care and patient satisfaction.

In 2017, there was an increase in turnover rate due to the fact that locum staff from a nearby hospital suffering bankruptcy were hired. Unfortunately, the nurses had to leave employment at our hospital to become permanent staff as the issue of a work visa is dependent on coming from outside the Kingdom. Despite this, there has been a decrease in the turnover rate of nurses at KFSHD from 2015 to date. Figure 1 indicates the turnover rate of bedside nurses at KFSHD.

Figure 1
Figure 1:
Turnover rate of bedside RN at KFSHD 2015-2019.

While there are no data available in KSA, the 2020 report by Nursing Solutions Inc (NSI)14 has provided some data for hospitals in the United States. Approximately 164 facilities participated in the NSI report by providing data relating to RN retention and staffing strategies. Similar to our data, the NSI report included data on terminations, both voluntary and involuntary, but did not include internal transfers.

The retention of nurses allows hospitals to receive the return on investment for the educational and development opportunities offered to nurses. The average total RN turnover rate for 202014 is calculated at 15.9%, with the average cost of turnover for a bedside RN estimated at US $44 400. This would equate to a cost of 166 500 Saudi Arabian Riyals (SAR) per bedside RN. Given the turnover improvements, the retention of bedside nurses has saved KFSHD a total of 832 500 SAR (US $222 000) from 2015 to 2019.

Patient Safety Measures

The satisfaction of nurses has been shown to positively impact patient safety measures. Early in the Magnet journey, the decision was made to focus on, but not exclusively address, pressure injuries, falls, catheter-associated urinary tract infections (CAUTIs) and central line–associated bloodstream infections (CLABSIs). The unit-level achievements for these NSIs are shared with the nurses on 3 levels. First, the information is shared immediately following the incident or detection, usually by the infection preventionist or Nursing Quality Improvement department member. The 2nd level is that monthly and quarterly results of these NSIs are shared with the units via email. Lastly, these results are also shared at hospital level through a monthly and quarterly report that is shared to all KSFHD employees and posted on the intranet of the hospital.

The units print these results and post them on quality boards that are displayed in the units. For ease of reference, these results are color coded: green indicates that the score is below the benchmark, red indicates that it is above the benchmark (exceeds the acceptable level), and orange indicates that the result is approaching the benchmark. The results are discussed at unit level, usually at a Clinical Practice Council meeting. The staff develops an action plan to address concerns if any exists. These action plans include quality improvement initiatives and have ranged from reeducation on existing policy implementation and acquiring additional items, for example, an alcohol cap for a CVP line and innovative ideas such as translating instructions into phonetic Arabic so that non–Arabic-speaking nurses are able to convey the prevention strategies for falls to Arabic-speaking patients. These initiatives are clinical nurse–driven and –led. They resulted in KFSHD reducing their rate on all 4 identified NSIs. The total number of falls, pressure injury, CLABSI, and CAUTI cases for KFSHD decreased for all but 1 time point from 2015 until 2019 (Table 1). These patient outcomes are directly related to vigilance and actions introduced to support meeting Magnet program requirements.

Table 1 - Number of Falls, Pressure Injuries, CLABSI, and CAUTI at KFSHD 2015-2019
2015 2016 2017 2018 2019
Total no. of CLABSI cases 38 17 (55%) 27 (−59%) 14 (48%) 10 (29%)
Total no. of CAUTI cases 62 36 (42%) 22 (39%) 10 (55%) 9 (10%)
Total no. of falls 93 64 (33%) 59 (8%) 39 (34%) 38 (3%)
Total no. of pressure injuries 93 84 (10%) 56 (33%) 47 (16%) 42 (11%)

Zimlichman and colleagues15 published an article on the analysis of cost and financial impact of healthcare-associated infections in 2013. The financial benefits obtained by KFSHD during 2015 and 2016 are based on the results of this study. In 2017, the Agency for Healthcare Research and Quality16 has estimated the additional hospital inpatient cost and mortality associated with selected hospital-acquired conditions at a 95% confidence interval as follows: falls would cost US $6694 per case, pressure injury US $14 506 per case, CLABSI $48 108, and CAUTI $13 793 per case. This would equate to 25 102 SAR for falls, 54 397 SAR for pressure injuries, 180 405 SAR per CLABSI, and 51 723 SAR per CAUTI case.

Patient Satisfaction

In the United States, it has been estimated that the loss of 1 patient because of patient dissatisfaction can lead to a loss of approximately US $200 000 over the lifetime of a practice.17 Furthermore, nursing turnover also affects patient satisfaction, as nursing turnover increases, the percentage of patients satisfied with their care decreases.9

Patients, who are customers of the healthcare system, communicate their satisfaction or dissatisfaction to others. The McKinsey Quarterly18 has reported that the word-of-mouth rates (in the mobile phone market) for positive and negative messages can increase a company's market share by approximately 10% or decrease it by approximately 20%, with all other things being equal. The financial return on investment for patient satisfaction therefore lies in the facility's ability to attract customers based on current patient experience.

King Fahad Specialist Hospital–Dammam has been part of the MOH Patient Experience Program since its initiation in 2018. The MOH results are reported at the facility level; no breakouts of wards, departments, or clinics are reported. In late 2018, KFSHD initiated discussions with Press Ganey to expand its program to a breakout level in order to report results at a ward and clinic level. The information technology department at KFSHD worked closely with Press Ganey to finalize the datasheets to be submitted to Press Ganey. Next, KFSHD needed to be benchmarked against the appropriate peer group. The 1st peer group used for benchmarking at KFSHD is the All PG Database; this database will compare KFSHD scores against all US facilities for a specified service type. The 2nd peer group used for benchmarking in the region is the Gulf Cooperation Council (GCC) peer group; this group contains facilities in the Middle East. Patient satisfaction with nursing overall results for inpatient and medical practice with the GCC benchmark shown in brackets is depicted in Table 2.

Table 2 - Patient Satisfaction With Nursing Overall for Inpatient Units and Medical Practice
Patient Satisfaction With Nursing Overall Q2 2019 Q3 2019 Q4 2019 No. of Facilities in Peer Group
KFSHD inpatient units 90.4 (84.6) 91.7 (84.4) 91.7 (85.8) 155
KFSHD medical practice 87.2 (75.9) 89 (75.9) 89.3 (75.8) 213

Summary of the Financial Benefits

The financial benefits that KFSHD has realized during the journey to Magnet accreditation outweigh the investments made. A total saving of 8 977 608 SAR (approximately US $2.3 million) has been noted over a 5-year period. The detail of the expenditure and cost-savings are reflected in Table 3. Net savings are noted in clinical care through the reduction of hospital-acquired infections, falls, and pressure injuries; the retention of nurses; and better management of consumable goods. Although not every hospital will achieve the same level of cost savings, the possibility of achieving a degree of the savings in the table above cannot be overlooked and may exceed our findings.

Table 3 - Financial Benefits of Magnet® Journey
Item 2015 2016 2017 2018 2019
NDNQI subscription 26,737.5 29,287.5 30,457.5 31,971.895 31,676.25
RN Satisfaction Magnet Module subscription 4687.5 4875 4875 4875
Patient Satisfaction subscriptiona 402,765
Pre-intent Program subscription 37,500
Attendance of conference 2018b 82,000 84,000 88,169 86,193
Application 18,750
Consultant for document review 139,591
AdamPlus System 62,813
Document review 142,500
Additional document submission 13,125
Site visitc 174,126
Patient safety indicators
 CLABSI −3,607,853 1,804,050 −2,345,265 −721,620
 CAUTI −87,360 −724,133 −620,685 −51,724
 Falls −12,5513 −502,050 −25,102.5
 Pressure injuries −174,724 −152,3130 −489,577.5 −271,988
Nurse indicators
 RN retention −1,165,500 6,993,000 −6,160,500 −499,500
 AORN certification 94,770
 MOTC certification 2437.5
RN-driven cost-saving initiatives
 Converting nonstock items in OR −276,618
 Total cost per annum 108,737.5 −4,917,461 6,497,108 −9,750,957 −915,035
 Savings over 5 y 8,977,608.11
aSubscription is for a 2-year period (2018-2019).
b2015 and 2016 are an estimate, did not attend conference in 2017.
cThis includes flights, accommodation, and appraiser fee.

Conclusion and Implications

Magnet accreditation supports and encourages nurses to take ownership of the profession and work toward building an environment that consistently demonstrates safe, high-quality, efficient, and effective care. These factors are quantified by high levels of nursing retention, exceptional delivery of care and positive patient outcomes, and a reduction in healthcare cost. While the initial investments in undertaking the Magnet journey seem high, the return on the investment in our experience exceeds the cost, especially when considering the impact that it had on improving the health and well-being of the patients and providers served.


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