Nurses are essential to high quality healthcare delivery. However, some might be surprised to learn that nursing services are folded into the room, board, and facility charges for hospitals in the reimbursement framework used by the Centers for Medicare and Medicaid Services and other healthcare insurance payers. Since nurses represent the largest labor expense in healthcare facilities, nursing positions are budgeted as a cost as opposed to a revenue generator. In contrast, physicians and advance practice clinicians can bill for their professional services and are recognized as revenue generators for the organization. Despite the high-level professional services that RN's provide, their value to payers gets lost within the fees for the patient room and its amenities.
Cost-cutting efforts in healthcare are substantially focused on reducing nursing labor expenses by decreasing the allocation of nurses “budgeted” for selected work settings. One might expect that changes to the nurse staffing complement are based on clinical, evidence-based, and nurse-driven decisions; sadly, that is not usually the case. Non-nurse administrators and financial officers typically determine the final budget allocations. Although validated clinical tools are available that may better inform nurse staffing needs, decisions are most often centered on achieving financial goals, even when clinical tools might indicate a need for more nurses. Whenever nurse staffing is cut to the minimum, both the nurse and the patient pay the price, while decision-makers may remain too far removed to feel the pain. Burn-out and high nursing turnover occur whenever budget strategies and leadership expectations are misaligned with clinical reality.
Prior to the pandemic, budget tightening to improve profitability was directly responsible for inadequate nurse staffing in many facilities; it also created more severe staffing shortages during the pandemic when all hands were already on deck. Hospitals paid large sums of money to staffing agencies to backfill and supplement nursing positions. Now, nursing salaries are rising as a retention strategy after nurses working alongside highly paid travel nurses objected to the profound earning inequity.
The real bottom line is that hospitals need nurses. Nurses enable hospitals to generate revenue. Without enough nurses, beds must be closed, EDs cease to be community safety nets, and key clinical services are impaired. Nurses are critical to the high-quality clinical outcomes that both patients and families expect. It is time that payers and healthcare organizations alike reclassify nursing as a revenue center and allocate a budget that supports achieving both patient- and nurse-centered goals that are intrinsic to a high quality, safe, and healthy work environment.
Happy New Year!
LINDA LASKOWSKI-JONES, MS, APRN, ACNS-BC, CEN, NEA-BC, FAWM, FAAN