Healthcare costs: Nursing

Nurse Irving is the charge nurse on a 24-hour observation unit where the majority of clients are admitted for chest pain. Then they go for a cardiac stress test, and are discharged if the test results are normal. During the unit huddle, Nurse Irving is informed that the hospital budget has become more limited due to price inflation, so every unit charge nurse is tasked with assessing ways to cut costs. After the huddle ends, Nurse Jade approaches Nurse Irving and says, “We waste so much money on broken equipment here.” Nurse Irving asks Nurse Jade what she means and she continues, “Just last week another portable heart monitor broke because it accidentally got sent down in the hospital laundry.” Nurse Irving realizes that these portable heart monitors cost thousands of dollars and says, “You’re right, we need to address this. Let's create a plan to preserve these heart monitors.” Nurse Jade agrees to help Nurse Irving and speaks to the rest of the staff about possible solutions. Nurse Irving and Nurse Jade will use what they know about healthcare costs to provide quality client care in a cost-effective way.

Healthcare costs in the United States are increasing every day; in fact, Americans spend over 3 trillion dollars on healthcare per year! But, increased spending of healthcare dollars hasn’t always translated into better health outcomes, such as average life expectancy. Healthcare facilities are tasked with improving health outcomes and delivering quality care in the most cost-effective way. Indicators of quality of care such as safety and client satisfaction scores directly influence how healthcare facilities are reimbursed. For example, increased rates of hospital acquired infections or hospital readmissions after discharge can decrease reimbursement.

On the other hand, healthcare facilities that consistently demonstrate positive quality indicators are reimbursed accordingly. Now, within the healthcare environment there are healthcare consumers and healthcare payers. Healthcare consumers are individuals who receive health services, and they can be insured or uninsured individuals who pay out of pocket for the care they recieve. Then there are healthcare payers which are organizations that collect payments and process claims, and include private health insurance companies, Medicaid, and Medicare. Private health insurance comes from private companies, and the premium for the insurance is often paid for in part by a person’s employer.

On the other hand, Medicaid and Medicare are two government-sponsored healthcare programs. Medicaid is an insurance program that serves clients of any age who are considered low-income, whereas Medicare is an insurance program that serves clients over 65-years-old, as well as those who are disabled or with end stage renal disease. When a client has Medicare, their diagnoses are categorized into a diagnosis-related group, or DRG. Each DRG has a payment assigned to it based on the average costs of treating other clients with these same diagnoses. Regardless of the amount a healthcare facility actually pays to care for a client, the DRG cost remains the same. One common DRG is for the treatment of chest pain; for example, if a client comes to Nurse Irving’s unit with chest pain and ends up needing additional care due to an infection, the hospital will only be reimbursed for the original DRG.

Like most healthcare providers, nurses face the challenge of providing quality care while keeping costs in check. Nurses play a key role in helping healthcare facilities to identify cost savings opportunities because of their perspective from the bedside. For example, nurses can identify which supplies are unnecessary or underutilized when providing care. In addition, nurses can reduce costs by routinely performing hand hygiene or repositioning clients every two hours, since these actions can decrease healthcare costs associated with infection and pressure injuries. Furthermore, nurses can help contain costs by capturing and documenting supplies used for client care.