Impact of Nurse-Patient Ratio on Healthcare Costs Essay Example

Nurse-patient ratio is an emerging nursing issue because of its link to patient safety, positive health outcomes, and healthcare costs. In the recent past, healthcare facilities in the US and across the globe have been facing financial uncertainty leading to the reducing of their nurse staffing in the quest to enhance their profitability (Twigg, Myers and Duffield 975). Reduced nurse staffing has the benefit of providing competitive advantage because the hospitals will spend less in reimbursing its workforce. However, reduced nurse staffing is detrimental as it infringes on patient safety and leads to poor patient outcomes. For a healthcare facility to protect its reputation at the same time cultivate profit from its services, it must choose adequate staffing levels. California took the lead as the US' state with legislated nurse-patient ratio beginning in 1999 and the subsequent amendment in 2004 where the Department of Health in California developed a multilayered process of determining the minimum nurse-patient ratios (Karen 11). Nurse-patient ratio depended on the healthcare section. The accepted ratios were 6:1 in psychiatric sections, 2:1 in all intensive care units, 3:1 in delivery and labor departments, 4:1 for pediatrics and 5:1 for oncology, telemetry, and medical-surgical units (Karen 12). The consequences of improved nurse-patient ratio were reduced mortality and lowered job dissatisfaction and burnout. A better quality of care was reported in California after the implementation of the nurse-patient ratio. However, the economic consequence has not been fully documented because of mixed research results. A section of research studies shows that nurse-patient ration lowers healthcare costs in terms of reduced patients' hospital bills while others studies suggest that increased nursing staffing increase healthcare costs by increasing the expenditure for training and compensating nurses. The research will discuss the positive and negative economic consequences of nurse staffing policy in healthcare.

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Nursing personal budget and hospital expenditure are two main measures for determining the overall economic consequences of increasing nursing staffing. As evident from previous research studies, there are mixed results on the relationship between nurse staffing and healthcare costs. Some studies such as those conducted by Thungjaroenkul, Cummings, and Embleton report statistical significance between the rise in healthcare expenditure and nurse staffing (256). According to the study, increasing the number of registered nurses (RNS) handling one patient can lead to increased hospital costs because the number of experienced RNs is increased. The review of a similar study conducted by Karen reveals an inverse relationship between increased skill mix and nursing staff and healthcare costs (16). The higher the staffing and skill mix in the nursing team, the higher the overall hospital expenditure. The study suggests that governments must in integrate the services registered nurse as part of the nursing skill sets, hospital expenditure can be reduced by increasing their working hours. The cost-to-charge ratio has always been used in healthcare economics to translate and transform hospital charges into patient costs. This method posits that increasing nursing staffing has the consequence of increasing the expenses because of the need to replace facilities and equipment to accommodate more nurses. In that way, patients will carry the burden of offsetting this huge financial burden. In another perspective, improved nurse-patient ration has the benefit to patients in that it lowers their hospital bill by reducing the lengths of hospital stays. Thungjaroenkul, Cummings, and Embleton examined the impact of nurse staffing on the patients' lengths of stays and found out that skill mix and nurse-to-patient ratios had a significant relationship with patients' lengths of stays (LOS) (263).

Numerous studies conducted in California reveals that improved nurse staffing reduces the general healthcare costs. For example, Karen cites a study conducted by Blue Cross Blue Shield Association in 2002 across Californian hospitals in which the findings show that adequate staffing of nurses according to 4:1 ratio saved the costs that hospitals would incur in recruiting new nurses, agency fees, nurse turnover and those associated with patient liability and complications (16). In that study, researchers discovered that the 4:1 nurse-patient ratio accrued a total savings of $331 million across Californian hospitals. The quality indicators used in measuring the cost-effectiveness of adequate nurse-patient ratio included the cost incurred to solve urinary tract infection, pneumonia after surgeries, wound infection, and other adverse events. In these quality indicators, Californian hospitals saved a significant amount of funds. If the study estimated that Californian hospitals saved approximately $500 million as a result of safe staffing ratio, it implies that the costs incurred by hospitals in complying with the nurse-patient ratio is offset by the advantages and benefits they will accrue from improving the quality of nurse staffing (Karen, 17).

As hospitals seek cost-effective ways of enhancing patient outcomes, nurse-patient ration improvement is the most preferred strategy. This is confirmed in Twigg, Myers and Duffield study conducted in sampled Californian hospitals in which the findings showed that the costs that hospitals use in saving a life of patients with heart attack using the enhanced nurse-to-patient ratios is significantly lower as compared to when the same hospitals use basic safety strategies such as thrombolytic therapy (977). The estimates of the costs identified in the study does not even include the savings that the hospitals would obtain from the reduced costs due to shortened hospitals stays among patients. Adding all savings will lead to hospitals offsetting approximately 50%of the overall labor costs. Improved nurse-patient ratio reduced healthcare costs because it reduces nurse turnover because it ensures that qualified nurses are satisfied and do not exit the professions. Research found out that approximately 57% of nurses leave their profession because of patient care loads and work-related stress (983). Such an aspect raises the costs of recruiting new nurses, compensations and other impacts of nursing turnover.

Karen points out that increasing nurse staffing is economically feasible in hospitals operating in competitive landscape because of the increase costs of acquiring new skills sets (16). However, it the findings does not discredit the role played by increased staffing in healthcare markets which are less competitive because of the presence of additional factors which impact on the profitability of facilities operating in these environments such as levels of commitment among nurses. It is thus necessary for healthcare leadership to continuously determine the levels of nurse staffing for each hospital. Regardless of whether a hospital operates as a profit or a non-profit entity, the nurses at adequate levels are fundamental resources. A higher nurse-patient ratio has a positive contribution to the overall financial performance of a healthcare facility. This has an implication for policy-makers and hospitals leadership that increasing nurse staffing has economic value to a hospital but the staffing rate should be done to adequate levels to avoid negative consequences (Everhart, Neff and Nogle 146). At first, increasing the number of registered nurses causes a consequential increase in operations costs in healthcare, the long-term consequence is that adequate nurse-patient ratio leads to profitability and cost savings attained through efficient care procedures, decreased lengths of stays, reduced chances of adverse events such as the occurrence of nosocomial infections (Everhart, Neff and Nogle 149).

Conclusion

In conclusion, increasing nurse staffing has both negative and positive consequences on healthcare economics. Consequently, healthcare leadership and management should be cautious in the implementation of nurse-patient ratio policy to ensure that the staffing is adequate enough to balance the revenues and the costs of running hospitals. Administrators and managers in hospitals need to implement strategies on top of the nurse staffing policy especially concerning recruitment and retention of nurses, and containment of costs in the present-day competitive healthcare market. Nurse staffing affects both the financial performance of hospitals and patient outcomes. Adequate nurse-patient ration creates an environment where services are provided on the basis of quality as hospitals will begin competing both using price and quality. The recommendation for future research is that there should be analysis of the consequences of nurse-patient ratio on long-term economic performance of hospitals. There is also the need to determine the impacts that nurse staffing has on the economy and financial well-being of individual healthcare units or departments. The consequence of nurse staffing in the revenue and costs of healthcare is the other potential research area in future to provide a thorough analysis of the procedures and processes that can cause increased profitability in healthcare.

Works Cited

Everhart, Damian, D. Neff and June Nogle. "The Effects of Nurse Staffing on Hospital Financial Performance: Competitive Versus Less Competitive Markets." Healthcare Management Review (201): 38(2), 146-155. doi: 10.1097/HMR.0b013e318257292b. Print.

Karen, R. "California Mandated Nurse-Patient Ratios Deemed Successful." American Journal of Nursing (2011): 111(3), 10-17. DOI: 10.1097/01.NAJ.0000406407.18944.94. Print.

Thungjaroenkul, Petsunee, Greta G. Cummings and Amanda Embleton. "The Impact of Nurse Staffing on Hospital Costs and Patient Length of." Nursing Economics (2007): 25(5), 255-265. Print.

Twigg, Diane E., et al. "Is there an economic case for investing in nursing care - what does the literature tell us?" Global Nursing Research (2015): 71(5), 975-990. https://doi.org/10.1111/jan.12577 . Print.