Is an archaic financial model at the root of what’s crippling the nursing profession and contributing to a diminished quality of care in the US?
For nearly 100 years now, fees for nursing services have been conveniently — and covertly — tucked into the hospital room charge. This financial structure was by design, created by savvy hospital administrators in the 1930s who saw it as an opportunity to keep nurses at arm’s length to maintain control and most importantly, increase their bottom line. This has led to an impaired ability to articulate the value that nurses provide for people and how the work of nurses impacts society as a whole.
It wasn’t always this way though. In the early 1900s, largely due to deplorable hospital conditions and the fact that hospitals typically didn’t employ nursing staff, individual patients would hire private-duty nurses to care for them in their homes. During that period, nurses were primarily self-employed. Much like physicians, they were paid independently for the services they provided. They were gaining financial independence and simultaneously growing into a strong lobby.
And nurses weren’t the only ones who benefitted from this model. The individualized, quality care their patients experienced often translated to improved outcomes. By the 1930s, however, the landscape would significantly change.
The evolution of the payment model
At the start of the 20th century, as surgical procedures began to improve and care shifted to the hospital system, patients hired nurses to come into the hospital to provide care as they recovered. Seeing the positive outcomes these nurses delivered, hospitals began recruiting nurses for hospital-based roles.
At that time, other forces were coalescing that contributed to nurses moving away from private-duty nursing to hospital-based roles. Care was shifting out of the home to institutions, hospitals were creating their own schools to serve as feeders for low-wage student nurses, and the Great Depression hit, causing many nurses to seek employment within the hospital system. Billing, however, continued to operate very similarly as it had with nursing services appearing as a separate line item on hospital bills.
Nurses had direct line of sight into the value they were delivering and the revenue they were generating for the hospital. Hospital leadership didn’t take too keenly to this. Simultaneously, early models of health insurance were being introduced, spurring hospital administrators to reevaluate their financial models and find ways to improve their bottom lines. They found a solution they could mirror from the hospitality industry where housekeeping services were baked into the room charge.
Soon, nurses were detached from the bill and the value of their services was completely hidden, buried within the cost of the hospital room charge. This then shifted nursing care to be seen as an expense that could be cut, rather than a revenue generator. Not only has this continued to devalue the critical work nurses do, but it’s also one of the key contributors to the nurse shortage and stands to have a significant impact on the healthcare industry as a whole — from staffing to the quality of care delivered to patients.
When nurses are folded into the cost of supplies, bedsheets, and food, it implies their care is not as valuable as the care provided by a physician. They’re treated as a commodity, rather than an investment. And as such, nurses are typically the first on the chopping block when hospitals need to cut costs, or the first to take on other roles and responsibilities when roles are cut in other departments.
The reimbursement misconception conundrum
When nursing departments are cut for short-term gains, it leads to poorer patient outcomes such as having a higher chance of dying within 30 days after discharge. Just having a nurse reduce their patient load by one person makes a significant difference.
For example, if a nurse cares for four people rather than five on their shift, each of those patients experiences a reduced chance of dying within 30 days, are significantly less likely to be readmitted to the hospital, and will get home faster. This is something everyone should be very mindful of. We are so careful to choose our surgeon or physician, but we have underestimated the even more impactful effect on our outcome that nursing has.
Still, there’s a pervasive misconception that adapting the payment model to one in which nurses are reimbursed for their services is a zero-sum game — that resources would simply be pulled from other areas. But this is not the case.
Investing in nursing services actually stands to reduce healthcare costs while increasing equitable access, and enhancing the quality and efficiency of healthcare.
Linda Aiken, who is widely considered to be the expert of nurse staffing and how it impacts patients has also studied the role of nurse practitioners and the value they bring specifically in hospitals. She and a team of scientists found that hospitals with higher ratios of nurse practitioners to patient beds also have lower mortality rates, lower rates of hospital readmissions, and the nurses they work with are less burned out.
The benefits of investing in nursing services
Equitable access to adequate care is a significant part of the current healthcare crisis. In fact, the Health Resources and Services Administration has designated more than 7,500 regions as “Health Professional Shortage Areas.” These regions alone represent a population of more than 76 million who don’t have access to basic non specialty healthcare.
Many things need to change to fix this problem, but one is investing in our nation’s nurses. Throughout history, nurses have been critical to providing equitable access to care for all communities — frequently stepping in to meet the healthcare needs of those in rural and lower socioeconomic areas.
Investing in nurses — by reimbursing them based on the value of their work — can improve job satisfaction thus reducing the churn rate and attracting more to the profession. And more nurses delivering quality care has consistently resulted in improved health outcomes for patients, reducing costs in the long run.
Even outside of the hospital system, if patients could access nursing services as they needed them and be reimbursed for those costs by their insurance, much like physical or occupational therapy, it would open up access to healthcare for so many individuals who currently do not have it. And since nurse practitioners can serve as primary healthcare providers, they can begin to address the healthcare gaps that exist in rural areas. They can support individuals as they age in place, alleviating the stress from family members.
We already see this in situations in which patients are directing their own care, stepping outside of the confines of health insurance and paying out-of-pocket to bring private-duty nurses in to provide care. These patients tend to experience faster recoveries from surgical procedures, maintain mental acuity longer, make fewer emergency visits, and the list goes on. Shouldn’t this be an option for every individual?
But, here we are, 100 years later and registered nurses remain the only degreed and licensed healthcare professionals delivering care that are exempt from direct reimbursement. So, as long as nurses are viewed as a “cost” rather than an asset within the healthcare system, we’ll continue to see poor retention rates and the gaps in care delivery will only widen.
Photo credit: Chinnapong, Getty Images
Jasmine Bhatti, RN, is the founder and CEO of Navi Nurses, a rapid-growth, private-duty nursing company that’s redefining at-home care through co-created care and client empowerment. Jasmine has been a registered nurse for 13 years and is finishing her PhD in Nursing and Health Innovation from Arizona State University.
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