New
Model

March 25, 2014 -- A New Financial Model for Nursing

I am a nurse and an informaticist. Combining these disciplines, my mission is to equip myself and my fellow nurses with the best tools available and also with some that are yet to be created. However, the existing financial model for nursing presents a large obstacle. That must change.

The dearth of nurse-centric (my term) tools is discussed in a paper published today, mHealth's great untapped potential: Nurses. In the context of hospital finance, nurses are seen as a cost center. Compare this with doctors who "...are considered the revenue-generators and the face of the healthcare institution."

Indeed, most of what nurses do -- administer medications, deliver hygiene, nutrition, education, progress assessments, and regular activities such as charting, health status and vital signs monitoring, ambulations and surveillance -- is not directly billed. Rather, these services are bundled into the hospital's room rate. From the point of view of accounting, nursing is a cost and rarely a revenue generator. Thus, there is little incentive to equip us with the tools that would make us more effective. Instead, workflow improvements focus on making us more efficient. In other words, the "successful" hospital gets nursing done for as little money as possible.

Yet nursing is essential to health care and, done well, contributes immeasurably to the quality of outcomes. It's time for the model to change. Starving us while pushing us to get more done and to work faster can be detrimental to quality. Hence, I offer a modest proposal.

To drive health care economics to perceive nursing as worthy of investment and redesign, we must become a revenue center. Here is one way we could do that.

Much as outpatient doctor visits are billed according to a scale of simple, medium, or complex (with fees charged accordingly), the various services that nurses provide should be un-bundled and billed on a similar scale. For example, some patients require in-bed hygiene care. They (or their insurance companies) should be charged for it, on a scale of quick, medium, or lengthy. An obese patient who requires a second nurse or an assistant to position them for a bed bath would incur a higher fee for hygiene service; it is more expensive to deliver. Nursing activities are usually charted at least briefly in the medical record; this new approach would add a charge generation to an existing recorded item much like, say, a CT scan generates both medical and financial data. Like airlines that have been able to reduce ticket prices by unbundling (charging extra for) baggage handling, hospitals could reduce room rates by unbundling the nursing services that come with them.

The article states that nurses are "underappreciated... [they] are looked upon as the single largest line item on the balance sheet... hospital IT departments are focused on those and other concerns and leaving nurses to their own devices. They don't have the time or resources to deal with nurses." In other words, we nurses often don't get the tools we need because the investment would not repay itself. It would just add to our cost that is already perceived as high.

This could change. The quality of nursing -- given incentives to equip us well -- could make a huge leap forward. It's time for a new financial model for nursing.

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