Nurses and the Bottom Line

An interesting article popped into my email today. It's titled The New Rainmakers, and discusses the role of nurses in hospital budgets.

Nurses cost money. In fact, their salaries are perhaps the biggest staffing cost a hospital must absorb. Over the past few decades, though few chief executive officers like to admit it, those costs have caused many hospitals to encourage their nursing managers to try to do more with less--less nurses per patient, that is.

Staffing is the biggest cost center for all providers of care to seniors, whether hospital, nursing home or assisted living communities. When financial times are tough - and even when they're not - cutting these costs directly affects the bottom line. When revenue slips, usually related to a lower census or occupancy, the biggest area to cut is staff wages - and that means staff hours.

With increasing emphasis being placed on quality and patient satisfaction by health plans and consumers alike, hospitals are realizing that reimbursement increasingly depends on how well nurses do their jobs, making nurses, as a new PricewaterhouseCoopers report says, the "rainmakers" of the hospital.

In my own local newspaper, printed tables display the patient satisfaction scores at all of our local hospitals side by side. Many of us have a choice in medical providers, and viewing these scores will undoubtedly help us choose a provider.

And yet, says Janet Hinchcliff, author of What Works: Healing the Healthcare Staffing Shortage,

"I'm not sure they [hospital administrators] realize the interconnections. This is going to be a big deal for them," she says. "Quality and patient satisfaction scores will show that a great deal of how a hospital is perceived has to do with the nursing staff. So they're a revenue contributor from a payment side, but also in terms of the fact that people are going to those hospitals because the nurses are really good."

What happens when a hospital chooses to spend just a little more in staff wages?

What about training expenditures, especially in the areas of leadership, customer relations and communication?

Repeated studies have shown that adequate levels of staffing and above average training investments DO have a significant return in the longevity of staff and, consequently in customer satisfaction.

Says Lilee Gelinas, another hospital executive (vice-president and chief nursing officer with VHA Inc.)

Nurse turnover among those with three years or less experience at some hospitals is 45 percent to 55 percent. "We can't hold on to the new kids coming out of school. Retention is tied to stability in the patient care environment, it's tied to nursing excellence, and it's tied to patient care excellence."

Excellence in care is apparently a language that the top management level didn't understand. But when the excellence of care and the happiness of patients reflects directly on the bottom line dollars, that's starting to speak their language.