Nursing and Finance: Avoiding Overspending

Nurse in the operating room

According to the Centers for Disease Control and Prevention (CDC), consumers generate $3 trillion in annual health care expenses — nearly 20 percent of the country’s gross domestic product. According to the New England Journal of Medicine “Catalyst” opinion leader survey, medical experts have believed for some time that nurses help health care organizations reduce these costs. Additionally, the RAND report “Controlling Health Care Spending in Massachusetts” endorses employing more nurse practitioners (NPs). [1] While health care administrators have continually looked for ways to reduce costs, nurses have facilitated this effort in their daily service, as demonstrated by the following examples.

Connecting on a Deeper Level

Nurses treat more than physical ailments. [2] They provide care on a deeper, holistic level by addressing issues such as patients’ diet, physical activity, and other habits.

By caring for the whole patient, nurses take proactive steps to prevent future illnesses from occurring. Patients identify with nurses closely, because they provide the most direct contact compared to other medical professionals. This empowers nurses to encourage clients to participate in their own wellness plans, which helps to reduce recurrent illnesses.

Reducing Preventable Hospital Readmissions

Lawmakers regard readmission reduction as crucial to lowering unnecessary medical expenses. [3] The Hospital Readmission Reduction Program aims to improve long-term patient outcomes by lowering reimbursements to hospitals with excessive readmissions. Additionally, the Value-Based Purchase Plan provides financial incentives for skilled nursing facilities for the same outcome. Nurses play a critical role in reducing hospital readmissions by:

  • Educating patients on their care plans
  • Helping patients assess care goals
  • Reducing premature discharges
  • Selectively admitting emergency room patients

Nurses reduce costs by synchronizing supplementary services such as health benefits, outpatient care, and transportation that serve as important resources in underserved communities where patients commonly visit emergency departments for non-life-threatening conditions. Nurses coordinate these services with consideration for consumers’ cultural and personal influences and resources. In these and other environments, nurse-led care coordination can increase follow-up by more than 30 percent and decrease readmissions by 20 percent.

Streamlining Resource Management

Nurses help reduce overhead by participating in resource allocation teams to help evaluate supply usage. During these meetings, the coordination team identifies the fine balance between safe service delivery and efficient resource allocation, while helping to establish organizational policies. [4] United States medical facilities discard substantial waste, 25 percent of which poses a biological threat. One popular waste reduction practice involves separating hazardous and nonhazardous waste streams. Another campaign, the popular “go green” initiative, promotes the three “R’s” – reduce, reuse, and recycle.

Care providers house patients exposed to antibiotic resistant organisms (AROs) in quarantine. Nurses can reduce resource waste in quarantine units by stocking minimal supplies and following efficient replenishment strategies.

More Education Equals Less Overhead

A National Center for Biotechnology Information (NCBI) study reports that many senior facility nurses acquire less training than their peers. [5] The report hypothesizes that this may be the result of lower salaries at senior homes and administrators’ needs to reduce costs.

Some facilities employ geriatric nurse practitioners (GNPs) to meet senior residents’ most common medical needs and train staff members, replacing physicians as primary care providers at half the cost. This practice offers senior facilities more value than employing GNPs as specialty staff members.

The Continued Search for Answers

The CDC reports that more than 30 percent of all health care expenditures go toward hospital services. U.S. care providers undoubtedly need to improve care while reducing cost.

Nearly 90 percent of nurse practitioners prepare for service as primary care providers, making them ideal candidates to deliver services in an environment that focuses on prevention. According to the American Association of Nurse Practitioners report ”Nurse Practitioner Cost Effectiveness,” consumer demand dictates that NPs fill primary care provider ranks to compensate for the physician shortage.

Nurse practitioner retail clinics provide services for common, low-risk medical ailments at less than the typical costs for emergency room or physician visits. [1] As primary care providers, nurse practitioners receive less compensation than physicians, which helps save money.

Over the past half century, researchers have gathered empirical evidence proving that nurse practitioners reduce costs by supporting and observing policies that maximize resource usage. The evidence suggests that nurses hold the key to helping care providers meet cost-saving goals.

Learn More

The University of San Francisco School of Nursing and Health Professions was founded in 1954 and instituted the first private university nursing program in California. From its initial launch of graduate degree programs in the 1980s, the school grew to offer the first MSN program with a Clinical Nurse Leader focus in 2005. And by 2007, the school had begun seeking students for the first Doctor of Nursing Practice degree in California. Under the guidance of some of the nation’s leading academic health care professionals, nursing students at the University of San Francisco are offered the leadership and clinical knowledge that can help inspire transformation in the health care system.

Recommended Readings

Tomorrow’s nurse

Why nurses are essential to delivering cost-effective care

What is a CNL?







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