Low Nurse Staffing Can Cost a Facility Millions of Dollars

The nursing shortage that has been presenting challenges in the healthcare industry shows no signs of abating anytime soon. Nurses are in higher demand than ever, and through 2024, the demand for registered nurses is expected to increase by 16 percent.

The nurse shortage poses myriad difficulties for healthcare organizations. Inadequate nurse staffing may be adversely affecting readmission rates, and under the Affordable Care Act (ACA), hospitals whose readmission rates are excessive face as much as a 3 percent reduction in payment for their costs associated with the readmissions, resulting in significant loss of revenue. For 2017, the Centers for Medicare and Medicaid Services (CMS) predicts that hospitals will take a total loss of $528 million in penalties.

The Hospital Readmissions Reduction Program (HRRP), passed as part of the ACA, is intended to give hospitals a financial incentive to reduce readmissions. According to a study by the University of Pennsylvania, hospitals that staff for manageable nurse workloads have lower readmission rates. The study, which matched 2,826 hospitals based on the number of hospital beds, compared HRRP penalties between the 1,413 well-staffed hospitals and the 1,413 similar hospitals with lower staffing levels. 

The study concluded that closely matched hospitals based on the same patient population characteristics still differ in HRRP penalties due to the level of registered nurse staffing. The 1,413 hospitals with low nurse staffing were significantly more likely than the 1,413 well-staffed hospitals to incur an HRRP penalty.

The debt incurred by readmissions through the emergency department far outweighs the cost of increasing nurse staffing levels. The three states with the highest readmission penalties under the HRRP in 2016 were New York ($40 million), Florida ($39 million), and California ($2 million), according to a report by Princeton, N.J.-based Besler. Georgetown University found that these same states also have the highest projected number of job openings through 2020 for nurses.

To help cut down on costly readmission penalties, it is vital for hospitals to be properly staffed. Innovative solutions need to be presented, including government officials’ influence to increase the nation’s nurse supply. The University of Pennsylvania study states, “Policy makers also may be able to gain traction on readmissions and their attendant costs through policy that creates a care environment sufficiently staffed and resourced to allow health care providers to do their work most effectively.”

The Emergency Nursing Supply Relief Act of 2017 (H.R. 3351) is a bill introduced by Rep. Jim Sensenbrenner (R-Wis.) as a response to the national nursing shortage. This bill will allocate 8,000 work visas annually for nurses, physical therapists, and other healthcare professionals for whom there is a critical need. The act will directly affect hospitals in states that have the highest readmission penalties by increasing the supply of nurses available to fill vacancies throughout the United States. Previous studies have shown that better nurse staffing is linked to improved performance on various quality measures including mortality, failure to rescue, patient satisfaction, and patient safety.

The coupling of shorter hospital stays with rising acuity only increases the importance of proper nurse staffing ratios. Proper nurse staffing allows for higher engagement between nurses and their patients, which in turn reduces the likelihood of improper discharges, thereby enabling healthcare organizations to avoid needless readmission penalties.

Brian Hudson is the senior vice president at Avant Healthcare Professionals, Casselberry, Fla.