Shrink Readmissions by Adding Nurses

Bumping up nurse staffing levels by three nurse hours per patient day provides a demonstrable and marked reduction in hospital readmissions. But the financial implications of doing so are tricky.

Changing the business model in healthcare from payment for outcomes rather than for volume of services rendered is critical to reducing costs and improving quality in healthcare. But so far, the financial incentives for re-engineering the business model are not significant enough to force a rapid transition.

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Still, we may be heading in the right direction—for instance, in nurse staffing.

Nurse staffing levels are always a critical point of contention between staff and management. CEOs rightly keep a close eye on labor costs, and nurses are among the most expensive of hospital labor. States, labor unions, and others have attempted to tell CEOs how they should manage nurse staffing ratios, and in many circumstances, they have succeeded in establishing minimum levels.

But how much is enough?

Nurse staffing ratios have been studied backwards and forwards to determine their impact on patient care, but a recent study in Health Affairs has finally linked nurse staffing levels to outcomes. According to lead researcher Matthew McHugh, PhD, JD, MPH, RN, hospitals with higher nurse-to-patient staffing ratios have lower odds for being penalized for excessive readmissions in CMS's Hospital Readmissions Reduction Program, which is estimated to reduce hospital payments by roughly $280 million in 2013.

Those are big numbers, but to extrapolate the financial and quality impacts of adding to nurse staffing for the roughly 5,000 hospitals around the country is impossible. Still, McHugh and his colleagues came close.

The research team was innovative in its approach. It attempted to eliminate almost any other variable in its calculations by "twinning" similar hospitals among the 2,826 hospitals studied based on nurse staffing ratios and data on readmissions penalties. In other words, researchers compared hospitals that were alike in every possible way other than nurse staffing ratios.

Here's what they found:

• Hospitals with higher nurse staffing had 25% lower odds of being penalized than similar hospitals with lower nurse staffing ratios.
• Hospitals with higher nurse staffing levels have 41% lower odds of receiving the maximum penalty for readmissions, compared with hospitals with lower staffing.
• Each additional nurse hour per patient day is associated with 10% lower odds of receiving penalties under HRRP, the researchers estimate.

McHugh says he and his fellow researchers were trying to overcome methodological, as well as political issues that have clouded nurse staffing studies in the past.

"When you think of nurse staffing studies, you can't take a lot of the results as seriously as you might otherwise because they're comparing apples to oranges," McHugh says. "We were able to take a measure of nurse staffing based on hours-per-patient-day and create matched pairs across the country. Each hospital had basically a twin, as similar as possible in all manner and respect except for nurse staffing."

The researchers made sure the hospitals were matched in terms of low-income patients, case mix, and teaching status. Doing so eliminated as many other variables as possible that could affect readmissions other than nurse staffing. It also allowed them to compare and isolate the effect of a much higher level of nurse staffing.

Still, left to CEOs and other upper management team members is what action to take from what the study reveals. The highest performing hospitals differed with the lowest performing ones by about three hours of nursing time per patient per day, "which is a lot," concedes McHugh, who adds, "we didn't go into calculating the financial trade-off."

That raises another difficult point: the financial implications.

Currently, the highest penalty for readmissions according to CMS policy is a 1% reduction in DRG payment. Somehow I doubt whether avoiding some of those 1% by adding three hours per patient day is going to pay off immediately.

Other payers may have penalties as well, but most readmission penalties apply to Medicare patients only. But if you focus only on the numbers, you'll miss all the other benefits of increasing nurse staffing, McHugh maintains. Further, the CMS penalty will rise to 2% for fiscal year 2014, and other penalties that may be affected by nurse staffing ratios appear likely as well, McHugh asserts, in future years.

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"So right now, this won't pay for itself entirely, but the good thing about focusing within is that the benefits of higher nurse staffing levels aren't isolated to particular patients, but apply to all of them," he says. "Besides, penalty percentages are going up and the number of conditions that are covered [by readmissions penalties] are being added."

Still, based on this study and in general, there's no magic number on nurse staffing levels, McHugh says. And there are ways to make more of your nurse staffing or get more out of it without necessarily adding headcount or unit labor costs. For instance, says McHugh, improving the education level of your nursing staff, or by requiring higher educational standards, "you get more bang for your buck."

CEOs are cognizant of staffing levels and are paying close attention to it on a financial side, but in relation to outcomes, maybe not so much, McHugh says

But clearly, nurse staffing has a connection with the quality care, patient satisfaction, and outcomes. And if hospitals and health systems are going to make the transition from volume to value, those metrics are crucially important.

A bill in Congress, (HR 1821), among other requirements, calls for staffing levels to be posted on Hospital Compare. The bill has been referred to committee and who knows if it will ultimately pass? But if it does, "that will not be comfortable for some hospitals," McHugh says, "but it would be helpful for both nurses and the public."

If you're a highly qualified, capable nurse, where would you want to work?