Determined to achieve meaningful use of electronic health records (EHR), hospitals and health systems will increasingly adopt clinical information technology between now and 2015. This is certainly a welcome development for our economy and patient health. However, because providers are putting larger investments into EHR systems, they are overlooking other strategies to quickly enhance clinical and financial performance and support their pending transformation to accountable care.
While EHR technology is key to reducing costs and improving care quality, safety, and outcomes, providers also can achieve these goals by leveraging patient classification software and managing nursing staff more effectively. When used in parallel or integrated with an EHR, these combined resources give organizations extra tools to realize even greater clinical and financial benefits. This is a lesson that San Diego-based Sharp HealthCare has learned and benefited from over the past two decades.
Since 1990, Sharp HealthCare has used a nursing staff management solution to assign nursing staff and resources appropriately, improve care, and manage RN labor costs and department budgets. Every hospital faces these common challenges, but addressing them successfully is especially difficult for California-based providers struggling to survive the Golden State’s unique and pervasive capitated environment.
Though health systems in other states have not been exposed to capitation, this will change soon with the Patient Protection and Affordable Care Act allowing the Centers for Medicare & Medicaid Services (CMS) in early 2012 to use payment models such as partial capitation. Under this particular model, providers and accountable care organizations will bear some but not all of the financial risk.
In addition to helping organizations better manage their bottom line in a risk-based reimbursement environment, a patient classification system makes it easier for hospitals to comply with nurse-to-patient ratio regulations. Fifteen states and the District of Columbia have passed nurse staffing legislation, according to the American Nurses Association. But with hospitals admitting a higher volume of sicker patients and cutting nursing budgets across the country, RNs and others are increasingly urging lawmakers in other states to pass laws to ensure sufficient staffing to meet patients’ needs.
Having the right skill mix and nurses with the necessary skills readily available to take care of the right patient at the right time is essential to quality of care, patient safety and financial health. Still, it is common for nurses, unions, and state regulators to question hospitals’ staffing level decisions. An intensive care unit RN, for instance, may contend that a patient’s acuity demands his or her sole attention or the services of an additional nurse. This questioning or complaint about inadequate staffing, which tends to increase when facilities institute layoffs in poor economic times, is often emotional.
A patient classification system enables hospitals to remove emotion from the equation by demonstrating through hard data that its decisions are valid, not arbitrary. The tool applies an evidence-based approach to assign, match, and schedule nurses where they are needed the most based on patient acuity level.
Institutions that use the technology to assess acuity on every shift across all patient care units are able to provide objective documentation showing they are not understaffed, which of course places patients at risk. This proactive assessment of patient acuity helps ensure business continuity when regular charge nurses are out sick or on vacation. Replacements typically are less familiar with a unit’s policies and procedures, which can result in poor patient outcomes and higher costs.
A patient classification system promotes operational consistency by offering data on fill-ins that can be used to run a department efficiently in the absence of the regular charge nurse. More importantly, the process of assessing acuity on every shift gives health systems the ability to act immediately to prevent understaffing and overstaffing, both of which result in higher costs from potential malpractice lawsuits, disputes with employees, lost productivity and overtime.
Lack of awareness among many nurses about the budget process, healthcare financial management principles and how assignments are determined is a major reason for those costs. When bedside RNs are unaware of the financial role they play in managing and determining the fiscal health of their employer, nurses and administrators are pitted against each other.
To eliminate damaging infighting and wasteful spending, Sharp HealthCare, which serves 1.3 million residents of San Diego County in southwest California, has made it a priority to educate nurses how to use the patient classification system to analyze, track, and monitor staffing, productivity, and nursing budgets. Its leaders discuss the critical role that technology, patient acuity, and appropriate nurse assignments play. Every Sharp HealthCare facility shares annual financial targets and justifies its department budget. Hospital executives and RN leadership emphasize that their budget development is comparable to how RNs manage their household finances. In other words, the health system deploys the funds it has to provide care in the most efficient and cost effective manner possible. Like nurses—or anyone else—Sharp HealthCare cannot spend money it does not have.
Today, RNs understand staffing decisions are based on patients’ best interests as opposed to driven by an effort to save money at the expense of quality care. The results are fewer misunderstandings, misconceptions, and conflicts that distract Sharp HealthCare hospitals and nurses from their core clinical mission.
Sharp HealthCare sets goals for facilities partly based on the location and the size of an institution’s nursing staff. As a not for profit healthcare system, the organization’s long-term viability is dependent on its financial health and well being.
Increased nurse awareness and the nurse staffing management system have helped Sharp HealthCare not only weather a weak economy for the past three years, but also post impressive financial results during the same period.
The outreach also gives nurses a clearer view of the economic picture at the facility and enterprise levels, and how their institution compares to local and national peers. Whenever a financial variance occurs in their unit, RNs now can easily pinpoint it and determine the reason why. The software enables Sharp Healthcare to:
- Deliver accurate patient acuity, skill mix, and census data in real time, ensuring charge nurses and nursing managers have the information necessary to optimize clinical and financial outcomes
- Analyze retrospectively whether nursing assignments were a factor in near misses that harmed or placed patients at risk
- Aggregate information to enhance clinical, financial, and operational decision-making
- Benchmark internal evidence-based data against national standards for acuity
- Develop and successfully manage nursing budgets
To further increase time savings for nurses and validity and reliability of data, Sharp HealthCare now is working to integrate the software with its EHR.
With health reform altering reimbursement models and the first of 78 million baby boomers beginning to turn 65 years of age in 2011, staffing, clinical, and financial pressures on providers will only intensify. Since RN labor costs represent providers’ single largest controllable expense and a significant percentage of their operating budget, it is critical to use nursing resources more efficiently and enlist RNs as strategic assets and financially oriented managers. Providers following this path will find it easier to navigate the rapidly changing healthcare ecosystem and meet their goals.
Susan Stone, PhD, RN, is chief nursing officer and Ruth Plumb, MSN, RN, is an acuity nurse specialist at Sharp HealthCare, which comprises four acute care and three specialty hospitals in southwest California.