Skip to main content

How Educated Nurses Save Hospitals Money

 |  By Alexandra Wilson Pecci  
   October 21, 2014

Researchers find that patients who receive 80% or more of their care from nurses with baccalaureate educations have 18.7% lower odds of readmission than patients treated by nurses without degrees.

The patient safety benefits of having a greater percentage of bachelor-prepared nurses have been well-established, but the business case for raising education levels among nursing staff has remained a bit more nebulous.

Olga Yakusheva, PhD

Hospitals certainly put patient safety first, but they also have to pay attention to their bottom lines. Now, a study published in the journal Medical Care is adding more evidence to the argument that investing in nurses' baccalaureate educations can make good business sense, too.

The study's lead author, Olga Yakusheva, PhD, associate professor of nursing at the University of Michigan School of Nursing and one of the lead researchers on the study, isn't a nurse. She's an economist.

"As an economist, I always think about financial incentives," she says.

"Ultimately, better patient outcomes are important," but "hospital administrators are the ones that are stuck with the bill," she points out.

That's why making the business case for having at least 80% of the nursing workforce hold bachelor's degrees is going to be so critical if the nation wants to reach the Institute of Medicine's goal for doing so by the year 2020.

"They want to make sure that they have their ends meet financially," Yakusheva says. "For people who are actually responsible for moving this forward, it is important for them to know that they do not have to make a huge finance sacrifice to improve patient outcomes, if they're investing in nurse education."

And according to Yakusheva's study, investing in nurse education does seem to improve both patient outcomes and the bottom line. Other studies of the relationship between nurse education and patient outcomes have examined hospital-level data.

A Close Look at Patient-Level Data

But Yakusheva and her research team examined patient-level data, comparing outcomes among patients in the same hospital, on the same unit, and with the same diagnosis.

The researchers found that patients who received 80% or more of their care from BSN-prepared nurses had 18.7% lower odds of readmission and 1.9% shorter lengths of stay. Researchers also found that a 10% increase in the proportion of BSN-educated care was associated with a 10% reduction in the odds of mortality.

"Simply based on how educated the nurses are… it's putting some patients at risk inadvertently," Yakusheva says.

Dollars Saved

What does this translate to in dollars and cents? A lot, the researchers found. They estimated that increasing the proportion of BSN-prepared nurses caring for each patient to 80% or more would reduce annual readmissions by roughly 248 days, reducing costs by more than $5.6 million annually.

The cost associated with salaries for a larger group of BSN-prepared nurses was estimated to be $1.8 million for the nurses included in the study, a cost that's far outweighed by the potential savings.

Yakusheva says she was expecting to find a difference in outcomes and costs, "but not quite as palpable a difference."

Perhaps that palpable difference will help get the ball rolling on meeting that 80% by 2020 goal, which the nation currently doesn't seem to be on track to reach. Currently, data shows that only about 55% of nurses are baccalaureate prepared.

Despite the patient safety evidence for increasing the number of baccalaureate-prepared nurses, and despite the landmark IOM report, there doesn't seem to be enough momentum toward reaching that deadline and goal: The percentages just aren't ticking up quickly enough.

The question is why not? Yakusheva says maybe the momentum hasn't been there because the business case for it has been lacking.

Make it Sustainable

"In the realities of healthcare delivery, as much as we want to focus on patient outcomes… you have to make it sustainable," she says. By looking at these patient-level data within the same hospital, "that makes a credible statement when you see the difference in outcomes."

Yakusheva warns against regarding this new study as definitive "proof" that increasing the number of nurses with BSNs will save money for hospitals and the healthcare industry.

But it does provide some might strong evidence toward that theory. And maybe it'll be the incentive that healthcare leaders need to invest more in nursing education.


Alexandra Wilson Pecci is an editor for HealthLeaders.

Tagged Under:

Get the latest on healthcare leadership in your inbox.