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Nurses Can't Afford to Ignore Healthcare Costs

 |  By Jennifer Thew RN  
   June 02, 2015


Concern for the hospital's bottom line has traditionally been outside the realm of RNs, but understanding healthcare costs gives them an advantage in improving patient care and insight into leadership challenges.

From the time we enter school, nurses are taught to be advocates who champion our patients' needs regardless of their diagnosis, social standing, or access to resources.

"When I was a student nurse the mantra was, 'We give care regardless of cost,'" says Susan J. Penner, DrPh, RN, MN, MPA, CNL, an adjunct faculty member who teaches courses in healthcare financial management at the University of San Francisco School of Nursing and Health Professions.

Times have changed in the years since Penner and I went to nursing school. Today, often to the chagrin of those providing bedside care, there is a much greater emphasis on healthcare costs and financial outcomes than there were just a few decades ago. I've heard many nurses imply that "bean counters," administrators, and for-profit companies value financial outcomes more than doing what's right for patients and that this mindset is detrimental to patient care.

But after talking with Penner, it became clear to me that nurses don't have to let financial goals determine how they provide care to their patients. In fact, hospital finances usually benefit when nurse-driven improvements to care delivery are made.


  Susan J. Penner

Quality Nursing Care is Cost-effective Care

"I think it's very important that nurses are able to link the high-quality work they do with the costs and savings that are involved," Penner says. "With all the concerns about healthcare costs right now and about performance, nurses are in a really key role to help lower healthcare costs."

She gives as an example, the push by CMS to reduce preventable readmissions. "The people in the hospital who are among the most crucial in doing that are the nurses," she says.

Nursing care is also instrumental in preventing hospital-acquired conditions, such as CAUTIs and DVTs after certain orthopedic procedures. HACs are about to start negatively affecting hospital reimbursements.

Additionally, nurses can help contain costs by reducing the waste of resources. This means not filling your pockets or the patient's room with IVs or wound care supplies that the patient may never end up using.


Nurses need to be educated on how their actions can positively or negatively affect the hospital's bottom line. "If we don't teach them how their practice is linked up with costs and revenues, they're never going to know and they're never going to see why waste is a problem," Penner says.

Nurses Don't Say the 'F' Word

Historically, nursing has shied away from discussions about finance in both the academic and clinical settings. "Something I've see in the literature is that not only do nurses not get this [exposure to finance] in school, but they don't learn this on the job," Penner says. "Even when nurses are promoted into management, they don't always get this kind of training."

Based on her own experience as both a bedside nurse and nurse leader, San Francisco General's Chief Nursing Officer, Terry Dentoni, MSN, RN, CNL, agrees.

"What I knew about cost was when that yellow sticker was on the door, someone was going to get charged for that IV," Dentoni says. "When I pulled six IVs out and put them in my pocket, I didn't understand that I was costing the organization money."

When she went into management, she gained financial knowledge through drills with her then CNO, but she describes her understanding of finance at that time as more of a rote, "check-the-box" mentality. It wasn't until 2007 when she took Penner's course on healthcare financial management that she understood the power that bedside nurses have to improve financial outcomes as well as patient care.

"If they knew what the cost-benefit ratios were," she says, "they could come up with business cases to support what goes on at the bedside to enhance hospital flow and hospital bottom line."

Bedside Business Sense Makes Cents

While she covers concepts like Medicare and insurance reimbursement, healthcare costs and revenue, and creating nursing budgets, a major focus of Penner's master's-level course at USF is on how-to create a business plan to support bedside care improvements.


Students work in teams to come up with an improvement project, write either a business plan or grant proposal, and perform a financial analysis of costs and savings to show the idea is cost effective.

She's seen projects ranging from proposals to purchase a robot that disinfects hospital rooms with ultraviolet rays to creation of a mobile diabetic foot care clinic. And though many of her students are experienced nurses like Dentoni, Penner says creative and cost-effective problem solving isn't something that should be left strictly to nurse managers and nurse leaders.

"Nurses across-the-board need to have some kind of insight on costs and benefits and making a business case," Penner says. "Another thing that I think would help is for hospitals to take a more bottom-up approach around budgeting rather than top-down."

By this she means, leaders should share budgetary concerns with front-line staff, involve bedside nursing staff on budget committees, and be open to hearing ideas for improvement from those performing direct care.

Dentoni has taken this approach at San Francisco General and says the more involved front-line staff in processes that contribute to cost-savings efforts, the more successful those efforts will be. "As executive leaders, we tell them what the metrics are and they tell us how they're going to do it," she says.

She saw this first-hand when trying to decrease operating room turnover time to 30 minutes or less. When the goal was first set by management success was sporadic, but once the staff decided this was a metric they wanted to improve, turnaround times were consistently 32 minutes or below.

"You've got to have them own it," Dentoni says. "It's all about giving information and letting them understand the business."

Dentoni points out nurses don't have to choose between being fiscally responsible or providing quality nursing care. They can do both. "It doesn't have to define us," she says, "but it does have to be considered to do the greater good for the greater amount of patients."

Jennifer Thew, RN, is the senior nursing editor at HealthLeaders.

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