Teas­ing out nurs­ing costs

Re­searchers urge use of ‘nurs­ing in­ten­sity’ data in hos­pi­tal billing

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Al­though nurs­ing care has al­ways been one of the larger sin­gle ex­penses in acute-care hos­pi­tals, some ex­perts have never been sat­is­fied with how nurses’ ser­vices have been lumped into the same over­all “room and board” charges as rou­tine hos­pi­tal costs.

All the way back in 1935, when the Amer­i­can Hos­pi­tal As­so­ci­a­tion pub­lished its first in­dus­try­wide fi­nan­cial and statis­tics guide of U.S. hos­pi­tals, the au­thors rec­om­mended that nurs­ing costs be de­ter­mined sep­a­rately from room and board to clar­ify the ac­count­ing of what it costs to treat hos­pi­tal pa­tients.

But it was not to be. In­stead, the cost of nurs­ing was “buried along with brooms, break­fast, and the build­ing mort­gage,” hurt­ing the vis­i­bil­ity of nurs­ing con­tri­bu­tions to health­care for the bet­ter part of a cen­tury, nurs­ing schol­ars John Dev­ereaux Thomp­son and Donna Diers wrote in the now out-of-print text­book Man­ag­ing Hos

pital Re­sources in 1991. Long­time nurs­ing re­searcher John Wel­ton has not given up the fight. He says hos­pi­tals could not only im­prove their op­er­a­tions, but some could even ben­e­fit their bot­tom lines if his ideas about link­ing nurs­ing in­ten­sity to med­i­cal billing came to fruition.

Wel­ton—named dean of the School of Nurs­ing and Health Sci­ences at Florida South­ern Col­lege, Lake­land, this year—has been study­ing what could be dif­fer­ent if the more than $200 bil­lion cost of hos­pi­tal nurs­ing was not lumped into the un­dif­fer­en­ti­ated “blob” of room-and-board costs. The study could wrap up next year, depend­ing on the de­mands on his aca­demic role, he says.

“We’ve cre­ated a sys­tem where we’ve hid­den the true cost of nurs­ing care,” Wel­ton says. “The ar­gu­ment I make is, we need to iden­tify the cost of nurs­ing in­ten­sity on a per-pa­tient ba­sis. The old as­sump­tions that the hos­pi­tal ac­count­ing sys­tem was based on, which was based in 1930s, don’t hold any longer. But we’re still stuck in them.”

Ob­servers say one of the biggest weak­nesses of the cur­rent billing sys­tem, which re­lies on pa­tient di­ag­no­sis codes, is that an­cil­lary fac­tors such as drugs and lab­o­ra­tory test­ing that are easy to ac­count for end up driv­ing the cost of care, even though they may have less im­pact on what hos­pi­tals ac­tu­ally spend on care than the dif­fi­cult-to-quan­tify mea­sure of nurs­ing in­ten­sity.

Nurs­ing in­ten­sity is the widely de­bated met­ric de­scrib­ing ex­actly how many min­utes of care a nurse pro­vides to a given pa­tient. Re­searchers say un­der­stand­ing vari­a­tions in nurs­ing in­ten­sity, both be­tween clas­si­fi­ca­tions of pa­tients and among the pa­tients in a given cat­e­gory, is a key in set­ting up ac­count­ing, staffing and billing mod­els that ac­cu­rately record the true cost of the care that hos­pi­tals pro­vide.

Catholic Health Ini­tia­tives—a 59-hos­pi­tal health sys­tem based in Den­ver—is one of sev­eral sys­tems con­tribut­ing nurs­ing-in­ten­sity data to the study, al­though Kathy San­ford, the sys­tem’s se­nior vice pres­i­dent and chief nurs­ing of­fi­cer, says the aca­demic goals are not her pri­mary rea­son for im­ple­ment­ing a new dig­i­tal sys­tem to track in­ten­sity.

“We’re putting this in as a way to un­der­stand what pa­tients need,” San­ford says. “As a nurse, I un­der­stand that cer­tain pa­tients need more care. This will tell us who those pa­tients are.”

For ex­am­ple, two pa­tients can come in to the hos­pi­tal for iden­ti­cal rea­sons, but if one of them has di­a­betes, their nurs­ing in­ten­sity is likely to be dif­fer­ent than a pa­tient with­out the chronic con­di­tion.

“This will help us fig­ure out how to more ef­fec­tively as­sign our nurs­ing re­sources,” she says. “It’s im­por­tant to us that we pro­vide the high­est qual­ity care pos­si­ble, and we be­lieve that to do that we have to as­sign the right nurse so that they’re pro­vid­ing the right care to the right pa­tient.”

How much care re­quired?

Joyce Batcheller—a se­nior vice pres­i­dent and chief nurs­ing of­fi­cer for the Austin, Texas-based Se­ton Fam­ily of Hos­pi­tals, part of As­cen­sion Health—has nurses in 10 hos­pi­tals tak­ing part in a nurs­ing in­ten­sity project. The goal is to find out ex­actly how the al­lo­ca­tion of nurses com­pares to key nurs­ing-sen­si­tive in­di­ca­tors such as pa­tient falls, pres­sure ul­cers and cen­tral-line in­fec­tions. Even­tu­ally, the data could be used to, among other things, more ac­cu­rately tell pay­ers how sick pa­tients in the hos­pi­tal are and how much nurs­ing la­bor their treat­ments re­quire, Batcheller says.

While a nurs­ing-in­ten­sity ad­just­ment in billing might not nec­es­sar­ily lead to greater to­tal re­im­burse­ment, it will al­low hospi-

tal of­fi­cials to talk with speci­ficity about changes in pa­tient acu­ity and to make the best de­ci­sions about al­lo­ca­tion of nurs­ing re­sources as pa­tient loads in­crease with the ag­ing of the baby boomer pop­u­la­tion.

“As things start to heat up with more bat­tles about man­dated ra­tios and the cost of health­care, how do we make sure we’re spend­ing money on the right things? I think the tim­ing is good,” Batcheller says.

An of­fi­cial in the hos­pi­tal and am­bu­la­tory pol­icy group at the CMS, who could not speak for at­tri­bu­tion for this ar­ti­cle, says any im­ple­men­ta­tion of a nursing­in­ten­sity fac­tor in CMS billing would not re­sult in larger or smaller re­im­burse­ments for the in­dus­try, but rather in more ac­cu­rate pay­ments. In other words, any re­dis­tri­bu­tion of pay­ments among hos­pi­tals for more accu- rate billing would not in­crease the to­tal amount of pay­ments to the in­dus­try.

A study of the is­sue that the CMS com­mis­sioned in 2008 by con­sult­ing firm RTI In­ter­na­tional con­cluded that al­though this com­pres­sion of nurs­ing costs within the billing sys­tem was a “crit­i­cal” prob­lem in the in­pa­tient prospec­tive pay­ment sys­tem, there was no fea­si­ble way to ap­ply pa­tient-level nurs­ing in­ten­sity data un­less hos­pi­tals agreed to im­ple­ment a more elab­o­rate billing-code sys­tem for in­pa­tient nurs­ing care per diem charges.

Al­though mod­ern ac­count­ing and clin­i­cal data sys­tems are pro­duc­ing ever-more in­for­ma­tion to show that nurs­ing time is not cor­rectly billed for, the sys­tems are usu­ally pro­pri­etary and not widely adopted enough to in­cor­po­rate those nurs­ing in­ten­sity mea­sures into stan­dard Medi­care billing, ac­cord­ing to the RTI re­port. Ob­servers note that more and more data are be­com­ing avail­able. Still, Wel­ton is hope­ful the idea will take hold at the CMS, and could even help the fed­eral govern­ment de­ter­mine if hos­pi­tals are de­vot­ing enough nurs­ing care to pa­tients of par­tic­u­lar in­ten­sity.

“They could say, there’s a line in the sand and once you step be­low that line, you are no longer pro­vid­ing the care to our ben­e­fi­cia­ries that you agreed to,” he says. “The data are there, it’s just a mat­ter of the po­lit­i­cal will and the in­dus­try will to move these ideas for­ward.” <<

A nurse at­tends to an in­fant pa­tient in the neona­tal in­ten­sive-care unit at Uni­ver­sity Med­i­cal Cen­ter Brack­en­ridge, Austin, Texas, part of the Se­ton Fam­ily of Hos­pi­tals. Ten Se­ton hos­pi­tals are par­tic­i­pat­ing in a nurs­ing in­ten­sity study.

Wel­ton: We have a sys­tem “where we’ve hid­den the true cost of nurs­ing care.”

Batcheller: “How do we make sure we’re spend­ing money on the right things?”

San­ford: “As a nurse I un­der­stand that cer­tain pa­tients need more care.”

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