The Case for Quality
The Case for Quality

Peter Buerhaus, Vanderbilt School of Nursing
Some things are just intuitively known.

For example, without surveys or research or data, most involved with the healthcare industry are fully aware of the value of nurses. Without them, we certainly couldn't run our country's clinics and practices and hospitals. And a skilled nursing facility would be … well, just an unskilled facility.

However, in the day-to-day operations world of diminishing reimbursements, rising costs and a seemingly unlimited list of capital requests, the spreadsheet value of adding more nurses or changing staff ratios isn't as immediately clear.

Can you make a business case for quality?

That was the simple question asked by a team of nationally renowned researchers1 who have spent the last several years looking at a host of issues associated with the nursing field. Their latest study, which looks specifically at nurse staffing mixes in hospitals, was published as part of a multi-part series in the January/February 2006 issue of the journal Health Affairs.

Coauthor Peter Buerhaus, PhD, RN, the Valere Potter Professor of Nursing and senior associate dean for research at Vanderbilt School of Nursing in Nashville, spoke with Medical News about the team's findings and implications to the bottom line.

Buerhaus says the team began by imagining a bell curve with all the hospitals plotted according to their specific nurse-staffing scenarios (licensed hours of nursing care and mix of RNs and LPNs). They chose to focus on what would happen if facilities in the bottom three-quarters were to bring their staffing up to the level found in the top quadrant. While not suggesting this is the "perfect" benchmark, he says the team chose the 75th percentile — as opposed to matching the hours and ratios of those in the 90th or 95th percentile — because it is an attainable goal.

"Most hospitals could find one way or another to get there," he notes.

From that starting point, the team looked at three variations on staffing: 1) changing the proportion of hours staffed by RNs vs. LPNs; 2) raising the number of licensed nursing hours for both RNs and LPNs; and 3) a combination … increasing the total number of nursing hours while also raising the proportion of RN vs. LPN hours.

"If we were to bring up staffing of both RNs and licensed practical nurses to the top quarter, there's a certain cost to that," Buerhaus says pragmatically. However, he continues, "You're also going to see a cost reduction."

It's this unemotional cost/benefit analysis that can be used to make a business case. The cost increases are immediately evident in terms of additional salaries and benefits. The cost reductions are perhaps not as quickly seen but have a huge bottom line impact over time. The savings correlated with staffing up nursing to the top quarter of the nation's hospitals come from a reduction in adverse outcomes, a reduction in days a patient spends in the hospital and a decrease in mortality rates.

In the first scenario of keeping the same number of overall nursing hours but changing the proportion of RN hours versus LPN hours, Buerhaus and associates found hospitals below the benchmark level would have to replace more than 37,000 LPNs with RNs at a cost of $811 million. However, this scenario also results in a short-term savings of $242 million and a longer-term savings of $1.8 billion.

"You also get the biggest reduction in the number of avoided complications, and you get 1.5 million less hospital days," he says. "It's also estimated this would result in 5,000 fewer (in-hospital patient) deaths."

The second scenario calls for an overall increase in the number of licensed nursing hours. To achieve this, the team said hospitals across the nation would have to add 114,456 more RNs and 13,093 LPNs at a cost of $7.5 billion. The resulting savings would total $5.8 billion over time.

"This one isn't as positive as the first one in that you don't save any money," he says of the net effect. "You get fewer avoided complications, but you do get more avoided hospital days," Buerhaus continues, adding the number of avoided deaths drops from almost 5,000 in the first scenario to only 1,800 in this one.

The third scenario is the most costly, requiring the bottom three-quarters of the nation's hospitals to both increase their number of licensed nursing hours and to change their staffing ratio of RN hours relative to LPN hours to match the top quarter.

"That costs you about $8.5 billion," Buerhaus states. "You get more reduction in the number of avoided complications so you get a gain there. You get 4,100,000 fewer hospital days and a total of 6,754 fewer deaths … but it gets pricey."

Relative to the net $8.5 billion it would cost to increase hours and add 158,000 more RNs, the total savings would come in around $5.7 billion.

While this specific study focused on the avoidance of specific adverse outcomes (failure to rescue, urinary tract infection, hospital-acquired pneumonia, upper GI bleeding and shock or cardiac arrest), Buerhaus says it is "highly likely" that hospitals will also see a savings in additional areas. For example, other studies have shown a correlation in staffing and medication error rates so increasing staffing could be expected to result in an avoidance of that complication, as well.

Furthermore, Buerhaus says actual costs and savings will vary on a case-by-case basis. Clearly, it is much less expensive to move from the 65th percentile to the 75th as opposed to having to move up from the 20th percentile. An organization's unique culture, patient acuity level, years of nursing experience and required specialty skills all impact the big picture. Still, the model provides a quantifiable means to explore both the costs and savings inherent in staffing changes.

Buerhaus and colleagues readily admit there is also an intrinsic value in the avoidance of complications and fewer deaths that would result from the most expensive third scenario on which you simply cannot put a price. However, purely from a business case standpoint, the three staffing options do exemplify the law of diminishing returns.

The results of this research underscore the much bigger issue facing the nation's healthcare industry. Clearly, in each of these staffing scenarios, increasing nurses diminishes adverse outcomes and death. Where, then, are hospitals to find more nurses?

Buerhaus concludes, "For our part, we are hoping this will stimulate people to now think much more seriously about the shortage of nurses … the current shortage, which is now entering its ninth year, and the shortage that is projected to occur downstream as we see the large number of RNs begin to retire from the workforce."