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Nurse Reimbursement: Redefining Nursing's Value

Learn more about the Commission for Nurse Reimbursement and its vision for transforming nursing and healthcare.

The 2024 Commission for Nurse Reimbursement Legislative Summit was an eye-opener. The summit's mission was clear from the start: to revolutionize healthcare by transforming nurse reimbursement models. The energy in the room was palpable as speakers from various healthcare sectors came together to discuss the pressing need for change.

As nurses, we know our daily struggles—short staffing, overwhelming workloads, and the constant pressure to provide top-notch care with limited resources. Hearing thought leaders and experts address these issues on a prominent stage was refreshing and validating. Attendees left the summit with a renewed sense of purpose, recognizing the historical roots and contemporary challenges facing the nursing profession. Here’s a rundown of the topics covered and why they matter to the millions of nurses in the U.S.

A Glimpse into the Past

Back in the 1920s, nursing was a powerhouse for women’s economic independence in the U.S. Private duty nurses were in high demand, hired directly by families or individuals, and paid independently for their expertise. It was a model that worked well, highlighting the critical role nurses played in patient care.

But things changed in the 1930s. In an effort to simplify billing, hospitals adopted a model similar to hotels, bundling nursing services into room rates. Sharon Pearce, co-founder of the Commission, described the change by saying, “Nurses bought into the medical model.”  While seemingly efficient, this move made the economic impact of nursing services invisible. Nurses went from being recognized as essential, independent professionals to being seen as a cost in hospital budgets.

The Present Reality

Fast forward to today: nursing in the U.S. is still without a direct reimbursement model, which has significant implications. As Rebecca Love, co-founder of the Commission, explained, “Healthcare is in serious trouble in the United States.” Each year, the U.S. sees 180,000 new nursing graduates, but a staggering 57% leave their jobs within just one to two years. This alarming trend isn’t new—it predates the COVID-19 pandemic.

The current reimbursement model incentivizes hospitals to minimize nursing costs, leading to chronic understaffing and burnout. Hospital administration often asks nurses to reduce staffing levels, not based on patient needs, but due to budget constraints. This pressure results in less time with patients, increased errors, and a disconnection from the core mission of nursing: delivering exemplary patient care.

An Analogy to Consider

Commissioner Paul Coyne provided a compelling analogy to illustrate the current nursing reimbursement issue:

Imagine running a restaurant with two sit-down establishments in town. One has ample, well-trained staff, creating an excellent dining experience, while the other skimps on staff, leading to mistakes and poor service. The former thrives, while the latter struggles. Yet, the restaurant skimping on staff generates more revenue because less staff means more profit. In hospitals, the situation is eerily similar. Adequate staffing leads to better patient outcomes, but the current financial model rewards cutting nursing staff to save money. Coyne went on to emphasize, “Every American citizen is suffering from a reimbursement model that makes absolutely no sense.”

A Call for Change

The Commission for Nurse Reimbursement Summit made it clear: We need to shift our perspective on nursing from cost avoidance to revenue generation. After all, nurses are critical to patient safety and care quality. The narrative must change to reflect the true value nurses bring to healthcare, including the direct care they provide to patients and their role in improving patient outcomes, reducing hospital readmissions, and enhancing overall healthcare experiences. By recognizing the comprehensive benefits nurses contribute, we can advocate for a reimbursement model reflecting their indispensable role in the healthcare system.

With a nursing reimbursement model in place, hospitals would have a financial incentive to maintain adequate staffing levels. Specifically, this model would prevent hospitals from continuing to leave units short-staffed by creating a financial framework where adequate staffing is directly tied to revenue. When hospitals see a clear link between investing in nursing staff and their financial performance, the incentive to maintain optimal staffing levels becomes much stronger. This not only ensures better care for patients, but also creates a more sustainable and supportive work environment for nurses—leading to less burnout, better work-life balance, and more time for nurses to provide high-quality care rather than being stretched too thin.

Advocacy is crucial. It’s time to educate the public and policymakers about the indispensable role of nurses. Reaching out to legislators, sharing personal stories, and emphasizing the need for a reimbursement model that acknowledges nurses' contributions are essential steps.

Existing Models that Reimburse Nurses

John Welton and Olga Yakusheva have developed innovative economic models for nurse reimbursement. John presented a model that extracts nurse intensity, or calculated nursing time, from diagnosis codes for hospitalization. He also discussed ideas where nurses could use an identification number to bill through procedural codes. Olga addressed a model developed by her and Robert Longyear that unbundles nursing payment from facility payment, with hospital payments adjusted based on performance in improving nursing workforce outcomes, including measures of nurse staffing levels and work environment.

Moving Forward

To secure the future of nursing and healthcare, we must correct the historical wrongs and create an economic model that supports and sustains the nursing profession. Florence Nightingale, a pioneer in nursing, envisioned a transformation that would unfold over 150 years, and this decade marks that milestone as she had predicted. Today, it is incumbent upon our generation to honor her legacy and realize her vision of nursing as a respected and integral part of healthcare.

The Summit was a powerful call to action, highlighting the urgent need to reform nursing reimbursement models. It underscored the essential role of nurses in maintaining a sustainable, equitable, and effective healthcare system. I was filled with renewed purpose and determination as the day ended. While the journey ahead is challenging, I am optimistic we can bring meaningful change through persistent dialogue, collaboration, and advocacy.

We can redefine the nursing profession through education, advocacy, and concerted efforts to drive policy change. Let's ensure that nurses receive recognition, respect, and reimbursement for their essential service and indispensable contributions to healthcare.

If you wish to support the Commission and its pivotal work, there are two ways you can do so. First, volunteer your time and talents by completing this form, and we’ll reach out as opportunities arise. Second, join our Membership Community to connect with like-minded individuals and receive benefits such as educational events, networking, and professional development. Your membership fees directly support the Commission's work, including advocacy, events, and model development. Use code TNB20 for 20% off your first year’s membership.

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