Testimony by Tina Gerardi, Deputy Executive Director, New York State Nurses Association, October 2, 2003, New York, NY.
The New York State Nurses Association (NYSNA) is pleased to provide advice to the Acute Care Working Group. We represent the interests of more than 34,000 registered professional nurses. We are the union representative for RNs in 130 contracts throughout the state, including 86 acute care institutions in both public and private sector venues.
Our members are committed to high quality patient care. Our message to you is no different than our message at the bargaining table: improving RN staffing will save lives and save money. Recently published research, some funded by the federal government, has revealed data that validates what registered nurses have been stating for years: the amount of RN staffing in acute care environments definitely matters. Increasing RN staffing will reduce errors, adverse patient outcomes and length of stay, while providing savings to Medicaid and other payors.
We encourage you to recommend the establishment of safe staffing levels by defining minimum RN to patient ratios. New Yorkers expect government to ensure quality of care and patient safety in healthcare facilities throughout the state. A February 2003 Zogby poll found that 82% of respondents believe New York State is responsible for establishing safe patient-to-nurse ratios as a public safety measure.
Opponents to this recommendation will say that it is costly and impossible to implement during a projected nursing shortage. We have countered these arguments with evidenced-based research, surveys of nurses, and health care industry reports that prove otherwise. Lack of established RN to patient ratios contributes to the nursing shortage; nurses are unwilling to work in unsafe conditions. Nurses are fleeing bedside care in acute care facilities; they are retiring sooner and working in other fields. Establishing safe nurse to patient ratios will end the stampede and be the incentive for nurses to return to their calling.
It is quite possible to establish and implement safe staffing standards. In fact, the Department of Health is doing just that in regulations currently being promulgated related to living liver transplants. The regulations call for a minimum of one registered nurse to be on staff for every two patients in intensive care and post-anesthesia care units, and for a minimum of one RN for every four patients transferred out of those units. It is unfortunate that it has taken media attention on a patient death to generate the will to ensure patient safety.
Several states have established RN to patient ratios. California and New Jersey have had regulations in effect for many years identifying the minimum level of staffing in several areas of nursing services. California has since developed a broad set of staffing regulations for all types of acute care services, mandated by the State Legislature. Those regulations will take effect January 2004. During the deliberations, huge fiscal implications were projected by the industry. However, a more recent estimate shows the impact to be a manageable $217,000 per year per hospital 1. Several California hospitals have chosen to put the standards into place prior to the effective date of the regulations.
Why would these facilities choose to accelerate the implementation of the staffing mandate? Perhaps they recognize the long-term effects of understaffing. These can be seen in poor patient care outcomes and often result in a facility losing market share. Market share is affected when, due to short staffing, hospitals must divert cases from the emergency room to other facilities. Loss of market share also occurs when a facility’s reputation in the community suffers and consumers choose other providers.
Significantly, there is a relationship between understaffing and high staff turnover rates. High turnover results in higher costs for staff recruitment, use of high cost temporary staffing, increased frequency of orientation and associated loss of productivity that accompanies orientation periods. Improved working conditions, including safe RN to patient ratios, result in lower turnover rates with a concomitant reduction in overall costs.
Additionally, we encourage you to promote accountability in budget language that describes fiscal incentives for recruitment and retention of the healthcare workforce. Public policy goals addressing the nursing shortage have been important investments. However, it will be difficult to evaluate if the policy goals have been met without enhanced accountability. It should be the Legislature’s right to know how many workers have attained a nursing degree under the Health Care Workforce Training Initiative. It should also be the Legislature’s right to know if the Workforce Recruitment and Retention dollars have adequately reduced turnover rates.
To promote accountability, NYSNA recommends that a uniform data set be used in the completion of the Institutional Cost Report, a document that is filed with the Department of Health (DOH) to justify payment for services from public monies. Currently, each facility completes the form using data in the way they choose. While DOH requires staffing to be reported, it is not uniformly captured; some facilities report FTEs (full time equivalent personnel) that are calculated in various ways and other facilities include direct care and non-direct care nursing staff. It is essential that uniform reporting be required in order to evaluate models of service delivery and cost effectiveness of services. The New York State Task Force on Health Care Quality Improvement and Information Systems recommended that the hospital community “improve the consistency of reporting and that the Institutional Cost Report be revised to collect information on all staffing levels 2.”
Chapter 1 of the Laws of 2002, the Health Care Workforce Recruitment and Retention Act, requires facilities to direct financing enhancements to direct care staffing. However, there is no requirement that the Legislature receive reports on the degree to which financing has improved recruitment and retention. NYSNA believes that to promote accountability, there should be a requirement to report turnover and vacancy rates of direct care staff in the facilities using these resources from year to year. Facilities that are awarded these funds should not lay off direct care personnel without scrutiny from the state regarding the effectiveness of the grants.
The references that follow provide documentation that improving RN to patient staffing ratios will help the Working Group meet its policy goals.
Research Proves that RN Staffing Levels Matter
“Higher acuity patients plus fewer nurses to care for them is a prescription for danger…staffing levels have been a factor in 24% of the 1609 sentinel events – unanticipated events that result in death, injury or permanent loss of function.” 3
Nurse staffing levels are clearly linked to quality of patient outcomes. A recent study found a strong relationship between RN staffing levels and five adverse patient outcomes: urinary tract infection, pneumonia, shock, upper gastrointestinal bleeding, and longer hospital stays. A higher number of RNs resulted in a 3% to 12% reduction in rates of these adverse outcomes. 4
Safe RN to patient staffing levels not only prevent adverse outcomes, but also save lives. A patient’s risk of death is directly related to a nurse's caseload. When staffing ratios exceed four surgical patients to one nurse, every additional patient increases the risk of death by 7%. Patients on surgical units with patient to RN ratios of 8:1 were 31% more likely to die than those on surgical units with ratios of 4:1. Hospitals with ample nurse staffing had 9.4% fewer cases of cardiac arrest and shock than hospitals with lower staffing levels. 5
Cost of Recruitment, Retention and Turnover
As hospital administrators know, staff turnover is expensive. Data shows
a turnover rate in health care staffing of 20.7% for all positions. Researchers
estimate that a 20% turnover rate could cost a hospital on average $5.5
million annually. 6 The Advisory Board, a
Washington D.C.-based organization, reports that it costs $42,000 to replace
a medical-surgical nurse and $64,000 to replace a specialty nurse. A 500-bed
hospital with 500 RN FTEs (full time equivalent positions) in a 60-40
general-specialty mix could save up to $800,000 by reducing their turnover
rate from 13% to 10%.
Hospitals who cannot retain their nursing staff pay a costly price. These facilities must often look to outside agencies to fill staff vacancies. The growth in agency nurses since 1997 has been 46% compared to the 7% growth in employed nurses. Hospitals pay 2-2.5 times as much for an agency nurse as an employed nurse. 7
Hospitals with high turnover rates experience an increase in the average cost per discharge of patients and a substantial decrease in profitability. 8 Facilities with turnover rates of less than 12% have a cost per adjusted discharge of $5,286 compared with an average cost per adjusted discharge of $7,190 for those with turnover rates that exceeded 21%. As turnover rates climb, the severity adjusted length of stay increases and return on assets and cash flow margin decreases. Hospitals with a 20% or more turnover rate experience an increase in costs of 36% over hospitals with lower staff turnover. Hospitals with a 20% or more turnover rate have a 17% return on assets whereas hospitals with a turnover rate of 4% to 12% have a 23% return. 9
Sufficiency in nurse staffing levels results in higher employee satisfaction and lower staff turnover. 10 Research shows that those healthcare facilities addressing nurses’ needs are like magnets: they attract and retain sufficient numbers of nurses even when widespread shortages exist. Hospitals that have attained Magnet status (awarded by the American Nurses Credentialing Center) have a greater percentage of RNs in the staffing mix. The result is fewer negative patient outcomes and increased patient satisfaction. These facilities have lower incidence of nurse injuries, resulting in lower costs relating to workers compensation and sick leave. They have better RN retention rates, resulting in lower costs related to recruitment and orientation. The average length of employment among RNs who work at a Magnet hospital is 8.35 years, roughly twice that of non-Magnet hospitals. Magnet hospitals also report an average nurse vacancy rate of 8.19%, well below the national average of 10.2%.
Investing in RN staffing is a cost-effective business strategy. A recent study found that hospitals experienced increased operating costs when they increased RN staffing, but saw no statistically significant effect on profit margins. 11 When facilities increase RN to patient ratios, they contribute to job satisfaction and lower turnover rates while reducing the possibility of costly errors.
Cost of Medical Errors Related to Staffing
The Institute of Medicine (IOM) estimates that medication errors increase nationwide hospital costs by about $2 billion a year. Disturbingly, the IOM also estimates that the number of lives lost to preventable medication errors alone represents over 7000 deaths annually. The US Pharmacopoeia reported that “the primary contributing factors to medication errors were distractions and workload increases, many of which may be a result of today’s environment of cost containment.” 12
Safe RN staffing prevents adverse events that increase hospital costs. For example, a recent study found that a greater proportion of RNs to patients yielded significantly fewer instances of pneumonia. (An increase of 10% in RNs corresponded to a decrease of 9.5% in the odds of pneumonia.) Furthermore, they found that pneumonia added 5.1 to 5.4 days to length of stay, 4.67% to 5.55% in the probability of death and $22,390 to $28,505 in costs. In one group (medium, nonprofit, nonteaching, nonrural hospitals) pneumonia caused a 75% increase in length of stay, a 220% increase in probability of death and an 84% increase in costs. 13
Ensuring patient safety through safe RN staffing is applicable to individual units as well as facility-wide. For example, intensive care units with high nighttime patient loads (one nurse for every three or more patients) have significantly higher rates of post surgical complications than units with richer RN to patient ratios. Patient complications associated with the greater patient load resulted in a 14% increase in direct hospital costs ($1248). 14
Insufficient Staffing Levels Affect Services
A lack of sufficient staffing is a primary factor to a hospital being on diversion status and the number of hours of patient boarding. Boarding is when a patient is admitted to a hospital through an emergency room, but cannot be transferred to an inpatient bed. One reason for the lack of inpatient beds was the financial pressures hospitals are under to staff inpatient beds at a level where they will nearly always be full, thus limiting a hospital’s ability to meet periodic peaks in demand. 15
When hospitals do not have sufficient RN staffing, they must sacrifice services to preserve patient safety. A recent survey by the American Hospital Association reported that the nursing shortage has caused emergency department overcrowding (38%); diversion of emergency patients (25%); reduced number of staffed beds (23%); discontinuation of programs and services (17%); and cancellation of elective surgeries (10%).
1. McCue, Mark and Harless, 2003
2. Reporting information on hospital care
in New York State: Recommendations to Governor George E. Pataki and the
New York State Legislature, 1999
3. Health care at the crossroads. Strategies
for addressing the evolving nursing crisis, 2002
4. Needleman, Buerhaus, Mattke, Stewart,
and Zelevinsky, 2001
5. Aiken, Clarke, Sloane, Sochalski, Busse,
Clarke and Benson, 2002
6. The business case for work force stability,
2002
7. Cost of caring: Key drivers of growth
in spending on hospital care, 2003
8. The business case for work force stability,
2002
9. Ibid.
10. Ibid.
11. Nurse staffing, quality and financial
performance, 2003
12. Summary of 1999 information submitted
to MedMARx: A national database for hospital medication error reporting,
2000
13. Cho, Ketefian, Barkauskas, and Smith,
2003
14. Dimick, Swoboda, Pronovost, andLipsett,
2002
15. Hospital emergency departments: Crowded
conditions vary among hospitals and communities, 2003
References
Aiken, L. S., Clarke, S. P., Sloane, D. M., Sochalski, J. A., Busse, R., Clarke, H., et al. (2002). Hospital nurse staffing and patient mortality, nurse burnout, and job dissatisfaction. “Journal of the American Medical Association”, 288(16), 1987-1993.
“The business case for work force stability”. Retrieved November 11, 2002, from http://www.vha.com
Cho, S. H., Ketefian, S., Barkauskas, V. H., & Smith, D. G. (2003). The effects of nurse staffing on adverse events, morbidity, mortality, and medical costs. “Nursing Research”, 52(2), 71-79.
Cost of caring: Key drivers of growth in spending on hospital care. (2003, February 19). “Pricewaterhouse Coopers”.
Dimick, J. B., Swoboda, S. M., Pronovost, P. J., & Lipsett, P. A. (2002). Management issues in critical care: Effect of nurse-to-patient ratio in the intensive care unit on pulmonary complications and resource use after hepatectomy. “American Journal of Critical Care”, 376-382.
Health care at the crossroads. Strategies for addressing the evolving nursing crisis. (2002). Oakbrook Terrace, IL: Joint Commission on Accreditation of Healthcare Organizations.
“Hospital emergency departments: Crowded conditions vary among hospitals and communities”. (Report to the Ranking Minority Member, Committee on Finance, United States Senate)(2003). Washington, DC: United States General Accounting Office.
McCue, M., Mark, B., & Harless, D. (2003). Nurse staffing, quality, and financial performance. “Journal of Health Care Finance”, 29(4), 54-76.
Needleman, J., Buerhaus, P., Mattke, S., Stewart, M., & Zelevinsky, K. (2001). “Nurse staffing and patient outcomes in hospitals” (Completed under contract to Health Resources and Services Administration, DHHS and available at: http://www.bhpr.hrsa.gov/nursing/staffstudy.htm). Boston, MA: Harvard School of Public Health.
Nurse staffing, quality and financial performance. (2003). “Journal of Health Care Finance, Summer”.
“Reporting information on hospital care in New York State: Recommendations to Governor George E. Pataki and the New York State Legislature”. (1999). New York State Task Force on Health Care Quality Improvement and Information Systems.
“Summary of 1999 information submitted to MedMARx: A national database for hospital medication error reporting.” (2000). Bethesda, MD: U.S. Pharmacopeia.
For more information, contact Governmental Affairs at 518.782.9400, ext. 283 or by e-mail.