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Dangerous Staffing Models | CMS Cuts Deeper
July 16, 2024
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Together with
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“Nursing budgets are an easy target for hospitals since they’re a huge slice of expenses, but it’s important for leadership teams to ask themselves if the reason they don’t have budget for other projects is actually because they aren’t investing enough on the front end, on their staff.”
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Carta Healthcare Director of Clinical Abstraction Betsy Castillo, RN
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New research in Medical Care found that hospitals opting to replace registered nurses with non-RN staff could be sacrificing patient safety for short-term financial gains.
This was one of the largest-ever studies investigating the tradeoff between RNs and lower-wage labor, yet it received surprisingly little coverage given the implications of its findings.
UPenn researchers analyzed clinical and claims data for 6.5 million Medicare patients across 2,676 US hospitals in 2019, finding that every 10 percentage-point reduction in RNs was associated with:
- 7% higher odds of in-hospital death
- 1% higher odds of readmission
- 2% increase in expected days
- “Significantly” lower patient satisfaction
Hospitals are often pressured to pursue “team nursing” models for the immediate financial lift of substituting RNs with nurses’ aides or licensed practical nurses, but the authors warn that the true impact of using less skilled workers is likely the exact opposite.
- The study estimates that a 10 percentage-point reduction in RNs would result in nearly 11k avoidable deaths annually and 5,207 preventable readmissions.
- That translates into roughly $68.5M of additional Medicare costs each year, with hospitals also losing nearly $3B annually because of patients requiring longer stays.
Then why do hospitals continue substituting RNs with lower-wage staff? From the patient perspective, the negative impact on outcomes – let alone mortality – should stop the idea of lowering the skill-mix in its tracks.
- That said, the average hospital sees an instant cost reduction of $31.94 per patient day for every 10 percentage-point reduction in RNs to total nursing staff.
The financial near-sightedness of that $31.94 cost reduction blinds hospitals to an estimated $66.03 of lost revenue per patient day for the same 10pp reduction in skill-mix… in other words the expected ROI is more than a two-fold loss.
The Takeaway
Nursing budgets are a huge slice of the hospital expense pie, making them a go-to target when leadership teams are looking to make cuts to fund other areas. This study reaches the paradoxical conclusion that the reason hospitals don’t have funds for other areas could be because they aren’t investing enough in the nurses they’re thinking of cutting.
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- CMS Cuts Deeper: “Dear doctors, happy annual cut-your-compensation day.” CMS is planning yet another physician reimbursement cut, proposing a 2.8% reduction to the MPFS conversion factor in 2025… after already cutting it by 3.4% this year. The proposed move would bring the estimated CY 2025 PFS conversion factor down by $0.93 to $32.36. CMS said the cut is required due to “factors specified in law,” which didn’t exactly sit well with overworked physicians.
- First Codes for Digital Therapeutics: On a brighter note for the CMS 2025 PFS, it included the first-ever codes specifically for behavioral digital therapeutic products. The trio of proposed HCPCS codes reimburse providers for the supply and management of FDA-cleared “digital mental health treatment devices” as long as they’re augmented by a behavioral therapy plan. Although Pear and Akili are probably rolling over in their graves, the fact that adoption follows reimbursement means that players like Click Therapeutics and Dario could be on their way to a surge in usage.
- Regard Series B: Regard landed $61M of Series B funding to help health systems comb through medical records to identify missed diagnoses, which directly translates to finding revenue that might have slipped through the cracks. Since launching its core product in 2021, Regard has grown its client list to nearly 100 hospitals including Cedars-Sinai, Banner, and Montefiore, leading to over 3M diagnoses of medical conditions that might not have been caught without the tech.
- ED Overcrowding: New research in Health Affairs explored the true extent of ED and hospital overcrowding during the pandemic by analyzing Medicare data from 2019 to 2022. Despite widespread reports of overcrowding, ED visits remained below baseline throughout the study period, and even fell to 25% below pre-pandemic levels by the end of 2022. The authors noted that hospital census spiked toward the start of the pandemic and length-of-stay remains elevated, “presumably related to increased acuity and reduced available bed capacity” rather than ED volume.
- OpenAI & Huffington Launch Thrive AI: Digital health stepped into the mainstream spotlight with Sam Altman and Arriana Huffington’s joint announcement of Thrive AI Health, a startup setting out to use AI to democratize access to wellness coaching and address health inequities. Look no further than the duo’s co-authored article in TIME for a buzzword-packed peek into Thrive AI Health’s lofty mission of creating hyper-personalized behavior change in notoriously difficult areas (diet, sleep, exercise) to reverse trend lines in chronic conditions such as diabetes and heart disease.
- BSCA Member Health Record: Blue Shield of California is making it easier for members to access their medical information by launching a new Member Health Record, which combines data from both claims and providers in a single dashboard accessible either online or through Blue Shield’s app. The Member Health Record includes lab results, diagnoses, and explanations of conditions alongside historical data that’s been shared with the plan, allowing members to set reminders for tasks like preventive services or immunizations.
- Lirio Teams Up With Cone: Lirio is launching its second Precision Nudging intervention focusing on diabetes through a collaboration with Cone Health, the NC-based system that was recently announced as Risant’s second acquisition target. Although that acquisition has yet to close and Risant presumably wasn’t involved with this partnership, Cone’s tech-forward approach to improving patient experiences and outcomes is right in line with its decision to use Lirio’s Precision Nudges to prompt behavior changes in its hypertensive and diabetic populations.
- Wegovy Cost Forecast: A JAMA study suggested that treating US adults with Wegovy (Novo Nordisk’s semaglutide) for cardiovascular event prevention would cost a whopping $127B annually. Researchers used criteria from the SELECT trial to determine that 5.6% of the US population would be eligible (overweight/obese, nondiabetic), and then factored in $16,188 per patient in annual drug costs. However, the study didn’t analyze whether that cost would be justified by Wegovy preventing an estimated 190k cardiovascular events over five years.
- HHAeXchange Acquires GHS: HHAeXchange has been quickly acquiring new solutions to bolster its homecare enablement platform for providers, MCOs, and state Medicaid agencies, recently picking up Generations Homecare System less than a month after adding Cashé Software to its portfolio. Generations Homecare System provides an all-in-one home-health management solution for connecting care teams, automating daily tasks, and maintaining compliance.
- Anti-Doping Device Partnership: With the Paris Summer Olympics right around the corner, Tasso is expanding its partnership with InnoVero to collaboratively develop and distribute athlete-centric anti-doping solutions. The partnership kicked off in 2021 and has already led to a virtually painless anti-doping blood collection system for the upcoming Paris games, which leverages capillary suction as opposed to vein draws or finger-pokes. Here’s a pic of a guy who’s not an Olympian (but has a couple UFC belts) using the Tasso to give you the gist.
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