Nursing practice is at the heart of the Centers for Medicare & Medicaid Services’ Hospital Value-Based Purchasing (VBP) program, so nurses must be able to articulate their value contribution. Nursing budgets and daily staffing decisions are integral to hospital VBP because they influence patient outcomes, patient safety, and patient satisfaction.

In this value-based environment, recommending a data-driven acuity-based system to support staffing decisions is appropriate. In other words, nursing leaders can use any of the VBP outcomes to justify the investment of one of these systems. One way is by demonstrating a return on investment (ROI). 

Editor’s note:
On July 12, the author and other experts conducted a 1-hour webinar: “CFO/CNO partnership for workforce management outcomes: Benefits of acuity-based staffing.” This webinar is available now, to watch.

Building a business case. Acuity-based Staffing

A data-driven, acuity-based staffing solution is an objective method for identifying the number of nurses required to meet patient needs. However, this kind of solution requires funding. Start by developing a business case that demonstrates the ROI. In many instances, when nurse leaders fall short of selling an idea to their colleagues, lack of substansive ROI is the cause.

When building a business case, identify an outcome quantified in dollars. Since the purchase of the acuitybased system can support an improvement in patient outcomes, you can justify the cost by quantifying the improvement in terms of increased reimbursement dollars. For example, assume that you expect an increase in reimbursement because of a decrease in mortality to equal $100,000 by 2017 (related to acuity-based staffing). In addition, assume you invested $250,000 to install a data-driven, acuity-based staffing system (spread over 5 years, or $50,000 per year). In this situation, you can expect an ROI of ($100,000 ÷ $50,000) x 100 = 200%.*

Meeting patient needs

A data-driven, acuity-based staffing system makes it  feasible to provide resources for a unit so staff can better meet each patient’s needs. Staffing by acuity is more suitable than staffing by ratio, which doesn’t account for individual patients’ needs.

When all patient needs are met, nurse leaders can expect an increase in reimbursement related to VPB, and most hospital administrators support these system purchases when presented with an ROI over time. Because these tools help to demonstrate the value contribution of nursing services, they provide an opportunity to recognize any inpatient unit as a revenue-generating department rather than a cost center.

Sylvain Trepanier is chief nurse executive for Providence St. Joseph Health in Torrance, California.

*Numbers are fictional and intended only to illustrate how to calculate an ROI.

Selected references

American Nurses Association. Nurse staffing. December 2015.

Department of Health and Human Services. Hospital value-based purchasing. September 2015.

Kutney-Lee A, McHugh MD, Sloane DM, et al. Nursing: A key to patient satisfaction. Health Aff (Millwood). 2009;28(4):w669-77.

Needleman J, Buerhaus P. Nurse staffing and patient safety: Current knowledge and implications for action. Int J Qual Health Care. 2003;15(4):275-7.

O’Keeffe M. Acuity-adjusted staffing: A proven strategy to optimize patient care. Am Nurse Today. 2016;11(3).

Pappas SH. Value, a nursing outcome. Nurs Adm Q. 2013;37(2):122-8.

Spetz J. Nurse credentials: What is the economic value? Nurs Econ. 2014;32(5):268-9.

Yakusheva O, Lindrooth R, Weiss M. Nurse value-added and patient outcomes in acute care. Health Serv Res. 2014;49(6):1767-86.