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Viewpoint: Putting money at the bedside


Teamwork has proven to be effective in creating strategies to improve patient outcomes. The Joint Commission, Centers for Medicare & Medicaid (CMS), clinical professionals, healthcare providers, hospital associations, and healthcare consumers proved the positive effect of teamwork by planning and strategizing together to improve healthcare delivery through the creation of core measures—performance measures that help ensure that patients receive the best evidenced-based care.

It’s essential that these same stakeholders continue to collaborate and to advocate with government legislators, community leaders, insurance company administrators, and hospital administrators to put more money at the patient’s bedside not only to satisfy core measures, but to provide quality care that meets the patients’ needs and increases both nurse and patient satisfaction.

Advocacy is needed because it’s not uncommon to hear of hospitals closing, dealing with financial difficulties, or merging with other hospitals to remain viable in today’s economic climate. Hospitals are faced with declining reimbursement from insurers and with the need to meet incentives from the CMS and hospital inpatient value-based purchasing (HIVBP) incentive programs, which provide reimbursement based on meeting certain criteria such as patient satisfaction scores. Financial challenges are having a significant negative impact on staff and patients.

Here is a closer look at some of the issues.


Although many hospitals are struggling financially, money doesn’t appear to be a problem for many chief executive officers (CEOs). According to the New York Times, the average yearly salary for an insurance CEO is $584,000, and a hospital CEO earns an average salary of $386,000 a year. In 2012, the salary for Aetna Insurance Company’s CEO was $977,000, with the total compensation estimated to be over $36 million.

Contrast these figures with the average annual salary earned by those who care for patients. A surgeon earns about $306,000, and a general physician earns about $185,000. Average salaries are even lower for those who provide direct care. In 2013, the average for a registered nurse (RN) was $68,910, the average for a licensed practical nurse (LPN) was 42,910, and the average for a nursing assistant was $24,890.

Despite these disparities, physicians, nurses, and nursing assistants aren’t complaining about their salaries, but are concerned about the increased workload, limited resources, and lack of sufficient staffing to care for the patients at the bedside. The most common reason for these issues is the reduced funds coming into the hospital from the government, private insurance companies, and incentive programs. Hospitals need more money to provide quality care at the bedside and improve patient and nurse satisfaction.


Hospitals are businesses in desperate need of improved financial reimbursement from both government and private insurance companies. Hospitals are facing tough financial constraints. For example, lower hospital reimbursement rates are causing many rural hospitals to close their doors. The CMS and the Patient Protection and Affordable Care Act (ACA) have led to Hospital Incentive Value-Based Purchasing (HIVBP), where hospitals receive payment based on quality of care. But this puts hospitals in a catch-22 situation, faced with an unsolvable puzzle to provide quality patient care with less and less money to do so.

According to Rau (2015) “1,700 hospitals win quality bonuses from Medicare, but most will never collect”. Value-based incentive programs are designed to provide hospitals payment based on performance. However, fewer than 800 of the 1,700 hospitals that earned the financial incentives will actually receive the money because of penalties inflicted by two other Medicare quality programs that take money away for hospitals if patients are readmitted or develop an infection. Therefore, value-based purchasing programs may actually cost hospitals more money because of all the required documentation and as a result of other Medicare quality programs. For instance, Mission Health System is predicted to lose $500 million of reimbursement due in part to a decrease in their Medicare and Medicaid reimbursements. Only 28% of hospitals are expected to get the incentive money or will break even after the incentive programs are taken into account (Kaiser Health News).

According to the American Hospital Association, the CMS underpaid hospitals $51 million by reimbursing 88 cents on every dollar the hospital spends caring for a Medicare patient and 90 cents for a Medicaid patient, which means hospitals lose money providing care for these patients. Hospitals can’t afford to continue to care for patients if insurance companies and government plans do not reimburse hospitals at greater rates.

As a result of diminishing reimbursements to hospitals, healthcare leaders and consumers of healthcare services, need to address not only a insurance company CEO making millions of dollars, but the overall reimbursement hospitals receive from government, private, and incentive programs. Only then can hospital closures be prevented and nurses provide quality care at the bedside.

The CMS has started an HIVB program that bases reimbursement on patient satisfaction survey results. Hospitals also can receive financial incentives for using electronic health records (EHR). However, it’s difficult for hospitals to meet incentive plans when they are financially struggling to stay open, have to fight for insurance reimbursement, and have limited resources and an inadequate number of nurses to meet patient care needs. The CMS has so many data collection requirements to which hospitals must adhere to receive reimbursement that many hospitals have had to implement new departments of employees to complete the tedious and timely task of reviewing patient records to collect the limited reimbursement CMS provides.

As an example, go to CMS.gov and look at details for “Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Fiscal Year 2015 Rates; Quality Reporting Requirements for Specific Providers; Reasonable Compensation Equivalents for Physician Services in Excluded Hospitals and Certain Teaching Hospitals; Provider Administrative Appeals and Judicial Review; Enforcement Provisions for Organ Transplant Centers; and Electronic Health Record (EHR) Incentive Program.” This CMS report provides so many revisions that it makes one overwhelmed and light headed just to read it. It’s a wonder that hospitals can even keep up with all the requirements and revisions CMS has made.


Financial difficulties can lead to unsafe working conditions for both healthcare workers and healthcare consumers. In fact, unsafe working conditions are causing nurses to be pulled in so many directions that both the nurses and patients are left dissatisfied. According to the Occupational Safety and Health Administration (OSHA), hospitals are the most hazardous places to work with an estimated 6.8 work-related injuries reported per 100 employees—twice the rate of private industry. Furthermore, OSHA reports that injuries and stress are the most common reasons nurses eventually decide to leave the profession entirely.

Nurse staffing

Nursing is typically the largest part of a hospital’s budget, so hospitals often cut that first when faced with budget challenges. Yet studies have shown that reducing the number of RNs can lead to negative effects on nursing well-being, nurses’ health, nurses’ ability to provide quality care, increased patient length of stay (LOS), and increased patient mortality.

Providing nurses with adequate staffing allows patients to receive both quality and safe care, which is what patients want and deserve and what all of us would want if we were hospitalized. Without adequate staffing, outcomes can suffer. Take the example of a nurse who is assigned eight patients on a medical/surgical unit. If one of the eight patients takes a turn for the worse, the nurse will be busy providing care to that patient. The other patients often have to wait until that nurse is available, even if they have an urgent need. This common situation is unfair and unsafe to patients who are admitted into hospitals.

Nurse and patient satisfaction

Nurses working in hospital settings are faced with increased workloads, which has lead to burnout and job dissatisfaction, ultimately taking a toll on patient safety, outcomes, and satisfaction.

Patient satisfaction surveys provide hospital administrators with data to support the need for improved nurse staffing, for more ancillary staff, and for supplies to be available so patients can receive the care they need. Today’s nurses have to work in environments that make it nearly impossible to meet all patients’ needs; this situation has led to low patient satisfaction scores in many hospitals across the United States. According to Comarrow, not one of 154 U.S. hospitals ranked on their patient satisfaction scores was among the upper end for satisfaction results. Studies from OSHA have found that hospitals with higher nurse satisfaction rates also have increased patient satisfaction scores.

Nurses are often counseled by nursing management on their patient satisfaction survey results and the need to increase scores so the hospital can receive reimbursement incentives based on excellent survey scores. A study by Kutney, McHugh, Sloane, and colleagues looked at 430 hospitals to assess the relationship between nursing care and patient satisfaction scores and found that when the nurse had a positive work environment and was assigned a manageable number of patients, patient satisfaction scores were favorable. The study authors noted that improving the work environment and nurse-patient ratio can improve both patient satisfaction and the quality of care patients receive, but unfortunately there continues to be a problem attaining those goals.

Action plan

As healthcare leaders we need to advocate for improving working conditions at the patient’s bedside. This includes allocating money for resources, supplies, and staffing. Taking into consideration patient acuity levels and the number of patients a nurse is assigned, and having readily available supplies and resources can improve patient and nurse satisfaction and quality of care. But money is needed to accomplish this. The Joint Commission, CMS, clinical professionals, healthcare providers, hospital associations, and healthcare consumers need to work together to lobby government legislators, community leaders, and insurance company administrators to provide money for care at the bedside.

Selected references

American Hospital Association. Financial Fact Sheets. Underpayment by Medicare and Medicaid Fact Sheet, 2015 Update. www.aha.org/research/policy/finfactsheets.shtml 2015.

Bouchard S. Hospital budgets consumed by bureaucracy. Healthcare Finance. www.healthcarefinancenews.com/news/hospital-budgets-consumed-bureaucracy September 8, 2014.

Center for Medicare & Medicaid Services. Details for title: CMS-1607. http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/IPPS-Regulations-and-Notices-Items/CMS-1607.html May 15, 2014.

Hertel R. Regulating patient staffing: a complex issue. MedSurg Matters Newsletter. 2010;21(1). https://www.amsn.org/sites/default/files/documents/practice-resources/healthy-work-environment/resources/MSM-Hertel-Jan12.pdf

Comarrow A. Hospital patients speak their mind in satisfaction surveys. U.S. News & World Report. http://health.usnews.com/health-news/best-hospitals/articles/2009/10/20/hospital-patients-speak-their-mind-in-satisfaction-surveys October 20, 2009.

Kutney-Lee A, McHugh M, Sloane D, et al. Nursing: a key to patient satisfaction. Health Aff. 2009;28(4):669-77.

Morris B, Jahangir A, Sethi M. (2015) Patient satisfaction: an emerging health policy issue. AAOS Now. 2015;9(8). www.aaos.org/news/aaosnow/jun13/advocacy5.asp

Ochs R. State: all hospitals struggling financially. Newsday. www.newsday.com/news/health/state-all-hospitals-struggling-financially-1.3321533 November 14, 2011.

Occupational Safety and Health Administration. Worker Safety in Your Hospital. https://www.osha.gov/dsg/hospitals/documents/1.1_Data_highlights_508.pdf 2015.

Ostendorff J. Jobs at risk as Mission eyes deep budget cuts. Citizen-Times. www.citizen-times.com/story/news/local/2014/07/29/jobs-risk-mission-eyes-deep-budget-cuts/13340991/ July 29, 2014.

Rau J. 1,700 hospitals win quality bonuses from Medicare, but most will never collect. Kaiser Health News. http://khn.org/news/1700-hospitals-win-quality-bonuses-from-medicare-but-most-will-never-collect/ January 22, 2015.

Sullivan K. Rural hospitals struggle to keep doors open. Fierce Health Finance.www.fiercehealthfinance.com/story/rural-hospitals-struggle-keep-doors-open/2014-08-26 August 26, 2014.

Batcher EH. Best health care jobs: registered nurse: salary. US News & World Report. www.money.usnews.com/careers/best-jobs/registered-nurse/salary 2015.

The Joint Commission. Core Measure Sets. www.jointcommission.org/core_measure_sets.aspx 2015.

Thungjaroenkul P, Cumings G, Embleton A. The impact of nurse staffing on hospital costs and patient length of stay: A systematic review. Nurs Econ. 2007;25(5):255-265.

Maureen Kroning is an associate professor of nursing at Nyack College School of Nursing in Nyack, New York.

3 Comments. Leave new

  • I am very curious as our CEO is converting us from Fee-for-service to value based. How can a hospital increase the value of care a patient/family receives if they do not increase resources at the front line of patient care, primarily nursing. Also, if nursing care has the biggest impact on patient outcomes, why are nursing services not reimbursed by CMS or earning revenues?

  • Jennifer Ausley, RN
    December 7, 2015 10:49 am

    Dear Editor:
    I am writing in response to the article, “Viewpoint: Putting money at the beside.” written by Maureen Kroning that appears in the October 2015, volume 10, number 10 issue. It is an excellent article to highlight the financial reimbursement issues affecting today’s healthcare systems. The five important elements Ms. Kroning discussed such as salaries, reimbursement, safety, nurse staffing, and patient/nurse satisfaction, all directly impact a hospital’s economic status. As a full-time registered nurse working within a level-one trauma center, this article certainly generated different reactions.

    Practicing as a bedside, clinical nurse, I am able to see firsthand the rippling effects on patient care due to decreased reimbursements and budget changes. If reimbursement does not occur, then hospitals suffer. Recently, due to being over the budget, our management has been obliged to “flex” – forcing employees to go home early when the patient census is low – in an attempt to meet budget criteria. These cuts cause a higher patient-nurse ratio and can thus lead to both patient and nurse dissatisfaction. Fears of delivering unsafe and ineffective care are also a concern. Staffing cuts and lower resources place higher demands on the nurse leading to physical and mental exhaustion correlating to lower patient satisfaction ratings, thus lower reimbursement. Personally, I believe that patient satisfaction scores should not be held in such high regard. If patients enter the hospital, reimbursement scores should be placed on how well the patient succeeds in clinical outcomes and not how happy they were with the service. As an ER nurse, we are consistently busy and those that are the sickest of the sick receive most of my attention. The patients that utilize the ER for primary care services will most likely be dissatisfied with their care when the acuity is high.

    It is time for all healthcare professionals to take a stand and advocate for a working relationship with health care administrators, government, community leaders and insurance companies to provide the money needed to improve work conditions at the bedside. With financial stability comes safer working conditions, and adequate staffing contributing to an excellent patient care experience. Improving work conditions will decrease the nurse work-load correlating with higher patient satisfaction scores. Our patients deserve excellent care at the bedside.

    Thank you for taking the time to read my response,

    Jennifer Ausley, RN
    Youngsville, NC


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