The Value of Nursing in Value-based Care

By Nelson Tuazon, DNP, DBA, RN, NEA-BC, CENP, CPHQ, CPPS, CPXP, FNAP, FACHE, FAAN
Vice President and Associate Chief Nursing Officer
University Health

Background

In the past several years, the US healthcare system has faced critical problems related to health equity, variations in quality and safety, and spiraling costs. The continuing healthcare disparities and cultural issues have also impacted access to care. Patient safety issues including medication errors, hospital-acquired conditions (HACs), healthcare-associated infections (HAIs), and missed care continue to plague the healthcare delivery system (Warshawsky & Cramer, 2019). The recent pandemic has exacerbated workforce management and employee issues. Technological advancements and innovations, new therapeutics and pharmaceuticals, and emerging diagnostics have compounded the increasing healthcare costs. More than ever, there is a compelling business case for addressing what ails the current healthcare system (Leger, 2023). Increasingly, there is pressing impetus to demonstrate the value of nursing in the current costly healthcare environment. As nursing leaders, we must understand and advance value-informed nursing practice (Yakusheva & Buerhaus, 2022).

Drivers of the Value Equation in Healthcare

In healthcare, value is defined as the outcome of care provided, divided by the cost of resources spent to achieve the desired outcome (Yakusheva et al., 2022a). Access, quality and safety, and cost remain to be the main drivers of the value equation in healthcare. Consumers and payers associate high-value care with improved outcomes using the least amounts of resources. Conversely, low-value care means using high amounts of resources with less-desirable levels of outcomes. In other words, we put high value in care that is effective and efficient and we make every effort to avoid or prevent low-value care that is ineffective, costly, and wasteful. Purchasers of health care services – the patients and their families – expect the highest value for the care and services they receive. In our efforts to deliver value in healthcare, we must recognize the explicit interplay of the desired outcomes and the cost to achieve these outcomes (Leger, 2023).

Nursing as Part of the Business of Delivering Care

The word business has a negative connotation in healthcare because of its association with the bottom line. However, nurse leaders understand that words matter in healthcare finance. There is an ongoing effort to differentiate health care from healthcare. Traditionally, health care has been associated with the set of actions taken to maintain or improve the health of an individual. As such, nurses, physicians, and other providers and professionals can be viewed as providers of health care. On the other hand, the word healthcare is associated with the system, industry, or field that delivers healthcare to individuals.  Healthcare is now strictly a business term in the US. Healthcare organizes doctors and patients into a system where the relationship can be financially exploited and hospitals, clinics, health insurers, the pharmaceutical industry, and medical device manufacturers extract as much money as often as possible (Sawyer, 2018, p. 494).

Value-based Payment

Regardless of the size, settings, or ownership of healthcare facilities, nurse leaders need to have a clear understanding of the reimbursement system in healthcare. Reimbursement is defined as the sum of money paid to cover the cost that has been spent. It is expected that reimbursement should cover or exceed the overall expenses to keep the healthcare organization financially viable.

It is instructive to differentiate retrospective from prospective payment system. In the retrospective payment system, health care is paid on actual charges, whereas in the prospective payment system, the payer determines the cost of care before the care is provided.  The move to a prospective payment system is also linked to the change from a volume-based to value-based payment, where the providers are reimbursed based on the quality of care provided. In value-based payment system, reimbursement can be lost when the specified care outcome is not achieved. This reinforces the need for high-value care where desired outcomes are achieved.

Healthcare leaders make every effort to avoid or prevent low-value care where inefficiencies and poor outcomes negatively impact reimbursement. For example, certain conditions such as hospital-acquired pressure injuries, hospital-associated infections, and readmission to the healthcare facility lead to penalties or reductions in reimbursement. In a value-based payment system, improved patient outcomes, enhanced financial health of the healthcare organization, and nursing empowerment are expected (Leger, 2023).

Value-informed Nursing Practice

Value-informed nursing practice is defined as the practice that consistently takes into consideration both the outcomes and the cost of resources to achieve these outcomes in the clinical decision making process (Buerhaus & Yakusheva, 2022; Yakusheva et al., 2022b). As part of their clinical decision-making, nurses determine the type and amount of resources needed to deliver the care the patient needs. Nurses are inseparable from the quality and safety of the care they provide. Equally, they are tightly linked to the cost of care delivered. The clinical decisions made by the nurse and the judicious and effective use of resources impact the value of care delivered. Thus, value-based care and value-informed nursing practice impact access, quality, and cost of healthcare.

Value-informed Nursing Practice and Innovation

The value of nurses has been recognized, especially during the recent pandemic. Nursing is no longer viewed as simply part of the cost of care. Recognizing the critical role of the nurse in achieving quality and safety goals and preventing hospital-associated infections, hospital-acquired pressure injuries, and readmissions, value-informed nursing practice is becoming a key driver in improving the financial health of the healthcare organization.

Innovations are essential to advancing value-informed nursing practice, as evidenced by the different outside-of-the-box innovative practices during the recent pandemic. Strategies that nurse leaders have implemented include a) developing cost-effective alternatives - finding alternative supplies and procedures; b) streamlining processes - avoiding adverse outcomes, errors, duplications, and delays, and c) implementing cost and resource saving - finding ways to overcall medical supplies and adapting to the environment (Yakusheva et al., 2022a).

Putting the Value in Nursing in the Era of Value-based Care

Value-based purchasing and payment models have provided the impetus for collaboration among clinical, administrative, and financial leaders. The transition to value-based models inherently affects quality and cost highlights the importance of collaboration between clinical and financial leaders. Both speak different languages, view different perspectives, and focus on different goals (Fogel, 2020). In health care, everything is interrelated, interconnected, and interwoven with finance. In any business decision such as budgeting, administrators must be aware of the clinical leaders’ concerns for staffing, patient acuity, staff productivity, and quality standards. Equally important, administrators cannot ignore financial implications of business decisions. The bottom line must remain solvent but the patient always come first (Leger, 2023).

A national study on the role preparation and competency of nurse managers, reported that nurse managers rated their competency scores for the art of management higher than those for the science of management (Warshawsky & Cramer, 2019). This self-assessment is in part due to the inexperience of the survey participants. The survey participants also reported their lowest competency scores in finance, strategic management, and performance improvement. This is concerning because nurse leaders are expected to possess these competencies to be successful amidst the increasing complexity of healthcare.

Advancing Value-informed Nursing Practice

Nurse leaders understand that the amount of revenues (e.g. reimbursement) should be enough to pay for the cost of the care provided. To obtain sufficient reimbursement, nurse leaders must work closely with other departments, particularly with the financial leaders. Collaboration with physicians and providers and other healthcare professionals is essential to achieve the desired quality and safety outcomes. Failure to achieve these outcomes such as hospital-associated infections, hospital-acquired pressure injuries, and readmissions will lead to penalties and reduced reimbursement (Leger, 2023; Yakusheva & Buerhaus, 2022).

Nurses are an integral part of the financial health of the organization. Yakusheva and Buerhaus (2022) recommend the following for nurses to achieve a new vision for the nursing profession and practice: a) nurses must consider the financial implications of their own nursing practice, b) nurses must take responsibility for their own financial security and well-being, and c) nurses must view themselves as human capital, not a resource.

From Value-informed to Value-driven Nursing Practice

The eminent Tim Porter-O’Grady challenges us further by positing that we must continue the journey from value informed to value-driven nursing (2022, pp. 1-3).  He proposes the following steps:

1. Nurses must formulate their own unique value algorithms that encompass social, clinical, financial, and practice factors. This can be achieved by using existing macro and micro clinical and financial data.
2. Utilize aggregate evidence of value that distinguishes intentional models or algorithms of practice from real practices to demonstrate significant value differentiation.
3. Nurses must assert ownership of their value, including fiscal value that integrates value obtained by other disciplines; nursing’s value goes beyond ridding of diseases. Value-driven nursing should be about caring and creating a goodness-of-fit between human and the multidimensional environment.
4. Nurses should actively participate in designing the service/payment formula to ensure that the social determinants of health are incorporated into the value-based payment reforms.
5. Nurses must claim ownership over the central role we play in health care. 

As we end the year, now is the time to take stock of what we have done to continue to demonstrate the value of nursing. It is fitting to quote Porter-O’Grady (2022) as we go into the New Year: “We have much to do, a system to change, a nursing profession willing to demonstrate its value and a healthy society to create. What could be a more hopeful and important work for the nursing profession we all know lives at the center of health care" (p. 3).

References

Buerhaus, P. I., & Yakusheva, O. (2022). Six part series on value-informed nursing practice. Nursing Outlook, 70(1), 8-9.

Leger, J. M. (2023). Financial management for nurse managers: Managing the heat with the dollar. (5th ed.). Jones & Bartlett.

Porter-O’Grady, T. (2022). Value informed to value-driven nursing practice. Nursing Outlook. https://doi.org/10.1016/j.outlook.2022.06.010

Sawyer, N. T. (2018). In the US, healthcare is now strictly a business term. Western Journal of Emergency Medicine, 19(3), 494-495.

Yakusheva, O., & Buerhaus, P. I. (2022). Value-informed nursing practice: Why must we think about the practice of nursing differently? Nursing Outlook. https://doi.org/10.1016/j.outlook.2022.06.008

Yakusheva, O., Munro-Kramer, M. L., Love, R., & Buerhaus, P. I. (2022a). Part 4: Value-informed nursing practice depends on nursing innovation. Nursing Outlook, 70(4), 566–569.

Yakusheva, O., Rambur, B., & Buerhaus, P. I. (2022b). Value-informed nursing practice: What is it and how to make it a reality. Nursing Outlook, 70(2), 211–214. 

Warshawsky, N., & Cramer, E. (2019). Describing nurse manager role preparation and competency: Findings from a national study. JONA: The Journal of Nursing Administration, 49(5), 249–255.