Why hospitals must educate nurses about healthcare costs

Guest post by Susan J. Penner, an adjunct faculty member of the University of San Francisco's School of Nursing and Health Professions, and author of the book "Economics and Financial Management for Nurses and Nurse Leaders."

Every day hospitals waste money, and the non-personnel expenses for a medical-surgical nursing unit at a typical hospital in America are thousands of dollars over budget. The nurse manager might investigate and find that one reason for the rise in costs is poor handling and labeling of lab tests, leading to repeat testing that is usually not reimbursed. Another potential reason is that nurses are taking far more supplies than are needed to patient rooms, often forgetting to charge for these items. The supplies cannot be used for other patients once they are removed from the storage room, and the hospital loses reimbursement, as charges are not reported.

This story is not unusual. Nurses are often completely unaware of the costs of care in their inpatient or outpatient settings. Few staff nurses have any background or education in healthcare finance, and often resist the idea that they need to think about the cost of nursing care. However, in these times of rapid change and ever more scarce resources, it's time for nurses to realize that their performance affects not only their patients' health but the financial health of their institution.

I teach a course in financial resource management in the Masters of Science in Nursing Program at the University of San Francisco. Some of my students are entry-level, completely new to the nursing profession and seeking a registered nurse license upon graduation. Other students are licensed and experienced RNs. No matter the level of experience, most of these students are skeptical about the need to learn financial concepts as they enter the course. By the end of the course, these students have a basic understanding of the importance of healthcare financing, and they are able to make a business case to acquire funding to improve patient care.

A fundamental concept I teach in this course is that healthcare budgets have an impact on nursing care, and nurses have an impact on healthcare budgets. One strategy in the course is to assign students to review California hospital chargemaster documents and report the charges for a selected item. When students find that a complete blood count (CBC) can cost as much as $200, they realize that mishandled or mislabeled lab specimens are going to cost the institution or payer a lot of money. When students find that gauze dressing charges can be $20 or more per package, they think about the costs of hoarding and wasting supplies, which allows them to teach themselves about the relationship between their nursing performance and hospital costs.

>> Read the full commentary at Hospital Impact