Paying hospitals on the basis of nursing intensity: policy and political considerations

Abstract

Some believe that explicit incorporation of nursing intensity into hospital payment systems would lead hospitals to increase the use of nursing resources. But 25 years of Medicare provider payment policies, followed increasingly by Medicaid programs and private insurers, means that any incorporation of measures of nursing intensity into payment systems needs to be consistent with concepts of prospective payment. But the main impact of such a step would be to increase equity among hospitals with different case mixes and blunt incentives to specialize in diagnosis-related groups with relatively low nursing intensity. Issues of the role of nurses in hospitals and the intensity of nursing resources used in care are more likely to be influenced by quality reporting and pay for performance than by incorporating nursing intensity into a prospective payment system.