Nursing Business

Read the following chapters in Financial Management for Nurse Managers and Executives, 5 ed., Jones (2019):

Chapter 5 – Quality, Costs & financing

Write 200-300 words post about how quality can influence cost.

APA format

Must have plagiarism receipt

CHAPTER 5

Quality, costs, and financing

Chapter goals

The goals of this chapter are to:

■ Define quality and how it is measured

■ Discuss value in health care and the impetus for integrating quality, cost, and financing

■ Describe the use of report cards in health care

■ Examine the role of Magnet and Baldrige designations in shaping hospital quality

■ Examine the intricate relationships among costs, quality of care, and health care financing

■ Describe incentives in our financing system that impact quality

■ Introduce the concept of a business case for quality

❃ Introduction

In the late 1990s and early 2000s, several reports raised concerns about the quality of health care and highlighted the complex relationships among the quality, costs, and financing of health care. The most notable are reports from the Institute of Medicine (IOM),1 To Err Is Human: Building a Safer Health System 2 and Crossing the Quality Chasm. 3 To Err Is Human estimated that between 44,000 and 98,000 hospital deaths per year were caused by preventable errors in health care. The authors contrasted this loss of life in health care with the loss of life in the airline industry by noting:

The likelihood of dying per domestic jet flight is estimated to be one in eight million.4 Statistically, an average passenger would have to fly around the clock for more than 438 years before being involved in a fatal crash.

Compared with errors in health care, data from the To Err Is Human report suggested that the likelihood of dying from preventable hospital errors is approximately 1 in every 350 to 770 hospital admissions (based on approximately 34 million hospital admissions in 1997). This report noted that even though the health care system is less safe than other industries and the risk of dying in the health care system is much greater than that of dying in an airline crash, the public has made few demands to improve the health care system. Why? Perhaps because society views safety problems in health care as provider deficiencies versus systems deficiencies. Yet the costs of health care system deficiencies are great, estimated to range from $17 billion5 to as much as $29 billion per year.6

Crossing the Quality Chasm provided solutions for overcoming the enormous barriers in the health care system that obstruct quality initiatives. This report identified sources of overuse, underuse, and misuse of our health care system, which, in turn, contribute to costs by increasing direct, indirect, and opportunity costs.7 The authors determined that care in the U.S. health care system should be:

■ Safe (avoiding injury to patients)

■ Effective (providing care based on scientific knowledge while minimizing the overuse, underuse, or misuse of care)

■ Patient-centered (being respectful, responsive, and considerate of patient preferences, needs, and values)

■ Timely (minimizing delays and wait times)

■ Efficient (avoiding waste)

■ Equitable (providing care that does not vary based on race, gender, geography, or socioeconomic status)

Although these six aims by themselves are not revolutionary, the impact of all six aims collectively on health care delivery has been. These two reports spurred the patient safety movement in health care and countless reports, manuscripts, and studies; almost all of the quality initiatives under way in health care organizations (HCOs) cite these IOM reports as their impetus.

Another IOM report, Preventing Medication Errors, suggests that medication errors are even more commonplace in HCOs than one might expect. This report estimated that, on average, a hospital patient runs the risk of being exposed to “more than one medication error each day.”8 Overall, approximately 1.5 million preventable adverse drug events are estimated to occur every year. The report also determined that, based on a conservative estimate of 400,000 adverse drug events per year in hospitals, the cost of medication errors would be approximately $3.5 billion.

Why have these reports drawn so much attention? Interestingly, they exposed what many health care professionals have known for a long time: the U.S. health care system does not live up to its potential.9 This is especially striking—and concerning—when one considers that the United States spends more on health care than any other country in the world. Would we—as individual citizens—pay for services that did not live up to our expectations? Would we continue to purchase goods and services time and again that are not a good value? Probably not, unless there were no other options. But that is what makes health care unique: We might switch providers or insurers, but we cannot switch health care systems unless we move to another country.

So that leaves us faced with changing and improving our system to better meet the needs of our society. Assessments of progress in improving the health care system since the IOM reports that made quality and patient safety everyday concerns suggest that a great deal more work is needed before our health care system is safe.10 A report by the nonprofit Consumers Union (publisher of Consumer Reports) estimated that 10 years after To Err Is Human, errors accounted for over 100,000 preventable deaths in hospitals per year, largely because of slow progress implementing computerized systems to prevent medication errors in hospitals, slow action by the U.S. Food and Drug Administration (FDA) to address confusion in medication labeling, the lack of transparency in error accountability and reporting systems, poor national coordination in tracking and reporting errors, and a lack of evidence on health providers’ competencies in patient safety practices.11 Some analysts believe the numbers from the IOM reports underestimate the magnitude of errors.12 A recent study estimated that as many as 210,000 to 400,000 individuals die each year due to avoidable medical errors.13 With these estimates, the cost associated with medical errors is predicted to range between $735 billion and $980 billion.14 Other estimates put the cost of inpatient preventable medication errors at approximately $16.4 billion and outpatient preventable medication errors at approximately $4.2 billion annually for a total of approximately $21 billion.15 Concerns about errors are so pervasive that errors have been called the third-leading cause of death in the U.S.16

This chapter explores the intricate relationships among health care quality, costs, and financing. We begin with a general discussion and definition of quality and how it is measured and then move to a discussion of the impetus for integrating quality, costs, and financing.17 We then discuss the emergence of report cards to grade health care providers and the role of quality recognition programs in the health care quality movement. Relationships among health care costs, quality, and financing are explored to highlight the incentives and disincentives in our health care financing system and to address concerns about the value of health care. We conclude the chapter by discussing the development of a business case for quality, variations in practice, and short- and long-term costs.

❃ What is quality, and how is it measured?

What is quality? In our society, we’ve all heard advertising slogans such as “Quality is Job 1.” In reality, that slogan is misleading because it does not account for how quality is defined and measured or outline the costs required for desired levels of quality.

Traditionally, quality was assumed to be an intrinsic part of health care, often without question. The responsibility for quality was concentrated at the top of most HCOs, and the focus was on adhering to certain criteria and standards and ensuring

that they were met.18 These so-called quality assurance programs were often punitive and focused on identifying and punishing individuals who committed errors or failed to adhere to standards.

Today, however, there is a widely held belief that quality in health care is far from what it should be. This belief has fueled changes in how quality is addressed in HCOs. Inspired by the aviation industry’s use of checklists and by quality improvement efforts in the motor industry, most notably Toyota’s lean management, the health care industry has attempted to shift its focus to a more patient-centered approach. In addition, experts have been urging the industry to shift from a punitive approach that shames and blames individual providers for errors to a “culture of safety where open discussion and reporting about adverse events, mistakes, disruptive behavior and unsafe conditions are encouraged, rather than punished.”19, 20 Today in many HCOs, the responsibility for quality is dispersed throughout the organization, and there has been a shift from focusing on quality assurance to the safety of the systems within which quality is determined, namely on how to prevent errors, build safer processes, create a nonpunitive environment or “just culture,” to address errors that do occur, and continuously improve quality. The intent is that quality efforts should be customer focused. Today, databases are commonly developed, maintained, and analyzed in HCOs using sophisticated statistical tools and processes. The results of these analyses are, in turn, used to develop future quality improvement efforts, such that quality is a never-ending process. Although some HCOs have stronger quality programs and perhaps better outcomes than others, all must have some commitment to quality to survive in today’s competitive and complex environment.

The IOM21 provided the following definition of quality, which is generally accepted in health care:

. . . the degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.

This definition acknowledges several important points.22 First, quality is not a static concept but rather a matter of degree. Second, quality increases the likelihood of beneficial outcomes but does not necessarily preclude poor outcomes despite even the provision of ideal care. Third, quality is based on the application of the best and most current professional knowledge available. And finally, quality is a very complex dimension that requires the consideration of a broad range of issues to ensure its attainment. Even under the best of conditions, quality may be elusive.

Avedis Donabedian, widely held to be the “father of quality assurance” and of the quality movement in health care,23 was an outspoken proponent of systems change to improve health care quality. Donabedian acknowledged that defining quality depends on perspective. For example, patients likely define quality differently than clinicians do, and patients and clinicians likely define quality differently than society at large.24 Donabedian also acknowledged that the definition of quality involves a valuation of benefits, monetary costs, and potential harms in health care, yet the quantification of benefits, costs, and harms is difficult to ascertain and may change over time.

In a seminal article,25 Donabedian defined quality as a function of structures, processes, and outcomes of care. Measuring quality, in turn, requires an examination of system attributes that represent the structures, processes, and outcomes of care. He described structural aspects of quality as resources used in the provision of care (e.g., physicians, nurses, and other care providers; organizational characteristics), process aspects of quality as the activities involved in providing care (e.g., the model of care delivery used and organizational policies and procedures), and outcomes as the consequences of care (e.g., condition-specific results of care and patient satisfaction).26 Donabedian also identified seven pillars or attributes of quality27:

■ Efficacy: the ability of care to improve health

■ Effectiveness: the degree to which attainable health improvements are realized

■ Efficiency: the ability to obtain the greatest health improvement at the lowest cost

■ Optimality: the most advantageous balancing of costs and benefits

■ Acceptability: conformity to patient preferences regarding accessibility, the patient–practitioner relationship, the amenities, the effects of care, and the cost of care

■ Legitimacy: conformity to social preferences concerning all of the above

■ Equity: fairness in the distribution of care and its effects on health.

The Centers for Medicare & Medicaid Services (CMS) and other organizations have adopted aspects of the Donabedian model in assessing the quality of care and have implemented

these concepts in programs that tie reimbursement to quality indicators (see examples in Exhibit 5.1).

❃ EXHIBIT 5.1

Types of Quality Measures

Type of Measure

Description

Example

Structure

Assesses the characteristics of a care setting, including facilities, personnel, and/or policies related to care delivery.

Does an intensive care unit (ICU) have a critical care specialist on staff at all times?

Process

Determines whether the services provided to patients are consistent with routine clinical care.

A patient received prophylactic antibiotic within 1 hour before surgical incision.

Efficiency

Measures how well care is provided with the least amount of resources.

Medicare spending per beneficiary

Safety

Evaluates whether a patient experiences an adverse event.

Central venous catheter–related bloodstream infections

Patient Experience

Provides feedback on patients’ experiences of care.

Responsiveness of hospital staff

Outcome

Evaluates patient health as a result of the care received.

30-day mortality, heart failure

Adapted from Morris C, Bailey K. 2014. Measuring health care quality: an overview of quality measures; Carrier E, Cross D. 2013. Hospital quality reporting: separating the signal from the noise. Measure examples taken from CMS’ Value Based Purchasing program.

The Nursing Role Effectiveness Model, derived from Donabedian’s structure–process–outcome framework, has been conceptualized as an approach for measuring and improving quality in nursing.28 In keeping with Donabedian’s approach, this model recognizes that structural and process components affect patient outcomes. Doran and Pringle29 identified the following as examples of variables that comprise these three components:

■ Structure

■ Patients: age, gender, education, type and severity of illness, comorbid conditions

■ Nurses: education, experience

■ Organizational: staffing, staffing mix, workload, and work environment

■ Process

■ Nurses’ independent role, including patient education and the implementation of nursing interventions

■ Medical care–related role, including medically directed or prescribed care, and the expanded scope of nursing clinical practice

■ Interdependent role: team communication, coordination of care, discharge planning, and case or care management

■ Nurse-sensitive outcomes

■ Functional status, self-care, symptom control (including pain management), patient safety and adverse occurrences, and patient satisfaction with care

This model has been tested and validated30 for its usefulness in capturing nurses’ contributions to quality of care in acute care. Although further work is needed to understand and measure the coordinating function of nurses, this model aids in understanding nursing’s role in the delivery of quality care.

Mitchell and colleagues31, 32 also derived a dynamic model to guide research examining nursing contributions to quality of care from Donabedian’s structure–process–outcome framework. This model reflects reciprocal relationships among the health care system within which care is provided, the interventions used, client characteristics, and the outcomes of care. The model emphasizes the need for analysis at the levels of individual, group, community, and population.33

The use of Donabedian’s structure–process–outcome framework by researchers, scholars, and practitioners as a basis for research and theory development suggests that it is compelling in its ability to capture important aspects of quality in health care. However, even Donabedian’s framework does not specify how quality should be measured in each and every case. Lohr34 emphasized that process and outcome measures should be used to assess quality because emphasizing only one aspect of quality could be misleading. She also pointed out that quality measures should be based on explicit clinical criteria and that quality measures should be adjusted for case mix, patient severity of illness, and patient comorbid conditions.

It is also important to point out that the IOM’s six aims fail to cover one strategic aspect of health care delivery that has a direct impact on the quality of health services and financial viability of an HCO: the safety of health care personnel. In fact, a World Health Organization (WHO) synthesis report on the best strategies for ensuring quality in hospitals includes personnel safety as a key aspect of quality. The report defines a regional or national hospital quality strategy as a long-term (2- to 5-year) program aimed at increasing safety for both

patients and personnel.35 It is important for nurse managers and executives to emphasize personal safety and patient safety in tandem in improving overall quality. For far too long, the safety of health care personnel, especially nurses and nurse aides, has not been considered a priority or measured as a key indicator in the journey to improving health care quality. One exception may be hospitals that have achieved or pursued Magnet® status by implementing broad, sweeping initiatives that emphasize improving the nurse’s work environment.

Data and reports have indicated that rates of musculoskeletal injuries from overexertion of health care personnel are among the highest of all U.S. industries.36 For example, in 2014 the average rate of overexertion injuries was 68 injuries per 10,000 full-time hospital workers, 107 per 10,000 full-time nursing home workers, and 174 per 10,000 ambulance workers, compared with an average of 33 per 10,000 full-time workers across all industries.37, 38 These injuries to health care workers clearly have an impact on the safety of patients, especially their safe handling, lifting, and moving. These injuries also have a financial impact on health care organizations.

Reports have also demonstrated a link between the work environment, particularly nurse staffing, and health care quality. For example, a review by the Agency for Health Research and Quality (AHRQ) on patient safety practices concluded that higher nursing staff levels are generally associated with improved patient safety and reduced harm.39 Another report pointed to the critical role of nurses in patient safety,40 concluding that the typical nurse’s work environment is a threat to patient safety in “all four of the basic components of all organizations—organizational management practices, workforce deployment practices, work design, and organizational culture.” 41

Recent studies also have revealed relationships among nurses’ safety, the work environment, and patients’ safety. One study reported the prevalence of musculoskeletal pain of 71% and depression of 18%42 among nurses, a much higher rate than the national average in the general population. Pain and depression were significantly associated with “presenteeism,”43 or reduced on-the-job productivity, as a result of health problems.44 Presenteeism, in turn, was found to be associated with a higher number of patient falls, a higher number of medication errors, and lower quality-of-care scores.45 Yet other studies have shown that the work environment is linked to the nurse’s productivity and the patient’s experience of quality of care.46-48 This is also evidenced in Magnet® hospitals where improving nurses’ work environment is emphasized.49 Therefore, it is important for nurse leaders to be vigilant in ensuring the safety and well-being of their nurses, as quality of care and their organizations’ financial health depend on it.

❃ The impetus for integrating quality, cost, and financing

In an ideal world, high-quality care would be a basic characteristic of the health care system. In some cases, it is. However, the reality of our health care system is that, unfortunately, we have a system with incentives around dollars, not around results that are indicative of quality. Quality cannot drive the system until there are incentives for quality. Those who manage the system have not been convinced of the need to realign incentives at all levels so that quality comes first.50

This sentiment is echoed in the IOM’s Crossing the Quality Chasm report, which called for a greater understanding of how financial and other incentives relate to quality. In some cases, reimbursements to providers are now based on the outcomes associated with the care provided. This is known as pay for performance or value-based purchasing (see Chapters 2 and 9), but this reimbursement system is still evolving. We know very little about how this system works and whether it will be sustainable over the long run. Anyone who works in the health care system knows that we have a long way to go before financial incentives are truly aligned with reward quality.

The impetus for today’s focus on quality comes from a variety of public and private sources. The federal government has been a major player in the quality debate in health care. The Advisory Commission on Consumer Protection and Quality in the Health Care Industry (known as the Quality Commission), established by executive order in 1996, was created to “advise the President [William J., “Bill” Clinton] on changes occurring in the health care system and, where appropriate, to

make recommendations on how best to promote and ensure consumer protection and quality health care.”51 The Quality Commission delivered “A Consumer Bill of Rights and Responsibilities,” which was endorsed by the president, and a final report, “Quality First: Better Health Care for All Americans,” which made the following recommendations52:

■ Provide strong leadership and clear aims for improvement in the health care system

■ Advance quality measurement and reporting

■ Create public–private partnerships to provide leadership in improving health care quality

■ Encourage actions by group purchasers that support and promote quality

■ Strengthen the hand of consumers by providing accurate, timely, and useful information

■ Focus on the quality of care provided to vulnerable populations

■ Promote accountability in the system by adhering to the Patient’s Bill of Rights, providing adequate and appropriate oversight, and adhering to quality standards

■ Reduce errors and increase safety in health care

■ Foster evidence-based practice and innovation

■ Adapt HCOs for change that promotes quality

■ Engage the health care workforce in quality initiative

■ Invest in information systems

The extent to which the Quality Commission’s recommendations have been put into place is debatable. Nonetheless, this group’s work brought several important quality issues to the forefront and informed quality initiatives that have followed.

More recent federal initiatives are discussed elsewhere in this book (e.g., Chapters 2 and 9), such as the implementation of the CMS pay-for-performance system and the Hospital Quality Initiative. These initiatives are a major step forward in aligning payment with quality incentives. Because CMS is such a prominent player in our health care financing system and exerts such great control in shaping U.S. health care, other major insurers have followed suit and will continue to do so. These initiatives bundle fees for hospitals and their physician affiliates if they meet certain quality standards in the provision of services for specific, complex procedures, such as heart surgery and hip and knee replacement surgery.

Today, the Patient Protection and Affordable Care Act (ACA), described in Chapter 2, represents the government’s most sweeping attempt to reform the health care system in 45 years. This legislation aims to improve the health of society by increasing access to care via expanded health care coverage to uninsured individuals and also aims to improve the health care system by aligning quality metrics with payment mechanisms. For example, this legislation will reduce payments to hospitals for preventable hospital readmissions and for hospital-acquired conditions. Although U.S. hospitals have been focused on improving quality in these key areas, other such efforts are needed to bring about the comprehensive improvements needed in the system.

In addition, CMS under the ACA launched several programs that tie payment to health care quality, including the Hospital Value-Based Purchasing (VBP) program, the Hospital Readmission Reduction Program (HRRP), and the Hospital-Acquired Conditions (HAC) reduction program. One other consequential initiative by CMS is a program called Partnership for Patients, which brings together government, provider organizations, payers, and patients with the two main goals of reducing preventable harm in U.S. hospitals by 40% and avoidable readmissions by 20% compared with 2010 baselines.53 These efforts seem to be having an impact on the industry. Between 2010 and 2014, the decline in hospital-acquired conditions was 17%, which translates to over 2 million fewer hospital-acquired conditions.54 In addition, as a result of these reductions, nearly 87,000 fewer patients died in the hospital and approximately $19.8 billion in health care costs were saved from 2010 to 2014.55

Another area of focus through the ACA was the formulation of a national strategy for quality improvement in health care. The National Quality Strategy (NQS) was first published in 2011 in compliance with the ACA mandate.56 The NQS, according to AHRQ, serves as a framework for aligning stakeholders across private and public sectors at the federal, state, and local levels.57 The initial NQS, which brought together federal agencies, health care payers, purchasers, providers, consumers, and other partners, established three aims and six priorities for quality improvement.58

The three broad aims were the following59:

■ Better Care: Improve the overall quality by making health care more patient-centered, reliable, accessible, and safe.

■ Healthy People/Healthy Communities: Improve the health of the U.S. population by supporting proven interventions to address behavioral, social, and environmental determinants of health in addition to delivering higher-quality care.

■ Affordable Care: Reduce the cost of quality health care for individuals, families, employers, and government.

The six priorities were60:

1. Making care safer by reducing harm caused in the delivery of care.

2. Ensuring that each person and all families are engaged as partners in their care.

3. Promoting effective communication and coordination of care.

4. Promoting the most effective prevention and treatment practices for the leading causes of mortality, starting with cardiovascular disease.

5. Working with communities to promote wide use of best practices to enable healthy living.

6. Making quality care more affordable for individuals, families, employers, and governments by developing and spreading new health care delivery models.

Although the United States is a leader in health care and medical innovation, too many individuals do not receive the right care, at the right time, in the right setting, every time.61 In addition, the NQS recognized that to achieve “optimal results every time requires an unyielding focus on eliminating patient harms from health care, reducing waste, and applying creativity and innovation to how care is delivered.”62

Another focus on quality comes from the Health and Medicine Division (HMD) of the National Academies of Science, Engineering, and Medicine formerly known as the Institute of Medicine (IOM), a not-for-profit organization that “serves as an advisor to the nation to improve health” and that “provides independent, objective, evidence-based advice to policymakers, health professionals, the private sector, and the public.”63 Three important IOM quality reports have already been mentioned in this chapter, which speaks to the significance of these reports. However, other IOM reports pertaining to improving the quality of care in the United States are particularly relevant for nursing. For example, a 1996 IOM report, “Nursing Staffing in Hospitals and Nursing Homes,” noted the following:

[T]here is a serious paucity of recent research on the definitive aspects of structural measures, such as staffing ratios, on the quality of patient care in terms of patient outcomes when controlling for all other likely explanatory or confounding variables.64

This 1996 IOM report laid the foundation for the IOM’s 2004 report, “Keeping Patients Safe:

Transforming the Work Environment of Nurses.”65 This 2004 report linked the nursing work environment with patient safety and outlined a number of recommendations for improving the work environment. These recommendations were far-reaching and aimed largely at the organizations where nurses work, but they also called on the federal government, private organizations, nursing organizations, labor organizations, and policymakers to take actions to improve the work environment for nurses and ultimately improve quality and patient safety.

These reports led to publications in the popular press and to numerous research efforts that have helped inform quality of care efforts, particularly as they pertain to nursing. The most recent IOM initiative relevant to nursing is its partnership with the Robert Wood Johnson Foundation to produce the 2011 report, The Future of Nursing: Leading Change, Advancing Health. As discussed in Chapter 2, this report put forth a series of key messages and recommendations focused on nursing practice, education, interdisciplinary partnerships, and workforce planning. This initiative has been instrumental in coalescing efforts to position nurses as key players in improving the quality and safety of health care in the United States and worldwide. Although some progress has been made in achieving the goals of the 2011 Future of Nursing Report, a 2015 evaluation of progress noted that efforts are still needed to achieve the full extent of changes recommended in the 2011 report, including removing barriers to expanding nurses’ scope of practice, transforming nursing education, positioning nurses to lead and change health care, and addressing diversity in the nursing workforce.66

Other initiatives have also influenced the push toward quality. The Joint Commission, an independent, not-for-profit organization that accredits U.S. hospitals, long-term care facilities, and other HCOs, has as its mission “to continuously improve health care for the public, in collaboration with other stakeholders, by evaluating HCOs and inspiring them to excel in providing safe and effective care of the highest quality and value.”67 In 2002, The Joint Commission introduced its first set of National Patient Safety Goals. Beginning in 2003, hospitals undergoing accreditation by The Joint Commission had to document and demonstrate organizational initiatives that were consistent with these goals. These goals and their associated requirements change annually and are aimed at improving the quality and safety of patient care in HCOs. Because The Joint Commission accredits about 19,000 HCOs and programs in the United States, these goals and requirements are extremely influential in shaping quality and patient safety initiatives nationwide.

Another influential step taken by The Joint Commission was a series of roundtables held on nurse staffing that resulted in a 2002 publication, Health Care at the Crossroads: Strategies for Addressing the Evolving Nursing Crisis. 68 This report linked

a shortage of nurses with potential quality and patient safety risks and recommended a series of efforts needed to change the nursing practice environment and nursing education and advancement. The report assigned responsibility for meeting those changes to a variety of groups ranging from The Joint Commission itself to professional organizations, the federal government, and organizations that employ nurses. The report addressed specific financial incentives that are needed to promote quality, improve the nursing work environment, and change nursing education:

First, make new federal monies available for health care organizations to invest in nursing services. Second, condition continued receipt of these monies on achievement of quantifiable, evidence-based, and standardized nursing sensitive goals. Finally, align private payer and federal reimbursement incentives to reward effective nurse staffing. 69

The Joint Commission subsequently established a Nursing Advisory Council in May 2003 to address the recommendations contained in this report, and this Council remains active today.70 In recommendations to the Robert Wood Johnson–IOM Future of Nursing initiative, The Joint Commission highlighted the need for continued efforts to build a culture of quality and safety by expanding leadership opportunities for nurses, by redesigning nursing education by preparing clinically and culturally competent nurses, and by supporting the study of quality and safety improvements by increasing research funding.71

The Institute for Healthcare Improvement (IHI), a not-for-profit organization founded in 1991, has also been an important leader in the health care quality movement. The IHI’s mission is to:

improve the lives of patients, the health of communities, and the joy of the health care workforce by focusing on an ambitious set of goals adapted from the IOM’s six improvement aims for the health care system—care that is safe, effective, patient-centered, timely, efficient, and equitable. We call this the “NO NEEDLESS LIST”: No Needless Deaths; No Needless Pain or Suffering; No Helplessness in Those Served or Serving; No Unwanted Waiting; No Waste; No One Left Out. 72

An extremely persuasive initiative of the IHI was the “100,000 Lives Campaign.” This nationwide initiative began in January 2005 with the goal of saving 100,000 lives in U.S. hospitals over the 18-month period that followed. The IHI proposed that lives would be saved if organizations implemented the following six initiatives73:

■ Address emerging patient needs at the first signs of patient decline by implementing rapid response teams, an interdisciplinary group of clinicians (including nurses) trained to treat urgent patient needs.

■ Prevent unnecessary patient deaths through the use of reliable, evidence-based care for patients with myocardial infarction.

■ Prevent adverse drug events by using systems to reconcile differences in patient medication.

■ Prevent central line infections by using a series of evidence-based steps in caring for patients with central lines (these steps are called the “Central Line Bundle”).

■ Prevent surgical site infections by using appropriate and reliable perioperative care.

■ Prevent ventilator-associated pneumonia by using a series of evidence-based steps in caring for ventilator patients (these steps are known as the “Ventilator Bundle”).

By June 2006, more than 3000 organizations were voluntarily participating—and investing—in these initiatives, which helped the IHI exceed its original goal of saving 100,000 lives. The IHI subsequently implemented the “5 Million Lives Campaign,” launched in December 2006 to address medically induced injuries in health care. This campaign added six additional interventions (high-alert medications, surgical complications, pressure ulcers, methicillin-resistant Staphylococcus aureus infections, readmissions for congestive heart failure patients, and providing governing boards with the latest information to accelerate organizational change) to the original set of six. At the close of the 5 Million Lives Campaign in December 2008, more than 4000 hospitals had voluntarily participated in the initiative and invested considerably in the implementation of these initiatives. However, whether the IHI reached its goal of saving 5 million lives by the end of the campaign is still unknown.74

Two other groups have been prominent in bringing about the recent focus on quality in health care, and particularly the focus on quality standards. The first group is the National Quality Forum (NQF), a private, not-for-profit organization of members that has the “three-part mission to improve American healthcare by: building consensus on national priorities and goals for performance improvement and working in partnership to achieve them; endorsing national consensus standards for measuring and publicly reporting on performance; and promoting the attainment of national goals through education and outreach programs.”75 Using a well-established

process for reaching consensus among stakeholders,76 the NQF has endorsed more than 600 consensus standards since its inception.

In 2004, the NQF endorsed a set of performance measures for nursing: the National Voluntary Consensus Standards for Nursing-Sensitive Care.77 These standards were developed to guide hospitals and other HCOs on a set of common measures that could be used to assess and improve nursing care and patient care quality. Exhibit 5.2 identifies the initial 15 NQF standards for nursing-sensitive care.78 In a routine “maintenance” review for continued relevancy, eight of the initial 15 nursing-sensitive standards were recommended to the NQF Board of Directors for ratification in 2009 (noted in Exhibit 5.2).79 The Joint Commission also developed an implementation guide for 12 of the original 15 NQF-endorsed measures (also shown in Exhibit 5.2).80 This action reflects just how important these measures have been in shaping organizational quality improvement efforts and research pertaining to the quality of nursing care for some time to come.

❃ EXHIBIT 5.2:

National Quality Forum–Endorsed National Voluntary Consensus Standards for Nursing-Sensitive Care

Patient-Centered Outcome Measures

Nursing-Centered Intervention Measures

System-Centered Measures

Death among surgical inpatients with treatable serious complications (failure to rescue) *

Pressure ulcer prevalence * ‡

Falls prevalence * ‡

Falls with injury * ‡

Restraint prevalence * ‡

Urinary catheter–associated UTI for ICU patients *

CLABSI rate for ICU and high-risk nursery patients *

VAP for ICU and high-risk nursery patients *

Smoking cessation counseling for heart failure †

Smoking cessation counseling for AMI †

Smoking cessation counseling for pneumonia †

Skill mix of RN, LVN/LPN, UAP, and contracted nurse care hours * ‡

Nursing care HPPD * ‡

Scores on the Practice Environment Scale—Nursing Work Index * ‡

Voluntary turnover for RNs, APRNs, LVNs/LPNs, UAPs * ‡ 81

*12 NQF Nursing-Sensitive Measures included in The Joint Commission’s Nursing-Sensitive Care Implementation Guide, 2009. http://www.jointcommission.org/assets/1/6/NSC%20Manual.pdf.

†NQF Nursing-Sensitive Measure initially included in the National Voluntary Consensus Standards for Nursing-Sensitive Care: An Initial Performance Measure Set, http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Initial_Measures/Nursing_Sensitive_Care__Initial_Measures.aspx.

‡8 Nursing-Sensitive Measures, initial and final measures. http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Initial_Measures/Nursing_Sensitive_Care__Initial_Measures.aspx and http://www.qualityforum.org/improving_care_through_nursing.aspx.

AMI, acute myocardial infarction; APRNs, advanced practice registered nurses; CLABSI, central line–associated bloodstream infection; HPPD, hours per patient day; ICU, intensive care unit; LVN/LPN, licensed vocation nurse and licensed practical nurse; UAP, unlicensed assistive personnel; UTI, urinary tract infection; VAP, ventilator-associated pneumonia.

The second group that has helped bring a focus on quality in health care is the Leapfrog Group, launched in 2000 as “a voluntary program aimed at mobilizing employer purchasing power to alert America’s health industry that big leaps in health care safety, quality and customer value will be recognized and rewarded.”82 The Leapfrog Group is made up of large Fortune 500 corporations and public agencies that have large numbers of employees for which they must purchase health insurance. These large companies in many cases make health insurance available to employees as well as their dependents and organizational retirees. The Leapfrog Group has identified four “leaps” or evidence-based practices that, if adopted by HCOs, would improve health care quality83: computerized physician order entry (CPOE), evidence-based hospital referrals, intensive care unit (ICU) staffing by physicians experienced in critical care medicine, and organizational progress in attaining safe practices determined by the Leapfrog Safe Practices Score (derived from the NQF’s list of Safe Practices). Leapfrog determined that if all hospitals implemented three of these four leaps, up to $12 billion and more than 57,000 lives per year would be saved.

Given that this organization is composed of some of the largest public and private organizations to purchase health care, the importance of this group cannot be overestimated.

The Leapfrog Group’s Hospital Recognition Program, a pay-for-performance, value-based purchasing program, rewards hospitals based on quality, resource use, and value in the aforementioned areas, plus in caring for patients with certain common acute conditions (acute myocardial infarction, pneumonia, newborn deliveries), with certain health care–acquired conditions (i.e., pressure ulcer incidence rates, hospital injury rates, central line–associated bloodstream infection rates), and with the implementation of policies regarding never-events and NQF-endorsed safe practices.84 Hospitals participate in an annual survey to report performance in these areas, and the information provided is benchmarked against Leapfrog’s national performance set. Recognition is based on a hospital’s “value” score, derived from a hospital’s performance on certain quality measures (65% of value score) and resource use (35% of value score).85 Hospitals that excel in these areas may be recognized by receipt of bonuses, increased reimbursement rates, increased public recognition, and increased market share. In 2011 Leapfrog included the achievement of Magnet Recognition® in its annual survey, which represents recognition of the growing importance of this award in the market.

Although the organizations and initiatives just discussed are not meant to be exhaustive, these and other efforts have converged to spur the focus on quality in health care today. Many of these efforts have focused on reducing variations in quality at the provider level by standardizing processes, including the use of checklists, protocols, and standard operating procedures. In many respects, these efforts to standardize and make practice safer are long overdue. Although standardization may help reduce variations in practice, there are concerns about the bureaucratization, depersonalization, and de-professionalization that could result.86 Mick and Mark87 recommended that serious consideration be given to the type and extent of standardization enforced and to the benefits and costs of standardization.

Efforts have also focused on improving patients’ involvement in their care by correcting the information imbalance that has traditionally existed in health care. That is, providers have in-depth knowledge about health care that is actually delivered and the care that should be delivered simply because they are trained in the provision of health care. Consumers, on the other hand, generally lack this in-depth knowledge and often rely on health care providers and other sources (including the Internet) to gather information. Because consumers rely on health care information from a variety of sources, there is a concern about the quality of information they receive. One mechanism for correcting the information imbalance between providers and consumers is the use of quality report cards aimed at equipping consumers with greater knowledge of provider performance and at improving consumer choice.

Quality reporting

The use of “report cards” provides a way for consumers and employers to grade and compare health care providers on measures of quality and performance. Report cards are typically based on available information about provider processes and outcomes, and these report cards are developed using either consumer surveys or audits. They are often constructed from data gathered on large national surveys of health care quality, such as the Healthcare Effectiveness Data and Information Set (HEDIS) and the Consumer Assessment of Healthcare Providers and Systems (CAHPS). The intent of report cards is to (1) provide individuals, payers, and other decision makers with information on which to base choices about providers and locations for receiving health care services and (2) stimulate quality improvements among providers.88

There are several public report cards, such as the one developed by the National Committee for Quality Assurance (NCQA). The NCQA is a private, not-for-profit organization dedicated to improving the quality of health care. Its vision is “to transform health care quality through measurement, transparency and accountability.”89 This organization makes information on health plans available for individuals and families to use in decision making about health plans and insurance. Reports for health plans are constructed using HEDIS, a standardized set of performance measures developed by the NCQA, to determine how plans perform in key areas: quality of care, access to care, and member satisfaction with the health plan and physicians.90 The NCQA also accredits health plans and HCOs based on quality of care measures and services provided91 and provides access for its customers to the interactive tool Quality Compass, which uses publicly reported NCQA data to determine a relative resource use quality index. This tool gives purchasers a way to select health plans, conduct a competitor analysis, and examine quality improvement and benchmarking plan performance.92

Other health care report cards include The Joint Commission’s Quality Check and the Hospital Compare (discussed in Chapter 3 as part of the pay-for-performance discussion). Quality Check93 is a Web-based tool that allows consumers to compare the quality of care at HCOs accredited by The Joint Commission. Hospital Compare, developed by CMS,94 is another Web-based tool that provides information to consumers about hospital performance on quality improvement measures and allows them to compare process outcomes at different hospitals. There are also other types of report cards, such as those sponsored by individual states and The Leapfrog Group, and proprietary health care report cards, such as Health Grades,

that provide competitive information across health care settings. Consumer Reports also offers a variety of resources for consumers to use in making decisions about health care and services, including an interactive tool that provides a state-by-state evaluation of physicians and hospitals,95 a guide for selecting a long-term care facility,96 and information about hospital safety based on surveys from both patients and nurses.97 Finally, U.S. News & World Report ranks hospitals and specialty hospitals annually based on organizational reputation, mortality, and other factors, including patient-to-nurse ratios and Magnet Recognition®.98

The American Nurses Association’s (ANA) “Nursing Care Report Card for Acute Care”99 was developed to assess the contribution of nursing care to health care quality.100 The following nursing care–specific indicators were developed101-103:

■ Structural aspects of care: mix of registered nurses (RNs), licensed practical nurses (LPNs), and other nursing personnel; total nursing care hours per patient day

■ Processes of care: skin integrity; nurse satisfaction

■ Care outcomes: nosocomial infection rate; patient injury rate; patient satisfaction with nursing care, pain management, and educational information

On the basis of evaluations of these indicators, the ANA has reported that an inverse relationship exists between the number of licensed nursing hours per acuity-adjusted day and patient length of stay, and an inverse relationship also exists between likelihood of adverse patient events (e.g., postoperative infections, pressure ulcers, urinary tract infections) and a “richer” staff mix that included more RNs.104 Although there were problems associated with the use of the ANA’s report card indicators in the early stages of development,105 many of these problems have been or are being addressed.106

The ANA’s report card evolved into the National Database of Nursing Quality Indicators (NDNQIs),107 an initiative that gathers unit-level nurse-sensitive data from U.S. hospitals. Hospitals pay an annual fee based on the number of beds to participate in the NDNQI. Although this is a proprietary database that is now owned by Press-Ganey, participating organizations receive unit-level reports for their organization quarterly. At the time of this writing, more than 2000 hospitals and 98% of Magnet® facilities across the United States were members of the NDNQI and contributed to this quality reporting effort.108

Despite the potential of quality report cards, there are ongoing questions about the reliability and validity of report card indicators, the standardization of their use, and the availability of data.109 Stakeholders ranging from providers to payers to patients rarely agree on the validity of all health care quality measures. The contention often stems from the perceived flaws of such measures, the different and sometimes conflicting interests of the stakeholders, and to a large extent the difficulty of measuring or agreeing on what is quality health care. To add to the controversy, report cards can be confusing and contradictory and may be tied to product sales from vendors, calling into question the motivation of such reports. In addition, the large number of quality measures can easily overwhelm care providers and patients. For example, CMS had 25 programs by 2015, a rapid increase from 5 programs in 2003, all aimed at improving health care quality as part of the NQS.110 The number of quality measures tracked by CMS was a marked increase from 119 in 2006 to 822 in 2015 and covered the following areas: patient safety (122 measures), patient engagement (78 measures), care coordination (57 measures), effective treatment (417 measures), health communities (95 measures), and Affordable Care (53 measures).111 In general, however, the use of report cards raises more fundamental questions: Do they achieve their intended purpose (i.e., do patients and purchasers use them to make cost and quality decisions)? Do they encourage HCOs to improve quality and patient outcomes? Do they instead simply encourage HCOs to meet certain standards to increase payments?

Using the results of several studies, the RAND Corporation determined that report cards have had little influence on consumer decision making and on changing physician behavior, yet health provider organizations have been responsive in making improvements based on the results of these report cards.112 In fact, improvements have been noted in diabetes care, women’s health screening, childhood immunizations,

smoking cessation, and management of heart disease. This finding is supported by other researchers,113 who have suggested that the public reporting of quality information stimulates an increased emphasis on quality improvement initiatives in organizations where quality performance was low and in turn adds value when quality objectives are achieved.

Some of the reasons offered in the RAND report for consumers’ lack of report card use are that the information is not presented in an appealing and understandable format, the information is not relevant to their situations, the abundance of information is overwhelming, help is needed to make sense of the information, the information is not always readily available (i.e., consumers do not have it when they need it, or even if it is available, they do not have time to seek the information and review it when they need it), and consumers are uncertain about the trustworthiness of the data.114 The report goes on to say that the use of report cards could be increased if information were provided and communicated in a more organized manner, if targeted educational initiatives were provided for consumers, and if more systematic usability testing of public report cards were conducted to determine the most useful formats.

Another study suggested that hospitals and other providers have been more willing to embrace quality reporting efforts because they are linked to payment.115 The study authors found that because these report cards are tied to payment and because hospitals tend to receive payment from multiple sources, hospitals may participate in multiple and varied reporting programs, each with a different focus.116 Also, whereas quality reporting programs that were perceived as necessary (e.g., CMS and The Joint Commission) tended to provide incentives that “pushed” the organization to improve quality, other programs, such as the IHI, state quality improvement organizations, and professional organizations that offered tools and resources to the organizations to change practices, provided incentives that “pulled” the organization to improve care processes. This study also reported that despite the increase in quality improvement resources that comes with participation in these report card programs, the resources available for quality measurement and improvement remain inadequate. Most frequently cited as lacking were information technology systems to support quality improvement efforts. The authors recommended that policy efforts be directed toward coordinating quality reporting programs to avoid duplication and to standardize data collection across programs as well as to support and encourage improvements in information technology systems.117

To assist health care providers and patients sort through the publicly available reports rating the quality of health care provided in hospitals, the Healthcare Association of New York State (HANYS) publishes a “report card on report cards.”118 This report card, according to HANYS, is based on a set of principles by which reports are evaluated. These principles are built on academic research and the recommendations of the National Priorities Partnership convened by the NQF.119 The principles include the use of the following120: a transparent methodology, evidence-based measures, an approach that aligns measures, appropriate data sources, the most current data, risk adjustment, an assessment of data quality, consistent data over time, and hospital preview before release to ensure accuracy.

The bottom line is that these report cards will continue to be published and used in the future as the health care system continues to strive to achieve quality and as consumers demand greater transparency in the care they can expect to receive. However, it is important for providers, patients, and policymakers to be aware of both the positive and negative effects of report cards. For example, a review of Coronary Artery Bypass Graft report cards introduced in New York State in the 1990s found evidence that report cards increased the appropriate referral of patients to providers, so that sicker cardiac patients were treated at teaching hospitals. However, the review of report cards also uncovered that providers were cherry-picking healthier patients, to the detriment of the sicker patients. On balance, these researchers determined that report cards led to higher levels of resource use and worse health outcomes, especially for sicker patients.121

Balanced scorecards

Another type of report card used by organizations is the balanced scorecard.122 Balanced scorecards are used internally for strategic management purposes and as a way to examine performance. Typically, performance is monitored in four areas123:

■ Customer perspective

■ Financial perspective

■ Internal processes (including human resources)

■ Learning and growth

Within these four areas, organizations identify and examine their performance on a key set of measures selected based on the importance to the organization. Information obtained from this self-evaluation is typically shared within the organization to improve processes, but it may be used as the framework for reporting to boards of directors and even the public, if desired. Balanced scorecards are valuable to organizations

because they allow organizations to look inward to determine the degree to which they have met their strategic objectives.

In HCOs, balanced scorecards provide the vehicle by which organizations can integrate and disseminate clinical, operational, and financial data to inform decision making.124 The Clinical Value Compass uses a similar approach for improving and disseminating information about clinical care throughout the HCO. In this case patient care processes and outcomes are assessed based on specific clinical, functional, cost, and patient satisfaction outcomes.125

The magnet movement

Kramer and Schmalenberg126 present a historical overview of the quality movement in nursing based on Magnet hospitals. Magnet hospitals are organizations that are recognized as providing excellent, high-quality nursing care while attracting and retaining nurses. The Magnet hospital concept was originally conceived to address concerns about recurring nursing shortages, specifically, to identify and examine HCOs that were particularly good at recruiting and retaining nurses and in turn delivering high-quality care. The original Magnet hospital study, conducted in 1982 and 1983, was grounded in the structure–process–outcome framework of Donabedian. The early research on Magnet hospitals reported that both nurse satisfaction and retention were related to nurses’ ability to deliver quality care. Magnet hospitals of the time were claimed to be analogous to Peters and Waterman’s “Best Run” companies, described in their now classic book In Search of Excellence. 127

The Magnet Hospital concept has evolved over time, with the launch of the Magnet Recognition® Program and the development of its “14 forces of magnetism” in the early 1990s. The first hospital received Magnet designation in 1994. Today, the American Nurses Credentialing Center’s (ANCC) Magnet Recognition Program offers certification to hospitals that meet its standards. At the time of this writing, over 400 hospitals have been designated as Magnet facilities.128

To receive the Magnet certification, hospitals are assessed based on the degree to which they excel in five key areas:

■ Transformational Leadership

■ Structural Empowerment

■ Exemplary Professional Practice

■ New Knowledge, Innovations, and Improvements

■ Empirical Quality Outcomes

These five areas were derived from the original “14 forces of magnetism” to streamline the Magnet application process and the documentation required.129 Linkages between the original forces of magnetism and the new model components are shown in Table 5.1.

❃ TABLE 5.1

A Comparison of the Original and New Magnet Approaches

Original Magnet Approach: 14 Forces of Magnetism

Reflected in . . .

New Magnet Approach: 5 Model Components

Quality of Nursing Leadership

⇒

Transformational Leadership

Organizational Structure

⇒

Structural Empowerment

Management Style

⇒

Transformational Leadership

Personnel Policies & Programs

⇒

Structural Empowerment

Professional Models of Care

⇒

Exemplary Professional Practice

Quality of Care

⇒

Empirical Quality Outcomes

Quality Improvement

⇒

New Knowledge, Innovations, Improvements

Consultation & Resources

⇒

Exemplary Professional Practice

Autonomy

⇒

Exemplary Professional Practice

Community & Health Care Organization

⇒

Structural Empowerment

Nurses as Teachers

⇒

Exemplary Professional Practice

Image of Nursing

⇒

Structural Empowerment

Interdisciplinary Relationships

⇒

Exemplary Professional Practice

Professional Development

⇒

Structural Empowerment

Based on information obtained from American Nurses Credentialing Center, Magnet Recognition Program Model®, http://www.nursecredentialing.org/Documents/Magnet/NewModelBrochure.aspx; and Overview of ANCC Magnet Recognition Program® (2008), http://www.nursecredentialing.org/Documents/Magnet/MagOverview-92011.pdf.

Hospitals are required to make application to ANCC to be considered for recognition, and to pay various required fees, which include an application fee, an appraisal fee (based on the number of licensed acute care beds and type of setting), a document review fee (for the team leader and each team member), and a site visit fee (per appraiser per day).130 Obviously, these costs can add up. Each facility must also prepare an application describing the structures and processes that reflect sources of evidence for the model components and associated empirical outcomes. During a site visit, the facility receives an in-depth review of documentation provided

with its application and undergoes a rigorous onsite assessment by a minimum of two expert appraisers to verify and expand on information provided. The Magnet Model and supporting documentation serve as the basis for the onsite visit, which usually lasts a minimum of 2 days. Public comments are also sought by ANCC for organizations undergoing assessment as part of their evaluation to verify information provided in the application and observations made during the site visit.131

Evidence on the effects of Magnet status on quality and financial performance is mixed. In some cases, research has shown that patients cared for at Magnet facilities may have better outcomes. For example, one of the earliest outcomes studies reported that patient mortality was lower in Magnet hospitals,132 and subsequent studies have reported that patient satisfaction is higher133 and falls are lower134 in Magnet versus non-Magnet hospitals. Nurses also perceived a more supportive work environment, higher job satisfaction, and lower levels of burnout in Magnet hospitals.135 However, recent studies have reported that there were no differences between Magnet and non-Magnet hospitals in nurses’ perceptions of working conditions and that, in some cases, the outcomes achieved in non-Magnet hospitals may be as good or better than those of Magnet hospitals.136 It is also unclear whether the public truly appreciates Magnet Recognition® and what it represents or whether they use this information to make decisions about where to receive care. Although Magnet facilities may have a good reputation within their communities and in turn may enjoy patient loyalty because of that reputation, Magnet facilities may not necessarily derive direct financial benefits from their recognition as a Magnet hospital. This may change, however, as influential purchasing groups such as Leapfrog (described earlier) consider Magnet Recognition® in their approaches for making value-based purchasing decisions, and as influential rating groups, such as U.S. News & World Reports, include Magnet Recognition® in their methodologies for ranking hospitals.

Based on a program developed by the Texas Nurses Association to recognize small and rural hospitals, the ANCC rolled out its Pathway to Excellence® program in 2007. The Pathway program is more broadly focused on all types of organizations, including long-term care organizations.137 Organizations awarded this recognition must reflect a work environment that fosters nursing excellence and must support 12 standards, including control over practice, and a work environment and systems in place that support quality and safe nursing care. The application fee for this program is considerably less than the Magnet program fee.138 Pathway recognition may be sought by organizations that do not desire (or cannot afford) to apply for Magnet Recognition® or as the first step for organizations before they apply for Magnet Recognition®. At the time of this writing, about 141 organizations in 34 states including Washington DC had been recognized as Pathway organizations.139

Chief executive officers (CEOs) and other hospital leaders have begun to appreciate the importance of Magnet Recognition® and Pathway Excellence® designation, especially in competitive markets where there may be other Magnet or Pathway facilities nearby. Chief nurse executives are expected to be knowledgeable of the process needed to achieve these recognitions, and many are recruited to HCOs based on their experiences leading Magnet or Pathway initiatives.

Magnet designation represents a significant investment for HCOs, yet that investment is purported to be offset by lower nurse recruitment and turnover costs.140 Drenkard contends that a return on investment (ROI) can be estimated to illustrate the benefits of Magnet Recognition® and to evaluate long-run financial gains. These returns come in the cost savings achieved through increased staff nurse retention and lower burnout; in decreased vacancy and turnover costs; in decreased agency use; in decreased staff injuries; and in increased patient, nurse, and quality outcomes. Drawing on the literature, Drenkard estimated the overall cost savings for a 500-bed hospital to be around $2.3 million.141 Drenkard’s study findings are in line with an earlier study conducted by researchers in one Veterans Affairs hospital that reported a net benefit of about $15 million from ANCC Magnet designation for the period 1998 through 2003, or about $2.5 million on average annually, unadjusted for inflation.142 During this period, approximately $150,000 was actually spent on Magnet-related activities.143 Yet another study using data from 1998 to 2006 concluded that although it

is costly for hospitals to attain Magnet status, the cost of becoming a Magnet hospital may be offset by higher net inpatient income.144 The authors report that on average, Magnet hospitals receive an adjusted net increase in inpatient income of about $104 to $127 per discharge after becoming a Magnet, which translates to about an additional $1.25 million in income per year.145

However, beyond the direct costs associated with the Magnet program is the investment to change the nursing and organizational culture from one that focuses exclusively on costs to one that strives to balance costs and quality by way of the magnet components.146 There is a need for research to document the costs and benefits associated with Magnet Recognition® and each of its components and to determine whether the benefits of obtaining Magnet status outweigh the costs of doing so. So far, the evidence is mixed. For example, a recent study147 reported mixed findings when comparing patient outcomes between Magnet and non-Magnet hospitals. Specifically, non-Magnet hospitals were found to have better patient outcomes than Magnet hospitals.148 According to the study, Magnet “hospitals had slightly better outcomes for pressure ulcers, but infections, postoperative sepsis, and postoperative metabolic derangement outcomes were worse in Magnet hospitals.”149 Also they found that Magnet hospitals had lower staffing numbers, which might have contributed to these outcomes. Another study of working conditions of nurses employed in Magnet hospitals compared with those working in non-Magnet hospitals found little difference.150 These findings suggest that further research is needed to guide organizations on the financial costs and quality benefits of embarking on the journey to Magnet Recognition®. The author of one study reported that Magnet Recognition was found to have no effect on hospital reimbursement or market share, but it was associated with a significant reduction in cost inefficiency and an increase in profitability.151 However, until further research is available, organizations must review the literature; weigh the costs and benefits of acquiring and maintaining Magnet Recognition®; and calculate their own ROI based on their philosophy of care delivery, belief in the program, and commitment to quality nursing care.

The baldrige award

A national award that recognizes quality and excellence in the business sector is the Malcolm Baldrige National Quality Award. This award, named after Secretary of Commerce Malcolm Baldrige, was established by Congress in 1987. The Baldrige Award is a prestigious award that is made by the president of the United States to recognize organizations that excel in seven areas152:

■ Leadership

■ Strategic planning

■ Customer focus

■ Measurement, analysis, and knowledge management

■ Workforce focus

■ Operations focus

■ Results

The award is not given for specific products or services but rather for quality performance. Up to three awards may be given each year in the following categories: manufacturing, service, small business, education, health care, and nonprofit.153 Responsibility for program oversight is within the U.S. Department of Commerce, and the program is managed by an agency within it, the National Institute of Standards and Technology (NIST).

To be considered for this award, organizations must submit an application documenting excellence in the seven areas just listed, pay a series of fees,154 and undergo a rigorous organizational analysis and assessment by a Board of Examiners. The Board of Examiners is composed of a minimum of eight quality experts. Public and private organizations are eligible to apply for this award. Many well-known U.S. organizations have received this award, such as Nestlé, Honeywell, AT&T, Motorola, and Boeing, as well as some that are not as widely recognized, such as Pal’s Sudden Service, Texas Nameplate Co., Inc., and the Chugach School District. At the time of this writing, 12 HCOs had received the Baldrige Award.

Obviously, HCOs can set a goal of applying and receiving recognition from both Baldrige and Magnet®. In fact, some of the Baldrige Award winners in health care are Magnet hospitals. However, because of the time and expense associated with both programs, HCOs may be faced with choosing to invest in one program over the other. According to studies conducted by the NIST, the Government Accounting Office, and others, “investing in quality principles and performance excellence pays off in increased productivity, satisfied employees and customers, and improved profitability—both for customers and investors.”155 Does either of these awards ensure the best possible quality 100% of the time? Not necessarily.

The decision to invest in pursuing Magnet designation or the Baldrige Award depends on the strategic goals of the organization at any point in time. Baldrige acknowledges that its criteria are consistent with those of the Magnet Recognition® Program, The Joint Commission Accreditation, and IHI initiatives.

❃ Relationships among health care quality, costs, and financing

The relationship among health care quality, costs, and financing is very complex, and although these aspects of care delivery are linked in some formal ways, they are inextricably linked in many informal ways. Although the definition of quality and in turn its presence or absence may depend on perspective, costs are incurred regardless. Moreover, although our financing system is moving toward pay for performance, not all payments are based on quality. In some cases, payment may be made to providers based on their performance on certain outcomes, but meeting certain thresholds on certain outcomes does not mean that high-quality care is necessarily provided.

A few definitions are important to clarify when discussing health care quality, costs, and financing. Value, defined broadly, is the relationship between costs and quality156:

Value = Quality/Cost

The relationship between cost and quality is illustrated in Fig. 5.1. Moving from low costs or expenditures to higher costs, quality increases. Some argue that efforts to increase quality may reach a point where increased expenditures result in no further increases in quality—and may actually lead to a reduction in quality. In other words, putting ever-increasing amounts of money into quality improvement efforts may not always achieve the outcomes intended. This point can be illustrated using an example from research. Blegen and colleagues examined the relationship between nurse staffing and patient outcomes.157 They reported that as the proportion of RN staffing increased, rates of adverse outcomes decreased—up to a point. When RN proportion increased above 87%, adverse outcomes also increased. To bring this back to costs, this finding suggests that simply spending more and more money to increase RN staffing levels alone and beyond certain levels may not improve quality. The same general relationship may hold as shown in Fig. 5.1. An important question that must be asked is how we can increase quality without simply increasing costs. Porter and Teisberg argue that high quality may actually cost less. 158

FIG. 5.1The relationship between cost and quality.

One way to achieve quality and lower costs is by focusing on efficiency, or the “mix of health care resource inputs that produce optimal quantity and quality of health and health care outputs.”159 Put another way, efficiency is the relationship between inputs and outputs160:

Efficiency = Output/Input

Inputs are generally taken to be direct costs (e.g., labor, capital, equipment), but they also can be in the form of indirect costs, such as staff time required to engage in certain processes. Efficiency is generally concerned with eliminating unnecessary procedures, waste in the system, and administrative costs.161 If we can do more with less or even accomplish the same result with less input, efficiency increases.

Another way to achieve quality and lower costs is by focusing on effectiveness, or the degree to which outcomes or results are achieved as intended. In health care, effectiveness means that a treatment, service, or technology provides a benefit to recipients under usual or natural circumstances.162 Effectiveness in health care also implies the appropriate use of knowledge and evidence to achieve a desired outcome while considering patients’ values.163

The relationship among quality, costs, and financing is muddied by the fact that the persons or groups that receive care generally want the highest-quality care possible regardless of cost and certainly without full knowledge of costs. Because the person or groups receiving care do not know the actual costs of care, they are unable to determine whether the care they receive is a good value or to determine the level of care that they are willing to purchase. Enthoven164 argues that knowledge of quality, product features, and prices or costs is needed to discern value and to make purchasing decisions in health care. Making purchasing decisions in health care

without knowledge of quality and costs is like taking a best guess or even rolling the dice.

Unfortunately, this approach to decision making in health care is all too common. There is a great deal of “medical guesswork” that goes into health care decision making, and the health care industry at large still knows very little about the treatments that really work and why.165 This lack of knowledge affects the information that gets passed on to patients and patients’ ability to determine the value of care they will receive.

The other complicating factor is that in our financing system, a third party (i.e., not the person giving or receiving the care but another entity) generally makes decisions about the type and amount of care that will be purchased for those who receive care. This third party (i.e., the payer or insurer) also has some say in the price of the care that is provided. Thus payers have some level of knowledge of costs and quality, and they in turn make decisions for those who will receive care. Insurers determine who receives care and the type of care they receive, and they select plans that will deliver the care for the price negotiated. Payers also manage patient enrollment into plans and the risks associated with the care patients receive, and they create price-elastic demand by forcing providers to reduce prices to increase revenues.166 It is the payer that estimates value, not the person receiving care, and the payer may well have a stronger interest in low costs than in high quality. Thus choices about the quality and costs of health care are filtered through the payer.

The IOM Crossing the Quality Chasm 167 report identified several sources of costs associated with quality. There are the obvious costs of measuring, monitoring, and maintaining a quality improvement program in HCOs and all of the training and prevention planning that goes with the process. There are also short- and long-term investments that must be incurred to ensure the integrity and maintenance of a quality program. However, some costs are often “unseen,” such as those incurred when a service is not delivered (i.e., underuse of care), when services are delivered but not needed (i.e., overuse), or when services are delivered inappropriately (misuse). Other examples include the redundancy in patient testing and the duplication of services that often occurs in health care, simply for the convenience of providers or to protect them from litigation. The lack of information sharing among providers adds costs, delays care, and puts the burden of undergoing sometimes uncomfortable and painful procedures on patients unnecessarily. Costs are also associated with poor quality—that is, organizations may be willing to incur the costs of “redoing” a process if needed but unwilling to incur the upfront costs to deliver a service the right way in the first place. Finally, psychological costs are associated with poor quality, such as frustrated staff, loss of professional integrity, turnover, dissatisfied patients, errors, and a bad reputation.

Research at Dartmouth has shown that both costs and quality vary by geographic region and the practices within them. For example, some regions within the United States spend much less on health care than others but achieve better patient outcomes. Dartmouth researchers determined that health care spending could be reduced by as much as 20% to 30% (and maybe more) if higher-spending regions adopted similar care delivery practices and achieved the same level of quality as certain low-spending regions.168

An important question to ask is what structural changes in the U.S. health care delivery and financing system would allow us to purchase more quality with the dollars we currently spend? A follow-up question is: If structural changes can be made, how would we go about making such changes? Although there is general agreement that system changes are needed to provide incentives that promote quality, perspectives differ on the specific changes needed to increase our purchasing power. For example, in 2011 an IOM report169 recommended coverage of all contraceptive methods as a preventive benefit free of copayment responsibility. Some might contend that this preventive benefit will save society money over time, but others might argue that removing the need for any deductible or copayment will result in overconsumption of these services, resulting in a net increase in costs.

Porter and Teisberg170 argue that mistargeted competition in health care has impeded the satisfactory performance of the U.S. health care system. They suggest that our health care system has based competition on the following:

■ The wrong level (i.e., the insurer)

■ The wrong objective (i.e., cost reduction)

■ The wrong form (i.e., competition among plans; competition among providers to be included in plans based on discounts; competition about who pays: the plan, the provider, or the patient)

■ The wrong level in the market (i.e., local level)

■ The wrong strategies and structure (i.e., providing a broad or shallow range of services)

■ The wrong information (i.e., information is not available to all, and the best available information is not always known or used by providers)

■ The wrong incentives for payers (i.e., payers benefit by enrolling healthy individuals or charging premiums, coinsurance, and copayment rates or denying coverage to those who are sick)

■ The wrong incentives for providers (i.e., providers are rewarded financially if they minimize patient referrals, spend less time with patients, discharge patients quickly, and readmit patients only if necessary, yet the fear of malpractice often encourages overtreatment).

The authors propose instead that competition should focus on prevention; creating and improving value in the system; developing deep levels of expertise; creating regional or national

markets; providing information to consumers and payers about providers, treatments, and alternatives; providing incentives so that payers help enrollees find the best care value; simplifying administrative and billing processes; and encouraging providers to develop areas of excellence and expertise, to measure and enhance quality and efficiency, and to set up systems to eliminate mistakes and improve standards. The ACA addresses some of these issues (e.g., prevention, focusing on value-based purchasing, simplifying administrative processes, addressing mistakes), and other resources have been put into place outside of this effort (e.g., hospital report cards and websites for comparing providers), but the degree to which these objectives will be achieved—or not—is merely speculation at this point.

Enthoven and Tollen171 provide a counterargument that suggests competition should be focused at the level of systems of care versus the individual level of provider as advocated by Porter and Teisberg. Enthoven and Tollen define systems of care as integrated delivery systems, or large, multispecialty group practices networked with hospitals, laboratories, pharmacies, and other essential facilities and services supported by per-capita prepayment (see Chapter 3 for a more detailed description of managed care and per-member payment). They acknowledge that consumers should have a choice of integrated delivery systems. They also argue that to align provider incentives with patients’ interests, systems of care must have the following characteristics: risk-adjusted prepayment to reward providers for keeping patients healthy; use of appropriate, evidence-based care; coordination of care across the care continuum (i.e., from home, to hospital, to home care); comprehensive patient records for the sharing of information; and incorporated strategies to improve efficiency.

An important issue in the discussion of health care costs, quality, and financing is access. The ANA has long held that issues pertaining to cost, quality, and access represent the cornerstone of its agenda.172 A classic definition of access to care is the “fit” between the client and the health care system regarding the availability of care, the adaptability of care to the patient’s needs (and of the patient to the system), the affordability of care, and the acceptability of care.173 Many individuals do not have access for all of these reasons. However, over the past two decades, the primary reason, unfortunately, pertains to costs. Insurance coverage, often considered a proxy for access, is now lacking for millions of people in the United States, although more than 20 million have gained insurance since 2010.174 In a recent report, the United States was last among eleven countries (Australia, Canada, Germany, the Netherlands, New Zealand, the United Kingdom, France, Norway, Sweden, Switzerland, and the United States) on dimensions of access to care, costs, and safety and ranked sixth on overall quality.175 As discussed in Chapter 2, the United States spends almost double the per-capita spending of all other countries, yet many people in the United States do not have access to care. The authors of a recent report attribute the United States’ poor ranking to a lack of universal health coverage, which is available in the other ten countries. Also, Americans with health problems reported the greatest difficulty accessing care.176 This lack of access to needed care affects the overall health of our society and contributes to a revolving-door system in which patients receive care in overburdened emergency departments, public health system, or free clinics. In essence, the lack of access to care may add more costs back into a costly system.

Given the sources of impetus for examining quality and integrating quality, costs, and financing cited earlier, there is little argument that changes are needed to address quality, costs, and financing issues. The bigger concern is how health care providers can best achieve quality efficiently and effectively. Although Porter and Teisberg and Enthoven and Tollen offer differing perspectives on structural systems changes needed to better integrate quality, costs, and financing, others suggest that a business case can be made for investing in quality.

A business case for quality

A business case is simply a position on whether an investment should be made in a project or initiative based on a systematic evaluation of the worth or value of the project or initiative. A business case involves the calculation of costs and benefits, rates of return on investments, break-even points, and other financial indices.177 The development and interpretation of a business case will depend on perspective. Consideration must be given to the entity (or entities) required to make investments and the entity (or entities) to which the returns accrue. That is, do investments and returns accrue to the organizational provider? The clinicians? The purchaser? The employer? Society? Some combination thereof? An important aspect of the business case is that the returns do not necessarily accrue to the entity making the investment. Another important point is that returns may not accrue during the time frame expected.

Historically, it has been hard to make a business case for improving health care quality nationally or regionally. This is largely due to the complexity of health care delivery and the cost structure, especially the large fixed costs that are inherent in health care delivery.178 This cost structure is relatively insensitive to small changes in patient volume, resource use, or the severity of patients’ health conditions.179 In addition, most of quality improvement projects rarely track the costs of implementation.180

In a 2013 study, the business case for quality was presented from the perspective of an academic multispecialty group practice with 56,000 providers in five states.181 The authors first listed the categories of beneficiaries of improved quality, which included patients, providers, insurers, and employers.182 In addition, they built their business strategy based on four fundamental organizational interests to improve health care quality: the needs of patients, the organization’s reputation, esprit de corps (i.e., group members’ shared loyalty and commitment to the mission of the association), and financial return sufficient to maintain state-of-the-art medical practices.183 The authors then break down the financial benefits of improving health care quality, reporting the following examples:

a. Orthopedic Surgery: A multidisciplinary team of orthopedic surgeons, anesthesiologists, and quality improvement analysts saw annual savings of approximately $2.6 million for patients undergoing primary hip and knee replacement. Besides the direct financial savings, the initiatives yielded a 40% reduction in blood product utilization and reduced infection rates, the average patient length of stay decreased from 3.8 to 2.7 days, and the hospital readmissions rate decreased from an average of 3% to 2.6%. In addition, staff satisfaction improved with no negative effect on patient satisfaction.

b. Cardiovascular Outpatient Clinic: A physician-led multidisciplinary team yielded a $2.3 million net savings, among several other improvements. The 6-month lean initiative aimed at decreasing unnecessary waste. This effort led to other improvements, including the following: an increase in physician schedule fill rates from 70% to 92%; a decrease in cancellations and no-shows from 30% to 10%; an increase in high-financial-yield patients from 150 to 200/month; a decrease in wait time for appointments of 91%, from 33 to 3 days; and an increase in face time with care providers from 240 to 285 minutes. According to the study, there was a return on investment of 5 to 1 – meaning that for every 1 resource invested, there was a gain of 5.

c. Reducing Preventable Harm and Waste

■ The treatment of pneumonia patients admitted through the emergency department was streamlined and standardized, reducing the average cost per case by 4.9% or $446, and the average length of stay by 0.3 days.

■ Activity-based accounting was used to estimate attributable costs of infections, and improvements were implemented that brought about a $2 million annual savings. In 2010 the improvement efforts saw a 15% reduction in infection rates, largely through reductions in central line–associated bloodstream infections.

■ A 100-day quality project team was charged with improving venous thromboembolism (VTE) prophylaxis practice. These efforts reduced the risk of venous thrombosis and pulmonary embolism, saving the hospital an estimated $1 million. These savings came largely from a dramatic increase in the percentage of patients who now have a timely decision made about VTE prophylaxis. Additionally, according to a “VTE lives saved calculator,” this work also saved approximately 6 lives per year from a fatal pulmonary embolism and prevented 93 VTE events.

The study also contends that investments in infrastructure can contribute to the business case for quality improvement. For example, the authors reported that efforts to improve specimen-labeling practices led to lower costs associated with legal fees and settlements, which more than offset equipment and labor costs. Although these savings are important, the impact of avoiding patient harm was acknowledged as invaluable.

In another study, Leatherman and colleagues184 examined whether improved quality provides a return on investment and the beneficiary of the returns provided by quality initiatives. They examined improvements in chronic disease management, patient safety, waste reduction, prevention, and approaches to value-based purchasing by estimating the financial and clinical implications of quality in four specific cases: high-cost pharmaceuticals management, diabetes management, smoking cessation, and employer-based wellness programs.

The results of their study were inconclusive but enlightening. For example, the high-cost pharmaceuticals programs they examined had a favorable financial impact on patients and society but an unfavorable financial impact on the care provider and mixed returns for the purchaser. The diabetes management program had an unfavorable financial impact on the care provider but a favorable financial impact on the purchaser, the patient, and society. The smoking cessation program had an unfavorable financial impact on the care provider and a neutral and unknown impact on the purchaser but a favorable impact on the patient and society. Finally, the wellness program had a favorable impact on the care provider, the purchaser, the patients, and society.

Interestingly, the authors made several observations worth noting. First, there is a failure in our system of financing to pay for quality, yet the system is willing to pay for system defects. For example, some aspects of the diabetes care management and smoking cessation programs could not be billed to anyone, yet these care management services were essential to the provision of the service. Also, payers incurred costs long after patients’ problems developed. To overcome this problem, Leatherman and colleagues recommended that the government

and other purchasers consider care management activities as essential, versus optional, services.

Second, they noted that consumers are unable to distinguish quality. To overcome this problem, they recommended that patients demand defect reports; that clinicians and organizations publicly report performance and defect problems; and that the government and payers release hospital-specific mortality data, educate the public on optional models of care delivery, and pay differentially for higher-cost patients.

Third, they noted that returns may not accrue immediately and are often displaced far into the future. They recommend that the government and payers address this problem by offering capitated population-based payment, by unifying Medicare Parts A and B (see Chapter 3 for a discussion of capitated payment and Medicare), by paying for case management, by providing disincentives for changing caregivers, and by investing in prevention and chronic care programs.

Fourth, they emphasized the disconnect between consumers and payers and suggested that consumers pay for the care they prefer within a set of options. They also recommended that the government and payers encourage innovations in care (e.g., chronic care management) and experiment with paying for nontraditional care delivery methods (e.g., e-mail consultation). Finally, they noted that access to information is uneven among clinicians, making the implementation of evidence-based practice challenging. They recommended that consumers become savvy in acquiring science-based protocols to discuss with their clinicians, that providers adopt electronic patient records and other mechanisms of decision support, and that the government and payers support the development of an information infrastructure and use their paying power to enforce the use of evidence-based practice.

This analysis tells us that there is much more we need to know to determine a business case for quality in all instances. For example, in another study (discussed in more detail in Chapter 9), Needleman and colleagues185 examined three nurse staffing scenarios and reported that there is an “unequivocal” business case for increasing nurse staffing under one of the three scenarios they examined (i.e., raising the proportion of RN staffing without changing the number of total licensed hours of care provided), but the business case was less clear among the other choices.

Attempts to develop a business case for quality represent an important step for better understanding the cost and financing implications of quality and for evaluating investment decisions based on differing levels of inputs and outputs. By doing so, patients, payers, and providers can use this information to trade off the costs they are willing to incur for varying levels of quality. Reiter and colleagues urge HCOs to adopt the business case approach to more clearly delineate the costs and investments of quality-enhancing interventions and to encourage the uptake of known, successful, and evidence-based quality improvements.186 These authors provide a checklist that can be used to assess organizational readiness for developing a business case for quality improvement initiatives. This approach can also help identify the actions and policies that are needed to better align our system of rewards and incentives to provide more value for patients, providers, and society.

❃ Implications for nurse managers and executives

Quality is a complex issue that can be difficult to define and measure. However, an understanding of the concept and its relationship to cost and financing issues is critically important for nurse managers and executives. The momentum to place quality in the forefront of health care has been building over the past two decades. Unfortunately, we have only scratched the surface in understanding the financial incentives needed to affect quality initiatives and in truly making headway in improving the quality of health care.

Report cards are a mechanism for publicly reporting quality information to patients and purchasers. The idea behind making quality information publicly available to patients and purchasers is that they will use the information to make decisions about providers, where and how care will be received or provided, and the value of the care they can expect to receive. Although report cards may be an important incentive that encourages HCOs to initiate quality improvement efforts, the use of public report cards has not been widely adopted by consumers. This may be partly because patients go where their physicians practice or affiliate and often cannot exercise a great deal of choice in where they receive care. Studies also indicate that the information contained in report cards is not presented in a useful and understandable format for consumers, is not readily available, is not relevant to their situations, and is not necessarily trusted by consumers.

Despite the availability of report cards, consumers in the United States still do not receive the health care they need. A RAND report suggests that adults across the United States receive only about half the care that they should receive and that “all adults in the United States are at risk for receiving poor health care,” regardless of where they live; why they seek care; where and from whom they receive care; or their race, gender, or financial status.187 This may be partly because of individuals’ lack of access to health care coverage, which in turn may limit their ability to pay for the care they receive. Thus many complex issues in our system need to be addressed before report cards or any other tools can help close the gap between what should be done and what is done in health care.

Balanced scorecards allow organizations to look inwardly to evaluate themselves in the areas of financial performance, customer perceptions and satisfaction, internal processes (generally administrative processes), and the ability to learn and grow. They also allow organizations to determine the degree to which they have met their strategic objectives. They hold promise for HCOs in that they integrate clinical, operational, and financial data, and this information can be shared more broadly within the organization to inform decision making.

Both the Magnet Recognition® Program and the Baldrige Award are intended to recognize excellence and quality. HCOs have to weigh the costs and benefits of pursuing these specific quality recognition awards and rely on their organizational objectives in making strategic decisions to pursue them. Regardless of whether a specific recognition is being sought, nurse managers and executives are intimately involved in the “journey” to achieve quality.

Numerous issues in nursing pertain to the quality, cost, and financing of health care. Better care processes can be devised by adopting quality measurement and improvement techniques and by the appropriate use of technology in delivering care. Quality involves not only the end results—patient outcomes and organizational performance—but also a focus on structures and processes that support care delivery. Investing in quality often requires changing the culture, or the accepted way of doing things, on work units and within organizations. This is no small feat, and changing the culture may take years to accomplish. To effectively achieve this kind of deep-level change, nurse managers are called upon to engage front-line staff. Nurse managers must work with staff to build buy-in by involving staff in the process of change as well as by listening and acting on staff needs and concerns.

Patient satisfaction, an outcome often associated with quality, is correlated with nurse satisfaction (discussed in Chapter 12).188 Newman and Maylor189 attempt to link patient and nurse satisfaction in their “nurse satisfaction, quality of care, and patient satisfaction chain.” In this model, the authors argue that nurses’ satisfaction with their jobs and the work environment may be an antecedent to nurses’ ability to actually meet quality of care expectations and patient satisfaction. This approach implies that efforts to improve quality, particularly patient satisfaction, must consider nurses’ satisfaction and the work environment. It is therefore incumbent upon nurse managers to appreciate these relationships and to recognize the importance of involving staff in quality initiatives.

Nurse managers and executives must also be aware of the “bigger picture” of quality within and outside of their organizations. They should become involved in organizational strategic planning efforts during which decisions would be made about, for example, pursuing Baldrige, Magnet, or any other type of quality recognition. Nurse managers have important information that can be used to guide these decisions, such as first-hand knowledge of quality performance issues at the point of care delivery, nursing performance outcomes that contribute to quality, and nursing quality issues within the context of the overall organization.

The relationship among quality of care, costs, and health care financing is intricate and complicated. Incentives within our financing system at times support and at others deter quality. The ACA puts forth different incentives that will change the way health care is delivered, change current practices in caring for certain types of patients, and change the ways in which health care is financed. It is up to the nurse manager to be aware of these issues and to minimize the impact of disincentives on quality of care to the extent possible.

Nursing has a long-standing focus on the moral and ethical responsibility to provide the best and highest quality of care for patients. Often, however, nurse managers are faced with budget constraints, staff shortages, and budget-cutting initiatives that put them in a position in which they may be asked to compromise their moral and ethical beliefs. For example, new equipment upgrades are being made almost constantly, and with each upgrade, there is usually some improvement in the product. When is the appropriate time to replace a piece of equipment with the latest version? Another tough position for nurse managers is the justification of staffing increases. What appropriate financial arguments can be used to justify increased staffing requests? If faced with both of these problems at the same time, how does the nurse manager make resource allocation decisions? There are no easy answers to these questions, and finding the answers often involves issues that are ethical in nature. These decisions also require that careful consideration be given to whether the investment is worth the cost or whether the investment is properly timed. The costs of nurse staffing may be minor compared with the denial of payment to organizations for adverse events and hospital-acquired conditions. When faced with such dilemmas, nurse managers may be called upon to build a strong argument—or a business case—using financial and other performance data to assess whether investments in certain quality initiatives should be made.

Achieving quality in HCOs requires an investment. The development of a business case allows managers to illustrate whether, how, and when efforts to invest in quality will pay off. Unfortunately, without building a business case, the expected payoff may not be known, and the derivation of benefits may not occur until far into the future. Also, although some returns may accrue to the organization, others may instead accrue to patients or society. When minimal direct financial returns accrue to the organization, decisions will need to be made about whether an investment is appropriate or whether the payoff to society will result in goodwill toward the organization that makes the investment worthwhile.

It is therefore of paramount importance that nurse managers collaborate with their financial colleagues to understand the process of building a business case, to develop their case, and to have a voice in determining how the business case will be interpreted. Although a business case can be used to justify certain investments in quality, nurse managers need other information to make trade-offs between the costs and quality of care, such as that obtained from the use of quality measures and benchmarking (discussed in Chapter 17).

McCloskey190 recommends that costs and quality be viewed simultaneously. That is, when there are concerns

about containing costs and cost-cutting options are being considered, nurse managers should ask, “Containing cost—at what risk to quality?” On the other hand, when the concerns are about quality and investing in quality initiatives, nurse managers should ask, “Quality—but at what cost?”

Several evidence-based interventions are known to improve patient outcomes and quality of care and to decrease costs. The Olds Nurse-Family Partnership is a nonprofit organization that has been supported primarily by public and private funding. This model, developed by Dr. David Olds, was envisioned using home visits by nurses to help young, often poor, mothers take better care of themselves and their babies.191 This model now provides assistance to 32,692 families in 43 states, the U.S. Virgin Islands, and six Tribal communities.192 The Transitional Care Model, developed by Dr. Dorothy Brooten193 and first tested as a way to provide high-quality, low-cost early discharge care to very low birth weight babies and their families, used advanced practice nurses to transition babies and families from hospital to home care. The model assessed quality by examining patient outcomes, costs, and patient satisfaction. This model has been tested in different patient populations—from infants to elderly adults194—and, in all cases, this model has demonstrated lower costs and improved patient outcomes. More recently, Dr. Mary Naylor has applied the model in several studies of elderly adults195 and home care,196 and the model is now being tested in CMS demonstration projects.

Nursing is a large and integral component of health care and can contribute in innovative ways to the future of health care delivery. Given the important roles that nurses play, variations in care that relate to nursing have implications for nurse managers. Variations in care may affect quality based on patient outcomes, and they may affect costs if there is overuse, underuse, or misuse of care. To adequately address variations in care, nurse managers should advocate the use of current research and evidence-based practice to inform the development of standards of care and to ensure that nursing care and practice are based on the best available knowledge and research. Nurse managers must also have a strong understanding and appreciation of nursing’s impact on the quality and costs of patient care and must articulate this understanding to organizational leaders and staff. Their insights can contribute to the development of a more comprehensive approach for improving the quality and safety of care in HCOs and in turn the costs incurred and financing available to the organization.

❃ Key concepts

Quality “The degree to which health care services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge.”197 Donabedian defined quality as a function of structures, processes, and outcomes of health care and recognized that measurement of quality requires an examination of system attributes that pertain to structures, processes, and outcomes of care.198

Structure Resources used in the provision of care, such as physicians, nurses and other care providers, and organizational characteristics.199

Process Activities involved in providing care, such as models of care delivery, and organizational policies and procedures.200

Outcomes Consequences or results of care, such as condition-specific results of care, and patient satisfaction.201

Report card Quality reporting strategy that grades health care providers on measures of quality and performance to provide individuals, payers, and other decision makers with information upon which to base health care decisions.202

Balanced scorecard An internal organizational report card used by organizations for strategic management purposes to examine performance. Typically, performance is monitored in four areas: customer perspective, financial perspective, internal processes (including human resources), and learning and growth.203

Value The relationship between costs and quality, which can be expressed as follows204:

Value = Quality/Cost

Efficiency “Mix of health care resource inputs that produce optimal quantity and quality of health and health care outputs.”205 Inputs can be direct costs (e.g., labor, capital, equipment) and indirect costs (e.g., time). Efficiency can be expressed as follows206:

Efficiency = Output/Input

Effectiveness Degree to which outcomes or results are achieved as intended. Effectiveness also means that a treatment, service, or technology provides a benefit to recipients under usual or natural circumstances.207 Effectiveness implies the appropriate use of knowledge and evidence to achieve a desired outcome while considering patients’ values.208

Business case Position on whether an investment should be made in a project or initiative based on a systematic evaluation of the worth or value of the project or initiative. Involves the calculation of rates of return on investments, break-even points, costs and benefits, and other financial indices.209

Cost Amount spent to acquire or maintain a good or service.

Access to care The availability of care that is appropriate and adaptable to patients’ health needs, acceptable to the patient, and affordable.

Price Amount charged for a particular service.

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61. Naylor M, Brooten D, Campbell RL. Transitional care of older adults hospitalized with heart failure: a randomized, controlled trial. J Am Geriatr Assoc. 2004;52(5):675-684.

62. Naylor MD. Transitional care: a critical dimension of the home healthcare quality agenda. J Healthc Qual. 2006;28(1):48-54.

63. Needleman J, Buerhaus P, Stewart M. Nurse staffing in hospitals: is there a business case for quality. Health Aff. 2006;25(1):204-211.

64. Nelson E, Mohr J, Batalden P, Plume S. Improving health care, part 1: the clinical value compass. Jt Comm J Qual Improv. 1996;22(4):243-258.

65. Newman K, Maylor U. Empirical evidence for “the nurse satisfaction, quality of care, and patient satisfaction chain,”. Int J Health Care Qual. 2002;15(20):80-88.

66. Oliveira J. The balanced scorecard: an integrative approach to performance evaluation. Healthc Financ Manage. 2001;55(5):42-46.

67. Page A. Committee on the Work Environment for Nurses and Patient Safety: Keeping patients safetransforming the work environment of nurses. Washington, DC: National Academies Press. 2004.

68. Palmer S, Torgerson D. Economics notes: definitions of efficiency. Br Med J. 1999;318(7191):1136.

69. Penchansky R, Thomas WJ. The concept of access: definition and relationship to consumer satisfaction. Med Care. 1981;19(2):127-140.

70. Pham H, Coughlan J, O’Malley A. The impact of quality-reporting programs on hospital operations. Health Aff. 2006;25(5):1412-1422.

71. Porter M, Teisberg E. Redefining competition in health care. Harv Bus Rev. 2004;82(6):65-76.

72. Porter ME, Teisberg EO. Redefining health care: creating value-based competition on results. Cambridge, MA: Harvard Business Review Press. 2006.

73. (website) www.hcqualitycommission.gov/about.html President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry..

74. RAND. http://www.rand.org/content/dam/rand/pubs/research_briefs/2006/RB4544.pdf Research highlights: report cards for health care (website). 2006.

75. RAND Corporation. http://www.rand.org/pubs/research_briefs/RB9053-2/index1.html Research highlights: the first national report card on quality of health care in America (website). 2006.

76. Reiter KL, Kilpatrick KE, Greene SB. How to develop a business case for quality. Int J Qual Health Care. 2007;19(1):50-55.

77. Rowell P. Lessons learned while collecting ANA indicator data: the American Nurses Association responds. J Nurs Adm. 2001;31(3):130-131.

78. Russell J. Journey to MagnetTM: cost vs. benefits. Nursing Econ. 2010;28(5):340-342.

79. Schiff G, Rucker T. Beyond structure-process-outcome: Donabedian’s seven pillars and eleven buttresses of quality. Jt Comm J Qual Improv. 2001;27(3):169-174.

80. Schuster M, McGlynn E, Pham C. In Institute of Medicine Committee on Quality of Health Care in America Crossing the quality chasm The quality of health care in the United States: a review of articles since 1987. Washington, DC: National Academies Press. 2001.

81. Trinkoff AM, Johantgen M, Storr CL. A comparison of working conditions among nurses in Magnet® and Non-Magnet® hospitals. J Nurs Adm. 2010;40(7/8):309-315.

82. Van Den Bos J, Rustagi K, Gray T. The $17.1 billion problem: the annual cost of measurable medical errors. Health Aff. 2011;30(4):596-603.

83. Wachter R. The end of the beginning: patient safety five years after “To Err Is Human,”. Health Aff. 2004;W4:534-545.

84. Wunderlich G, Sloan F, Davis C, Committee on the Adequacy of Nurse Staffing in Hospitals and Nursing Homes. Nursing staff in hospitals and nursing homes: is it adequate?. Washington, DC: National Academies Press. 1996;9.

85. Zelman WN, Pink GH, Matthias CB. Use of the balanced scorecard in health care. J Health Care Finance. 2003;29(4):1-16.

1On March 15, 2016, the name of the “Institute of Medicine” was changed to the “Health and Medicine Division of the National Academies of Science, Engineering, and Medicine.”

2Kohn L, Corrigan J, Donaldson M. 2000. To err is human: building a safer health system. Committee on Quality of Health Care in America, Institute of Medicine. Washington, DC: National Academies Press.

3Committee on Quality of Health Care in America, Institute of Medicine. 2001. Crossing the quality chasm. Washington, DC: National Academies Press.

4Source cited: Federal Aviation Administration, Office of System Safety. 1999. Aviation Safety Reporting System (ASRS) Database.

5Van Den Bos J, Rustagi K, Gray T, et al. 2011. The $17.1 billion problem: the annual cost of measurable medical errors. Health Aff 30(4):596-603.

6Committee on Quality of Health Care in America, Institute of Medicine, Op. cit., 2001.

7Schuster M, McGlynn E, Pham C, et al. 2001. The quality of health care in the United States: A review of articles since 1987. In Crossing the Quality Chasm. Committee on Quality of Health Care in America, Institute of Medicine. Washington, DC: National Academies Press.

8Aspden P, Wolcott J, Bootman J, Cronenwett LR. 2007. Preventing medication errors. Committee on Identifying and Preventing Medication Errors, Institute of Medicine. Washington, DC: National Academies Press.

9Berwick D, Joshi M. 2005. Healthcare quality and the patient. In Ransom S, Joshi M, Nash D, editors. The health care quality book: vision, strategy and tools. Chicago: Health Administration Press, pp. 3-24.

10See, the following references: Clancy C. 2009. Ten years after “To Err Is Human.” Am J Med Qual 24(6):252-528; Leape L, Berwick D. 2005. Five years after To Err Is Human: What have we learned? JAMA 293(19):2384-2390; and Wachter R. 2004. The end of the beginning: Patient safety five years after ‘To Err Is Human.’ Health Aff W4:534-545.

11Consumers Union. 2009. To err is human—to delay is deadly: ten years later, a million lives lost, billions of dollars wasted. http://safepatientproject.org/pdf/safepatientproject.org-to_delay_is_deadly-2009_05.pdf.

12Classen DC, Resar R, Griffin F, et al. 2001. ‘Global trigger tool’ shows that adverse events in hospitals may be ten times greater than previously measured. Health Affairs 30(4):581-589. doi: 10.1377/hlthaff.2011.0190

13James JT. 2013 A new, evidence-based estimate of patient harms associated with hospital care, J Patient Saf 9(3):122-128. doi: 10.1097/PTS.0b013e3182948a6

14Andel C, Davidow SL, Hollander M, Moreno, DA. 2012. The economics of health care quality and medical errors. J Health Care Finance 39(1):39-50.

15National Priorities Partnership and National Quality Forum (NQF). 2010. Preventing Medication Errors: A $21 Billion Opportunity. https://psnet.ahrq.gov/resources/resource/20529.

16Makary MA, Daniel M. 2016. Medical error—the third leading cause of death in the U.S. British Medical Journal 353:i2139. doi: http://dx.doi.org/10.1136/bmj.i2139.

17Costs are defined in Chapter 6 as expenses associated with providing care. Financing, discussed in Chapter 3, reflects the ways and means by which health care is paid.

18Schiff G, Rucker T. 2001. Beyond structure-process-outcome: Donabedian’s seven pillars and eleven buttresses of quality. Jt Comm J Qual Improv 27(3):169-174.

19Kissoon, N. 2010. The Toyota way . . . or not?—new lessons for health care. Physician Exec 36(6):40-42.

20O’Reilly K. 2012 Fear of punitive response to hospital errors lingers. http://www.amednews.com/article/20120220/profession/302209938/2/.

21Institute of Medicine, Lohr K, editor. 1990. Medicare: a strategy for quality assurance. Washington, DC: National Academies Press, p. 44.

22Ibid.

23Best M, Neuhauser D. 2004. Avedis Donabedian: father of quality assurance and poet. BMJ 13:472-473.

24Donabedian A. 1982. Explorations in quality assessment and monitoring, volume I. The definition of quality and approaches to its assessment. Ann Arbor, MI: Health Administration Press.

25Donabedian A. 1966. Evaluating the quality of medical care. Milbank Mem Fund Q 44(3 suppl):166-206.

26Donabedian A. 1982. Explorations in quality assessment and monitoring, volume II. The criteria and standards of care. Ann Arbor, MI: Health Administration Press.

27For those who would like to know more about these pillars, see Donabedian A. 1990. The seven pillars of quality. Arch Pathol Lab Med 114:1115-1118.

28Irvine D, Sidani S, McGillis Hall L. 1998. Finding value in nursing care: A framework for quality improvement and clinical evaluation. Nurs Econ 16(3):110-131; Irvine D, Sidani S, McGillis Hall L. 1998. Linking outcomes to nurses’ roles in health care. Nurs Econ 16(2):58-64, 87; Doran D, Pringle D. 2011. Patient outcomes as an accountability. In Doran D, editor. Nursing-sensitive outcomes: state of the science, 2nd edition. Toronto: Jones & Bartlett.

29Doran and Pringle, Op. cit., 2011, pp. 1-23.

30Doran D, Sidani S, Keatings M, Doidge D. 2002. An empirical test of the Nursing Role Effectiveness Model. J Adv Nurs 38:29-39.

31Mitchell P, Ferketich S, Jennings B. 1998. Quality health outcomes model. Image J Nurs Sch 30(1):43-47.

32Mitchell P, Lang N. 2004. Framing the problem of measuring and improving healthcare quality: has the quality health outcomes model been useful? Med Care 42(2 suppl):II-4-I-11.

33Ibid.

34Lohr K. 1997. How do we measure quality? Health Aff 16(3):22-25.

35The World Health Organization (WHO). 2003. What are the best strategies for ensuring quality in hospitals? http://www.euro.who.int/__data/assets/pdf_file/0006/74706/E82995.pdf.

36Centers for Disease Control and Prevention (CDC). 2015. Safe Patient Handling and Movement (SPHM). https://www.cdc.gov/niosh/topics/safepatient/.

37Ibid.

38U.S. Bureau of Labor Statistics (BLS). 2015. Incidence rates for nonfatal occupational injuries and illnesses involving days away from work per 10,000 full-time workers by industry and selected events or exposures leading to injury or illness, private industry, 2014. http://www.bls.gov/iif/oshwc/osh/case/ostb4374.pdf.

39Agency for Health Research and Quality (AHRQ). 2013. Making health care safer ii: an updated critical analysis of the evidence for patient safety practices. https://www.ahrq.gov/research/findings/evidence-based-reports/makinghcsafer.html.

40Institute of Medicine (IOM). 2004. Keeping patients safe: transforming the work environment of nurses. Washington, DC: The National Academies Press. https://doi.org/10.17226/10851.

41Ibid.

42Letvak SA, Ruhm CJ, Gupta SN. 2012. Nurses’ presenteeism and its effects on self-reported quality of care and costs. Am J Nurs 112(2):30-38; quiz 48, 39. doi: 10.1097/01.NAJ.0000411176.15696.f9

43Ibid.

44Schultz AB, Chen CY, Edington DW. 2009. The cost and impact of health conditions on presenteeism to employers: a review of the literature. Pharmacoeconomics 27(5):365-378.

45Letvak SA, Ruhm CJ, Gupta SN. 2012. Nurses’ presenteeism and its effects on self-reported quality of care and costs. Am J Nurs, 112(2), 30-38; quiz 48, 39. doi: 10.1097/01.NAJ.0000411176.15696.f9

46Urban AM, Wagner JI. 2013. Another link to improving the working environment in acute care hospitals: registered nurses’ spirit at work. Nurs Leadersh (Tor Ont) 26(4):77-88.

47Buerhaus PI, DesRoches C, Donelan K, Hess R. 2009. Still making progress to improve the hospital workplace environment? Results from the 2008 National Survey of Registered Nurses. Nurs Econ 27(5):289-301.

48Kieft RA, de Brouwer BB, Francke AL, Delnoij DM. 2014. How nurses and their work environment affect patient experiences of the quality of care: a qualitative study. BMC Health Serv Res 14:249. doi: 10.1186/1472-6963-14-249

49Kramer M, Maguire P, Brewer BB. 2011. Clinical nurses in Magnet hospitals confirm productive, healthy unit work environments. J Nurs Manag 19(1):5-17. doi: 10.1111/j.1365-2834.2010.01211.x

50Hungate R. 2001. Reflecting on Donabedian. Health Aff 20(3):295.

51President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry. http://www.hcqualitycommission.gov/about.html.

52President’s Advisory Commission on Consumer Protection and Quality in the Health Care Industry. http://www.hcqualitycommission.gov/final.

53U.S. Department of Health and Human Services (HHS). 2016. Partnership for Patients. https://psnet.ahrq.gov/resources/resource/21716.

54Centers for Medicare & Medicaid Services (CMS). 2015. Saving Lives and Saving Money: Hospital-Acquired Conditions Update: Interim Data From National Efforts To Make Care Safer, 2010-2014. http://www.ahrq.gov/sites/default/files/publications/files/interimhacrate2014_2.pdf.

55Ibid.

56Patient Protection and Affordable Care Act, Pub. L. No. 111–148 § 3011-3015, 124 Stat. 293-304 (2010).

57Agency for Health Research and Quality (AHRQ). 2014. National Strategy for Quality Improvement in Health Care 2014 Annual Progress Report to Congress. http://www.ahrq.gov/workingforquality/reports/annual-reports/nqs2014annlrpt.pdf.

58Ibid.

59Agency for Health Research and Quality (AHRQ). 2011. National Strategy for Quality Improvement in Health Care. http://www.ahrq.gov/working forquality/reports/annual-reports/nqs2011annlrpt.pdf.

60Ibid.

61Agency for Health Research and Quality (AHRQ). 2011. National Strategy for Quality Improvement in Health Care. http://www.ahrq.gov/working forquality/reports/annual-reports/nqs2011annlrpt.pdf.

62Ibid.

63Health and Medicine Division (HMD). www.nationalacademies.org/HMD .

64Wunderlich G, Sloan F, Davis C. 1996. Nursing staff in hospitals and nursing homes: is it adequate? Committee on the Adequacy of Nurse Staffing in Hospitals and Nursing Homes. Washington, DC: National Academies Press, p. 9.

65Page A. 2004. Keeping patients safe: transforming the work environment of nurses. Committee on the Work Environment for Nurses and Patient Safety. Washington, DC: National Academies Press.

66National Academies of Sciences, Engineering and Medicine. 2015. Assessing progress on the institute of medicine report. The Future of Nursing. Washington, DC: The National Academies Press.

67The Joint Commission. About The Joint Commission. http://www.jointcommission.org/about_us/about_the_joint_commission_main.aspx.

68The Joint Commission. http://www.jointcommission.org/assets/1/18/health_care_at_the_crossroads.pdf.

69Ibid, p. 7.

70See, for example, these facts about the Council, https://www.jointcommission.org/facts_about_the_nursing_advisory_council/.

71See more on The Joint Commission’s testimony to the IOM and Robert Wood Johnson Foundation Initiative on the Future of Nursing, at the Institute of Medicine, February 23, 2010, http://www.nationalacademies.org/hmd/Reports/2010/The-Future-of-Nursing-Leading-Change-Advancing-Health.aspx.

72Institute for Healthcare Improvement. http://www.ihi.org/about/Documents/IntroductiontoIHIBrochureDec10.pdf.

73Adapted from http://www.ihi.org/offerings/Initiatives/PastStrategicInitiatives/5MillionLivesCampaign/Documents/Overview%20of%20the%20100K% 20Campaign.pdf.

74More information on the IHI’s “5 Million Lives Campaign” is available at http://www.ihi.org/engage/initiatives/completed/5MillionLivesCampaign/Pages/default.aspx.

75The National Quality Forum. http://www.qualityforum.org/About_NQF/About_NQF.aspx.

76The National Quality Forum’s Consensus Development Process. http://www.qualityforum.org/Measuring_Performance/Consensus_Development_Process.aspx.

77National Quality Forum. 2004. National voluntary consensus standards for nursing-sensitive care: an initial performance measure set. A consensus report. Washington, DC: National Quality Forum. http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Initial_Measures/Nursing_Sensitive_ Care__Initial_Measures.aspx.

78For more details on the measurement of these standards, see the consensus report cited in note 77.

79http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Measure_Maintenance/Nursing_Sensitive_Care_-_Measure_Maintenance.aspx.

80http://www.jointcommission.org/national_quality_forum_nqf_endorsed_nursing-sensitive_care_performance_measures/.

81Based on information from: http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Initial_Measures/Nursing_Sensitive_Care__ Initial_Measures.aspx; http://www.qualityforum.org/Projects/n-r/Nursing-Sensitive_Care_Measure_Maintenance/Nursing_Sensitive_Care_-_Measure_Maintenance.aspx; and http://www.jointcommission.org/assets/1/6/NSC% 20Manual.pdf.

82The Leapfrog Group. About Us. http://www.leapfroggroup.org/about.

83The Leapfrog Group. 2016. Four Leaps in Hospital Quality, Safety and Affordability. http://www.bcbsil.com/provider/pdf/7_leapfrog_fact_sheet.pdf.

84The Leapfrog’s Competitive Benchmarking Reports. http://www.leap froggroup.org/ratings-reports/competitive-benchmarking. See also http://www. leapfroggroup.org/survey-materials/scoring-and-results

85http://www.leapfroggroup.org/data-users/leapfrog-value-based-purchasing-platform

86Mick S, Mark B. 2005. The contribution of organizational theory to nursing health services research. Nurs Outlook 53(6):317-323.

87Ibid.

88RAND. 2002. Research highlights: report cards for health care. http://www.rand.org/pubs/research_briefs/RB4544/index1.html.

89National Committee for Quality Assurance. About NCQA. http://www.ncqa.org/about-ncqa.

90National Committee for Quality Assurance. http://www.ncqa.org.

91For more details on NCQA’s report cards, please see NCQA Report Cards, http://www.ncqa.org.

92http://www.ncqa.org/tabid/177/Default.aspx.

93http://www.qualitycheck.org/consumer/searchQCR.aspx.

94https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/HospitalQualityInits/HospitalCompare.html.

95http://www.consumerreports.org/health/doctors-hospitals/doctors-and-hospitals.htm.

96http://www.consumerreports.org/health/doctors-hospitals/nursing-home-guide/0608_nursing-home-guide.htm.

97Patients beware: 731 nurses reveal what to watch out for in the hospital. Consumer Reports. http://www.consumerreports.org/health/doctors-hospitals/hospitals/overview/hospitals-and-nurses-ov.htm.

98http://static.usnews.com/documents/health/best-hospitals-methodology.pdf?s_cid=related-links:TOP.

99American Nurses Association. 1995. Nursing care report card for acute care. Washington, DC: American Nurses Association.

100Moore K, Lynn M, McMillen B, Evans S. 1999. Implementation of the ANA Report Card. J Nurs Adm 29(6):48-54.

101American Nurses Association. 1997. Implementing Nursing’s Report Card: a study of RN staffing, length of stay, and patient outcomes. Washington, DC: American Nurses Association.

102Jennings B, Loan L, DePaul D, et al. 2001. Lessons learned while collecting ANA indicator data. J Nurs Adm 31(3):121-129.

103McGillis Hall L. 2002. Report cards: relevance for nursing and patient safety. Int Counc Nurses 49:168-177.

104Rowell P. 2001. Lessons learned while collecting ANA indicator data: the American Nurses Association responds. J Nurs Adm 31(3):130-131.

105Jennings B, et al, Op. cit., 2001.

106Rowell P, Op. cit. See also Montalvo I. (September 30, 2007). The National Database of Nursing Quality Indicators (NDNQI®) OJIN 12(3), Manuscript 2; and Clarke SP, Donaldson NE. 2008. Nurse staffing and patient care quality and safety. In patient safety and quality: an evidence-based handbook for nurses. Rockville, MD: Agency for Healthcare Research and Quality. http://www.ncbi.nlm.nih.gov/books/NBK2676/.

107For more information, please visit http://www.pressganey.com/solutions/clinical-quality/nursing-quality.

108http://www.pressganey.com/solutions/clinical-quality/nursing-quality.

109McGillis Hall, Op. cit., 2002.

110Centers for Medicare & Medicaid Services (CMS). 2015. 2015 National Impact Assessment of the Centers for Medicare & Medicaid Services (CMS) Quality Measures Report. https://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/QualityMeasures/Downloads/2015-National-Impact-Assessment-Report.pdf.

111Ibid.

112RAND Corporation. 2006. Research Brief. Document number RB-9053-2. http://www.rand.org/pubs/research_briefs/RB9053-2.html.

113Hibbard J, Stockard J, Tusler M. 2003. Does publicizing hospital performance stimulate quality improvement efforts? Health Aff 22(2):84-95. See also What can we say about the impact of public reporting? Inconsistent execution yields variable results. Ann Intern Med 148:160-161.

114RAND Corporation, Op. cit., 2006.

115Pham H, Coughlan J, O’Malley A. 2006. The impact of quality-reporting programs on hospital operations. Health Aff 25(5):1412-1422.

116Ibid.

117Ibid.

118Healthcare Association of New York State (HANYS) Quality Institute. 2013. HANYS’ Report on Report Cards: Understanding Publicly Reported Hospital Quality Measures. http://www.hanys.org/quality/data/report_cards/2013/docs/2013_hanys_report_card_book.pdf.

119Ibid.

120Ibid.

121Dranove D, Kessler D, McClellan M, Satterthwaite M. 2002. Is more information better? the effects of “report cards” on health care providers. https://www.nber.org/papers/w8697.pdf.

122McGillis Hall, Op. cit., 2002.

123See the classic work of Robert Kaplan and David Norton cited at the end of this chapter for more details on the balanced scorecard.

124See, for example, Oliveira J. 2001. The balanced scorecard: an integrative approach to performance evaluation. Healthc Financ Manage 55(5):42-46; and Zelman WN, Pink GH, Matthias CB. 2003. Use of the balanced scorecard in health care. J Health Care Finance 29(4):1-16.

125Nelson E, Mohr J, Batalden P, Plume S. 1996. Improving health care, part 1: the clinical value compass. Jt Comm J Qual Improv 22(4):243-258.

126Kramer M, Schmalenberg C. 2005. Best quality patient care: a historical perspective on magnet hospitals. Nurs Adm Q 29(3):275-287.

127Peters RJ, Waterman RH. 1982. In search of excellence. New York: Harper Row.

128http://www.nursecredentialing.org/Magnet/FindaMagnetFacility.aspx.

129http://www.nursecredentialing.org/Magnet/ProgramOverview/New-Magnet-Model.aspx.

130http://www.nursecredentialing.org/MagnetScheduleFees.aspx.

131http://www.nursecredentialing.org/Magnet/PublicComment. See also eligibility requirements for individual organizations applying for Magnet status, http://www.nursecredentialing.org/OrgEligibilityRequirements.aspx; and health care systems applying for Magnet status, http://www.nursecredentialing.org/SysEligibilityRequirements.aspx.

132Aiken L, Smith H, Lake E. 1994. Lower Medicare mortality among a set of hospitals known for good nursing care. Med Care 32:771-787.

133See Aiken L, Sloane D, Lake E. 1997. Satisfaction with inpatient acquired immunodeficiency syndrome care: a national comparison of dedicated and scattered-bed units. Med Care 35(9):948-962; and Aiken L, Sloane D, Lake E, et al. 1999. Organization and outcomes of inpatient AIDS care. Med Care 37(8):760-772.

134Lake ET, Shang J, Klaus S, Dunton NE. 2010. Patient falls: association with hospital Magnet status and nursing unit staffing. Res Nurs Health 33(5):413-425.

135Laschinger HKS, Shamian J, Thomson D. 2001. Impact of Magnet hospital characteristics on nurses’ perceptions of trust, burnout, quality of care, and work satisfaction. Nurs Econ 19(5):209-219.

136See Trinkoff AM, Johantgen M, Storr CL, et al. 2010. A comparison of working conditions among nurses in Magnet® and Non-Magnet® hospitals. J Nurs Adm 40(7/8):309-315; and Goode CJ, Blegen MA, Park SH, et al. 2011. Comparison of patient outcomes in Magnet® and non-Magnet® hospitals. J Nurs Adm 41(12), 517-523.

137http://www.nursecredentialing.org/Pathway/AboutPathway.aspx.

138http://www.nursecredentialing.org/Pathway/AboutPathway/PathwayFees

139http://www.nursecredentialing.org/Pathway/DesignationOrganizations.aspx.

140Brady-Schwartz D. 2005. Further evidence on the Magnet Recognition Program: implications for nursing leaders. J Nurs Adm 35(9):397-403.

141Drenkard K. 2010. The business case for Magnet. J Nurs Adm 40(6): 263-271.

142Doloresco LG, Bradham DD, et al. 2004. building a business case for magnet designation in VHA. http://www.va.gov/nursing/docs/final buscasereport11-26.pdf.

143Ibid.

144Jayawardhana J, Welton JM, Lindrooth RC. 2014. Is there a business case for magnet hospitals? Estimates of the cost and revenue implications of becoming a magnet. Med Care 52(5):400-406. doi: 10.1097/mlr.0000000000000092

145Ibid.

146McClure M, Hinshaw A. 2002. Magnet hospitals revisited: attraction and retention of professional nurses. Washington, DC: American Nurses Publishing. See also Russell J. 2010. Journey to magnet: cost vs. benefits. Nursing Econ 28(5):340-342.

147Goode CJ, Blegen MA, Park SH, et al. 2011. Comparison of patient outcomes in Magnet(R) and non-Magnet hospitals. J Nurs Adm 41(12):517-523. doi: 10.1097/NNA.0b013e3182378b7c.

148Ibid.

149Ibid.

150Trinkoff AM, Johantgen M, Storr CL, et al. 2010. A comparison of working conditions among nurses in Magnet and non-Magnet hospitals. J Nurs Adm 40(7-8):309-315. doi: 10.1097/NNA.0b013e3181e93719

151Karim SA. 2014. The Magnet recognition program: What are the effects on financial performance? http://gradworks.proquest.com/36/34/3634002.html.

152https://www.nist.gov/baldrige/publications.

153http://www.nist.gov/baldrige/about/baldrige_faqs.cfm.

154Organizations may be required to pay all or some of the following fees: an eligibility fee of $360; an application fee ranging from $9600 for a health care organization with 500 or less staff to $18,000 for a health care entity with more than 500 staff. A supplemental fee ranging from $100 (less than or equal to 500 staff) to $2000 (more than 500 staff) is required, while the site visit fee ranges from $30,000 to $35,000 for a small health care entity and from $50,000 to $60,000 for a large one. A $1250 processing fee is required for applications submitted on a computer disk. For more information specific to health care, http://www.nist.gov/baldrige/enter/award_fees.cfm.

155Ibid.

156Folland S, Goodman A, Stano M. 2012. The economics of health and health care, 7th edition. Upper Saddle River, NJ: Prentice-Hall.

157Blegen MA, Goode CJ, Reed, L. 1998. Nurse staffing and patient outcomes. Nurs Res 47(1):43-50.

158Porter ME, Teisberg EO. 2006. Redefining health care: creating value-based competition on results. Cambridge, MA: Harvard Business Review Press.

159Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs. 2006. Performance measurement: accelerating improvement. Institute of Medicine. Washington, DC: National Academies Press.

160Palmer S, Torgerson D. 1999. Economics notes: Definitions of efficiency. BMJ 318(7191):1136.

161Committee on Quality of Health Care in America, Op. cit., p. 52.

162https://www.nlm.nih.gov/nichsr/hta101/ta101014.html. Effectiveness is distinguished from efficacy in that efficacy implies that a benefit is achieved under ideal or controlled conditions.

163Committee on Quality of Health Care in America, Op. cit., pp. 47-48.

164Enthoven A. 1993. The history and principles of managed competition. Health Aff 12(suppl):27-43.

165Carey J. May 29, 2006. Medical guesswork. Bus Wk 3983:72-79.

166Ibid.

167Committee on Quality of Health Care in America, Op. cit., 2001.

168http://www.dartmouthatlas.org/keyissues/.

169http://www.nationalacademies.org/hmd/Reports/2011/Clinical-Preventive-Services-for-Women-Closing-the-Gaps.aspx

170Porter M, Teisberg E. 2004. Redefining competition in health care. Harv Bus Rev 82(6):65-76. See also Porter ME, Teisberg EO. 2006. Redefining health care: creating value-based competition on results. Cambridge, MA: Harvard Business Review Press.

171Enthoven A, Tollen L. 2005. Competition in health care: It takes systems to pursue quality and efficiency. Health Aff (Millwood) W5-420-W5-433.

172http://www.nursingworld.org/MainMenuCategories/Policy-Advocacy/Positions-and-Resolutions/Issue-Briefs/Access-to-care-for-immigrants.pdf

173Penchansky R, Thomas WJ. 1981. The concept of access: Definition and relationship to consumer satisfaction. Med Care 19(2):127-140.

174http://www.hhs.gov/about/news/2016/03/03/20-million-people-have-gained-health-insurance-coverage-because-affordable-care-act-new-estimates

175http://www.commonwealthfund.org/publications/fund-reports/2014/jun/mirror-mirror

176Ibid.

177Jones C. 2005. The costs of nursing turnover, part 2: Application of the Nursing Turnover Cost Calculation Methodology. J Nurs Adm 35(1):41-49.

178Homer C. 2004. Exploring the business case for improving the quality of health care for children. Health Aff (Millwood) 23(4):159-166.

179Rauh SS, Wadsworth EB, Weeks WB, Weinstein JN. 2011. The savings illusion—why clinical quality improvement fails to deliver bottom-line results. N Engl J Med 365(26):e48. doi: 10.1056/NEJMp1111662

180Kilpatrick KE, Lohr KN, Leatherman S, et al. 2005. The insufficiency of evidence to establish the business case for quality. Int J Qual Health Care 17(4):347-355. doi: 10.1093/intqhc/mzi034

181Swensen SJ, Dilling JA, Mc Carty PM, et al. 2013. The business case for health-care quality improvement. J Patient Saf 9(1):44-52. doi: 10.1097/PTS. 0b013e3182753e33

182Ibid.

183Swensen SJ, Dilling JA, Mc Carty PM, et al. 2013. The business case for health-care quality improvement. J Patient Saf 9(1):44-52. 10.1097/PTS. 0b013e3182753e33

184Leatherman S, Berwick D, Iles D, et al. 2003. The business case for quality: case studies and an analysis. Health Aff 22(2):17-30.

185Needleman J, Buerhaus P, Stewart M, et al. 2006. Nurse staffing in hospitals: is there a business case for quality? Health Aff 25(1):204-211.

186Reiter KL, Kilpatrick KE, Greene SB, et al. 2007. How to develop a business case for quality. Int J Qual Health Care 19(1):50-55.

187RAND Corporation. 2006. Research Highlights: The first national report card on quality of health care in America. http://www.rand.org/pubs/research_briefs/RB9053-2.html.

188Kessler D, Mylod D. 2011. Does patient satisfaction affect patient loyalty? Int J Health Care Qual 24(4):266-273.

189Newman K, Maylor U. 2002. Empirical evidence for “the nurse satisfaction, quality of care, and patient satisfaction chain.” Int J Health Care Qual 15(20):80-88.

190McCloskey J. 1995. Breaking the cycle. J Prof Nurs 11(2):67.

191http://www.nursefamilypartnership.org/getattachment/about/fact-sheets/NFP_May_2016_Snapshot.pdf.aspx

192Ibid.

193Brooten D, Kumar S, Brown L, et al. 1986. A randomized clinical trial: early discharge and nurse followup of very low birthweight infants. N Engl J Med 315:934-939. (Reprinted in Rinke LT, editor. 1987. Outcome measures in home care. New York: National League for Nursing, pp. 95-108.)

194See Brooten, Naylor MD, York R, et al. 2002. Lessons learned from testing the Quality Cost Model of Advanced Practice Nurse Transitional Care. J Nurs Scholarsh 34(4):369-375.

195Naylor M, Brooten D, Campbell RL, et al. 2004. Transitional care of older adults hospitalized with heart failure: a randomized, controlled trial. J Am Geriatr Assoc 52(5):675-684.

196Naylor MD 2006. Transitional care: a critical dimension of the home healthcare quality agenda. J Healthc Qual 28(1):48-54.

197Institute of Medicine, Lohr K, editor. 1990. Medicare: a strategy for quality assurance. Washington, DC: National Academies Press, p. 44.

198Donabedian A, Op. cit., 1966.

199Donabedian A, Op. cit., 1982.

200Ibid.

201Ibid.

202RAND, Op. cit., 2002.

203Oliveira J, Op. cit., 2001.

204Folland S, Op. cit., 2009.

205Committee on Redesigning Health Insurance Performance Measures, Payment, and Performance Improvement Programs, Op. cit.

206Palmer and Torgerson, Op. cit., 1999.

207https://www.nlm.nih.gov/nichsr/hta101/ta101014.htmlhttp://www.nlm.nih.gov/nichsr/ihcm/hsrckey.html.

208Committee on Quality of Health Care in America, Op. cit., pp. 47-48.

209Jones, Op. cit., 2005.

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