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Testing an inpatient nursing intensity billing model.
John M Welton1, Clara E Dismuke
1College of Nursing, Medical University of South Carolina, Charleston, SC, USA.
Policy, Politics & Nursing Practice
|July 25, 2008
Summary
Adjusting hospital room charges with nursing intensity weights better reflects the economic value of nursing care. This method improves cost accuracy and transparency in billing for inpatient services.
Area of Science:
- Healthcare economics
- Nursing administration
- Hospital finance
Background:
- Inpatient nursing care accounts for over 40% of hospital direct costs.
- Current billing practices compress costs and obscure the economic value of nursing.
- Accurate cost allocation is crucial for fair hospital reimbursement.
Purpose of the Study:
- To examine a method for adjusting daily room charges using nursing intensity weights.
- To assess the impact of nursing intensity adjustments on cost variance.
- To advocate for unbundling nursing care charges from room and board.
Main Methods:
- Utilized claims data from 286 hospitals across four states.
- Analyzed 1,856,256 patient discharges from 2002.
- Applied nursing intensity weights based on diagnosis-related groups (DRGs).
Main Results:
- Nursing intensity adjustment improved explained total cost variance by 8.5% for all adult patients.
- For Medicare-only patients, the adjustment improved explained total cost variance by 9.4%.
- The adjusted model showed higher R-squared values compared to unadjusted days.
Conclusions:
- Unbundling inpatient nursing care intensity and charges from room and board is recommended.
- Implementing this billing process can enhance financial transparency in hospitals.
- Accurate reflection of nursing costs is vital for hospital financial health.
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