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Nursing intensity billing

Abstract

Hospital nursing care has traditionally been billed using a fixed daily room and board rate. This approach hides the variability of nursing care within and across nursing units and does not align nursing costs with daily charges for actual patient care. Anew nursing intensity billing (NIB) model for assigning hospital daily room charges is proposed, and initial results are reported.

Methods: Two charge methods, one using traditional room and board daily billing and another using an NIB approach, were developed for 12 adult medical or surgical units at the Medical University of South Carolina (MUSC) Medical Center using retrospective data from January 1 to May 31, 2005. The room and board charge was assigned as private room or intermediate care based primarily on patient location. The NIB model added an additional focused care charge between private and intermediate care, and the charge for the 3 levels was based on daily nursing intensity entered as actual hours of nursing care delivered. The mean and sum of charges were compared between the 2 methods. Charge rates were simulated at $700, $950, and $1,200 for the 3 levels, which correlated with the existing proprietary room rates. Nursing cost-to-charge ratios were calculated for room and board and NIB methods.

Results: The NIB model resulted in a 32.2% increase in charges or a total sum of $4,870,250 for the 12 nursing units over the 5-month period. The variability of nursing cost-to-charge ratio was reduced from 0.34 to 0.80 for room and board to 0.33 to 0.45 for the NIB method.

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Conclusion: The NIB method of assigning charges based on nursing intensity rather than on patient location increased overall charges and more evenly distributed direct nursing costs to daily charges. Assigning charges based on nursing intensity is appealing as it reflects actual care given in the acute care environment. The NIB provides evidence to support higher charge rates and has the ability to redistribute hospital charges based on nursing care. The relationship between increased daily hospital charges and actual reimbursement is unknown.

Corresponding Author

ABSTRACT

This study aimed to: estimate the billing of nursing procedures at an intensive care unit and calculate how much of total ICU revenues are generated by nursing. An exploratory-descriptive, documentary research with a quantitative approach was carried out. The study was performed at a general ICU of a private hospital in the city of Sao Paulo. The sample consisted of 159 patients. It was concluded that the nursing procedures were responsible for 15.1% of total ICU revenues, which breaks down to an average 11.3% of revenues coming from nursing prescriptions and 3.8% from medical prescriptions. Demonstrating how much nursing contributes to hospital revenues is essential information for nursing managers, as it is an important argument to obtain resources and guarantee safe care.

Descriptors: Nursing; Health Care Costs; Hospital Costs.

Introduction

In 1993, the International Council of Nursing (ICN)(1) appointed, in a document called “Quality, costs and Nursing”, the importance of nurses considering costs when assessing the results of their actions, in view of growing economic pressure on global health systems. The same document stated that finance turned into another knowledge domain for nurses, who should clearly demonstrate costs and profitability of their care with a view to arguing on the resources needed for safe care. Profitability “is the level of revenue, i.e. the financial return provided by a certain investment”. It can be expressed by the percentage of profits on total investments(2).

Nurses constitute an important decision level in resource allocation, when they decide on service priorities in their work units and on what resources will be used to accomplish them. This is already a reality at some private and public hospitals, where nurses, as managers of their business units, assess needs related to material, physical, human and financial resources, critically analyze the unit’s expenses every month, comparing real and budgeted expenses, and participate in next year’s budget planning.

Thus, nurse administrators are increasingly involved in financial decision and budget planning at their institutions and have to manage often scarce (human, material and financial) resources. Therefore, nurses need to seek knowledge in hospital administration and, today, also in accounting in order to manage their costs(3-7).

The emphasis on cost containment and improved health system efficiency have created the explicit need to quantify and justify costs(3). Nurses in hospitals, however, do not know data about nursing care costs and mainly billing(6,8).

Billing is the “set of revenues expressed in monetary units, which a company obtains through the sale of goods or services in a given period”. In other words, “it is the number of units of goods or services sold, multiplied by the unit sales price”(2).

In hospital institutions, nursing care payments are included in daily fees or procedure rates. Daily fees include basic nursing services, understood as usual or routine procedures, such as: bathing, good, washing, among others. Procedure rates, charged separately from daily fees, include nursing procedures like: trichotomy, urinary catheter, dressing and others. Whether these procedures are charged or not and the amounts charged depend on negotiations between service providers and health insurance operators.

These considerations reveal the importance of nurses, who generate revenues through actions prescribed to patients and management of activities performed at their unit, especially at private hospitals, where health operators are the main payment sources.

Although nursing’s important contribution to increase hospital billing is appointed, no Brazilian or international research was found to show the percentage of these revenues in a hospital organization. In fact, hospital organizations present their global annual balance sheet without distinguishing these data per services.

This situation motivated the authors to investigate the extent to which nursing contributes to the revenues of an Intensive Care Unit (ICU) at a private hospital. The high cost of maintaining a structure as complex as an ICU has increasingly justified strict cost control in that area. This unit has been responsible for the highest hospital spending, due to the demand for specialized staff, qualified in care delivery to critical patients, and to the continuous inclusion of new technologies; on the other hand, it has been one of the sectors with the highest billing.

Aims

To estimate the revenues nursing procedures generate per patient at an adult ICU of a general private hospital in São Paulo City, in May and June.

To estimate the percentage of total ICU billing that corresponds to nursing procedures during the months under analysis.

Method

An exploratory, descriptive and documentary quantitative research was carried out at a general Intensive Care Unit (ICU) of a large 407-bed private hospital in São Paulo City. At the unit, on average, 130 surgical and clinical patients are admitted per month, with a predominance of surgical patients.

Nursing professionals at the unit deliver comprehensive care to patients and perform standardized nursing procedures the nurse prescribes, through the Nursing Care Systemization (NCS), as well as procedures demanded through medical prescriptions.

The billing of nursing procedures demanded through prescriptions is done as a whole, without any specification of the hospital business unit that generated it. In other words, all procedures performed at the ICU and other units the patient was hospitalized at are added up. Therefore, data had to be surveyed from the prescriptions and notes of patients hospitalized at the ICU. Thus, due to information volume, the researchers decided to work with a sample of procedures per patient and then make estimates for the population during the months under analysis.

To constitute the sample, proportional stratified random sampling was used, with a 95% confidence interval. To calculate the sample, patient data were considered for a two-month period – May and June, with a maximum sample error of 5%. This resulted in a sample of 159 patients. In total, between May and June, 260 patients were hospitalized at the ICU. To permit sample distribution among the strata, the following groups were established: age: up to 60 years and older than 60; hospitalization time and reason for hospitalization. Patients with kidney failure, multiple traumas, digestive hemorrhage, burn, hypertensive emergency, metabolic disorders and angioplasty were grouped under other reasons, as there were few patients in these situations

Samples were randomly drafted in each of the segments. The 159 patients drafted contributed with 834 prescriptions, 400 of which were medical and 434 nursing prescriptions. Less medical prescriptions were included, as some did not describe the nursing procedures of interest to the study, which entail billing for nursing.

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