Low Nurse Staffing May Cost Your Facility Millions of Dollars

By Brian Hudson, SVP

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January 12, 2018

The nurse shortage may be affecting your bottom line in more ways than one. Inadequate nurse staffing may be adversely affecting your readmission rates. Under the Affordable Care Act, hospitals with excessive readmission rates may not be reimbursed for up to three percent of their readmission costs. This penalty causes a significant loss of revenue. For 2017, The Centers for Medicare and Medicaid Services (CMS) predicts that hospitals are expected to take a total loss of $528 million in penalties.

The Hospital Readmissions Reduction Program (HRRP), passed as part of the Affordable Care Act, is intended to bring a financial incentive to hospitals to reduce readmissions. According to a study by the University of Pennsylvania, hospitals that staff for manageable nurse workloads have lower readmission rates. The study matched 2,826 hospitals based on the number of hospital beds. The study compared HRRP penalties between the 1,413 well-staffed hospitals and the 1,413 similar hospitals with lower staffing levels.

The study concluded that closely matched hospitals based on the same patient population characteristics, still differ in HRRP penalties due to the level of registered nurse staffing. The 1,413 hospitals with low nurse staffing were significantly more likely to receive an HRRP penalty compared to the 1,413 well-staffed hospitals.

The top 10 states who had the highest total dollar amounts stripped from their hospitals under the Hospital Readmission Reduction Program (HRRP). Image from Medisolv.

The debt incurred by emergency department readmissions far outweighs the cost of increasing nurse staffing levels. According to HRRP, the top states with the highest readmission penalties in 2016 were New York ($40M), Florida ($39M) and Illinois ($26M). Georgetown University found that these same states also have the highest number of job openings for nurses.

To help cut down on costly readmission penalties, it is vital for hospitals to be properly staffed. This can be difficult based on the nurse shortage affecting the U.S. Innovative solutions need to be presented, including government officials influence to increase the nation’s nurse supply. The University of Pennsylvania study stated, “Policy makers also may be able to gain traction on readmissions and their attendant costs through policy that creates a care environment sufficiently staffed and resourced to allow health care providers to do their work most effectively.”

H.R. 3351 – The Emergency Nursing Supply Relief Act of 2017 is a bill introduced by Rep. Jim Sensenbrenner (WI) as a response to the national nursing shortage. This bill will allocate 8,000 work visas annually for nurses, physical therapists and other healthcare professionals who are in critical need. The Emergency Nursing Supply Relief Act will directly affect hospitals in states that have the highest readmission penalties by increasing the supply of nurses available to fill vacancies throughout the U.S. Previous studies have shown that better nurse staffing is linked to improved performance on various quality measures, including mortality, failure to rescue, patient satisfaction, and patient safety.

Shorter hospital stays coupled with rising acuity place additional importance on proper nurse staffing ratios. Proper nurse staffing allows for higher engagement between nurses and their patients which reduces the likelihood of improper discharges, and saves your organization needless readmission penalties.

About the Author

Brian Hudson is an experienced healthcare staffing executive with more than 20 years of experience in strategic leadership and healthcare staffing, including international nurse staffing. Brian brings a unique understanding of domestic and international healthcare human capital, along with staffing and solutions expertise. Brian can be reached at

About Avant Healthcare Professionals

Need nurses? Avant Healthcare Professionals is the premier staffing specialist for internationally educated registered nurses, physical therapists and occupational therapists. Avant has placed thousands of international healthcare professionals across U.S. facilities to help improve the continuity of their care, fill hard-to-find specialties, and increase patient satisfaction, revenue and HCAHPS scores. Avant is a Joint Commission accredited staffing agency and founding member of the American Association of International Healthcare Recruitment (AAIHR). Avant Healthcare Professionals is a member of the Jackson Healthcare® family of companies.


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