ACOs Impact on Nursing

As we await CMS proposed regulations on Accountable Care Organizations (ACOs), hospitals grapple with the many issues of pay-for-performance programs. I’ve posted about concerns regarding the ACO membership and quality measures. Also, I made an observation I called the ACO Paradox.

To add another issue to the list, a recent article by Kurtzman et al. (2011) in Health Affairs raises concerns about pay-for-performance (P4P) programs’ effect on the nursing workforce. The authors write that these incentive programs “increase both the burden and the blame for nurses without corresponding improvements in staffing levels, work environment, salaries, or turnover.” In addition to the Medicare hospital-acquired conditions policy and hospital inpatient value-based purchasing program, the impending ACO payment policies may add to nurse workload.

Especially for nursing-sensitive indicators (e.g., pressure ulcers, patient falls, catheter-associated infections), improved quality may be directly related to increased nurse staffing. This brings to mind two questions regarding ACOs and nurses.

First, under the health reform law, ACOs must meet certain quality thresholds to qualify for “shared savings” with Medicare. Can nursing-sensitive quality be achieved while reducing costs? Correlational research links higher nurse-to-patient staffing ratios to improved quality for some measures, including pressure ulcers, falls with injuries, catheter-associated urinary tract infections, and vascular catheter-associated infections. Since nursing can represent 40% of hospitals’ direct care budgets, achieving high marks for these types of measures may contribute to the ACO Paradox: What if improved healthcare quality is accompanied by increased costs?

Second, how should ACOs distribute potential Medicare “shared savings” bonuses among nursing staff? The Kurtzman et al. (2011) article makes the point that “performance incentives are typically paid to physicians, hospitals, and other providers, rather than directly to staff nurses—individually or collectively.” Complexity of nurse staffing at hospitals is the primary reason incentives are not paid to nurses. But should they be? Does it makes sense to reward nurses for quality?

As ACOs create legal entities to meet the CMS requirements, nurse incentives will need to be addressed.