8.1 Health Care Economics Introduction
Open Resources for Nursing (Open RN)
Learning Objectives
- Practice and advocate for cost-effective care
- Summarize funding and reimbursement sources for patient-care services
- Explore how political, social, and demographic trends have affected the patient population and delivery of health care
- Analyze the link between economics and quality
- Describe nursing strategies to provide cost-effective care
- Examine economic pressures impacting case management and the management of institutional resources
- Describe the impact of evidence-based practice on health care economics and patient care outcomes
Whether health care is a right or a privilege is a historical ethical question debated around the world that ultimately leads to the question, “Who gets what resources?” Economics is the study of how individuals and societies make decisions about how to use their limited resources. Health care is considered a limited resource because there isn’t enough money or time in the world to purchase and provide care for every individual in every conceivable manner. The ethical question of who pays for that care is referred to as the ethics of rationing health care.
Economics is split into two broad categories called macroeconomics and microeconomics. Macroeconomics looks at decisions that affect the entire society as a whole, whereas microeconomics looks at the financial decisions of businesses and individuals.[1] This chapter will provide an overview of the broad topics of health care funding and reimbursement models at a societal level, as well as staffing and budgeting issues at the institutional level that impact nurses in their day-to-day work. Economics in health care affects an individual’s ability to pay for and receive health care, the ability of an institution to provide health care services, and nurses’ ability to provide safe, quality care to the communities they serve.
- Khan Academy. (2017, August 8). Macroeconomics unit: Basic economics concepts. https://www.khanacademy.org/economics-finance-domain/macroeconomics/macro-basic-economics-concepts ↵
This textbook discusses professional and management concepts related to the role of a registered nurse (RN) as defined by the American Nurses Association (ANA). The ANA publishes two resources that set standards and guide professional nursing practice in the United States: The Code of Ethics for Nurses With Interpretive Statements and Nursing: Scope and Standards of Practice. The Code of Ethics for Nurses With Interpretive Statements establishes an ethical framework for nursing practice across all roles, levels, and settings and is discussed in greater detail in the “Ethical Practice” chapter of this book. The Nursing: Scope and Standards of Practice resource defines the “who, what, where, when, why, and how of nursing” and sets the standards for practice that all registered nurses are expected to perform competently.[1]
The ANA defines the “who” of nursing practice as the nurses who have been educated, titled, and maintain active licensure to practice nursing. The “what” of nursing is the recently revised ANA definition of nursing: “Nursing integrates the art and science of caring and focuses on the protection, promotion, and optimization of health and human functioning; prevention of illness and injury; facilitation of healing; and alleviation of suffering through compassionate presence. Nursing is the diagnosis and treatment of human responses and advocacy in the care of individuals, families, groups, communities, and populations in recognition of the connection of all humanity.”[2] Simply put, nurses treat human responses to health problems and life processes and advocate for the care of others.
Nursing practice occurs “when'' there is a need for nursing knowledge, wisdom, caring, leadership, practice, or education, anytime, anywhere. Nursing practice occurs in any environment “where'' there is a health care consumer in need of care, information, or advocacy. The “why” of nursing practice is described as nursing’s response to the changing needs of society to achieve positive health care consumer outcomes in keeping with nursing’s social contract and obligation to society. The “how” of nursing practice is defined as the ways, means, methods, and manners that nurses use to practice professionally.[3] The “how” of nursing, also referred to as a nurse’s “scope and standards of practice,” is further defined by each state’s Nurse Practice Act; agency policies, procedures, and protocols; and federal regulations and ANA’s Standards of Practice.
State Boards of Nursing and Nurse Practice Acts
RNs must legally follow regulations set by the Nurse Practice Act by the state in which they are caring for patients with their nursing license. The Board of Nursing is the state-specific licensing and regulatory body that sets standards for safe nursing care and issues nursing licenses to qualified candidates based on the Nurse Practice Act. The Nurse Practice Act is enacted by that state’s legislature and defines the scope of nursing practice and establishes regulations for nursing practice within that state. If nurses do not follow the standards and scope of practice set forth by the Nurse Practice Act, they may be disciplined by the Board of Nursing in the form of reprimand, probation, suspension, or revocation of their nursing license. Investigations and discipline actions are reportable among states participating in the Nurse Licensure Compact (that allows nurses to practice across state lines) or when a nurse applies for licensure in a different state. The scope and standards of practice set forth in the Nurse Practice Act can also be used as evidence if a nurse is sued for malpractice.
Find your state's Nurse Practice Act on the National Council of State Board of Nursing (NCSBN) website.
Read more about malpractice and protecting your nursing license in the “Legal Implications” chapter of this book.
Agency Policies, Procedures, and Protocols
In addition to practicing according to the Nurse Practice Act in the state they are employed, nurses must also practice according to agency policies, procedures, and protocols.
A policy is an expected course of action set by an agency. For example, hospitals set a policy requiring a thorough skin assessment to be completed when a patient is admitted and then reassessed and documented daily.
Agencies also establish their own set of procedures. A procedure is the method or defined steps for completing a task. For example, each agency has specific procedural steps for inserting a urinary catheter.
A protocol is a detailed, written plan for performing a regimen of therapy. For example, agencies typically establish a hypoglycemia protocol that nurses can independently and quickly implement when a patient’s blood sugar falls below a specific number without first calling a provider. A hypoglycemia protocol typically includes actions such as providing orange juice and rechecking the blood sugar and then reporting the incident to the provider.
Agency-specific policies, procedures, and protocols supersede the information taught in nursing school, and nurses can be held legally liable if they don’t follow them. It is vital for nurses to review and follow current agency-specific procedures, policies, and protocols while also practicing according to that state's nursing scope of practice. Malpractice cases have occurred when a nurse was asked by their employer to do something outside their legal scope of practice, impacting their nursing license. It is up to you to protect your nursing license and follow the Nurse Practice Act when providing patient care. If you have a concern about an agency’s policy, procedure, or protocol, follow the agency’s chain of command to report your concern.
Federal Regulations
Nursing practice is impacted by regulations enacted by federal agencies. Two examples of federal agencies setting standards of care are The Joint Commission and the Centers for Medicare and Medicaid Services.
The Joint Commission accredits and certifies over 20,000 health care organizations in the United States. The Joint Commission’s standards help health care organizations measure, assess, and improve performance on functions that are essential to providing safe, high-quality care. The standards are updated regularly to reflect the rapid advances in health care and address topics such as patient rights and education, infection control, medication management, and prevention of medical errors. The annual National Patient Safety Goals are also set by The Joint Commission after reviewing emerging patient safety issues.[4]
The Centers for Medicare & Medicaid Services (CMS) is an example of another federal agency that establishes regulations affecting nursing care. CMS is a part of the U.S. Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid. The CMS establishes and enforces regulations to protect patient safety in hospitals that receive Medicare and Medicaid funding. For example, one CMS regulation often referred to as “checking the rights of medication administration” requires nurses to confirm specific information several times before medication is administered to a patient.[5]
Standards of Practice
The ANA defines Standards of Professional Nursing Practice as “authoritative statements of the actions and behaviors that all registered nurses, regardless of role, population, specialty, and setting, are expected to perform competently.”[6] These standards are classified into two categories: Standards of Practice and Standards of Professional Performance.
The ANA’s Standards of Practice describe a competent level of nursing practice as demonstrated by the critical thinking model known as the nursing process. The nursing process includes the components of assessment, diagnosis, outcomes identification, planning, implementation, and evaluation and forms the foundation of the nurse’s decision-making, practice, and provision of care.[7]
Read more information about the nursing process in the “Nursing Process” chapter of Open RN Nursing Fundamentals, 2e.[8]
The ANA’s Standards of Professional Performance “describe a competent level of behavior in the professional role, including activities related to ethics, advocacy, respectful and equitable practice, communication, collaboration, leadership, education, scholarly inquiry, quality of practice, professional practice evaluation, resource stewardship, and environmental health. All registered nurses are expected to engage in professional role activities, including leadership, reflective of their education, position, and role.”[9] This book discusses content related to these professional practice standards. Each professional practice standard is defined in the following sections with information provided to related content in this book and the Open RN Nursing Fundamentals, 2e textbook.[10]
Ethics
The ANA’s Ethics standard states, “The registered nurse integrates ethics in all aspects of practice.”[11]
Read about ethical nursing practice in the “Ethical Practice” chapter of this book.
Advocacy
The ANA’s Advocacy standard states, “The registered nurse demonstrates advocacy in all roles and settings.”[12]
Read about nurse advocacy in the “Advocacy” chapter of this book.
Respectful and Equitable Practice
The ANA’s Respectful and Equitable Practice standard states, “The registered nurse practices with cultural humility and inclusiveness.”
Read about cultural humility and culturally responsive care in the “Diverse Patients” chapter in Open RN Nursing Fundamentals, 2e.[13]
Communication
The ANA’s Communication standard states, “The registered nurse communicates effectively in all areas of professional practice.”[14]
Read about communicating with clients and team members in the “Communication” chapter in Open RN Nursing Fundamentals, 2e.[15]
Read about interprofessional communication strategies that promote patient safety in the “Collaboration Within the Interprofessional Team” chapter of this book.
Collaboration
The ANA’s Collaboration standard states, “The registered nurse collaborates with the health care consumer and other key stakeholders.”[16]
Read about strategies to enhance the performance of the interprofessional team and manage conflict in the “Collaboration Within the Interprofessional Team” chapter of this book.
Leadership
The ANA’s Leadership standard states, “The registered nurse leads within the profession and practice setting.”[17]
Read about leadership, management, and implementing change in the “Leadership and Management” chapter of this book.
Read about assigning, delegating, and supervising patient care in the “Delegation and Supervision” chapter of this book.
Read about tools for prioritizing patient care and managing resources for the nursing team in the “Prioritization” chapter of this book.
Education
The ANA’s Education standard states, “The registered nurse seeks knowledge and competence that reflects current nursing practice and promotes futuristic thinking.”[18]
Read about professional development and specialty certification in the “Preparation for the RN Role” chapter of this book.
Scholarly Inquiry
The ANA’s Scholarly Inquiry standard states, “The registered nurse integrates scholarship, evidence, and research findings into practice.”[19]
Read about integrating evidence-based practice into one’s nursing practice in the “Quality and Evidence-Based Practice” chapter of this book.
Quality of Practice
The ANA’s Quality of Practice standard states, “The nurse contributes to quality nursing practice.”[20]
Read about improving quality patient care and participating in quality improvement initiatives in the “Quality and Evidence-Based Practice” chapter of this book.
Professional Practice Evaluation
The ANA’s Professional Practice Evaluation standard states, “The registered nurse evaluates one’s own and others’ nursing practice.”[21]
Read about nursing practice within the legal framework of health care, negligence, malpractice, and protecting your nursing license in the “Legal Implications” chapter of this book.
Read about reviewing the interprofessional team’s performance, providing constructive feedback, and advocating for patient safety with assertive statements in the “Collaboration Within the Interprofessional Team” chapter of this book.
Resource Stewardship
The ANA’s Resource Stewardship standard states, “The registered nurse utilizes appropriate resources to plan, provide, and sustain evidence-based nursing services that are safe, effective, financially responsible, and used judiciously.”[22]
Read more about health care funding, reimbursement models, budgets and staffing, and resource stewardship in the “Health Care Economics” chapter of this book.
Environmental Health
The ANA’s Environmental Health standard states, “The registered nurse practices in a manner that advances environmental safety and health.”[23]
Read about promoting workplace safety for nurses in the “Safety” chapter in Open RN Nursing Fundamentals, 2e.[24]
Read about fostering a professional environment that does not tolerate abusive behaviors in the “Collaboration Within the Interprofessional Team” chapter of this book.
Read about addressing the impacts of social determinants of health in the “Advocacy” chapter of this book.
