Nurse leaders proficient in healthcare and industry finances are integral to any institution’s success, the nurses in their charge, and the quality of patient care. In addition, nurse leaders control the largest percentage of the operating budget at most healthcare institutions. For this reason, projecting confidence in discussing hospital and healthcare finance, knowing the impact of the nursing budget on patient outcomes, and sharing the contributions of nurse leaders to the success of hospital networks is essential to the nurse leadership role.
Northwestern Memorial Hospital is a unique example of nursing embracing finance. Michelle Janney, Ph.D., RN, NEA-BC, senior vice president, and Wood-Prince chief nurse executive successfully incorporated finance into nursing. First, unit managers increased financial literacy by completing a finance course. Then, guided by data, the nurse managers evaluated products and services the same way they would manage their bank accounts. Cost transparency allowed the managers to discuss supplies and services and make the best budget-conscious decisions. As a result, nursing took ownership of the budget and created a successful system. Their hard work resulted in $4.9 million in productivity savings and reduced nurse turnover costs by $7.6 million over two years.
Financial literacy is patient advocacy.
Nurse leaders comfortable discussing finance are advocating for patients. Financial literacy improves health, finances and improves patient care quality and outcomes. Assessing nurse staffing levels, the cost of equipment, care delivery, and reimbursement hurdles are common focus areas of the nurse leader. As a result, clinicians, nurses, and patients become stewards of resource allocation, while the patient experience remains central to nursing care.
Care quality is falsely associated with high costs.
The nurse leader’s challenge is ensuring affordable quality care. Lower healthcare costs are often falsely associated with poorer patient outcomes and lower-quality care. Conversely, compared to 11 other wealthy countries, the US has the highest per capita healthcare spending and has lower life expectancies, the highest suicide rates, and high chronic disease and obesity rates. But there is an association between the higher cost of increased nurse staffing and improved quality metrics including mortality rates, shorter hospital length of stays, lower readmission rates, and increased cost-effectiveness.
The finance department needs a clinical expert.
As a clinical leader, first-hand knowledge of what happens in clinical areas is valuable to finance department leaders. Viewing the business of healthcare through strategic relationships leads to valuable clinical insights and ensures that business leaders make decisions that ultimately support excellent patient outcomes.
Building relationships with the finance department is vital for successful collaboration. Nurse leaders, in partnership with financial executives, empower patient-centered changes. These changes are essential to patient outcomes, the financial security of the healthcare institution, and the increased morale of patients and clinical staff.
To build rapport with the financial team:
Understand institutional financial measures of success.
Although health networks might develop individualized success measures, they are likely tied to the Centers for Medicare and Medicaid Services (CMS) quality metrics. Quality metrics serve to quantify healthcare processes, patient outcomes, and organizational structures. There are hundreds of quality metrics, all aimed to improve patient care and financial success. The nurse leader is essential to ensuring that hospitals meet CMS quality measures and economic impacts are understood.
Follow legislature that affects hospital finances.
Healthcare policy and insurance reimbursement are constantly changing. Nurse leaders work near the frontlines, and therefore have a unique perspective about implementing new laws and regulatory requirements into daily practice. Understanding regulations that impact healthcare and insurance reimbursements allow the nurse leader to educate clinical teams on the practical implementation of the laws and their implications to their practice.
An extremely important way to keep up with new laws and regulations is to join nurse leaders and state and federal nursing organizations., By increasing the nurse leaders’ knowledge allows them to discuss new legislation with hospital executives and alert them to potential financial impacts.
The journey to becoming a financially savvy nurse leader starts with accepting that there is a relationship between patients and financing quality care. The virtues of honesty, transparency, curiosity, and commitment to improving patient care are the impetus for increasing the financial literacy of all nurse leaders.
