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Is What's Good for the Patient Good for the Hospital? Aligning Incentives and the Business Case for Nursing

This article examines the social and business case for quality related to nursing and the need to restructure incentives to align the interests of the hospital and payers with the interests of the patients. Increasing the proportion of nurses who are registered nurses is associated with net cost savings. Increasing both nursing hours and the proportion of nurses who are registered nurses would result in improved quality and fewer deaths (creating a social case for improved staffing) but would be associated with small cost increases. Cost offsets associated with reduced turnover because of higher staffing would reduce the net cost increase but not result in savings. Under current reimbursement systems, hospitals that increase nurse staffing to improve patient outcomes will likely lose money as a result. Current proposals for pay for performance would create limited incentives for improving hospital nursing care.