Journal of Gerontological Nursing

Primary Nursing in Long-Term Care: Is it Economically Feasible?

Marshelle Henry, RN, BSN

Abstract

There is a documented need for more professional nurses in long-term care.1,2 It has also been found that nursing homes staffed with higher proportions of registered nurses have better patient outcomes,3 fewer transfers to acute care facilities,4 and staff who exhibit attitudes thought to be associated with high quality care.5 Wack and Rodin6 have argued that "deindi viduation and dependence" occurs in nursing homes where the majority of care is provided by nonprofessionals.

Modified primary care, where RNnursing assistant teams are responsible for a primary caseload, is one method of increasing the number of RNs in the nursing home. In long-term care facilities that have implemented primary nursing, the care has been found to be "good to almost excellent,"7 the incidence of decubitus ulcers has decreased,8 and the number of patient and family complaints has decreased.9

DEMAND

Currently, 19,100 nursing homes house 1 .72 million residents. I0 The population over the age of 80, which is most vulnerable to nursing home placement, is growing rapidly. It is estimated that between 320 and 600 new 100-bed facilities are needed each year for the next 15 years.11 Federal and state governments are major sources of funding for this care. In 1987, 43.9% of the long-term care provided was paid for out-ofpocket, 43.9% was paid by Medicaid, and the rest was paid by private funds and private health insurance.12 Medicare plays a negligible role in financing long-term care.

Medicaid nursing home expenditures grew from $9.8 billion in 1980 to $17.8 billion in 1987.12 It is estimated that nursing home expenditures will grow from the current 0.8% of the gross national product to 1.2% by the year 2000. 10 Federal and state legislators have thus felt a need to control costs. For example, in California, providers are reimbursed on a prospective class, per them basis. Rates are determined by whether a facility is hospitalbased or free-standing and on the level of care: intermediate, skilled or subacute.13 It is California's intention tha these fairly fixed payments will keep expenditures down.

SUPPLY

On the assumption that fewer availal ble beds would decrease demand, and thus nursing home expenditures, 40 states enacted "certificate of need" leg islation,2,14 which requires that facilitie demonstrate that an unmet need exist and that they are able to competently fil that need before more beds can be built This legislation has created a shortage o nursing home beds. Flat rate payment do not take into account the variou levels of dependency, and in turn, th( labor intensity of each of the levels o care.15 Facilities lose money as the) care for highly dependent Medicaid pa tients whose reimbursement does no cover the cost of their care. Administra tors would rather admit private patient! or independent Medicaid patients ink available openings.

COMPETITION

The limited supply of available beds creates a system where facilities do no have to compete for residents. Heavy care Medicaid patients must accep whatever bed is available. However private patients, who are aggressivel) sought by facilities as they are seen as a mechanism for covering losses in curred with Medicaid patients, fre quently do not exercise their consumei clout in choosing a provider. Physicians occasionally act as the consumer's agent, and the consumer is often mentally impaired.16 Bishop has pointed out that admissions to nursing homes frequently follow hospital stays.10 She argues that choices made in haste may not be true choices. Once in a facility, it is doubtful that a resident will, or can, pack up and leave.

NEED FOR BUDGET NEUTRALITY

An absence of competition, when combined with a captive, fairly powerless market, makes it doubtful that any…

There is a documented need for more professional nurses in long-term care.1,2 It has also been found that nursing homes staffed with higher proportions of registered nurses have better patient outcomes,3 fewer transfers to acute care facilities,4 and staff who exhibit attitudes thought to be associated with high quality care.5 Wack and Rodin6 have argued that "deindi viduation and dependence" occurs in nursing homes where the majority of care is provided by nonprofessionals.

Modified primary care, where RNnursing assistant teams are responsible for a primary caseload, is one method of increasing the number of RNs in the nursing home. In long-term care facilities that have implemented primary nursing, the care has been found to be "good to almost excellent,"7 the incidence of decubitus ulcers has decreased,8 and the number of patient and family complaints has decreased.9

DEMAND

Currently, 19,100 nursing homes house 1 .72 million residents. I0 The population over the age of 80, which is most vulnerable to nursing home placement, is growing rapidly. It is estimated that between 320 and 600 new 100-bed facilities are needed each year for the next 15 years.11 Federal and state governments are major sources of funding for this care. In 1987, 43.9% of the long-term care provided was paid for out-ofpocket, 43.9% was paid by Medicaid, and the rest was paid by private funds and private health insurance.12 Medicare plays a negligible role in financing long-term care.

Medicaid nursing home expenditures grew from $9.8 billion in 1980 to $17.8 billion in 1987.12 It is estimated that nursing home expenditures will grow from the current 0.8% of the gross national product to 1.2% by the year 2000. 10 Federal and state legislators have thus felt a need to control costs. For example, in California, providers are reimbursed on a prospective class, per them basis. Rates are determined by whether a facility is hospitalbased or free-standing and on the level of care: intermediate, skilled or subacute.13 It is California's intention tha these fairly fixed payments will keep expenditures down.

SUPPLY

On the assumption that fewer availal ble beds would decrease demand, and thus nursing home expenditures, 40 states enacted "certificate of need" leg islation,2,14 which requires that facilitie demonstrate that an unmet need exist and that they are able to competently fil that need before more beds can be built This legislation has created a shortage o nursing home beds. Flat rate payment do not take into account the variou levels of dependency, and in turn, th( labor intensity of each of the levels o care.15 Facilities lose money as the) care for highly dependent Medicaid pa tients whose reimbursement does no cover the cost of their care. Administra tors would rather admit private patient! or independent Medicaid patients ink available openings.

COMPETITION

The limited supply of available beds creates a system where facilities do no have to compete for residents. Heavy care Medicaid patients must accep whatever bed is available. However private patients, who are aggressivel) sought by facilities as they are seen as a mechanism for covering losses in curred with Medicaid patients, fre quently do not exercise their consumei clout in choosing a provider. Physicians occasionally act as the consumer's agent, and the consumer is often mentally impaired.16 Bishop has pointed out that admissions to nursing homes frequently follow hospital stays.10 She argues that choices made in haste may not be true choices. Once in a facility, it is doubtful that a resident will, or can, pack up and leave.

NEED FOR BUDGET NEUTRALITY

An absence of competition, when combined with a captive, fairly powerless market, makes it doubtful that any costly change in the method of care delivery in the nursing home setting will be forthcoming. Therefore, the nurse manager wishing to implement modified primary nursing will have to do so in a budget-neutral manner.

The research on the cost of integratng primary nursing into long-term is limited and largely anecdotal. Wilson and Dawson17 found no added cost in primary nursing, where costs were defined as nursing hours and supply expenditures. In another study, a Canadian research group converted two extended care units from modified team nursing to modified primary nursing. Costs involving nursing salaries, benefits, materials, and supplies were compared between the experimental units and two control units. Following the implementation of modified primary nursing, $6,000 in sick leave and $600 in material and supply costs was saved on the experimental unit. 18

Neither the system described by Wilson and Dawson or by the Canadian researchers required changes in staffing or in professional .nonprofessional ratios. This has also been the case in other facilities.19"21 In one facility that did make changes in the staff mix, expenses were partially offset by less sick time, workers compensation, unemployment, and educational costs paid out to nonprofessional workers.9 Cohen-Mansfield and Rosenthal corroborated that nonprofessionals in long-term care use more paid time off.22

Because the literature specific to long-term care is limited, a look to the literature specific to acute care is warranted. However, acute care studies on the economic aspects of primary nursing have yielded conflicting results. This may be because studies measuring cost have used varied measurement techniques23-24 and have frequently been poorly controlled.25 Even so, there are some acute care findings that may be applicable to long-term care.

A recurrent theme in the acute care literature has been that primary care models require less total staff26"28 and fewer supervisors.27 It has also been found that RNs have less nonproductive time and may be more costeffective.29 Jenkins found that meeting costs decreased after a professional practice model was implemented.30 She also suggested that primary nursing may decrease union activity and its inherent costs.

Given these findings, three case scenarios are presented. The economic feasibility of a modified primary care model is examined in each case.

FACILITY ONE

The first facility is a 180-bed proprietary facility. It is typical in that forprofit institutions represent 74.9% of the long-term care facilities in the nation. 10 A recent fall in the profit margin has yielded a change in management and a return to stringent cost containment. In this facility, the bottom line is of utmost importance and no increases will be tolerated within the nursing budget.

In 1987, its patients were 67.2% private, 28.8% Medi-cal (California's version of Medicaid) and 4% Medicare. The Medi-cal reimbursement rate for this facility is $57.26 per day, whereas Medicare's rate is $64.55 per day.13 In 1987, costs were $71.96 per day and charges to private patients were $98.92 per day.31

Staffing is established to meet government mandated standards. An average patient load for a nursing assistant is between 8 and 10 patients on the day shift, 10 to 20 patients on the evening shift, and 15 to 25 patients on the night shift. One licensed nurse is responsible for the 40 patients on the unit. This type of load has been documented elsewhere.1,32

A modified primary care model would not be realistic here. Because staffing is already stretched to the limit, it is not realistic that the cost of increasing the professional mix could be offset by an overall decrease in the total number of staff. A more appropriate goal would be to first increase the total number of caregivers on the floor.

FACILITY TWO

The second facility is a private, notfor-profit nursing home that houses 400 residents. It represents the 20% of long-term care facilities that are private, not-for-profit.10 In 1987, 50% of its patients were Medi-cal, 49.8% were private, and 0.2% were Medicare.31 Reimbursement rates are the same as for the first facility. Expenses in 1987 were $80.43 per day,31 higher than the first facility. This is consistent with the literature, which has shown that private facilities have greater costs than proprietary facilities.33 Operating requirements that exceed revenue are subsidized by a national federation and private donations. This facility has been open to new delivery ideas and has been underwritten by grants in the past.

On an end-stage dementia unit, similar to the unit in the first facility, two licensed nurses and eight nursing assistants care for 40 patients on the day shift. There are six nursing assistants and one licensed nurse on the evening shift, and three nursing assistants and one third of a licensed nurse on the night shift. It has been management's observation that, except for meals and morning and bedtime care, much of the paid time of the nursing assistants is nonproductive. It is possible, then, that the total number of staff could be decreased while the professional mix could increase. For example, the day pattern could change to three licensed nurses and six nursing assistants. Modified primary care could men be initiated where permanent teams of one licensed nurse and two nursing assistants cover a primary case load. The nursing assistant salary that is saved could, in part, pay the additional salary required to replace one nursing assistant with a registered nurse. Additional start-up funds would have to be secured to cover inservice training and meeting costs.

Assuming that this is done, the limiting factor becomes staff availability. As Maraldo states: "Institutions do not offer competitive salaries and caring for the elderly is not generally considered to be a glamorous job."32 RN salaries in long-term care have been estimated at 15% below those of acute care nurses.132 Salaries at facility two are below the community average, and there has been a frequent exodus of nurses from it to the third facility.

FACILITY THREE

The third facility houses 1,457 residents and is owned and managed by the county. It represents 5% of the facilities nationally.10 Of its residents, 92% are Medi-cal, 7% are Medicare, and less than 1% are private.31 This facility has a distinct Medi-cal reimbursement rate of approximately $1 86 per day.

On a unit comparable to those in the first two facilities, there are six nursing assistants, two licensed nurses, and one head nurse on the day shift. As there is already one licensed nurse for every two nursing assistants, moving to modified primary nursing would entail only a change in patterns of accountability.

Nurse supply is less of a factor here The current vacancy rate for RNs is less than 1%. This low rate can be attributed to the fact that nurses at this facility have contracted for the highest wages in the city.

SUMMARY

Many have urged that more professional nurses be employed in longterm care. Modified primary care is one approach to meeting this end. However, an absence of competition in the industry removes the motivation for making costly changes in the method of care delivery. Therefore, new modes of delivery must be budget-neutral. Previous studies, although sparse and poorly documented have suggested that primary nursing can be budget-neutral where fewer total nursing hours are used. Limiting factors then become already estab" lished staffing patterns and the supply of nurses. Further discussion needs to address the ethical basis for work rearrangement and the impact of organizational culture on change.

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