Mandated nurse-to-patient ratios spark high costs, few savings

Implementing mandated nurse-to-patient staffing ratios would cost Massachusetts providers an estimated $676 million to $949 million a year, net relatively minimal savings and have an insignificant impact on quality, according to a new analysis from the Massachusetts Health Policy Commission.

The range of additional RNs required represents a 15% and 21% increase from current staffing levels. The higher estimated annual costs of $676 million to $949 million represent 1.1% to 1.6% of total healthcare spending in Massachusetts and 2.4% to 3.5% of total hospital spending.

The estimated costs are on the conservative end because they do not include non-acute hospitals, emergency departments, observation units, outpatient facilities and costs related to the state's implementation of the proposal, turnover and recruitment, or penalties for noncompliance, the commission noted.

Community hospitals that serve a high proportion of MassHealth and Medicare patients would need to hire the most nurses, likely 21% to 30% more. Medical/surgical and psychiatric units within hospitals would require the greatest number of additional RNs, amounting to an additional 46%. Night nurses would have the biggest gap in current staffing levels versus what's required in the mandate.

Mandated staffing ratios could exacerbate the nursing shortage, said Michael Brookshire, a partner at consulting firm Bain & Co. Around 1.1 million new RNs are needed by 2022 to bridge the shortfall, according to the U.S. Bureau of Labor Statistics.

"The nursing shortage issue is going to continue to be a huge one, but it butts up against any mandates on staffing ratios," Brookshire said.

Providers would save $34 million to $47 million as they hire more nurses, resulting from reduced length of stay and fewer adverse events. A reduction in RN turnover and workforce injuries could also yield additional cost savings, the commission said.

In general, employing more nurses is associated with shorter hospital stays, fewer patient deaths and fewer bed sores and hospital-acquired infections. Yet, studies on the impact of California's mandated staffing ratios on patient outcomes have yielded mixed results. California's law was implemented in 2004.

"Failure to rescue" following a complication decreased significantly more in some California hospitals than hospitals in other states. For other outcomes, some worsened, some improved and others did not change, ultimately indicating that the ratios did not systematically improve the quality of patient care, according to the commission.

"Protocols, processes and approaches that a hospital uses are likely a better gauge of quality. There are ways to deliver very high-quality care with relatively lean staffing levels," Brookshire said.

Under the proposal, hospitals would have to send their implementation plans to the commission, ensuring that it will not reduce its workforce as a result of the new mandate. They would have to post nurse-to-patient ratio notices within each unit.

A 1-to-3 nurse-to-patient ratio would be required in all units with step-down/intermediate care patients; 1-to-1 for active labor patients and for patients with obstetrical complications as well as for babies up to two hours after birth; 1-to-6 for uncomplicated mothers or babies; 1-to-4 for medical/surgical patients; and 1-to-5 for psychiatric patients.

Emergency departments would require 1-to-1 ratios for critical-care or intensive-care patients or 1-to-2 if the patient is stable; 1-to-2 for urgent patients who are not stable; 1-to-3 for urgent stable patients; and 1-to-5 for stable patients that are not urgent. The commission and attorney general could fine providers up to $25,000 for each violation.

Providers are already grappling with a nursing shortage, which has increased wages and turnover. They are also facing reimbursement pressure including threats to curtail payments related to the site-neutrality proposal, a shift in payer mix away from the commercially insured, as well as higher technology and pharmaceutical costs.

Mandated nursing ratios would add to that pressure and providers would likely shift costs to payers and ultimately patients, Brookshire said.

New England has the lowest percentage of RNs under age 40 and the highest share of RNs 50 or older compared with other regions throughout the country. Massachusetts RNs also earned more, an average of $90,000 a year compared to the $72,000 national average.

Massachusetts hospitals performed better than California's on five of six nursing-sensitive quality measures reviewed in 2015 including infections related to catheters and methicillin-resistant bacteria, according to the commission. Massachusetts and California performed similarly on three additional nursing-sensitive quality measures covering states' Medicare populations.

"Our analysis raises significant questions about the impacts of these ratios on healthcare costs and spending in the Commonwealth," Stuart Altman, chair of the commission, said in a statement.

The Massachusetts Health Policy Commission will have a panel discussion on the ballot measure on Oct. 16 and 17. The commission helped implement a law in 2014 requiring 1-to-1 or 1-to-2 nurse-to-patient ratios in intensive-care units.

While mandated staffing ratios haven't been widely adopted yet, that could change if bigger health systems shift in that direction, said Brookshire, likening the issue to new minimum wage policies employers are implementing.

Hospital systems throughout the country should be planning for mandated staffing ratios, thinking through how they could impact their nursing pipeline, cost structure and use of technology, he said.

"Minimum wage laws started as a localized movement and gained steam when large firms got behind it," Brookshire said.