Cost
Containment
Kelli Erb
Ferris State University
NURS 450
Objectives
-To understand why healthcare costs are so
high
-To understand how high costs effect the
nursing profession
-To identify strategies the healthcare
community can do to help contain costs
Introduction
 Cost
containment is defined as “the
process of controlling the expenses
required to operate an organization or
perform a project within a pre-planned
budgetary constraint. The cost
containment process is an important
management function that helps keep
costs down to only necessary and
intended expenses in order to satisfy
financial targets” (businessdictionary.com)
Why is healthcare cost so
high?
 Aging
Population
 Chronic disease
 The cost of
pharmaceuticals
 Cost of technology
(Rundio & Wilson, 2010)
 Rising
expectations
of the public about
the capabilities of
the healthcare
system
 Lifestyle choices
Cost Containment Effects:
 The
medical
community
including insurance
companies, nursing
staff, physicians,
hospitals, and drug
companies.
 Patients
Why do Nurses care?
 Nurses
make up
the largest
percentage of
healthcare team in
acute care setting
(Beard & Sharkey, 2013)
 Nurses
can provide
strategies and
support costeffective quality
improvements if
organizations
engage nurses in
this process
Why do Nurses Care?
 “Nurses
have historically been targeted
when hospitals need to cut costs and
sadly they have come to expect that as
normal practice” (Urban, 2014 p. 74).
 “Nurses are targets for cost-containing
measures because they accept this as
part of their work” (Urban, 2014 p. 75).
Nursing Research Study
 Research
study done in Italy
 Identifies if there is a relationship between
cost containment and economical crisis
and the effect on Italian nurses.
(Palese, Vianelli, De Maino & Bortoluzzi, 2012)
Result?
 The
result of the study was due to cost
containment efforts like hiring specialized
nursing assistants instead of RNs, the RNs
felt higher stress. The RNs also stated they
had to take care of more patients which
could lead to negative patient outcomes.
(Palese, Vianelli, De Maino & Bortoluzzi, 2012)
Nursing Theory


Nola Pender’s Health Promotion Model (HPM)
demonstrates an increase in patient’s well
being. Patients will promote healthy behavior
when there is an incentive.
This HPM relates to cost containment because
if patients are being rewarded they will
actively try and prevent illness and disease. It
makes patients more accountable.
(nursingplanet.com)
Pender’s HPM
HPM- Propositions
“Positive affect
toward a behavior
results in greater
perceived selfefficacy, which can
in turn, result in
increased positive
affect”
(nursingplanet.com)
“When positive
emotions or affect
are associated with
a behavior, the
probability of
commitment and
action is increased”
Sociology Theory
 Structural-Functionalism
theory “sees
society as a complex system whose
parts work together to promote
solidarity and stability”
 If all disciplines work cohesively, we
can help control costs in all areas of
healthcare as well as providing quality
care.
(educationportal.com)
Assessment of Cost
Containment
 Politicians
 Economic
Forces
 The medical
profession
 The legal system
 The public
 The mass media
(Blank, 2012)
Assessment of Healthcare
Environment RCA
Cost of
Technology
High insurance
Cost
Overuse of resources
Focus on acute treatment rather
Then prevention
Expect to be cured
Lack of staff education on
Cost of materials
And use all available
resources
Cost of Supplies
High
expectations
from consumers
High Healthcare
Cost
Case Study

Patient Alice was admitted for a routine surgery. Alice was
unable to be weaned from the vent in PACU and was sent
to the ICU after her surgery. In the ICU she has bath
supplies, compression sleeves and an incentive spirometer
at her bedside. Alice also had a central line placed due to
poor IV access. Two days later Alice was able to transfer to
a med-surg floor. Her bath supplies, incentive spirometer
and compression sleeves were left in the ICU and
eventually thrown out. She developed a central line
infection and had to be treated and increased her length
of stay. During her stay she refused to take some of the
medications she was unfamiliar with and her IV fluids were
changed four times in the course of a week. How much
did this cost? What could have been done to prevent
some of the waste?
Case Study Product Prices
 Incentive
Spirometer-$2.13 x2
 Compression Sleeves-$9.13 x2
 Aloe Bath wipes-$2.28 x2
 Shampoo cap- $1.79 x2
 Disposable BP cuff-$2.87x2
 Central line kit- $9.73
 Alcohol impreg. Caps(10)- $3.01
Case Study Med Prices
 Protonix-
$4.85
 Lisinopril-$4.56
 Oxy IR-$5.36
 Subq Heparin- $19.39
 Lovenox-$89.50
 Norco- $5.79
 1000ml LR- $90.42
Case Study

CLABSI- $6,000-$29,000!!!!
-Supplies $49.14
-Medications $219.87
(vdh.virginia.gov)
Inferences and Implications
 What
does all of this mean?
-National spending is estimated to increase
from 25% to 40%over the next 20 years.
-Without applying some cost containment
strategies, healthcare costs will not be
improved.
(DiPersio, 2013)
Inferences (con’t)
 “Per
capita spending on health care in
the US is more than double that in most
other high-income, highly industrialized
countries, yet performance on indicators
of health status is often worse”
 “The IOM reports there is a strikingly
persistent and pervasive pattern of higher
mortality and inferior death”
(Anderson, Willink, & Osborn, 2013, para 1).
Inferences and Implications
-Something has to change
-nurses will have to take more patients
-poor patient outcomes
-decrease in morale and job
satisfaction
-bankrupt health systems
Nursing Strategies
Quality & Safety recommendations
 CLABSIs
 CAUTIs
 Falls
 Pressure
Ulcers
Nursing Strategies
 Education
on cost of supplies
 Going Green on linen changes
 Reducing incidental overtime
 Encouraging engagement
-Magnet Recognition
Nursing Strategies
 Reduce
waste of
materials and
medications
http://youtu.be/BB8
QYveucJY
http://youtu.be/aPA
0vnVpqGc
http://youtu.be/Mxds
KVy4Izs
Recommendations
Managed Care
-Optimize use of
resources
-Increase
accountability
-focus on disease
prevention and health
maintenance instead
of crisis intervention

(Rundio & Wilson, 2010)
Value-Based
Purchasing
-No additional charge
for patient or insurance
company if patient
develops an infection
after surgery.

Recommendations
 Accountable
Care
Organizations
This is one bill across
all settings.
 Cost-Benefit
Analysis
“Process of
examining scenarios
to determine relative
value of an
intervention when
measured against
predetermined
criteria”
( Rundio & Wilson, 2010, p. 174)
Recommendations
 Medicare
reimbursement
 Exchange Admin
Data
 Pay scale for
Physicians
(Dipersio, 2013).
 Corporate
wellness
programs
 Health plan
consolidation
 Non-subsidization
of hospital infection
moral hazard
QSEN Competencies
 Quality
Improvement- “Use data to
monitor the outcomes of care processes
and use improvement methods to design
and test changes to continuously improve
the quality and safety of health care
systems” (qsen.org)
QSEN Competencies
 Safety-”minimizes
risk of harm to patients
and providers through both system
effectiveness and individual
performance” (qsen.org).
ANA Standards
 Quality
of Practice- “the registered nurse
contributes to quality nursing practice”
(ANA, 2010).
 Collaboration-”the registered nurse
collaborates with the healthcare
consumer, family, and others in the
conduct of nursing practice” (ANA. 2010).
ANA Standards
 Resource
Utilization-”the registered nurse
utilizes appropriate resources to plan and
provide nursing services that are safe,
effective, and financially responsible”
(ANA, 2010).
Summary
Nurses can do
it!
References




American Nurse Association. (2010). Nursing scope
and standards of practice (2nd ed.) Silver
Spring, MD
Anderson, G., Willink, A., & Osborn, R. (2013).
Reevaluating “Made in America” – Two CostContainment Ideas from Abroad. The New England
Journal of Medicine. doi:10.1056/NEJMp1302140
Beard Jr, E., & Sharkey, K. (2013). Innovation amidst
radical cost containment in health care.
Nursing Administration Quarterly, 37(2), 116-121.
doi:10.1097/NAQ.0b013e3182869e67
Blank, R. (2012). Transformation of the US Healthcare System: Why is
change so difficult? Current Sociology,60 (4). 415-426.
doi:10.1177/0011392112438327
Central line-Associated Bloodstream Infections. (2014). Retrieved
from https://www.vdh.virginia.gov/Epidemiology/Surveillan
ce/HAI/clabsi.htm
Cost containment. (n.d.). In Business Dictionary. Retrieved from
http://www.businessdictionary.com/definition/costcontainment.html
DiPersio, L. (2013). Strategies for health care cost containment in
2013. Journal of Communication in Healthcare, 6(1).
doi:10.1179/1753806813Z.00000000042
Nursing Theories. (January, 2012). Health Promotion Model.
Retrieved from
http://nursingplanet.com/health_promotion_model.html
Palese, A., Vianelli, C., De Maino, R., & Bortoluzzi, G. (2012).
Measures of Cost Containment, Impact of The Economical
Crisis, and the Effects Perceived in Nursing Daily Practice:
An Italian Crossover Study. Nursing Economics, 30(2). 86-93.
Quality & Safety Education for Nurses. (2005). Competencies.
Retrieved http://qsen.org/compentencies/
Rundio, A., & Wilson, V. (2010). The Business of Healthcare. Nurse
Executive Review and Resource Manual (pp. 172-177). Silver
Spring, MD: American Nurses Credentialing Center.
Structural-Functional Theory in Sociology: Definition, Examples & Quiz.
(n.d.). In Education Portal. Retrieved from http://educationportal.com/academy/lesson/structural-functionaltheory-in-sociology-definition-examples-quiz.html#lesson
Urban, A. (2014). Taken for granted: normalizing nurses’ work in
hospitals. Nursing Inquiry, 21(1) 69-78.