Health care expenses in the United States present a complex and an intricate web involving various government agencies, payments made by insurance companies, and direct payments made by patients, at that, more than half of all healthcare expenses are covered by private insurances or individuals (Sherman & Bishop, 2012). Even with all the multiple sources of health care finance flow and an increase in patient numbers, hospitals across the entire U.S. are losing money as more and more patients turn out to be uninsured and unable to pay their bills (Sherman & Bishop, 2012). To adapt to the new rules of health care industry where costs are rising, many hospitals have opted to lay off some of the staff, specifically the full-time, registered nurses and replaced them with unlicensed assistive nursing staff (Thungjaroenkul, Cummings & Embleton, 2007). The health care is under unrelenting pressure to cut costs, Sherman and Bishop (2012) have presented interesting figures according to which “healthcare costs in the United States have skyrocketed to an average of $8,000+ per person each year. Left unchecked, they could rise to $13,000+ per person by 2018” (p. 32). Financial problems relating to patient care are becoming a more pressing issue that is putting a strain on the U.S. budget.
According to the statistical data provided by the Centers for Medicare and Medicaid Services and National Health Statistics group, the costs for health care amount to more than $2.7 trillion and make up around 18 percent of the GDP (Patel, 2013). This is a gigantic amount and a strain on the budget considering that 30 percent of these costs are believed to be wasteful spending relating to exorbitant administrative expenses, red tape, and fraud (Patel, 2013). Two types of budgets are normally used by healthcare organizations: an operational and a capital budget (Sherman & Bishop, 2012). The operational budget is used to maintain day-to-day costs while the capital budget is a more global concept that presents an overview of the planned costs for major equipment purchases, maintenance, construction of new facilities, and other (Sherman & Bishop, 2012).
The financial problem relating to patient care is becoming increasingly acute, and the impact on the budget makes itself felt. The capital budget of the overall patient care appears to be in significant risk due to extensive costs cuts. Recent lay-offs and replacing registered nurses with unlicensed staff with a view of cutting costs compromises the quality of patient care and overall health sector (Thungjaroenkul, Cummings & Embleton, 2007). Furthermore, Thungjaroenkul, Cummings and Embleton (2007) refer to various studies examining the impact of reducing the number of registered nurses, some of them reveal that “a decrease in number of RN leads to increased patient mortality, increased rates of failure to rescue, and increased medical errors” (p. 265). Aside from the decline in health care, due to financial problems in patient care, many hospitals have to put on hold many decisions regarding the equipment purchase (Sherman & Bishop, 2012).
In times of restricted health care funding, hospitals are compelled to make changes in the work environment and attempt to provide health care services for patients with financial problems. Admittedly, both the capital budget of the hospital and the budget of the country may be under strain due to increased costs. The financial problems experienced by patients should not be solved by reducing the RNs with higher qualifications and replacing them with non-licensed personnel as it leads to an overall quality loss in patient care.
Patel, K. (2013). Containing Health Care Costs: Recent Progress and Remaining Challenges. Web.
Sherman, R., & Bishop, M. (2012). The business of caring: What every nurse should know about cutting costs. American Nurse Today, 7(11), 32-34. Web.
Thungjaroenkul, P., Cummings, G. G., & Embleton, A. (2007). The Impact of Nurse Staffing on Hospital Costs and Patient Length of Stay: A Systematic Review. Jannetti Publications, 25(5), 255-265. Web.