Press Release  HPC RELEASES FINDINGS FROM INDEPENDENT ANALYSIS ON MANDATED NURSE STAFFING RATIOS

BOSTON — Wednesday, October 3, 2018 – Today, in preparation for its annual Health Care Cost Trends Hearing, the Massachusetts Health Policy Commission (HPC) released findings from a new analysis on the potential cost impact of mandated nurse-to-patient staffing ratios on hospitals, non-hospital settings that employ registered nurses (RN), and the Commonwealth as a whole. The HPC examined California’s experience with a mandated nurse staffing ratios law, the state’s current RN workforce and staffing at Massachusetts hospitals, and estimated costs associated with implementing mandated ratios. The new analysis found that, if the mandated nurse-to-patient staffing ratios law were implemented, the Commonwealth would see an estimated annual cost impact of $676 million to $949 million. These estimates are likely conservative due to lack of detailed staffing data for additional units, such as emergency and outpatient departments.

The HPC estimated that Massachusetts hospitals would need to increase staffing by 2,286 to 3,101 additional full-time equivalent RNs to comply with the mandated ratios, with community hospitals that serve a high proportion of MassHealth and Medicare patients facing the largest impacts. Medical/surgical and psychiatric units within hospitals would require the greatest numbers of additional RNs.

The HPC also found the potential for cost savings if the law were implemented, estimating possible savings of $34 million to $47 million, resulting from reduced hospital length of stay and reduced adverse events related to the increase in RN staffing. Additional cost savings could be realized due to the reduced rate of RN turnover and workforce injuries.

“The HPC was established to oversee the Commonwealth’s health care delivery and payment system and monitor growth in health care spending against the cost growth benchmark. It has a specific statutory responsibility to examine factors that contribute to cost growth within the Commonwealth’s health care system as part of the annual cost trends hearing,” said Stuart H. Altman, HPC Chair. “Consistent with this role, we conducted an independent analysis of the potential costs related to mandated nurse-to-patient staffing ratios. Our analysis raises significant questions about the impacts of these ratios on health care costs and spending in the Commonwealth. We look forward to more discussion about the implications of our analysis at the upcoming cost trends hearing.”

The research and findings were developed by Dr. David Auerbach, HPC’s Research Director and Dr. Joanne Spetz, Professor, Institute for Health Policy Studies at the University of California, San Francisco (UCSF), two nationally recognized health care workforce experts.

The HPC is dedicating a portion of the upcoming annual Health Care Cost Trends Hearing (October 16 and 17, 2018) to a discussion of mandated nurse-to-patient staffing ratios. The analysis and findings will be presented, and will be followed by a panel discussion featuring participants with varied perspectives and expertise on the topic: Vicki Bermudez, Regulatory Policy Specialist, California Nurses Association; Deborah Devaux, Chief Operating Officer, Blue Cross and Blue Shield of Massachusetts; Nancy Gaden, Senior Vice President and Chief Nursing Officer, Boston Medical Center; Dr. Judith Shindul-Rothschild, Associate Professor, William F. Connell School of Nursing, Boston College; and Dr. Joanne Spetz, Professor, Institute for Health Policy Studies, UCSF.

The hearing is a two-day public event featuring live testimony from top health care providers, industry leaders, and government officials. The full agenda for the hearing can be found on the HPC’s website.

“The estimated costs are likely to be conservative as we were not able to include, due to data limitations, certain costs related to implementation in Massachusetts emergency departments, observation units, and outpatient departments,” said David Seltz, Health Policy Commission Executive Director. “Our approach to the cost impact estimate was developed independently from other studies and as a result, our findings differ from those in other public reports on this issue. We welcome any comments or feedback from the public and other interested stakeholders on this analysis in advance of the annual Cost Trends Hearing on October 17.”

Key Findings

• The annual cost impact of the implementation of mandated nurse-to-patient staffing ratios is estimated to be between $676 million and $949 million. The estimates include hiring additional RNs to meet staffing requirements, wage increases for existing RNs, and implementation costs faced by the Commonwealth’s state-operated hospitals.
   
• The required increase in hospital RNs would likely increase the demand for RNs throughout Massachusetts, leading to a gradual increase in RN earnings of between 4% and 6% in hospital and non-hospital sectors. Wage increases for existing RNs resulting from mandated nurse staffing ratios would likely not occur immediately due to existing collective bargaining agreements.
   
• The HPC’s cost impact analysis does not include costs and additional RNs required in hospital emergency departments, outpatient departments, and observation units due to lack of detailed data, and thus are likely conservative. The estimates also do not include costs of non-acute hospitals, state agency implementation, turnover and recruitment, or penalties for non-compliance. 
   
• The HPC also examined opportunities for savings to offset costs of implementation based on existing academic literature. HPC staff calculated a range of estimated potential savings of $34 – $47 million with the hiring of additional nurses, which could lead to reduced hospital length of stay and reduced adverse events.
   
• The HPC estimated required increases in staffing of between 21% and 30% for community hospitals that care for a high proportion of MassHealth and Medicare patients, between 14% and 20% for other community hospitals, and between 5% and 7% for the state’s academic medical centers. Required increases in staffing are expected to be larger for night-time shifts (23% to 31%) than for evening and day shifts.
   
• Regarding additional RNs by units, the HPC estimated that 46% would be required to meet staffing mandates in medical/surgical units, 18% in psychiatric units, and 15% in labor and delivery units. Additional RNs would also be required to meet staffing mandates in freestanding psychiatric hospitals.

The analysis, conducted with expert consultation, is consistent with the HPC’s statutory purpose and mission. It is not intended to promote or oppose the pending ballot question, but rather to add data-driven analysis to the policy discussion on this issue.

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The Massachusetts Health Policy Commission (HPC), established in 2012, is an independent state agency charged with monitoring health care spending growth in Massachusetts and providing data-driven policy recommendations regarding health care delivery and payment system reform. The HPC's mission is to advance a more transparent, accountable, and innovative health care system through its independent policy leadership and investment programs. 

Visit us at Mass.gov/HPC. Tweet us @Mass_HPC.

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