untitled

2002). Within traditional complex health-care or-
ganizations, community or public health agencies,
or alternative health systems such as health mainte-
nance organizations, financing in relation to man-
aged care and managed competition is becoming a
topic of heated discussion in the development of
operational goals. This new form of health-care fi-
nancing, based on the ratio of benefits over costs or
the “highest quality services at the lowest available
cost” (Prescott, 1993, p. 192), challenges the old
ways of competing for and paying for health-care
services. Cost-saving measures integrating patient
outcomes are paramount to health-care organiza-
tional survival and the economic viability of pro-
fessional nursing practice.
As the United States is in the midst of radical
health-care changes, the entire debate focuses on
the concept of economics. From an economic per-
spective, health-care organizations are a business.
The competition for survival among organizations
is becoming stronger, cost controls are becoming
tighter, and reimbursement is declining. However,

The human dimension of health care is

missing from the economic discussion.

the human dimension of health care is missing
from the economic discussion.
In the economic debate, the belief in caring for
the patients as the goal of health-care organizations
has been lost. Ray (1989) questioned how eco-
nomic caring decisions are made related to patient
care in order to enhance the human perspective
within a corporate culture. When patients are hos-
pitalized, it is the caring and compassion of the reg-
istered nurse that the patients perceive as quality
care and making a difference in their recovery
(Turkel, 1997). The concerns of patients themselves
are not about costs or health-care finance. Yet, in a
climate increasingly focused on economics, it has
become difficult to quantify the economic value of
caring. Consequently, newer cost systems, such
as managed care, do not look at human caring
or the nurse-patient relationship when allocating
resource dollars for reimbursement.
Historically, nursing care delivery has not been
financed or costed out in terms of reimbursement
as a single entity. The prospective payment system
of diagnostic related groups (DRGs) connected

nursing services to the bed rate for patients

(Shaffer, 1985). The current reimbursement sys-

tems, including health maintenance organizations

(HMOs), managed care, Medicare, Medicaid, and

private insurers, are reimbursing hospitals at a flat

capitated rate. Subsequently, it is hospital adminis-

trators who must determine how these resource

dollars will be allocated within their respective

institutions.

Thus, it is necessary for caring nursing inter-

actions to be viewed as having value as an eco-

nomic resource. When professional nursing salary

dollars are viewed as an economic liability that

limits the potential profit margins of organiza-

tions, they are examined closely, and in many in-

stances the number of registered nurses has been

significantly reduced (Ketter, 1995). Hospital

executives attribute these workforce reductions to

the declining reimbursements of a managed care

environment. It is imperative to the future of

professional nursing practice that the economic

value of caring be studied and documented, so

human caring is not subsumed by the economics of

health care.

Review of the Literature:

Political and Economic

Constraints of Nursing Practice

In order to use the economic dimension of the

Theory of Bureaucratic Caring to guide research,

nursing administration, and clinical practice, it is

necessary to understand both the way in which

health care has been financed and the current reim-

bursement system. Nurses, who understand the

economics of health-care organizations, will be

able to synthesize this knowledge into a framework

for practice that integrates the dimensions of

economics and human caring.

Nursing had its origins in poorly paid domestic

work and charitable religious organizations

(Dolan, 1985). Prior to the establishment of

Medicare and Medicaid in 1965, the health-care

system was not profitable for hospitals. Nursing

students subsidized hospitals, and hospital-based

nursing care was not considered a reimbursable

expense or source of revenue (Lynaugh & Fagin,

1988).

370 SECTION IV Nursing Theory: Illustrating Processes of Development