Health Policy$ense

Magnet Hospitals Do Better on Medicare Value Measures

Nursing excellence pays off

Despite major components of the Affordable Care Act on the chopping block, value-based care reforms largely have bipartisan support and are likely here to stay. And while the majority of providers and politicians support efforts to incentivize value over volume, fewer providers have realized success achieving higher value care.

A new study by Karen Lasater, Hayley Germack, Dylan Small, and Matthew McHugh points to nursing as a key to achieving value in health care. We ask whether investing in an intervention aimed at supporting direct care nurses – Magnet recognition – influences hospitals’ performance on Medicare’s Hospital Value Based Purchasing (VBP) measures. Indeed, Magnet recognition is associated with better performance on VBP measures.

Our findings support the idea that investments in frontline nurses may yield positive returns through better patient outcomes and value-based payments.

Magnet recognition predicts higher scores on Total Performance Score – the measure linked to financial rewards and penalties. The investigators also examine associations of Magnet recognition and the four domains that comprise the Total Performance Score. Magnet hospitals score higher on Clinical Processes of Care and Patient Experience domains, and perform no differently on the Outcome and Efficiency domains. A detailed discussion of these results can be found here.

The findings add to a large body of evidence demonstrating Magnet hospitals offer better patient outcomes (including mortality, infections, and patient satisfaction), greater workforce satisfaction, and increase revenues. Some investigators credit Magnet’s outcome advantage to other organizational differences between Magnets and non-Magnets (i.e. larger size, private ownership, teaching designation). In the present study, we address this concern by employing a matching approach that paired Magnet and non-Magnet hospitals on these observable hospital characteristics. Our findings support the idea that investments in frontline nurses may yield positive returns through better patient outcomes and value-based payments.

Currently, less than 10% of US hospitals are Magnet recognized, and even that group differs in organizational nursing features known to be correlated with Magnet recognition, such as staffing and nurse-reported measures of the practice environment.

It is worth noting that achieving Magnet recognition is a costly investment for hospitals – requiring both financial and time commitments. It is also not the only way to improve nurse work environments.  However, if policy efforts continue to incentivize value-based care, such an organizational-level investment may be increasingly attractive. Policies aligning hospital financial incentives with health outcomes – i.e., Value-Based Purchasing, Hospital-Acquired Condition Reduction Program, and Hospital Readmissions Reduction Program – overlap with outcomes shown to be sensitive to nursing care.  Amidst a changing health policy and reimbursement climate, one thing is certain – nurses are essential to high-value care.

This study received funding from LDI's Small Grants Program.