Common good Essay Example

  • Category:
  • Document type:
  • Level:
  • Page:
  • Words:

Reducing hospital spending to lower the cost of healthcare.

In Australia and across the world, the cost of healthcare has been skyrocketing due to various reasons. Increasing spending on healthcare sector is chewing up a large amount of state and federal resources that are available. Among the things that is pushing up the cost of healthcare is growing and aging population, non-communicable diseases, and people are currently going for expensive medical services frequently. Quality of healthcare in many countries has increased due to the development of advance technology, facilities, and better training. Patients are now getting treatments and medications that did not exists 10 years ago. For example, an aging person today visits a physician frequently, consume more drugs, and has more tests and surgical procedures than old person many years ago (International Council of Nurses, 2015).

This high cost of healthcare has forced the providers to increase the cost of healthcare to meet their demands, this has trickled down to the consumer because the cost of individual healthcare in Australia has increased by over 60 percent over the last decade. This increased care is pushing the budgets of families and individuals upwards and it is forcing the less fortune in the society to miss important healthcare attention. To save this situation governments, healthcare providers, and nonprofit making organizations have been trying to come up with ways and means of reducing the costs of healthcare so that the poor can afford and get equal medication attention like the rich in the society (Australian Institute of Health and Welfare, 2012).

There are different opinions on how to reduce the cost of healthcare so that the amount an individual will spend will become less. Some belief that improving efficiency will bring down the cost, for examples in pharmaceutical area, statistics from bad drug deal shows that benefits schemes pays $1.3 billion, which is too much of prescription drugs. Others believe that percent of patient care revenue involving risk sharing with payers, educating people on lifestyle diseases because a lot of money are spend of treating lifestyle diseases that can be prevented, and lastly is that nurses assisting in bringing down this cost (Australian Institute of Health and Welfare, 2012). Though nurses have been trying to assist in lowering the cost of healthcare, their attempt has not been successfully because of many reasons. In other words the common good of reducing the cost of healthcare by nurses have not been successful achieved because of different reasons, one of the reasons is that nurses effort are ignored by many doctors and healthcare providers management. I will discuss ways in which nursing fraternity can assist in bringing down the cost of healthcare.

In healthcare system, the stakeholders normally rely a lot on front-line workers to help in containing cost of providing healthcare so as to make healthcare more affordable to many in the society. Nursing is made up of the largest front line workers and as a result of their numbers they have an opportunity to significantly help in contain the cost (International Council of Nurses, 2015). There are approximately 380,000 practicing nurses in Australia, the number has been growing rapidly over the last few years due to high healthcare demand. They are increasing at a rate of approximately 25,000 per year which is approximately 7 percent from 2012, they are expected to grow at a rate of 10 percent over the next decade according to the Nursing and Midwifery Board of Australia (Australian Institute of Health and Welfare, 2012).

Nurses are well positioned such that they can do a lot with the little resources that are available while providing quality healthcare to those in need of help. With such influence in a healthcare facility, the way in which funds are used and consumed is also within their power (International Council of Nurses, 2015). To reduce cost of management, healthcare providers should allow all nurses to train on financial matters. Many of them do not learn financial matters whether in school or at work hence disadvantaging them in making sound decision that can contain expenditure. If they understand budgeting or financial matters such as cost-benefit ratios, they can assist in budget making or come up with business cases that support what goes on bedside to improve on organizations flow. Financial knowledge will also assist them understand how patients care outcomes affect organization revenue especially in U.S. For example in U.S if a patient is readmitted 30 days after being discharged, the hospital will lose Medicare reimbursement money, if nurses are ignorant of these the hospital will lose a lot of money in a way that can be prevented (Rose, 2012). That means nurses help in preventing readmission since they understand patient’s condition better.

Management and doctors should no longer ignore the nurse’s contributions in hospitals because they are crucial in managing costs. They should be involved in organization budget making process for the organization to achieve the common good of containing costs. A budget is a plan prepared annually and it contain organizations objectives and goals, revenues and planned expenses, and it guides the management on the best use of available materials and human resources (Rose, 2012). In budget making process expenses and revenue projections are reviewed and compared until it get balanced. There are different budgets used by organizations, they include capital and operational budget. Operational budget is relevant to nurses because they are people who are close to the patients and which means they know what is required in order to be able to provide care and services on everyday basis (Rose, 2012). Involving them in making this budget will assist in helping those in charge of budgeting make informed decision on the best materials and medicines to purchase, this will minimize loss of revenue.

After the budget has been approved by management, it need to be monitored continuously to make sure that expenses remain within the estimated budget limits. Nursing manager receives feedback on the true data expenses on a daily basis, that makes it easy to find out whether there is are discrepancies between budgeted projections and the real results, they are normally known as variances (Rose, 2012). The managers will then work on it to modify expenses and thus correct variances so as to ensure that every department live within its budget for a given period of time. Nurse Managers can reduce cost by decreasing the number of staff and evading unnecessary use of unscheduled leave that will need overtime to recover.

Some patients conditions are now considered “never” events, things that should not occur during a patients stay in hospital, they include pressure, ulcers, and HAI (hospitals acquired infection) because such conditions are no longer being reimbursed. Nurse’s closeness to patience can help in preventing such occurrence hence cutting cost of healthcare. Hospitals lose a lot through wastage of resources. Wastages occurs in different ways. Largest wastes occurs in line of supply. Procurement officers in some occasions over order medications, order expired products, or mislabeled items because of large dent in the budget. Nursing contributions will assist reduce this form of wastage because they know what is required by a patience and which resource is the best? Reducing waste of resources will also involves things such as carrying around many IVs or wound care supplies that patients may end up not using (Staff, 1988). When patients with lifestyle visited the hospitals they should treat and educate them on how to prevent such kind of diseases, this will reduce the number of times the patient will visit the hospital.


Australian Institute of Health and Welfare. (2012). Nursing and midwifery workforce 2011.

Canberra: Australian Institute of Health and Welfare.

Rose, S. (2012).The business of caring: What every nurse should know about cutting costs.

American Nurse Today. 7(11).

Finkler, S. A., Jones, C., & Kovner, C.T. (2012). Financial Management for Nurse Managers

and Executives. 4th ed. St. Louis, MO: Saunder.

Roussel, L. A. (2013). Management and Leadership for Nurse Administrators. 6th ed.

Burlington, MA: Jones and Bartlett.

Staff, I. M. (1988). Controlling Costs and Changing Patient Care? The Role of Utilization

Management. Washington: National Academies Press.

International Council of Nurses. (2015). Nurses: A Force for Change Care Effective, Cost

Effective. International Council of Nurses. International Nurses day.