Value Added of Nurses in Acute Care

This paper estimates an individual nurse’s incremental contribution to patient improvement in clinical condition during hospitalization, or Value Added (VA), and examines how patient exposure to high value-added nurses influences various inpatient outcomes. We use panel data on 757 staff nurses matched with 6,381 adult (18+) medical or surgical patients discharged between 6/1/2011-12/31/2011 from a large urban Magnet-designated 854 bed teaching hospital. We estimate a variant of the standard value added model (VAM) previously used in the education literature for examining the contribution of teachers to student test scores gains (McCafrey et al. 2003), using a split cohort design. The nurse VA is estimated as the average change in patient clinical condition scores from admission to discharge that is attributable to the individual nurse’s fixed effect. We find that a one standard deviation increase in nurse VA is associated with a 0.71 (p=0.024) standard deviation greater improvement in patient's clinical condition during hospitalization, 16.1% (p<0.01) reduction in the length of stay, 9.8% (p<0.01) reduction in the costs of hospitalization, as well as with reduced odds of in-hospital mortality (odds ratio 0.573, p=0.096), and 30-day readmission (odds ratio .836, p=0.046). Nurse value added is positively associated with nurse education (having a Baccalaureate degree increases nurse’s VA by 0.23 standard deviations (p=0.05)) and nurse expertise level (in a 3 level expertise variable, expertise level 2 is associated with 0.45 standard deviations (p=0.03) and level 3 is associated with 0.50 standard deviations (p<0.01) higher nurse value added); tenure at the hospital, age and gender were non-significant. The implications of this analytic approach are far-reaching and herald future opportunities and concerns for health care performance measurement and payment.  Achieving nurses value-added implies attention to policies and funding for nurse education and retention of expertise in direct patient care settings.