The Nurse Leader as Economist Responses  

Responding to Margaret Lawrence Moreland

Hello Margaret,

Thank you for your post. You analyzed with detailed clarity the major financial challenges of the American healthcare industry, which involve nursing and drug shortages and the fee-for-service model. Your explanation about supply-demand relationships and pricing concepts enhances one’s understanding of healthcare system challenges. The nurse residency program represents a possible organizational response to combat nursing shortages and maintain staff stability.

New graduate nursing programs include supervised mentorship, hands-on learning opportunities, and professional development initiatives that aid nurse transition into practice (Rae et al., 2025). For example, hospitals that prioritize employing nurse residency programs that mirror the American Association of Colleges of Nursing (AACN) model experience reduced hospital staff departures while simultaneously achieving better healthcare results (Mohammad & Al-Hmaimat, 2024).

Extended workforce development investments by your organization will boost nurse retention, resulting in better employee retention and reduced expenses from frequent nurse recruitment, training, and staffing shortages. Additionally, strengthening nurse residency programs can enhance job satisfaction and long-term career commitment, ultimately improving patient care quality.

References

Mohammad, Z., & Al-Hmaimat, N. (2024). The effectiveness of nurse residency programs on new graduate nurses’ retention: Systematic review. Heliyon, 10(5). https://doi.org/10.1016/j.heliyon.2024.e26272

Rae, M., Loh, L. W. L., Neo, N. W. S., Mordiffi, S. Z., Toh, Z. A., Koh, C. S. L., Woo, B. F. Y., & Ang, W. H. D. (2025). Registered nurses’ experiences of the graduate nurse residency program: A qualitative study. Nurse Education Today, 148, 106638. https://doi.org/10.1016/j.nedt.2025.106638

Responding to Maydelis Rodriguez

Hello Maydelis,

I appreciate your post. Your discussion presented an in-depth analysis of financial issues in US healthcare combined with an explanation of portable ultrasound machines serving to solve these issues. The value-based purchasing (VBP) model marks a strategy for your organization to handle increased costs and reimbursement challenges. VBP provides financial reimbursement through quality metrics rather than quantity measures, which enhances the value of care, reduces waste, and enhances the quality of care (Sandhu et al., 2023).

Portable ultrasound machines with the VBP payment model allow hospitals to capture better IV placement successes, which enhance their performance metrics and raise reimbursement levels. With VBP, organizations receive financial reimbursements compensating for their deficiencies while maintaining durable cost deductions and delivering the best medical care (Hecht et al., 2022). Medical centers have streamlined operations as they eliminate unnecessary administrative burdens caused by denied claims and unnecessary procedures. With ultrasound guidance and VBP, there is enhanced financial incentive alignment with care outcomes focused on patients.

References

Hecht, M., Marzolf, J., & Castle, R. D. (2022). Financing whole-person health. Global Advances in Health and Medicine, 11, 216495612110625. https://doi.org/10.1177/21649561211062511

Sandhu, A. T., Heidenreich, P. A., Borden, W., Farmer, S. A., P Michael Ho, Hammond, G., Johnson, J. C., Wadhera, R. K., Wasfy, J. H., Biga, C., Takahashi, E., Misra, K. D., & Joynt, K. E. (2023). Value-based payment for clinicians treating cardiovascular disease: A policy statement from the American Heart Association. Circulation, 148(6). https://doi.org/10.1161/cir.0000000000001143

By Day 6 of Week 3

• Read a selection of your colleagues’ responses and respond to at least two of your colleagues on two different days by suggesting a possible strategy that their organization might pursue to address the stated economic concern(s). Be specific and provide examples.

Topic: Week 3: Discussion

Margaret Lawrence Moreland

Mar 11 3:46pm

Financial Concerns in the United States Healthcare System

In 2023, healthcare spending accounted for 17.6% of the United States Gross Domestic Product (Centers for Medicare & Medicaid Services, 2024), meaning that a significant portion of this nation’s economy is dedicated to healthcare. However, this country is not a world leader in healthcare services
(the opposite is true as a first-world country), and this high percentage of the GDP is seen as financially burdensome.

Year after year, politicians argue over how best to manage this financial problem; healthcare systems attempt to cut costs, but there is no clear answer. In this post, I will discuss what I believe to be the most important financial concerns in healthcare: nursing shortages, drug shortages, and fee-for-service reimbursement.

Nursing Shortages: Poor staffing leads to poorer patient outcomes.
This nation is no stranger to “nursing shortages”. The U.S. Chamber of Commerce projects 193,000 job openings for nurses annually until 2032 and only 177,400 nurses to enter the workforce from 2025 to 2032 (Hoover, Lucy, & Mahoney, 2024). Nurse staffing challenges are also a critical financial challenge. A shortage of nurses means that healthcare systems cannot efficiently care for patients.

Firstly, nurse shortages are associated with worse patient outcomes and, thus, cost-ineffective care (Griffiths et al., 2023). Secondly, nursing shortages are associated with an increased incidence of hospital-acquired conditions (American Organization for Nursing Leadership, 2023). Finally, nursing shortages lead to delays in successful discharge, so healthcare systems not only shed expenses for caring for these patients longer but face reimbursement that does not cover the additional cost (American Hospital Association, 2022). To put this all together, take, for example, a patient with a history of COPD who presents to the emergency room with shortness of breath.

The patient is admitted to the medical-surgical floor for monitoring and oxygen therapy. Due to staff shortages and high-nurse patient ratios overnight, the patient is not checked on for several hours. The patient’s CO2 builds up unknowingly to the present staff, and the patient is discovered unconscious during shift change (worse patient outcome). The patient is upgraded to ICU for BiPAP.

Due to staffing shortages in the ICU, q2 turns are not able to be completed, and the patient develops a pressure injury (hospital acquired condition). The patient does eventually recover, but due to the AMS and stay in ICU, she is now decompensated, and physical therapy recommends they be discharged to acute rehab. Case management has to acquire authorization from rehab facilities and the patient’s insurance, and the patient stays in-patient for several more days awaiting discharge (delay in discharge).

I believe this comes down to a “supply vs. demand” concern, as our aging population with chronic diseases requires more high-intensive nursing care, but we do not have the nurses to provide such care. There are multiple modalities in place to combat the ongoing nursing shortage, such as expanding and diversifying nursing education (American Association of Colleges of Nurses, 2025),supported by government funding and grants (Espey et al., 2022).

Other strategies for combating nursing shortages include increasing staff retention. My proposed service solution focuses on reducing staff turnover by providing additional, specialized education, which in turn would reduce staff and nursing shortages in intensive care units.

Drug Shortages: Unequal Substitutes
The term “national shortage” also applies to pharmaceutical drugs. National drug shortages occur due to quality issues, delays in shipment, and discontinuations (Center for Drug Evaluation and Research, 2025), with the number of active drug shortages reaching an all-time high in 2024 (American Society of Health-Systems Pharmacists, 2025).

Drug shortages are a financial concern in healthcare because when a particular drug is in shortage, not only does the price of that drug increase, but so do the substitutes, which leads to increased healthcare system and patient costs (Office of the Assistant Secretary for Planning and Evaluation, 2023). For example, within the last week, it was announced that there is a national shortage of hydromorphone, and fentanyl should be used in its place. When comparing morphine, hydromorphone, and fentanyl, intravenous use of fentanyl is associated with the
highest cost to healthcare systems (Palmer et al., 2017).

My place of work, in particular, utilizes 0.2mg- 0.5mg hydromorphone IVP for acute post-surgical pain, and current recommendations are to use 25mcg-50mcg fentanyl IVP instead. However, my facility only purchases fentanyl in 100mcg/2mL vials, while hydromorphone was purchased in 0.2mg/1mL or 0.5mg/1mL vials. This essential means that whenever I or another nurse pulls a dose of fentanyl, not only is it costing the hospital and patient more, but over half of the product itself may be wasted. Such practices fill the pharmaceutical companies’ pockets and represent poor patient care.

Overall, this concern is related to the economic principle of “price.” Some pharmaceutical drugs hold advantages that their counterparts/substitutes do not; however, most of the time, certain drugs are more expensive than others, so pharmaceutical companies can make a profit. In my providexample, fentanyl does not have better outcomes than hydromorphone in post-surgical care, but the price is higher, putting financial strain on healthcare systems and patients.

Fee-for-Service: Leading U.S. healthcare to lowest quality
Finally, it is my opinion that the third most concerning financial issue within the United States is the concept of “fee-for-service”, the most predominant reimbursement model today in which healthcare providers are paid for each service they provide, regardless of the outcome (Lewis et al., 2023). “Feefor service” does not promote better patient outcomes, high-quality care, or value-based care; it supports healthcare providers caring for the highest volume of patients possible to have the most financial gain.

When healthcare providers value quantity over quality, the patients suffer, and the results can be costly. Per Dowd & Laugesen (2020), under fee-for-service reimbursement, up to 30% of healthcare services are wasteful. Take, for example, a patient who goes to an urgent care clinic with fever, chills, productive cough, and fatigue. The patient-provider encounter is less than 5 minutes, and the provider orders a respiratory viral panel and strep test for the patient.

The patient is discharged home with orders to encourage PO fluids and rest. The patient continues to decline at home and is prompted to visit the emergency department after developing shortness of breath, where they are diagnosed with pneumonia and require admission for intravenous antibiotics. The urgent care provider, operating under fee-for-service, ordered testing (strep test) that was unrelated to the patient’s symptoms and focused on having a short visit to maximize the number of visits in one day.

Not only did the patient receive a low quality of care, but had additional costs related to transportation to/from urgent care and hospital, time off work, need for IV antibiotics, and inpatient admission. This encounter could easily cost thousands of dollars.

This concern does not directly relate to my proposed project on addressing nursing turnover and shortages. However, I feel that they fall under the same umbrella: if you do not invest in high-quality measures and rely on ‘quick fixes,’ the results are costly, and patients suffer. Again, fee-for-service
mentality falls under the notion of unequal supply vs. demand.

There is a large demand for healthcare providers to provide care, and many will sacrifice quality in order to meet the high demand. Relating back to my previous example, if one healthcare provider needs to see 40 patients in one day, the demand (40 patients) is significantly higher than the supply (one healthcare provider), so the quality that the healthcare provider gives diminishes.

References:
American Association of Colleges of Nursing. (March, 2025). Title VIII nursing workforce development programs. https://www.aacnnursing.org/Portals/0/PDFs/Policy/Title-VIII-Fact-Sheet.pdf

American Hospital Association. (December, 2022). Fact Sheet: Workforce shortages delay patient discharges and exacerbate providers’ severe financial challenges. https://www.aha.org/factsheets/2022-12-05-workforce-shortages-delay-patient-discharges-and-exacerbate-providers-severefinancial-challenges

American Organization for Nursing Leadership. (2023). Reducing hospital acquired conditions:
Initiatives to improve outcomes. https://www.aonl.org/system/files/media/file/2023/07/S%2BN_ExecInsights-FINAL2.pdf

American Society of Health-System Pharmacists. (2025). Drug shortages statistics. https://www.ashp.org/-/media/assets/drug-shortages/docs/2024/2024-Drug-ShortagesSurvey.pdf

Center for Drug Evaluation and Research. (2025, January 10). Drug shortages. U.S. Food and Drug Administration. https://www.fda.gov/drugs/drug-safety-and-availability/drug-shortages

Centers for Medicare & Medicaid Services. (2024, December 18).
Historical. https://www.cms.gov/data-research/statistics-trends-and-reports/national-healthexpenditure-data/historical

Dowd, B. E., & Laugesen, M. J. (2020). Fee‐for‐service payment is not the (main) problem. Health Services Research, 55(4), 491–495. https://doi.org/10.1111/1475-6773.13316

Espey, M., Director, A., Nadeau, S., Cusick, J., Shepherd, M., Cogan, A., Parshall, J., Zhavoronkova, M., Sozan, M., Glass, A., McManus, A., McConville, D., & Williamson, M. W. (2022, June 7). How to ease the nursing shortage in America. Center for American Progress. https://www.americanprogress.org/article/how-to-ease-the-nursing-shortage-in-america/

Griffiths, P., Saville, C., Ball, J., Dall’Ora, C., Meredith, P., Turner, L., & Jones, J. (2023). Costs and costeffectiveness of improved nurse staffing levels and skill mix in acute hospitals: A systematic review. International Journal of Nursing Studies, 147, 104601. https://doi.org/10.1016/j.ijnurstu.2023.104601

Hoover, M., Lucy, I., & Mahoney, K. (2024, May 22). Data deep dive: A national nursing crisis. U.S. Chamber of Commerce. https://www.uschamber.com/workforce/nursing-workforce-data-center-anational-nursing-crisis

Lewis, C., Horstman, C., Blumenthal, D., & Agrams, M. K. (2023). Value-based care: What it is, and
why it’s needed. The Commonwealth Fund. https://www.commonwealthfund.org/publications/explainer/2023/feb/value-based-care-what-itis-why-its-needed

Office of the Assistant Secretary for Planning and Evaluation. (2023, May). Impact of drug shortages on
consumer costs. U.S. Department of Health & Health Services. https://aspe.hhs.gov/sites/default/files/documents/87781bc7f9a7fc3e6633199dc4507d3e/aspertc-costs-drug-shortages.pdf

Palmer, P. P., Walker, J. A., Patanwala, A. E., Hagberg, C. A., & House, J. A. (2017). Cost of intravenous analgesia for the management of acute pain in the emergency department is substantial in the United States. Journal of Health Economics and Outcomes Research, 5(1), 1–15. https://doi.org/10.36469/9793

Maydelis Rodriguez

Healthcare Financing Concerns in the United States
The United States faces several critical healthcare financing concerns that significantly impact the delivery and accessibility of care. One of the foremost issues is the rising cost of healthcare. The increasing prices of hospital care, pharmaceuticals, and medical devices, such as the median annual
list price for new drugs reaching $300,000 in 2023, place a substantial financial burden on patients and healthcare providers (American Medical Association, 2024).

This concern relates to the economic principle of price, as higher costs make healthcare less affordable, leading to delayed or foregone care and negatively affecting health outcomes (Grover, Orgera, & Pincus, 2022). Another major concern is the underpayments and reimbursements from Medicare and Medicaid, which often do not cover the actual cost of providing care. This issue ties into the supply versus demand principle, as inadequate reimbursements can lead hospitals to limit the supply of certain services, resulting in longer wait times and reduced access to care (Hartman, Martin, Whittle, & Catlin, 2024).

Additionally, the administrative burden posed by practices such as prior authorization and payment denials by commercial insurers diverts valuable resources away from direct patient care. This concern is related to the scarcity of resources, as administrative tasks consume time and personnel that could be better allocated to patient care (Sahni, Carrus, & Cutler, 2021).

The proposal for portable ultrasound machines for IV placement, blood draws, and central line placement addresses these financing concerns effectively. By improving the accuracy and success rates of these procedures, portable ultrasound machines can reduce complications and the need for multiple attempts, thereby lowering overall treatment costs and enhancing patient satisfaction. This solution addresses the issue of rising healthcare costs by minimizing waste and improving efficiency (Le et al., 2022; Malik et al., 2025).

Furthermore, portable ultrasound machines can increase the efficiency of procedures, allowing hospitals to provide high-quality care even with limited reimbursement rates, thus addressing the concern of underpayments and reimbursements (Sakr et al., 2025). Additionally, the use of portable ultrasound machines can streamline procedures, reducing the administrative burden associated with complications and multiple attempts. This allows healthcare providers to allocate their time and resources more effectively, improving overall efficiency and patient care (Le et al., 2022; Malik et al., 2025).

References
American Medical Association. (2024). Trends in health care spending. Retrieved from https://www.ama-assn.org/about/research/trends-health-care-spending

Grover, A., Orgera, K., & Pincus, L. (2022). Health care costs: What’s the problem? AAMC Research and Action Institute. Retrieved from https://www.aamcresearchinstitute.org/our-work/issuebrief/health-care-costs-what-s-problem

Hartman, M., Martin, A., Whittle, L., & Catlin, A. (2024). National health care spending in 2022: Growth similar to prepandemic rates. Health Affairs (Millwood), 43(1). https://doi.org/10.1377/hlthaff.2023.01360

Le, M.-P. T., Voigt, L., Nathanson, R., Maw, A. M., Johnson, G., Dancel, R., … & Soni, N. J. (2022). Comparison of four handheld point-of-care ultrasound devices by expert users. The Ultrasound Journal, 14(27). https://doi.org/10.1186/s13089-022-00274-6

Malik, A., et al. (2025). Handheld ultrasound versus standard machines for placement of peripheral IV catheters: A randomized, non-inferiority study. Emergency Medicine. Retrieved from https://www.physiciansweekly.com/comparing-ultrasound-types-for-iv-placement-in-emergency-care/

Sahni, N. R., Carrus, B., & Cutler, D. M. (2021). Administrative simplification and the potential for saving a quarter-trillion dollars in health care. JAMA, 326(17), 1677-1678. https://doi.org/10.1001/jama.2021.17315

Sakr, M., Nemerofsky, S., Cano, N., Alapatt, L., Anzalone, C., & Nafday, S. (2025). Use of point-of-care ultrasound for central line placement: A quality improvement project. Hospital Pediatrics, 15(3), 256-264. https://doi.org/10.1542/hpeds.2024-008029