1. Murray, Kathleen RN, CNA, MSN

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Many hospitals mission statements detail their goals of providing top-of-the-line healthcare to the communities they serve. But like many other businesses, healthcare organizations operate on limited margins and deal with countless external factors that impact financial reimbursement. In recent years, there's been a significant increase in uninsured and underinsured patients, coupled by decreases in Medicare and Medicaid reimbursement and a growing shift of healthcare costs to consumers. Today, financial reimbursement and revenue status should be at the top of the list for all healthcare administrators, as they can only carry out an organization's mission if they remain financially sound.

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It's estimated that 46 million Americans under the age of 65 were uninsured in 2004.1 The primary reason people lack medical coverage is because they can't afford it. As a result, the uninsured are one of the biggest challenges that organizations need to focus on, not only because of the impact to financial reimbursement, but because of negative effects on access to healthcare.


The underinsured are insured but don't have sufficient coverage. They may go without seeking healthcare to avoid unaffordable pocket expenses. When a medical crisis arises, the only medical option the underinsured can seek is the higher-cost emergency room visit that can potentially lead to a lengthy hospitalization and unpaid hospital bills.


The private insurance sector is an issue for employers, employees, and healthcare organizations. Employers are offering plans with higher deductibles and have shifted the increase in cost of care to their employees, potentially causing employees to forego necessary medical treatment and testing due to financial constraints.


Another option that many employers target is consumer-driven healthcare plans. Presently, the two most popular types of consumer-driven plans are health reimbursement arrangements and health savings accounts. Employers feel that consumer-driven health plans are potentially a step in the right direction to decrease the cost of healthcare coverage for the private business sector. Employees see these plans as an investment opportunity and will be prudent with spending their money on healthcare. These consumer-driven health plans will be on the list for employees to choose from within the next few years.


Currently, a shift in Medicare reimbursement is happening, and reimbursement is expected to focus more on quality and pay-for-performance guidelines in the near future. Additionally, the impact of the Part D Medicare Drug Benefit Program could potentially impact Medicare hospital reimbursement in the next several years because of the unpredicted cost of Part D.


Nonetheless, as future reimbursement decreases, it'll become more difficult for organizations to reinvest in technology and equipment, update or replace buildings, and provide new patient services for the community. Because of this, it's imperative that nurse managers have a full understanding of the financial reimbursement challenges facing their organization and strategically plan for the provision of quality patient care.




1. Kaiser Commission on Medicaid and the Uninsured. Health insurance coverage in America: 2004 data update. Available at: Accessed May 5, 2006. [Context Link]