Do Aged Medicare Patients Receive More Costly Routine Nursing Services

Many in the hospital industry maintain that elderly patients require more daily routine nursing services than other hospital patients. Based partly on this, Medicare pays a routine nursing salary cost differential. GAO analyzed existing studies relating to the existence and size of the routine nursing salary cost differential and proposed a methodology that it would use if asked to make such a study.

None of the studies which GAO identified adequately supported the existence of an industrywide routine nursing salary cost differential and GAO believes that evidence tends to be against the existence of such a differential. If GAO were to attempt to determine the existence and size of an industrywide nursing differential, it would conduct a work-sampling study in routine nursing care units in a nationwide sample of hospitals. The study sample would consist of 90 hospitals grouped into four strata on the basis of reported routine nursing salary costs. The sample would be weighted toward large hospitals with a high proportion of Medicare patients. GAO would collect data on the first 30 hospitals in the study and would use the data to estimate required sample size before continuing the study. If the sample size required was substantially higher than 90, GAO would reconsider whether the study should proceed. GAO would have the nursing staff observed and would record their activities. These data would be combined with hospital records to determine the average cost of routine nursing for the aged and the non-aged. GAO estimates that such a study would cost about $8.3 million. GAO believes that a much larger sample at a significantly higher cost would be necessary to permit a reliable estimation of the influence of hospital size and patient characteristics on the size of any differential.