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MASSACHUSETTS NURSE NEWSLETTER :: October
2004
As nursing crisis continues, hospitals turn
to Magnet program
MNA focuses on latest industry strategy
to avoid ratios, boost reimbursements
By Mary Crotty
Associate Director of Nursing
 In
the wake of an onslaught of studies and reports detailing deplorable
nursing care in hospitals and a massive exodus of nurses who are
refusing to work under such conditions, and in the face of a growing
movement by nurses, the public and legislators for the imposition
of mandated RN-to-patient ratios to correct these deficiencies,
the hospital industry has increasingly turned to a voluntary "JCAHO-like"
process of accreditation and validation of its nursing programs.
This designation, known as "Magnet recognition" has been around
for years, but more recently has been embraced by hospital and nursing
administrators as a means of boosting public confidence in their
nursing care, improving retention of its nursing staff and, perhaps
more importantly, increasing its reimbursement for services by the
federal government and private insurers.
 Here
in Massachusetts, two hospitals—Massachusetts General Hospital
and Winchester Hospital—have achieved "Magnet recognition,"
and a number of other hospitals are involved in the process of seeking
recognition. Hospitals formally seeking recognition where the nurses
are represented by the MNA include Jordan Hospital, Dana Farber,
Caritas Norwood, Newton-Wellesley and Northeast Health System (see
associated story for details of Northeast Health Systems' pursuit
of Magnet status).
In response to this activity, many MNA members have asked for
information about this program: what it is, what it means for nurses,
and more importantly, for information on its viability as an approach
to addressing the problems nurses face in their practice and in
their workplace. For unionized nurses, where the union is the primary
vehicle for addressing concerns of nurses, nurses have questioned
if and how the Magnet program can be incorporated into the labor-management
process.
"We have real concerns about the legitimacy of the Magnet program,
especially in light of the fact that it is yet another expensive,
consultant-driven process that is being used to give the illusion
of nurse empowerment," said Karen Higgins, RN and MNA president.
"The fact that Magnet status is being used as a public relations
gimmick to avoid providing safe staffing levels and that it is trading
on the public's trust in nursing as a vehicle for marketing have
raised concerns among our members and the Board of Directors."
The MNA's Board of Directors started an extensive evaluation of
the Magnet program and its impact on nursing in general and MNA
members in particular. This issue of the Massachusetts Nurse
is devoted to an initial and detailed backgrounder on the Magnet
program for our members. In the coming weeks, the Board will be
finalizing and producing an official position statement on the program.
In this issue you will find a history of the Magnet program; an
analysis of how the Magnet program and unions match up; and a first-hand
account of one MNA bargaining unit's experience with the Magnet
process.
What is a 'Magnet' hospital?
In the early 1980s, in reaction to
pressure to resolve a nation-wide nurse staffing crisis, the American
Academy of Nurses (AAN) identified a number of hospitals that demonstrated
a better-than-average ability to attract and retain professional
nurses. They also studied factors associated with higher staff retention
rates. The term "Magnet" came into popular use
to refer to hospitals which had these characteristics. 1
A decade later, in 1994, the American Nurses Credentialing Center(ANCC),
which is a subsidiary of the American Nurses Association (ANA),
developed a formal Magnet Recognition Program ("Magnet"). The program
confers the designation "Magnet Nursing Services Recognition" on
hospitals that are able to pass a lengthy credentialing inspection
by a team of surveyors —in very similar fashion to JCAHO's
(Joint Commission on Accreditation of Healthcare Organizations)
inspection and credentialing process.
According to the AANC, as of July 30, 2004, there were more than
100 Magnet-designated facilities in the country. Currently, two
hospitals in Massachusetts, Massachusetts General Hospital and Winchester
Hospital, have been designated as Magnet facilities, both in late
2003.
Magnet Recognition
Magnet evaluation criteria are based
on quality indicators and standards of nursing practice as defined
in the ANA's Scope and Standards for Nurse Administrators
(1996). The criteria are similar to JCAHO standards. To obtain Magnet
status, health care organizations must apply to the ANCC; submit
extensive documentation that demonstrates their compliance with
the ANA standards;and undergo an onsite evaluation to verify the
information in the documentation submitted and to assess the presence
of the "forces of magnetism" within the organization.2
Magnet reviewers solicit feedback from a number of sources, including
community members; the state board of nursing; state-based consumer
organization; state health departments;OSHA;and the National Labor
Relations Board. Appraisers may even ask individuals such as taxi
drivers and hotel staff near the facility how the facility has contributed
to the community.3 Magnet status is awarded for a four-year
period, after which the organization must reapply.
The program is marketed by AANC as a vehicle which can provide
the following benefits: enhance nursing care; increase staff morale;
attract high quality physicians; reinforce positive collaborative
relationships; create a "Magnet culture"; improve patient quality
outcomes; enhance nursing recruitment and retention; and provide
a competitive advantage for hospitals.4
AANC collects a fee from hospitals for its Magnet recognition
process. Their fees5 include an appraisal fee ranging
from $9,765 for a hospital with less than 100 beds to $47,250 plus
$50 per beds over 950 in large hospitals. A $15,000 fee applies
to independent outpatient facilities with a $4,500 added to the
inpatient fee if done in conjunction with an inpatient review. Honorariums
paid to appraisers are $1,000 each; there are usually at least two
appraisers per facility. There is also a site visit fee of $1,500
per day, per appraiser. Site visits usually require two appraisers
for two or more full days, but large organizations could require
more appraisers and/or more visit days. The travel, lodging and
other related expenses for the site visit are paid by the hospital
applicant. Re-designation fees are charged upon re-application.
Hospitals seeking Magnet designation will also incur staff costs
to assure that policies and procedures within the hospital are adequate
to meet designation standards, plus the costs to prepare application
materials. In addition, the staff hours required to pull the documentation
together are considerable.6 Jeanette Ives Erickson, RN,
MS, senior. Vice president, patient care and chief nurse at Massachusetts
General Hospital, indicated to Nursing Spectrum that 2,305
pages of written evidence were submitted to AANC by MGH as evidence
illustrating the 95 Magnet and core criteria necessary for MGH to
gain its September 2003 Magnet designation.7
Why we're seeing the emergence of magnet
"Pay for Performance" is the newest trend in hospital reimbursement.
It has been called the beginning of the third wave in reimbursement.8 The previous two Medicare reimbursement schemes were: 1) the original
cost-based reimbursement mechanism and 2) the DRG-based prospective-payment
system. The DRG system emerged during the Reagan era, with its focus
on bringing competition to healthcare and its view of healthcare
as just another business arena. The DRG system restructured hospital
finance. Hospitals began to be compensated for saving (or making)
money on specific diagnoses, at the expense of less profitable diagnoses,
i.e. the acronym DRG, or diagnosis-related groups. The DRG system
had the effect of encouraging hospitals to concentrate on the profitability
of its various "lines of business," and it inevitably impacted the
quality and delivery of care.
The financial reimbursement system is essentially the tail wagging
the dog—with the dog being the health care system. Today we
see CMS (Centers for Medicare and Medicaid Services, formerly known
as HCFA, the Healthcare Financing Administration) beginning to link
Medicare payments directly to quality of care, which is viewed
as signaling the end to the DRG payment era.9 CMS is
funding pilot projects to tie payments to hospitals to demonstrators
of quality.10 Hospitals that demonstrate efforts to achieve
quality (performance) will very shortly see financial rewards for
their efforts. This emerging reimbursement system is known as "Pay
for Performance."
This coming change in the reimbursement system is fostering the
desire of hospitals to gain Magnet designation of their facilities.
The linkage to Magnet designation is that organizations including
JCAHO, the ANC and others, publicize the correlation between various
indicators of quality such as lower mortality rates and shorter
lengths of stay with Magnet hospital status.11 What is
clear is that hospitals that can tout having Magnet designation
will be far better positioned for reimbursement purposes. And the
evolving "Pay for Performance" Medicare payment system will roll
out to other payors, if past is prologue. The result is that hospitals
have concluded that obtaining Magnet designation will help them
secure better reimbursement in coming years.
Hospitals are being nudged in this direction by the federal government
and major industry players such as JCAHO. In late July, 2002 Congress
passed the "Nurse Reinvestment Act," which included grants to encourage
facilities to implement Magnet criteria for excellence in nursing
services. Just days after President Bush signed that legislation
into law, JCAHO released a report on the nursing shortage that recommended
that facilities adopt the characteristics of Magnet hospitals to
foster a workplace that empowers and is respectful of nursing staffs.12
It is not a stretch to say that the quality of care provided by
the current Magnet hospitals is to be commended. Correlations have
been found to exist between Magnet designation and positive outcomes
for patients and lower nurse turnover.
However, questions surround the motivations to encourage all hospitals
to achieve Magnet designation, confusion of cause and effect, and
the implications, complexities and underlying dangers related to
Magnet and require us to take a deeper look at labor and staffing
issues related to Magnet.
Currently, there are no RN-to-patient ratios required for achieving
Magnet status. In fact, the AANC is an affiliate of the American
Nurses Association, which is also opposed to the concept of specific
RN-to-patient ratios.
The similarities between the Magnet approach and JCAHO have also
raised concerns among nurses given their experience with the lack
of impact JCAHO accreditation has had on the quality of nursing
care in hospitals and a number of studies that call the entire process
into question.
At best, voluntary accreditation is a snapshot in time of the
conditions established at a particular hospital before and during
the surveyors' visits. Receiving Magnet status, like JCAHO accreditation,
provides no guarantee that those conditions (if they are conducive
to quality patient care and a good nurse work environment)will be
in place a year or even a month following the awarding of that recognition.
So the question remains: How does this process fit with the real
power of nursing unions to have a say in the creation of mutually
negotiated and legally enforceable standards and working conditions
derived through collective bargaining?
(See related story.)
1 www.flcenterfornursing.org/research/fcnmagnet.pdf
2 www.jcaho.org/news+room/press+kits/facts+about+magnet+hospitals.ht
3 www.nursingworld.org/tan/sepoct02/magnet.htm
4 www.jcaho.org/news+room/press+kits/facts+about+magnet+hospitals.htm
(2004)
5 Effective April 1, 2003
6 From a publication of the Minnesota Department of Public Health,
December 2001, at www.health.state.mn.us/divs/chs/rhpc/PDFdocs/magnet.pdf
7 www.nursingspectrum.com/MagazineArticles/article.cfm?AID=10508
8 www.aishealth.com/Compliance/ResearchTools/RMCCMSLinks.html,
Reprinted from the Oct. 10, 2003 issue of Report On Medicare Compliance
9 www.aishealth.com/Compliance/ResearchTools/RMCCMSLinks.html,
Reprinted from the Oct.10, 2002 issue of Report On Medicare Compliance.
10 www.cms.hhs.gov/quality/default.asp
11 www.nursingworld.org/ancc/magnet/benes.html
12 www.nursingworld.org/tan/sepoct02/magnet.htm
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