Have Nurse Practitioners Reached a Tipping Point?: Interview of a Panel of NP Thought Leaders

Peter I. Buerhaus, PhD, RN, FAAN


Nurs Econ. 2010;28(5):346-349. 

In This Article

Payment Rates

Buerhaus: If NP payment rates increased across the board so that they equaled physician payments for the same services, would this stimulate NPs to see more patients?

Pilon: Patient volume in nurse-managed centers is already an issue as these centers are looking for volume every day to try to achieve financial sustainability while serving largely underinsured or uninsured patients. But for commercial payers, increasing payments would result in NPs seeking more commercial business. Location and clientele both make a difference. NPs serve a lot of the underserved population and sometimes the patients with commercial insurance do not want to sit in the same waiting room, which is yet another issue.

Buerhaus: If NPs are interested in gaining market share and having a greater impact on the delivery of health care, then wouldn't it make sense to keep their prices lower than physicians to attract payers who are becoming more cost conscious?

Pilon: Third-party payer contracts determine the payment level a provider will receive. If the NP bills a lower fee than the contract will pay, they will not collect the full amount available. This tactic weakens NPs ability to remain financially viable. Also, there are legal constraints regarding how much a provider can discount prices if the patient is insured. Every service we provide is based on CPT codes that precisely define the clinical work. If the work is being done by different types of providers, the payments, from my perspective, should be the same.

Esperat: The increasing cost consciousness of payers is a factor that should be considered in establishing the price of the goods and services delivered by NPs. In a competitive market, as the health care industry has become, the price elasticity of service needs to be considered if we are to be serious players in this market. (Note: In economics, price elasticity refers to the sensitivity in the relationship between the quantity of a good or service demanded and changes in its price. For example, if a 10% decrease [increase] in the price of a service provided by a NP resulted in a 15% increase [decrease] in the quantity demanded of that service, then the price elasticity of demand for that particular service is quite sensitive and is termed "elastic" – the percentage change in quantity demanded exceeded the percentage change in its price. On the other hand, if a 10% decrease [increase] in price resulted in demand increasing [decreasing] by only 1% or 2%, then the relationship is not very sensitive, and is referred to as "inelastic." Because total revenue is the sum of the price times the quantity of goods or services sold, NPs would want to consider the price elasticity of the goods or services it provides when setting its prices and in determining competitive strategy. – Buerhaus)

Hanson: From the patient perspective it is important that NPs receive equal payment for equal competent service. Also, NPs need to be able to fit into the Medicare and Medicaid guidelines for reimbursement in the same way physicians do in order to complete Medicare documentation of services.

Buerhaus: Are the costs of operating a nurse managed clinic comparable, lower, or higher than a physician primary care clinic?

Pilon: Significantly lower. Salaries of NPs are just over half of what a primary care physician is typically paid.

Hansen-Turton: And for these lower costs, studies show NPs see patients twice as often as other providers and achieve lower emergency room use, decreased hospital patient days, lower prescription costs, and attain higher medication compliance.