Hospitals Say They Can’t Afford to Pay Nurses More. Their Spending Priorities Tell a Different Story.

Nurses hear the same explanation year after year: there just isn’t enough money. Hospital leaders point to shrinking reimbursements, rising operating costs, and tight budgets as reasons they cannot increase nurses’ salaries. Yet many of these same hospital systems pay their CEOs and executive leadership teams millions of dollars in salaries, bonuses, and other compensation. It raises a simple but important question: if there isn’t enough money to fairly compensate the people providing direct patient care, how is there enough money for executive compensation at the top?

The conversation becomes even more interesting when discussing nonprofit hospitals. Many people assume that “nonprofit” means a hospital does not make money. That is simply not true. Nonprofit hospitals can and often do generate substantial profits. The difference is that they do not distribute those profits to shareholders. Instead, they receive significant tax advantages in exchange for reinvesting those earnings back into the organization to fulfill their charitable mission. The real issue is not whether nonprofit hospitals have money. The issue is how they choose to reinvest it.  In fact, where I live, there is new construction at almost every hospital.

If hospitals are truly reinvesting in their mission, then one of the first places those dollars should go is into the nursing workforce. After all, patients are not admitted to hospitals because of impressive buildings, expensive advertising campaigns, or beautiful lobbies. They are admitted because they need medical care, and that care is delivered around the clock by nurses. Nurses are the ones continuously assessing patients, recognizing subtle changes in condition, preventing complications, educating families, coordinating care, administering medications, and often catching problems before they become life-threatening. Quite simply, there is no hospital without nurses.

Unfortunately, too many hospital systems continue to view nursing as an expense to be controlled rather than an investment that improves patient outcomes. The result is predictable: chronic understaffing, burnout, high turnover, and experienced nurses leaving the bedside. Hospitals then spend enormous amounts of money recruiting, hiring, orienting, and training replacement nurses, only to watch the cycle repeat itself.

Perhaps the clearest example of this contradiction occurs during nursing strikes. Hospital executives often take a firm position during contract negotiations because they know they can bring in replacement travel nurses to keep the hospital operating. These travel nurses frequently cost substantially more than the hospital’s own staff nurses once agency fees, premium hourly rates, travel expenses, housing, and other costs are factored in. Hospitals willingly spend these extraordinary amounts for a temporary period to avoid disruptions in patient care.

If hospitals can suddenly find millions of dollars to pay replacement nurses during a strike, it becomes difficult to accept the argument that they cannot afford to pay their permanent nursing staff more. The money clearly exists when leadership determines it is a priority. The issue is not whether hospitals have the financial resources. The issue is where they choose to allocate those resources.

Imagine if even a portion of the money spent on strike staffing, excessive turnover, recruitment costs, overtime, and constant orientation of new employees had instead been invested in retaining experienced bedside nurses. Competitive salaries, improved staffing levels, and better working conditions would not only improve nurse retention but would also enhance patient safety, increase patient satisfaction, and reduce costly complications. Investing in nurses is not simply an investment in employees. It is an investment in better healthcare.

This is not to suggest that hospital administrators should not be compensated fairly. Leading a large healthcare system is an enormous responsibility. However, executive compensation should reflect an organization’s mission and values. Every budget is a reflection of priorities. When executives receive multimillion-dollar compensation packages while bedside nurses are told there is no money available for meaningful raises, those priorities deserve to be questioned.

Hospitals frequently describe themselves as patient-centered organizations committed to serving their communities. If that commitment is genuine, then investing in the professionals who spend the most time with patients should be among their highest priorities. Nurses are not simply another line item on a budget. They are the foundation upon which every hospital operates.

If nonprofit hospitals truly exist to improve the health of their communities, then they should be reinvesting their financial resources where they will have the greatest impact: in the nurses who provide compassionate, skilled, lifesaving care every single day. Fairly compensating nurses is not simply a labor issue. It is a patient care issue. And if hospitals can afford to pay premium rates for temporary replacement nurses during a strike, they can certainly afford to invest in the nurses who have devoted their careers to caring for patients every day of the year.

I still believe making nursing into a revenue producing center rather than a cost center, it would greatly improve the profession.  Just like physicians, nurses should be able to bill for their services.