DNP 815 How can economic theory be applied to your proposed DNP Project? 

DNP 815 How can economic theory be applied to your proposed DNP Project? 

DNP 815 How can economic theory be applied to your proposed DNP Project? 

Economic theory is based on a model of human behavior that assumes rationality, a primary motivation to be happy, and the ability to calculate subtle differences between possible trade-offs. The goal of economic theory is accurate prediction of the choices people make regarding resource allocation. . (Scott, et al 2001). Efficiency in resource use (getting the most out of limited resources) is a goal that every health-care organization can accept, regardless of one’s perspective (e.g., that of society, insurers, hospital administrators, or patients). Economic analysis is fundamentally about resource use and can serve an important role in health-care decision-making. 

My DNP project is on patient centered fall prevention measures. The sequelae from falls are costly. Fall-related injuries account for up to 15 percent of rehospitalizations in the first month after discharge from hospital. Inpatient fall rates range from 1.7 to 25 falls per 1,000 patient days, depending on the care area. Extrapolated hospital falls statistics indicate that the overall risk of a patient falling in the acute care setting is approximately 1.9 to 3 percent of all hospitalizations. Based on data from 2000, total annual estimated costs were between $16 billion and $19 billion for nonfatal, fall-related injuries and approximately $170 million dollars for fall-related deaths across care settings in the community. As health care moves toward patient-centered care, fall-related-injury prevention now has the potential to be addressed across the care continuum (Currie,2008. In the United States, there are approximately 37 million hospitalizations each year.  Therefore, allocation of the scarce resources of nursing care becomes the responsibility of the frontline nurse. 


Currie L. (2008) Fall and Injury Prevention. Patient Safety and Quality: An Evidence-Based Handbook for Nurses. Rockville (MD): Agency for Healthcare Research and Quality (US); 2008 Apr. Chapter 10. Available from:

Scott, R. D., Solomon, S. L., & McGowan, J. E. (2001). Applying Economic Principles to Health Care. Emerging Infectious Diseases7(2), 282-285.

Reform and healthcare delivery continues to be at the forefront of policy debate, given the slow-growing percentage of the gross domestic product GDP) and budget deficit in health care. Economic theory has been a major topic in healthcare conversation; different economic philosophies and theories and the passage of the Affordable Care Act (ACA) increased the involvement in health care (Hartman, 2010). The surprising increase in healthcare costs in recent decades and the effort to control increased the relevance of the economic analysis of clinical interventions. The use of cost-effectiveness to guide reimbursement decisions wherein keeping individuals healthy is key to profitability. The development of strategies for disease prevention, self-care, or adherence to beneficial clinical treatments can also have payoffs. Health outcomes are measured, such as the number of avoided infections or the cost per life saved.

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My DNP project is about Central line-associated bloodstream infection (CLABSI). This remains an important component of any efforts of quality improvement given its impact on patients and healthcare organizations, and it is associated with an increased length of stay in the hospital and a cost of $16 000 – $69 000 on each event. The metrics for reimbursement negotiations and hospital ranking, and CLABSI (Ormsby et al., 2020). Bloodstream infections have a significant impact on patient outcomes, including mortality, length of stay, and healthcare costs.


Hartman, S. (2010). Economic theories. Philosophies and Theories for Advanced Nursing Practice, 327.

Ormsby, J. A., Cronin, J., Carpenter, J., Graham. D., Potter-Bynoe, G., Chandonnet, C. J., Vaughan, A. M., Weir, L., Flaherty, K. A., Chandonnet, C. J., Priebe, G. P., & Sandora, T. J. (2020). Central venous catheter bundle adherence: Kamishibai card (K-card) rounding for central-line-associated bloodstream infection (CLABSI) prevention. Infection Control & Hospital Epidemiology, 42, 1058- 1063.

According to economic theory, the supplies and consumptions are rational and followed by efficient machines to produce the best and economical products for the market. However, the behavior of the investors is complex as compared to the behavior recognized in most of the theories of economics (Jones et al., 2020).

The delivery of healthcare services is dependent on the efficacy of the healthcare system. However, the different roles in the healthcare system like nurses, physicians, pharmacists, and home-based assistance are responsible for doing work in respect to the healthcare system or services are being financed and organized. The understanding of health economics is important for nurses and other healthcare professionals to effectively serve as policy advocates while

DNP 815 How can economic theory be applied to your proposed DNP Project
DNP 815 How can economic theory be applied to your proposed DNP Project

providing services of leadership and fostering EBP to keep a complete knowledge and using scientific practices (Ortiz, 2018) . It is further assumed that patients receiving healthcare services from nurses or physicians are highly affected by the economic system. The factors affecting the system are the cost of healthy food items, the connectivity between education and pay scale, and the cost of transportation influencing the income the patient is earning. All elements help the patient to make a decision about his diet and to avail healthcare services whenever it is required.

Keeping in mind these aspects of economic theory I would like to develop the proposed plan of the DNP project in context to economic factors enabling me to underpin the scientifically good practices in the completion of the project. The use of cost-effective resources and an efficient timeline of the completion of the project would be another important thing that I need to be aligned in context to the elements of economic theory and successful completion of my project.

It is because of the fact a nurse practicing evidence-based services is used to deliver the care while providing the most effective services efficiently and cost-effectively. The adoption of organizational culture and economic context of nursing practice is important for me in the completion of my DNP project.


Jones, T., Drach-Zahavy, A., Amorim-Lopes, M., and Willis, E. (2020). Systems, economics, and neoliberal politics: Theories to understand missed nursing care. Wiley Online Library, 586-592

Ortiz, M. (2018). Transitional Care: Nursing Knowledge and Policy Implications. SAGE Journal, 1-9


Economic theory in nursing, as said by Jones and Yoder in 2010, is the ideology that nurses evaluate the task and resources and consider all possible alternatives comparing the costs and efforts to determine what the most financially sound options are in terms of not only efficiency for the company, staff, and clients, but also maintaining the effectiveness of the intervention itself (Jones & Yoder, 2010). As said in Butts and Rich’s 2018 textbook, efficiency is one of the key components of economic theory. Basically, a company will ask what effective intervention can be implemented to benefit client care and safety that is also the most efficient price to maintain the financial stability of the company (Butts & Rich, 2018, chapter 14, p. 496). My DPI project helps to improve communication amongst staff. This improvement of communication amongst staff helps to decrease sentinel events from occurring to clients or staff. Sentinel events cost hospitals several thousands of dollars each year because the hospital is liable to pay for an event that occurred under the direct care of a staff member that could have otherwise been prevented. Many of these events can be prevented with proper communication and handoff from nurse to nurse. This will then increase task efficiency, decrease sentinel events and save the hospital and clients money in the grand scheme of things. This helps to maintain financial stability for the facility, which then allows for more funds to be placed elsewhere to benefit client care and safety. This is a definite way to illustrate economic theory in the nursing practice. One small fix can domino into many big changes that benefit each party in the situation.


Butts, J. B., & Rich, K. L. (Eds.). (2018). Philosophies and theories for advanced nursing practice (3rd ed.). Jones & Bartlett. ISBN-13: 9781284112245

Jones, T. L., & Yoder, L. (2010). Economic theory and nursing administration research–is this a good combination?. Nursing forum45(1), 40–53.

Economic theory aims to accurately predict choices healthcare organizations make regarding resource allocation; the theory examines the subtle differences between possible trade-offs. Economic principles focus on scarcity, cost, and supply and demand and these are considered when trying to meet the needs of the patient. Healthcare organizations benefit from using a structured approach in measuring and comparing health outcomes and costs of using alternative interventions that still lead to great patient outcomes (Jayawardana & Mossialos, 2021). Therefore, it is important to understand how economic principles shape patient care decision making. 

My DNP project focuses using an alternative approach to managing pain. Continuously using pharmaceuticals to manage pain can be costly. One study showed that hospitals should focus on improving pain management without raising cost and by implementing alternative approaches costs can be lowered by 4% (Dusek et al., 2018). Given the prevalence of pain experienced by hospitalized patients and the significant cost it takes to manage pain economic theory can be applicable. Using a method such as virtual reality can help improve pain outcomes while reducing healthcare costs.


Dusek, J. A., Griffin, K. H., Finch, M. D., Rivard, R. L., & Watson, D. (2018). Cost savings from reducing pain through the delivery of Integrative Medicine Program to hospitalized patients. The Journal of Alternative and Complementary Medicine24(6), 557–563. Jayawardana, S., & Mossialos, E. (2021). How should economic evaluation be used to measure value and set priorities in health care? AMA Journal of Ethics23(8). 

Government’s responsibility to protect and advance the interests of society includes the delivery of high-quality health care. Because the market alone cannot ensure all Americans access to quality health care, the government must preserve the interests of its citizens by supplementing the market where there are gaps and regulating the market where there is inefficiency or unfairness. The ultimate goal of achieving high quality of care will require strong partnerships among federal, state, and local governments and the private sector. Translating general principles regarding the appropriate role of government into specific actions within a rapidly changing, decentralized delivery system will require the combined efforts of the public and private sectors.

A framework is provided for understanding the 10 roles that government plays by improving health care quality and safety in the United States. Examples of proposed federal actions to reduce medical errors and enhance patient safety are provided to illustrate the 10 roles: (1) purchase health care, (2) provide health care, (3) ensure access to quality care for vulnerable populations, (4) regulate health care markets, (5) support acquisition of new knowledge, (6) develop and evaluate health technologies and practices, (7) monitor health care quality, (8) inform health care decision makers, (9) develop the health care workforce, and (10) convene stakeholders from across the health care system.


King M. W. (2017). Health Care Efficiencies: Consolidation and Alternative Models vs. Health Care and Antitrust Regulation – Irreconcilable Differences?. American journal of law & medicine43(4), 426–467.

Tang, N., Eisenberg, J. M., & Meyer, G. S. (2004). The roles of government in improving health care quality and safety. Joint Commission journal on quality and safety30(1), 47–55.

Economics is essential to health care as it creates a budget for services available to patients. Given the current budget deficits, this has been a controversial policy debate. Current systems primarily focus on a free marketplace mechanism aside from the Veterans Health Administration (VHA) (Butts & Rich, 2017). Medicare is often confused as a policy of socialism as the government finances it; however, it is not, as they pay the fees to the free market providers (Butts & Rich, 2017). The Affordable Care Act (ACA) was implemented to create an increase in coverage due to the yearly increase in underinsured and uninsured cases (Butts & Rich, 2017). A study demonstrated that living in areas of health disparities causes a rate spill over to those with health insurance (Kirby & Cohen, 2018). As the competitiveness in the market of insurers continues, there is conflicting evidence on the resolution to this problem

Economic theory is essential for doctorate-prepared nurses as it guides policymakers. The decisions directly impact the health professional as it affects payment for services and the implementation process. An example is a shift from fee for services to value-based care. This approach has prioritized meeting quality measures for increased payments. With this approach, healthcare facilities and providers are encouraged to provide a comprehensive healthcare approach and strict documentation. Documentation of preventative services and comprehensive health care delivery entails healthcare providers spending more time on documentation and its importance. It also drives health care providers to focus on implementation that surrounds the improving quality of care and meeting quality measures for increasing payment options versus increasing the influx of patients.

This information has been applied to the future purposed direct practice improvement project as advanced directives is a quality measure. Currently, Medicaid services provide a billable option to compensate those advanced directives documented. In the current facility of implementation, no current workflow policy has been created for this. As the facility is transitioning from fee-for-service to value-based care, they have not yet addressed this possibility for revenue. In the hope that the future project of Five Wishes will effectively increase advanced directives, future implementation of fees for these services could be considered.


Butts, J. B., & Rich, K. L. (2017). Philosophies theories and for advanced nursing practice (3rd ed.). Jones & Bartlett Learning.

Kirby, J. B., & Cohen, J. W. (2018). Do People with Health Insurance Coverage Who Live in Areas with High Uninsurance Rates Pay More for Emergency Department Visits? Health Services Research53(2), 768–786.

Economic theory is going to be a functional basis of my DNP project as we are looking to approve it. As we are looking at adding a new point of care (POC) testing, this will include several components, the market, competition, and efficiency (Butts & Rich, 2017). In looking at the market, the organization needs to maximize its utility by purchasing equipment based on pricing and available resources. The organization already has the required equipment to provide POC testing. Still, it will need to determine other costs involved in the implementation, such as testing strips and the time necessary for the nurses to test at the bedside. The vendor will be looking at maximizing their profits at the same time. Competition determines the price and quality of the machine, testing supplies, and test validity. The organization will also look at the efficiency of POC testing in the Emergency department. They will need to determine if the costs and workload of doing POC testing at the bedside can offset the impact of ED length of stay (LOS) and the impact on patient care.  With any project, including the DPI project, the organization must anticipate the use of the product along with costs for initial implementation and ongoing expenses (John et al., 2019). If this becomes a process that the organization continues post DPI project, there must be a positive economic impact and increased patient outcomes.


Butts, J. B., & Rich, K. L. (2017). Philosophies theories and for advanced nursing practice (3rd ed.). Jones & Bartlett Learning.

John, J., Koerber, F., & Schad, M.. (2019). Differential discounting in the economic evaluation of healthcare programs. Cost Effectiveness and Resource Allocation, 17(1).

My DPI focuses on unnecessary antibiotic therapy/treatment for UTIs. Hensher et al. (2017) cited that the primary motivation for this growing attention is the desire to avoid exposing patients to unnecessary harm; which the phenomenon also possesses a significant economic dimension. This has received direct attention from an economic perspective, for the overutilization of low-value care. Hensher et al. (2017) emphasize the implications of this phenomenon and pointed out that if healthcare resources are utilized unnecessarily or expended to yield no benefit or may even expose patients to harm, such resources could clearly be conserved with no loss of benefit to patients, will reduce risks, improve patients’ health, and conserve money. Considering the financial burden of the treatment and diagnosis of UTI accounting for approximately 6 billion US dollars of expenditures. Bladder infections or cystitis alone accounts for over 10 million office visits and 1 million emergency department visits and over 2 billion dollars as annual healthcare costs in the US alone due to various prescriptions and diagnostic tests which some of the prescriptions may be unnecessary. From an economist perspective, some of these resources may be conserved and directed toward other patients’ healthcare needs thereby reducing the financial burden on other aspects of important needed healthcare. This in turn will be financially beneficial and invested towards improving the healthcare cost.


Abou Heidar, N. F., Degheili, J. A., Yacoubian, A. A., & Khauli, R. B. (2019). Management of urinary tract infection in women: A practical approach for everyday practice. Urology annals11(4), 339–346.

Hensher, M., Tisdell, J., & Zimitat, C. (2017). “Too much medicine”: Insights and explanations from economic theory and research. Social science & medicine176, 77-84.

Focus on human care has the capacity to dislodge nurses from the concerns of economic decisions in their daily practice. Economic theory provides advanced practicing nurses the broad understanding and knowledge on economics on their profession. According to Butts and Rich (2017) “Economics is considered both a social science and a foundational form of knowledge” (p. 489). It is important to state that economic theory plays a significant role in the allocation of limited nursing resources, while alongside research, guides policy makers in its application. Economics is a science that deals with human behavior (Butts & Rich, 2017), explaining its use to explore several phenomena. Exploring relationships between economic theory and nursing administration provides an insight into the economics of operations management in the clinic.

Economic theory of market competition has gained momentum in discussions bordering around healthcare topic. The Affordable Care Act, promulgated in 2016, during the Obama administration, has made economic theory inevitable for nursing practice. Economic theory requires that healthcare economists raise objection to relying on competition in healthcare, it is, however; imperative that advance nursing practice is aware of the competition in the competitive market. Economic theory states that if nursing profession is viewed as substitutes compared to physicians, the demand and pricing of nursing and the elasticity of demand for physician will increased. Viewed as complements, demand and price for nursing services decrease compared to physician services (Griffith, 1984). Economic theory will be used as analytical tool in my DNP project where the need arises to do cost-benefit analysis in the allocation of limited resources and in decision-making process as administrative


Butts, J. B., & Rich, K. L. (2017). Philosophies theories and for advanced nursing practice (3rd ed.). Jones & Bartlett Learning.

Griffith, H. (1984). Nursing Practice: Substitute or Complement According to Economic Theory. Nursing Economic$2(2), 105–112.

Economic theory suggests that a nurse would evaluate the utility of all possible alternatives and then compare the relative costs and benefits of each option before making this choice. The rational choice would be the option in which the expected benefits outweigh the opportunity cost. Nursing units in acute care hospitals can be conceptualized as production firms. Production is defined as the conversion of production factors into goods and services. Nursing care is the primary service produced by these firms, and a nurse is the primary (but not exclusive) factor used to produce the service. Managers of the nursing production firm are faced with decisions regarding the volume and quality of care that is to be produced and the purchase of required resources.

My project focuses on resuscitation efforts and new interventions postcode to increase survival.  Damluii (2018), explains that although cardiac arrest research has focused on survival, the financial burden of postcardiac arrest care and its healthcare-associated cost is unknown. Moreover, it is unclear whether hospital profiles or the use of specific therapeutic interventions linked with survival are associated with cost burdens. To address these gaps in knowledge, we aimed to estimate the total health care cost associated with postcardiac arrest hospitalizations. We also examined the secular trends of inflation-adjusted cost and its association with patient and hospital level characteristics and implementation of certain therapeutic interventions. The US Nationwide Inpatient Sample (NIS) is a part of the Healthcare Cost and Utilization Project, sponsored by the Agency for Healthcare Research and Quality. The data are publicly available to any researcher for purposes of reproducing the results. The variation in cost was reasonably explained using the appropriate method during resuscitation efforts. Baseline comorbidities had different effects on inflation-adjusted hospital costs. Notably, prior myocardial infarction, primary diagnosis of myocardial infarction, and hypertension were associated with lower costs. 

Howard Thom, Josephine Walker, Peter Vickerman, Will Hollingworth, Exploratory comparison of Healthcare costs and benefits of the UK’s Covid-19 response with four European countries, European Journal of Public Health, Volume 31, Issue 3, June 2021, Pages 619–624,

Damluii, A.A, Al-Damluii, M.S., Pomenti, S., Zhang, T.J., Cohen, M.G., Mitrani, R.D., Moscucci, M., Myerburg, R.J. (2018). Health Care Costs After Cardiac Arrest in the United States. Circulation: Arrhythmia and Electrophysiology. 11:e005689.

Against a background of increasing demands on limited resources, health economics influences decision-making at all levels of health care. Health economics seeks to facilitate decision-making by offering an explicit decision-making framework based on the principle of efficiency (Barrett, J. S. (2022).   Economists have long regarded healthcare as a unique and challenging area of economic activity because of the specialized knowledge of healthcare professionals (HCPs). Few would argue that scarcity of resources plagues our current healthcare environment. Reports of missed nursing care and rationing of nursing care because of inadequate staff now appear in the literature with increasing frequency. Decisions regarding the allocation of nursing care significantly impact the financial performance of healthcare organizations, the job satisfaction of nurses, and, most importantly, the health outcomes of patients (Barrett, J. S. (2022). Nursing ethics and the state nurse practice act guide the nurse to prioritize utility for patients above utility for self, discipline, and employer.

While economic theory could be adapted to address how nurses prioritize care, the issue of how they should prioritize care must be addressed by other normative theoretical and ethical frameworks. The third-party reimbursement structure for health care in general, and nursing, reflects a mixed market economy. Because of government regulations, effectively achieved through the administration of the prospective payment system (PPS) for Medicare and Medicaid, price and production do not vary as predicted by the laws of supply and demand (Barrett, J. S. 2022). According to Berrett (2022), “for individual nurses, time is their currency, and nursing care activities are the services that must be purchased with the time available. Nurses can thus be conceived as consumers—they spend their time buying services for their patients.” Economic theory suggests that a nurse would evaluate the utility of all possible alternatives and then compare each option’s relative costs and benefits before making this choice. The rational choice would be the option in which the expected benefits outweigh the opportunity cost. This aligns with my DNP project, which seeks to provide beneficial health services to patients because the allocation of nursing care will significantly impact the financial performance of my facility, the job satisfaction of nurses, and, most importantly, the health outcomes my project aims for to provide for our patients.

Barrett, J. S. (2022). Health Economics and the Healthcare Industry. Fundamentals of Drug Development, 319.