Hospital Staffing Decisions: Does Financial Performance Matter? (original) (raw)
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Nurse staffing patterns and hospital efficiency in the United States
Social Science & Medicine, 1997
Almtract-The objective of this exploratory study was to assess the effects of four nurse staffing patterns on the efficiency of patient care delivery in the hospital: registered nurses (RNs) from temporary agencies; part-time career RNs; RN rich skill mix; and organizationally experienced RNs. Using Transaction Cost Analysis, four regression models were specified to consider the effect of these staffing plans on personnel and benefit costs and on non-personnel operating costs. A number of additional variables were also included in the models to control for the effect of other organization and environmental determinants of hospital costs. Use of career part-time RNs and experienced staff reduced both personnel and benefit costs, as well as total non-personnel operating costs, while the use of temporary agencies for RNs increased non-personnel operating costs. An RN rich skill mix was not related to either measure of hospital costs. These findings provide partial support of the theory. Implications of our findings for future research on hospital management are discussed.
Staffing Patterns and Hospital Efficiency
Institute For Research on Labor and Employment, 1993
The objective of this study was to assess the effect of four different nurse staffing strategies on hospital costs: Part-time RNs; RN temporary agencies; RN rich skill mix; and organizationally experienced RNs. Two regression equations were specified to consider the effect of these strategies on personnel and benefit costs and on non-personnel operating costs. A number of additional variables were also included in the equations to control for the effect of other organization and environmental causes of hospital costs. Consistent with the hypotheses, use of part-time RNs and experienced staff reduced personnel and benefit costs while the use of temporary agencies for RNs increased non-personnel operating costs. An RN rich skill mix was not related to either measure of hospital costs. The implications of our findings for hospital administration are discussed.
Health Services Research, 2006
Research Objective. The financial savings from the Balanced Budget Act (BBA) are attractive to policy makers, but such savings come at a cost. We measure changes in nurse staffing at hospitals related to potential declines in reimbursement through the BBA. Study Design. Following Hadley, Zuckerman, and Feder (1989), we define a fiscal pressure index (FPI) to measure the differential effect of the BBA. We estimate the effect of the FPI on the number of full-time equivalent registered nurses (RN) and licensed practical nurses (LPN) per adjusted patient day using American Hospital Association (AHA) data of a panel of hospitals from 1996 to 2001. The AHA data are combined with the Area Resource Files and health maintenance organizations penetration data. We control for hospital heterogeneity using fixed effects. Population Studied. All urban short-term general hospitals that responded to the staffing and uncompensated care questions in the AHA survey between 1996 and 2001. We define safety net hospitals as those with a high ratio of uncompensated costs to total hospital expenses (see, e.g., ). Principal Findings. We find that the nonsafety net hospitals that were most susceptible to the provisions of the BBA experienced a decline in RN staffing ratios about twice the rate of the nonsafety net hospitals that were least susceptible to the BBA. We are unable to detect an effect of the BBA on staffing at safety net hospitals. Conclusions. RN and LPN staffing levels per adjusted patient day declined, on average, between 1996 and 2001. Within the context of the general decline, we find that RN staffing per adjusted patient day declined even more at nonsafety net hospitals that were most susceptible to lower reimbursement related to the BBA. Thus, there was a small but statistically significant incremental effect of potential BBA losses on RN staffing at hospitals that were expected to be affected most. This incremental decline represented about a 6 percent increase in nurse workload that in isolation might not affect quality. Nevertheless, the BBA contributed to the contemporaneous trends toward higher nurse workloads that could have deleterious effects on quality. In contrast, safety net hospitals did not respond to the provisions of the BBA by reducing staffing ratios.
A Decomposition of Hospital Profitability
Health services research and managerial epidemiology, 2015
Objectives: This paper evaluates the drivers of profitability for a large sample of U.S. hospitals. Following a methodology frequently used by financial analysts, we use a DuPont analysis as a framework to evaluate the quality of earnings. By decomposing returns on equity (ROE) into profit margin, total asset turnover, and capital structure, the DuPont analysis reveals what drives overall profitability. Methods: Profit margin, the efficiency with which services are rendered (total asset turnover), and capital structure is calculated for 3,255 U.S. hospitals between 2007 and 2012 using data from the Centers for Medicare & Medicaid Services' Healthcare Cost Report Information System (CMS Form 2552). The sample is then stratified by ownership, size, system affiliation, teaching status, critical access designation, and urban or non-urban location. Those hospital characteristics and interaction terms are then regressed (OLS) against the ROE and the respective DuPont components. Sensitivity to regression methodology is also investigated using a seemingly unrelated regression. Results: When the sample is stratified by hospital characteristics, the results indicate investor-owned hospitals have higher profit margins, higher efficiency, and are substantially more leveraged. Hospitals in systems are found to have higher ROE, margins, and efficiency but are associated with less leverage. In addition, a number of important and significant interactions between teaching status, ownership, location, critical access designation, and inclusion in a system are documented. Many of the significant relationships, most notably not-for-profit ownership, lose significance or are predominately associated with one interaction effect when interaction terms are introduced as explanatory variables. Results are not sensitive to the alternative methodology. Conclusion: The results of the DuPont analysis suggest that although there appears to be convergence in the behavior of NFP and IO hospitals, significant financial differences remain depending on their respective hospital characteristics. Those differences are tempered or exacerbated by location, size, teaching status, system affiliation, and critical access designation. With the exception of cost-based reimbursement for critical access hospitals, emerging payment systems are placing additional financial pressures on hospitals. The financial pressures being applied treat hospitals as a monolithic category and, given the delicate and often negative ROE for many hospitals, the long-term stability of the healthcare facility infrastructure may be negatively impacted.
Effects of Specialty Hospitals on The Financial Performance of General Hospitals, 1997–2004
Inquiry, 2007
Hospital specialization has become a controversial topic, culminating in a moratorium issued in 2003 by Congress directing the Centers for Medicare and Medicaid Services to cease payments to new physician-owned specialty hospitals for those Medicare and Medicaid patients referred by physicians with a financial interest in the facility. This paper focuses on one important economic question: does the presence of specialty hospitals in a market affect general hospitals' financial performance? We estimate longitudinal fixed-effects models for a national panel of short-term acute care hospitals for the period 1997 though 2004; models are estimated for general hospital patient-care revenue, costs, and operating margins. We find that the presence of one or more new or established specialty hospitals in a market has a negative effect on general hospital costs and a positive effect on general hospital operating margins. Results, which were consistent across several different modeling app...
Nurse Staffing Levels: Impact of Organizational Characteristics and Registered Nurse Supply
Health Services Research, 2007
Objective. To assess the impact of nurse supply in the geographic areas surrounding hospitals on staffing levels in hospital units, while taking into account other factors that influence nurse staffing. Data Sources. Data regarding 279 patient care units, in 47 randomly selected community hospitals located in 11 clusters in the United States, were obtained directly from the hospitals from the U.S. Census report, National Council of State Boards of Nursing, and The Centers for Medicare and Medicaid Services. Study Design. Cross-sectional analyses with linear mixed modeling to control for nesting of units in hospitals were conducted. For each patient care unit, the hours of care per patient day from registered nurses (RNs), LPNs, nursing assistants, and the skill-mix levels were calculated. These measures of staffing were then regressed on type of unit (intensive care, medical/surgical, telemetry/stepdown), unit size, hospital complexity, and RN supply. Principal Findings. RN hours per patient day and RN skill mix were positively related to intensity of patient care, hospital complexity, and the supply of RNs in the geographic area surrounding the hospital. LPN hours, and licensed skill mix were predicted less reliably but appear to be used as substitutes for RNs. Overtime hours increased in areas with a lower RN supply. Vacancy and turnover rates and the use of contract nurses were not affected by nurse supply.
Hospital financial performance in the United States of America: a follow-up study
Eastern Mediterranean health journal = La revue de santé de la Méditerranée orientale = al-Majallah al-ṣiḥḥīyah li-sharq al-mutawassiṭ, 2006
To clarify and validate the factors that influence hospital profitability in the United States of America, we used a cross-sectional design to examine data for 1998. Several changes and government regulations introduced in the early 1990s influenced hospital performance. We included those variables to give a better understanding of the hospital payment system. Among the explanatory variables considered, geographic location, competition, hospital size and occupancy rate were identified as the main contributors to hospital profitability.