## Healthcare Economist

Unbiased Analysis of Today's Healthcare Issues

## Nurse-Staffing Levels and the Quality of Care in Hospitals

Written By: Jason Shafrin - Apr• 20•06

Most people intuitively believe that having more nurses on staff at a hospital improves health outcomes. After reading Money Magazine‘s report that an average RN earns approximately \$70,000 per year, relying on ‘intuition’ may not be the most appropriate manner to judge a nurse’s cost effectiveness. Do health outcomes really improve to justify this cost?

Needleman, Buerhaus, Mattke, Stewart, and Zelevinsky (2002) provide convincing evidence that nurses do improve health outcomes in hospitals. The study examines 799 hospitals in eleven states and tests to see how variation in nurse staffing or nurses hours worked changes health care outcomes. The first stage of their analysis runs a logistic regression. The health outcome for each patient was regressed on patient diagnosis related group (DRG), age, sex, primary insurer, state of residence, a dummy for emergency admission and the presence of any chronic diseases. These factors were added up and each hospital was assigned a risk factor. The second stage uses an ordinary least squares (OLS) regression to calculate the difference between the expected health outcome and the actual outcome using hospital dummies, nurse staffing and hours, the number of beds, etc.

Below is a table of their results. All coefficients less then 1.00 indicate that health outcomes improved. Outcomes statistically different from 1 at the 5% level receive a star (*).

 Proportion of RN hours No. of RN hours/patient day Length of Stay -1.12* -0.09* Urinary Tract Infection 0.48* 0.99* Upper gastrointestinal bleeding 0.66* 0.98* Hospital-acquired pneumonia 0.59* 0.99* Cardiac Arrest 0.46* 0.98 Failure to Rescue 0.81* 1.00 In-Hospital Death 0.90 1.00

Since outcomes improve in all six of the seven categories under the first model and in four of seven categories under the second model, it seems that nurses do have a positive effect on health.

I find two possible problems with the study:

1. Nurses may be a proxy for quality. Good hospitals may have better technology, more qualified doctors, and more nurses. The superior health outcomes may not be due to the nurse staffing at all but to other factors which are correlated with the number of RN work hours.
2. The first stage logistic regression may have omitted variables. For instance, if rich people have better health outcomes—due to lifestyle choices—and are able to afford hospitals with more nurses, we would find a spurious correlation between health and nurse staffing, since nurse staffing level is simply a proxy for inherently healthier patients.

Despite these two problems, the evidence does seem convincing. As standard economic theory would predict, increasing inputs (nurses) will lead to increased outputs (health) ceteris paribus.  Future research needs to determine more precisely what is a nurse’s cost benefit ratio in order for hospitals to ascertain the appropriate RN staffing.

Needleman, J; Buerhaus, P; Mattke, S; Stewart, M; Zelevinsky, K (2002); “Nurse Staffing Levels and the Quality of Care in Hospitals,” New England Journal of Medicine, Vol 346 (22).

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