Hospital staffing adjustments under global budgeting

The U.S. Department of Veterans Affairs operates a hospital system that distributes a national global budget to 159 hospital units. Over recent years, cost containment and downward budgetary pressures have affected hospital performance and the quality of care delivered in unknown ways. This article examines hospital staffing levels as potential performance measures. We first develop a regression model to estimate the number and types of clinical staff required to meet current inpatient workloads at VA medical centers. We are able to improve on previous analyses by employing better data on physicians and by evaluating the behavior of hospitals in consecutive years. Our findings provide managers of hospital systems with promising new approaches for comparing hospital production processes and more information on the effects of global budgeting on individual hospital staffing within systems.