Economics of nursing

Pay-for-performance initiatives have renewed interest in payment reform as a vehicle for improving nurse staffing and working conditions in hospitals because of research linking investments in nursing and better patient outcomes. This article addresses the economics of nursing from a broad perspective that considers how both national policies such as hospital prospective payment and managerial decisions within institutions impact the outcomes of nurses and patients. Cost offsets are considered from the perspective of savings in patient-care resources that accrue from investments in nursing. Cost offsets are also considered from the perspective of the interactions among different strategies for investing in nursing, including the impact of staffing levels on patient outcomes with varying educational levels of nurses and varying quality of practice environments.