The impact of public hospitals' privatization on nurse staffing

Privatization is one of the strategies that public hospitals may adopt to remain competitive. Privatized hospitals may implement nurse staffing cuts as a cost-saving mechanism and to increase financial performance. A better understanding of how privatization may affect nurse staffing is important given its association with patient and organizational outcomes.

The aim of this study was to examine the impact of not-for-profit (NFP) and for-profit (FP) privatizations of public hospitals on nurse staffing.

Based on secondary data sets from the American Hospital Association Annual Survey, the Centers for Medicare & Medicaid Services Impact Files, and the Area Health Resources File, this study used a nonexperimental longitudinal design consisting of negative binomial and linear regression models with hospital level and year fixed effects. Our sample consisted of nonfederal and noncritical access, acute care, public hospitals (n = 492) followed from 1997 to 2013 (8,335 hospital-year observations). Nurse staffing was measured as full-time equivalents (FTEs) and skill mix. Privatization was defined as conversion from public to either private NFP or private FP status.

FP privatization was associated with greater decreases in registered nurse (RN) staffing FTEs (incidence rate ratio [IRR] = 0.93, p = .004) and total nurse staffing FTEs (IRR = 0.93, p = .001), compared with NFP privatization: RN staffing FTEs (IRR = 0.95, p = .003) and total nurse staffing FTEs (IRR = 0.96, p = .007).

Overall, privatization was associated with decreased RN FTEs and total nurse staffing FTEs and no changes in licensed practical nurse FTEs and RN skill mix.

A close monitoring of nurse staffing level, after privatization, is encouraged to prevent potential deterioration in quality of care.