The effect of minimum nurse staffing legislation on uncompensated care provided by California hospitals

Abstract

This study assesses whether California's minimum nurse staffing legislation affected the amount of uncompensated care provided by California hospitals. Using data from California's Office of Statewide Health Planning and Development, the American Hospital Association Annual Survey and InterStudy, the authors divide hospitals into quartiles based on preregulation staffing levels. Controlling for other factors, they estimate changes in the growth rate of uncompensated care in the three lowest staffing quartiles relative to the quartile of hospitals with the highest staffing level. The sample includes short-term general hospitals over the period 1999 to 2006. The authors find that growth rates in uncompensated care are lower in the first three staffing quartiles as compared with the highest quartile; however, results are statistically significant only for county and for-profit hospitals in Quartiles 1 and 3. The authors conclude that minimum nurse staffing ratios may lead some hospitals to limit uncompensated care, likely due to increased financial pressure.

Figure 1

Conceptual Model of the Effect of AB394 on Hospital Uncompensated Care Notes: Boxes with dashed lines are not modeled *Hospital net income would be reduced by increases in nurse staffing and nurse wages. The reduction may be offset by higher private pay prices if higher quality allows hospitals to negotiate better rates. However, we hypothesize that during the study period, the cost increase would not be fully offset by price increases so that the net effect on net income would be a decrease.