The Impact of Market Conditions on RN Staffing in Hospitals: Using Resource Dependence Theory and Information Uncertainty Perspective

PURPOSE: Due to a limited number of studies with generalizable findings on the relationships between market conditions and RN staffing levels in hospitals, this study examined such relationships employing a longitudinal design with a representative national sample. MATERIALS AND METHODS: We used longitudinal panel datasets from 2006 to 2010, drawn from various datasets including the American Hospital Association Annual Survey Database and the Area Health Resource File. A random-effects linear regression model was used to measure the influence of market conditions on RN staffing levels. RESULTS: The results of this study showed that market conditions were significantly associated with RN staffing levels in hospitals. First, an increase in per capita income and being located in urban rather than rural areas were associated with a greater number of RNs per 1,000 inpatient days and a higher ratio of RNs to LPNs and nursing aides. In addition, an increase in the number of physician specialists was associated with an increase in the number of RNs per 1,000 inpatient days. Second, an increase in Medicare HMO penetration in the environment was related to an increase in the RNs to LPNs and nursing aides ratio. Lastly, an increase in market competition was associated with an increase in the number RNs per 1,000 inpatient days and the ratio of RNs to LPNs and nursing aides. CONCLUSION: The findings of this study suggest that staffing decision makers in hospitals should consider how to best align their RN staffing levels with their operating environment. In addition, health policy makers may improve the levels the RN supply in communities that needs more RNs by modulating external environmental forces (eg, specialist resources) that influence RN staffing levels in hospitals.