The effect of minimum nurse staffing ratios on the financial performance of acute care hospitals in California

By Ilbret Ilo Pourmanafy Master of Public Administration, Health Administration The California Nurses Association (ANA) sponsored the legislative Assembly Bill (AB) 394 to ensure safe staffing for patients in California. AB 394 was introduced by Assembly person, Khuel, and signed into law by Governor Davis in the fall of 1999. This law is the first law mandating nurse staffing ratios for acute-care hospitals. This paper determines whether the nurse- to-patient ratio law has impacted acute care hospitals financially due to in-hospital mortality and/or unplanned readmission to intensive care units. The California Department of Health Services estimated that the mandated nurse-to-patient ratios would cost California hospitals $956 million annually after implementation given adequate recruiting sources (CHA, 2004). Not many study’s have been published addressing the fiscal impact to hospitals of the mandated nurse-to-patient ratios that were implemented in 2004. Previous results have shown that there was not a complex financial burden on hospitals, as the quality care of acute care patients was impeccable. From the research conducted also showed that in hospital mortality and/or unplanned readmission to intensive care units decreased due to AB 394.