title: The effects of managed care and prospective payment on the demand for hospital nurses: evidence from California.
abstract: OBJECTIVE
  To examine the effects of managed care and the prospective payment system on the hospital employment of registered nurses (RNs), licensed practical nurses (LPNs), and aides.
  
  
  METHODS
  Hospital-level data from California's Office of Statewide Health Planning and Development (OSHPD) Hospital Disclosure Reports from 1976/1977 through 1994/1995. Additional information is extracted from OSHPD Patient Discharge Data.
  
  
  METHODS
  Multivariate regression equations are used to estimate demand for nurses as a function of wages, hospital output, technology level, and ownership. Separate equations are estimated for RNs, LPNs, and aides for all daily services and for medical-surgical units. Instrumental variables are used to correct for the endogeneity of wages, and fixed effects are included to control for unobserved differences across hospitals.
  
  
  RESULTS
  HMOs are associated with a lower use of LPNs and aides, and HMOs do not have a statistically significant effect on the demand for RNs. Managed care has a smaller effect on nurse staffing in medical-surgical units than in daily service units as a whole. The prospective payment system does not have a statistically significant effect on nurse staffing.
  
  
  CONCLUSIONS
  HMOs have affected nursing employment both because HMOs have reduced the number of discharges and because of a direct relationship between HMO penetration and the demand for LPNs and aides. Contrary to press reports, LPNs and aides have been affected more by HMOs than have registered nurses.
authors.affiliation: Public Policy Institute of California, San Francisco 94111, USA.
authors.forename: J
authors.initials: J
authors.lastname: Spetz
mesh_terms: D002140:California; D003363:Cost Control; D003953:Diagnosis-Related Groups; D006279:Health Maintenance Organizations; D006801:Humans; D008329:Managed Care Programs; D015999:Multivariate Analysis; D020380:Needs Assessment; D009728:Nursing Assistants; D009741:Nursing Staff, Hospital / Q000600:supply & distribution*; D009743:Nursing, Practical; D010561:Personnel Staffing and Scheduling / Q000191:economics*; D011243:Preferred Provider Organizations; D011445:Prospective Payment System; D011787:Quality of Health Care; D012044:Regression Analysis; D012456:Salaries and Fringe Benefits; D016526:Workload