Frontiers in Operations: Valuing Nursing Productivity in Emergency Departments

Problem definition : We quantify the increase in productivity in emergency departments (EDs) from increasing nurse staff. We then estimate the associated revenue gains for the hospital and the associated welfare gains for society. The United States is over a decade into the worst nursing shortage crisis in history fueled by chronic underinvestment. To demonstrate to hospital managers and policymakers the benefits of investing in nursing, we clarify the positive downstream effects of doing so in the ED setting. Methodology/results : We use a high-resolution data set of patient visits to the ED of a major U.S. academic hospital. Time-dependent hazard estimation methods (nonparametric and parametric) are used to study how the real-time service speed of a patient varies with the state of the ED, including the time-varying workloads of the assigned nurse. A counterfactual simulation is used to estimate the gains from increasing nursing staff in the ED. We find that lightening a nurse’s workload by one patient is associated with a 14% service speedup for every patient under the nurse’s care. Simulation studies suggest that adding one more nurse to the busiest 12-hour shift of each day can shorten stays and avert $160,000 in lost patient wages per 10,000 visits. The reduction in service times also frees up capacity for treating more patients and generates $470,000 in additional net revenues for the hospital per 10,000 visits. Extensive sensitivity analyses suggest that our key message—that investing in nursing will more than pay for itself—is likely to hold across a wide range of EDs. Managerial implications : In determining whether to invest in more nursing resources, hospital managers need to look beyond whether payer reimbursements alone are sufficient to cover the up-front costs to also account for the resulting downstream benefits.