Content area
Full text
1. Introduction
Hospitals in the USA face a challenging time catering to a growing yet aging population (Elg et al., 2013). In 2019, the US Census Bureau reported that over 54 million Americans are over the age of 65, making up 16.5% of the country's population (United States Census Bureau, 2020). Taking care of an aging patient population requires hospitals to not only provide better access for patients, but also invest in resources such as skilled nurses and technology in the care delivery process (Li and Benton, 2006). An appropriate nurse staffing level is essential to maintaining high quality of care in both inpatient care and transition of care (Needleman et al., 2002; McHugh et al., 2013). The American Nursing Association (ANA) advocates increasing nurse staffing to improve care quality by providing timely patient care. Operations-wise, however, hospital administrators face dual pressures in nursing staffing decisions. On the one hand, staffing more nurses can hopefully help ensure the quality of care in the downstream hospital supply chain (Dobrzykowski, 2019). Having more nursing capacity in a hospital not only provides the needed care to patients during their hospital visits, but also can better prepare patients for post-hospitalization care (e.g. reinforce discharge instructions and track patient recoveries post-discharge) (McDermott and Stock, 2007; Needleman and Hassmiller, 2009; Twigg et al., 2013). On the other hand, employing more nurses can result in higher payroll costs, and nurse payroll costs are already the most considerable portion of total operating costs for hospitals (American Hospital Association, 2019).
Further, hospitals are facing increasingly high competition (Fulton, 2017). In 2021, President Joe Biden signed an executive order that targets to boost competition among hospitals and other healthcare providers (The White House, 2021). As one of the most vital resources to hospital operations, nurse capacity has important implications for a hospital's success in a competitive market. On the one hand, keeping slack in nurse capacity helps counter the increased uncertainties in patient demand and gain more market share. On the other hand, there is a significant shortage of nurses in the USA. Hospitals find it hard to recruit nurses and are experiencing nurse burnouts and job dissatisfactions due to increased workloads (Aiken et al., 2002). A recent Bureau of...