Effects of New Zealand's health reengineering on nursing and patient outcomes

Background: In 1993, New Zealand (NZ) implemented policies aimed at controlling costs in the country's public health care system through market competition, generic management, and managerialism. The cost control focus was similar to reengineering efforts implemented by other countries struggling with escalating health care costs, particularly the United States. Objective: The study's purpose was to examine the effects hospital reengineering may have on adverse patient outcomes and the nursing workforce. Research Design: The study was a retrospective, longitudinal analysis of administrative data. Relationships between adverse outcome rates and nursing workforce characteristics were examined using autoregression analysis. Subjects: All medical and surgical discharges from NZ's public hospitals (n = 3.3 million inpatient discharges) from 1989 through 2000 and survey data from the corresponding nursing workforce (n = 65,221 nurse responses) from 1993 through 2000 were examined. Measures: Measures included the frequency of 11 nurse sensitive patient outcomes, average length of stay, and mortality along with the number of nursing full time equivalents (FTEs), hours worked, and skill mix. Results: After 1993, nursing FTEs and hours decreased 36% and skill mix increased 18%. Average length of stay decreased approximately 20%. Adverse clinical outcome rates increased substantially. Mortality decreased among medical patients and remained stable among surgical patients. The relationship between changes in nursing and adverse outcomes rates over time were consistently statistically significant. Conclusions: In the chaotic environment created in NZ by reengineering policy, patient care quality declined as nursing FTEs and hours decreased. The study provides insight into the role organizational change plays in patient outcomes, the unintended consequences of health care reengineering and market approaches in health care, and nursing's unique contribution to quality of care.