Skill mix versus flexibility: Decoding nurse staffing impacts on critical access hospitals

Objective: This study examines the effect of nurse staffing (skill mix and flexibility) on the financial sustainability, efficiency, and quality of care in Pennsylvania's critical access hospitals (CAHs) from 2000 to 2023. Methods: This retrospective longitudinal study utilized unbalanced panel data from Pennsylvania's CAHs (n = 357 hospital-year observations). We employed 2-way fixed effects regression models to analyze the relationship between nurse staffing variables (skill mix and flexibility) and hospital performance outcomes (total margin, cost per adjusted discharge [CPAD], cost per adjusted patient day [CPPD], average length of stay [ALOS], and readmission index). We controlled for hospital-specific, socioeconomic, and demographic factors. Results: A higher registered nurse (RN) skill mix significantly reduced log(winsorized(CPAD)) (β = −0.495, p<0.01) and log(ALOS) (β = −0.571, p<0.01), indicating improved cost efficiency and patient throughput. Increased nurse flexibility significantly increased log(ALOS) (β = 0.315, p<0.05) but reduced the readmission index (β = −0.895, p<0.01). No significant associations were found between skill mix and total margin, CPPD, or readmission index, nor between flexibility and financial metrics. Discussion: A richer RN skill mix enhances efficiency by reducing costs and length of stay, while increased staffing flexibility reduces readmissions but extends ALOS. These findings emphasize the complex interplay between nurse staffing and CAH performance. Strategic management of RN skill mix and flexibility is crucial for optimizing resource use and improving patient outcomes in rural hospitals. Conclusions: Policymakers and CAH administrators should strategically balance RN expertise and staffing flexibility to ensure both financial viability and clinical excellence in these essential rural health care institutions.