Labor-Management Relations Affect Hospital Competitiveness, Financial Performance and Quality of Care

From 1995 to 1998, researchers from the Economic Policy Institute assessed the impact of labor-management cooperation and new employment and human resource practices on hospital performance, processes and outcomes.

The study, carried out in the Minneapolis/St. Paul area, included an analysis of hospital financial and human resources data over a 10-year period, along with surveys of nurses, ancillary hospital workers, and administrators.

The Economic Policy Institute is a nonprofit, nonpartisan think tank seeking to broaden the public debate about strategies to achieve a prosperous and fair economy.

Key Findings

The investigators found that:

  • Higher levels of cooperation between labor and management led to a higher ratio of registered nurses to patients, higher levels of employee involvement, and better financial performance among the hospitals studied.

  • The quality of information available to nurses about patient status is central to determining patient outcomes.

    For example, when hospitals transfer routine tasks once performed by registered nurses to nursing assistants, the quality of information declines, the frequency of medication errors increases, and patient perceptions of the quality of care declines.