Nurse Practitioner Autonomy and Hospital Staffing: The Role of Physician Scarcity

• In Event: How Practice Environments Shape Physician Behavior and Workforce Decisions

Abstract

This paper examines how nurse practitioner (NP) practice autonomy reallocates NPs across healthcare facilities in the United States. Since 2010, twenty states have adopted NP full practice authority (FPA), allowing NPs to diagnose patients, prescribe medications, and treat illnesses independently of physicians. While FPA is known to legalize autonomous practice of NPs and increase access to primary care, little is known about how it operates through the reallocation of NPs to most valuable practice environments. We develop a simple model in which NPs choose between team and autonomous practice while healthcare facilities differ in physician scarcity and the demand for autonomous NP practice. The model predicts (1) a re-sorting of NPs from hospitals to non-hospital healthcare facilities after FPA and (2) heterogeneous effects on hospital staffing of NPs depending on the degree of physician scarcity. We first provide evidence on reallocation across hospital and non-hospital healthcare facilities using the American Community Survey (ACS) from 2010–2023. Exploiting staggered adoption of FPA, we find that the share of NPs employed in hospitals declines  following FPA. Conversely, we find increases in NP employment shares in non-hospital industries, including outpatient care centers and office-based practices. The increase for outpatient care centers is statistically significant in our baseline specification, whereas the increase for offices of medical practitioners is not statistically significant but suggestive, consistent with an expansion of autonomous practice opportunities in non-healthcare facilities with limited availability of physicians. We then examine hospital staffing responses using the American Hospital Association (AHA) Annual Survey from 2010–2023. Our main outcome is advanced practice nurses (APNs) per 100 beds, which we use as a proxy for NP staffing. We find that APN staffing declines significantly in physician-abundant hospitals after FPA, while it does not in physician-scarce hospitals. These patterns are consistent with the model’s central prediction: as FPA increases outside options and draws some NPs away from hospital team practice, hospitals facing binding physician constraints experience larger productivity gains from NP autonomy and may be better able to retain or attract NPs. These findings suggest that NP practice autonomy reallocates clinical labor and may help alleviate staffing constraints in physician-scarce healthcare markets.

Author

• Kihwan Bae, West Virginia University
  Presenting Author