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Nurse staffing recommendation

BUSINESS ANALYTICS II GROUP XXX

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Goals and aims
Primary Goal
Does the hiring of ten additional nurses at Kletzl Hills yield sufficient mortality
reduction (and corresponding increase in bonus) to justify the expense of
hiring them?

Supporting Modalities
Building a regression model to understand the primary goal
The goal of the exercise is also to build a model which is robust (includes all
important variables) but at the same time is parsimonious.
The exercise is about including variables on the basis of the business
question and context to find the most optimal method of addressing the
challenge

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Results & conclusion

Hiring 10 additional nurses at Kletzl Hills is associated


with a decrease in mortality between -0.73 to -0.085
percentage points

As a result, Kletzl Hills' yearly bonus will change


between $0.4 M and $3.6M

With yearly cost per nurse of $60.000, we have evidence


that hiring 10 additional nurses will be profitable with a
significance level of 3.9%

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Data
Source
Data comes from the WellNet Health System, and counts with observations
of 42 hospitals

Available variables
Services offered - Dummy variables
1
High-tech services, High-touch services, Residency program

Demographics Describe population in ZIP code surrounding hospital


2
Gender, Race, Education, Income & employment, Age, Population

Hospital KPIs - Specific hospital measurements


3
Mortality rate, Nurse rate, Case weight, Other

Limitations to data
Missing some relevant variables like nurse quality or hours of physicians

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Model
Goal
The model estimates the effect of a change in nurse staffing ratio (nsr) on
mortality rate

Controls
It controls for the following x-variables to avoid OVB on nsr effect
1 Case weight: Controls for hospital population's sickness
2 High-touch: Amount of high-touch services in the hospital; controls for
services high in staff and with low mortality rates (incremental with the
amount of services)
3 Percentage Medicare: Controls for elder people who tend to require
more nurses with higher mortality rates
4 Median income: Controls for factors like access to better medicine in
higher income hospitals that interfere with nsr effect in mortality rates
5 Unemployment rate: Controls for inequity factors in the distribution of
income

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Results
Nurse staffing ratio effect
Nrs coefficient Mortality impact Bonus impact
Mean: -6.1 Mean: -0.41 p.p Mean: $2M
95% CI: -10.93 95% CI: -0.73 to 95% CI: $0.4 -
to -1.28 -0.085 p.p $3.6M
p-value: 1.5% Hiring 10 Decreasing 1
nurses p.p in mortality
increases nsr has a bonus
by 0.067 impact of $5M

Profitability analysis
We have strong evidence with 3.9% significance level that hiring additional
nurses will be a profitable measure
Ha: Benefits of reduced mortality > Costs of 10 additional nurses
p-value: 3.9%

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Robustness check
Using education as a proxy to income instead of unemployment
rate

-1.27
-2.01

-6.1 -6.89

-10.92
-11.73

Control for unemployment Control for education

The closely matching values of the coefficient indicate that the model is robust
when different variables are used to describe the effect on mortality

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Conclusion

We started with the primary goal of determining whether the Keltz


Hills hospital should go ahead with the decision to hire 10 additional
nurses

We built a regression model on the basis of the business context


that helped eliminate the effects of OVB and helped us determine
the correlation between NSR and mortality holding other significant
variables constant

On the basis of this model, we came to the conclusion should invest


in hiring 10 additional nurses that will contribute to a bonus change
of $0.4M and $2.3M with a significance level of 3.9%

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Data
Source
Data comes from the WellNet Health System, and counts with observations of 42
hospitals

Available variables
1 Services offered 2 Demographics 3 Hospital KPIs
Dummy variables Population in ZIP code surrounding Specific hospital measurements
hospital
High-tech services Gender Mortality rate
Burn care, cardiac % of female population Percent of admitted patients
catheterization, coronary care, Race who die in hospital
CT scan, heart surgeries, % of black,% hispanic Nurse rate
lithotripsy, others
Education Nurse staffing ratio
% with no more than high Case weight
High-touch services school degree, % with graduate Measure of hospital
Alcohol rehabilitation, alternate degree population's sickness
birthing, home health care, drug
rehabilitation, others
Income & employment Other
Median income, % Average length of stay (los),
unemployment Number of inpatients referred
Residency program
Age in, Number of beds staffed,
% age 5 or under, % Medicare Number of surgeries performed,
if hospital was opened in 1988
Population

Limitations to data
Missing some relevant variables like nurse quality or hours of physicians

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