The level of nursing staff is considered a decisive factor in healthcare quality and patient outcomes. However, the impact on hospital financial performance remains underexplored.

This study examines the relationship between nursing staff assignment, financial performance, and healthcare quality.

This study collected 495 data observations from 99 hospitals in Taiwan from 2015 to 2019. The research variables were patient-to-nurse ratio, financial performance, and healthcare quality. Data was collected from the National Health Insurance Administration of the Ministry of Health and Welfare and the National Health Insurance Medical Quality Information Disclosure Network. We conducted a multiple regression analysis to explore the relationship between nurse staffing and healthcare quality and between nurse staffing and financial performance. Furthermore, we examined the mediating and moderating effects of healthcare quality on the relationship between nurse staffing and financial performance.

The results indicate that patient-to-nurse ratios had a statistically significant positive relationship with net operating profit margin, gross operating profit margin, and after-tax net profit margin. Patient-to-nurse ratios had a statistically significant positive relationship with “Percentage of unplanned rehospitalizations within 14 days post-discharge,” “Percentage of re-emergency visits to the same hospital within three days post-discharge,” and “Percentage of hospitalization days exceeding 30 days in acute beds.” Furthermore, the “Percentage of re-emergency visits to the same hospital within three days post-discharge” had a negative moderating effect on the relationships between patient-to-nurse ratios and return on assets, net operating profit margin, and gross operating profit margin. The “Percentage of hospitalization days exceeding 30 days in acute beds” had a negative moderating effect on the relationships between patient-to-nurse ratios and return on assets, net operating profit margin, and after-tax net profit margin.

The relationship between patient-to-nurse ratios and financial performance was positive but moderated by healthcare quality to some extent. Due to low healthcare quality, cost savings based on high patient-to-nurse ratios might not be achieved, thus reducing financial performance. This study suggests that when considering nursing staff assignment, hospital managers should consider whether the hospital's healthcare quality could play a moderating role in improving financial performance.