The evolution of nurse staffing within hospitals is closely linked with the evolution of health care in the United States. Florence Nightingale began modern nursing education in the St. Thomas hospital in London, using it as a training ground for new nurses. Under this model, unpaid nursing students staffed hospital wards and left after graduation for community work or private duty for wealthy clients. Hospital work was considered menial and to be performed only by those less skilled. The early 20th century saw the widespread adoption of anesthesia and antisepsis—innovations that would change health. World War I was the first war in which more soldiers died from battle wounds than from disease. This was largely due to medical innovations and nursing care (Clodfelter, 2002).

In the United States toward the end of World War I, the American Association for Labor Legislation introduced the first model national health insurance bill. The American Medical Association and insurance companies Prudential and Metropolitan, which had begun to emerge as leaders in employer-based health insurance, vehemently opposed this bill. The trend toward employer-based health insurance helped move nurses from the community and private duty into hospitals where one nurse could care for multiple patients at the same cost. During this time, the hospital was transformed from a primarily charitable operation to a business that partnered with physicians to centralize care and advance medical technology. This agenda was further promoted by passage of the Hospital Construction Act, or Hill-Burton, in 1946. Over the next 35 years, this law provided more than $3.7 billion in federal funds and a $9 billion state match to 42 states for the construction of hospitals.

After World War II, as part of the national recovery, employers were taxed heavily on excess profits. To offset these taxes, employers contributed to employee-based health plans and pensions, insuring more than 60% of the American population by the mid-1950s (Morone, Litman, & Robins, 2008). During this time, the nursing profession grew dramatically and nurses began assuming responsibilities in new care areas such as intensive care and operating rooms.

In 1965, Lyndon Johnson signed the Social Security Amendments of 1965, whose primary provisions created and enacted Medicare and Medicaid. This move enrolled the elderly and the extremely poor on insurance rosters, at the expense of the federal and state government. Debate over cost containment started as advances in medicine were made and care became more expensive. Hospitals incorporated nursing labor costs into their room and board fees to balance finances. Many believe that this practice decreased the visibility of nursing and left the profession vulnerable to cost cutting.

Medicare adopted a prospective payment system in 1983, thereby fundamentally changing the methods of healthcare payment. Instead of paying physicians and hospitals for what they did, reimbursement was determined by the disease or procedure; this scheme is known today as diagnostic related groups (DRGs). This payment restructuring left nurses even more vulnerable to hospital cost cutting: If the hospital was reimbursed a fixed amount for patient care, nonrevenuegenerating departments such as nursing were inevitably viewed as an area for potential savings.

Over the next two decades, average hospital length of stay decreased from seven to eight days to four to five (Graf, Miller, Feilteu, Coakley, & Erickson, 2003; Unruh & Fotter, 2006). The National Hospital Discharge Survey (2009) reported that the
average length of stay in 1980 was 7.6 days; in 2004, it was 5.6 days, and by 2009 it had dropped even lower to 5.4 days. During this same period, the number of outpatient visits and surgeries almost doubled. Declining reimbursement by Medicaid and Medicare acted as incentive for hospitals to move patients through more quickly so as to maximize revenues—and many experts believe that the average length of stay will continue to shorten (The National Hospital Discharge Survey, 2009).