Economic austerity and healthcare restructuring: correlates and consequences of nursing job insecurity

The healthcare system underwent considerable restructuring and downsizing in the early to mid-1990s in several countries as governments cut costs to reduce their budget deficits. Studies of the effects of these efforts on nursing staff and hospital functioning in various countries generally reported negative impacts. Healthcare restructuring and hospital downsizing is again being implemented in North America in 2009/2010 as governments struggle to reduce their deficits at a time of worldwide economic recession. The present study examines the relationship of hospital restructuring initiatives in and their link with increased threats to job security with a variety of individual and hospital outcomes in a sample of nursing staff working in hospitals undergoing significant restructuring and downsizing. Data were collected from 289 nursing staff working in California hospitals. Nurses reported a relatively large number of restructuring and downsizing initiatives. Restructuring initiatives and threats to job security accounted for a greater increment in explained variance on every outcome measure than did personal demographic factors and work situation characteristics. Threats to job security were generally associated with negative work attitudes and satisfactions, levels of psychological well-being and perceptions of hospital functioning. Some suggestions for more successful approaches to cost reductions are offered.