The past decade has witnessed pronounced changes in the organization of U.S. hospitals, many the direct result of restructuring and reengineering initiative intended to decrease costs and increase productivity. Little is known about how these initiatives have affected clinical care and patient outcomes. Using data from a variety of sources, the authors describe initiatives that hospitals undertook over this period, indicate how staffing changed relative to the case-mix of patients receiving care, and examine changes in nursing practice environments over the period from 1996 to 1998. The authors found that apparent increases in nurse-to-patient ratios may be deceiving and that increases in patient acuity and nurses' responsibilities may have increased the workload of nurses in hospitals in ways, when coupled with a deteriorating practice environment, may adversely affect patient outcomes.