This study aims to evaluate the new nursing policy's effect on improving overall nurse staffing levels in Korean acute care hospitals.The Korean government introduced the Integrated Nursing and Care Service policy, which adopted advanced staffing standards. Under the new scheme, reimbursement of nursing fees was differentiated by the patient-to-nurse ratios, and financial incentives were provided to policy participating hospitals to promote additional employment in overall hospitals.We analysed 1362 acute care hospitals. The probability and degree of improving nurse staffing levels for each hospital were examined using a two-part model. Whether policy participation had affected to improve nurse staffing levels was evaluated by the difference-in-difference approach.Policy participating hospitals were 3.89 times more likely to enhance nurse staffing levels compared to non-participating hospitals. The policy participation effect was found to improve average nurse staffing levels by 1.12 grades.Korean nurse staffing policy reform was successful to encourage hospitals to improve their overall nurse staffing levels.Nursing leaders and policymakers should understand that providing incentives could affect hospitals' employment behaviour change under the market-oriented healthcare system. For developing future nursing policies, these strategies should be considered appropriately.