Understanding the Nursing Shortage

The United States is facing a severe nursing shortage that threatens the underpinnings of our health care system. We can take steps now that can provide short and long term solutions to this looming crisis.

The United States employs over 2.2 million registered nurses (RNs) – the largest professional category in America. There are currently over 120,000 unfilled nursing positions. By 2015, another 400,000 nurses will be needed. The RN shortage hurts patient care and already leads to thousands of unneeded deaths per year.

Recommendations:

1. Direct Health and Human Services to use some of the already-earmarked Nurse Reinvestment Act dollars to market nursing as a second career. With less than a two-year degree, one can make a good living working just part-time. A concentrated marketing effort will attract more Americans to the nursing profession and help solve the long-term shortage.

2. Allow foreign nurses to take the National Council Licensure Examination (NCLEX), the test that accredits nurses in the U.S., in their country of origin. Today, qualified nurses from abroad can only take the examination on American soil, which is a significant barrier to attracting new talent. Making it easier for foreign nurses to come to the U.S. will ease the short-term burden.

Justification …

Key imbalances

• In 1980, the average age of a nurse was 38 compared to the current 45 year old average.

• The current average age of retirement for a nurse is just 52.

• The average age of an RN is increasing more than twice as fast as all other occupations in the U.S.

• The number of students graduating from nursing school is smaller than the number of nurses that are retiring each year.

• Fewer nurses entering into the nursing field resulted in experienced nurses retiring or cutting back on hours due to the increased stress.

• The nursing profession is effectively pulling from half the population – only 10% of nurses are men.

• While the number of new nurses increased 3.7% in 2001 and 8.0% in 2002, there were still 10,000 fewer nurses in 2002 than in 1995.

Demand is increasing

Two main factors cause heightened demand for nurses:

1. Aging population. In 2000, there were 34.7 million people in the U.S. over 65 years old. By 2020, there will be over 53 million people over 65.

2. Regulatory burdens. In 2001, six new states limited overtime for nurses. Also, states like California now require all hospitals to have a one-to-five nurse to patient ratio (the average is one-to-seven today).

Wages

Nursing salaries average $47,000/year and wage increases have significantly outpaced inflation each of the last six years.

The wage increases have unexpectedly resulted in a backward-bending supply curve where many nurses have actually cut back their hours because they only want to earn a specific amount per year annually. Therefore, while higher wages attract new nurses in the long term, they create greater shortages in the short-term due to less total nursing hours.

A looming healthcare crisis can only be averted if we act now and act resolutely.

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