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Wednesday, Novembe r12, 2003

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Bethanne Fox or Jeff Haskins at 301/652-1558, or
Jon Gardner, Health Affairs, 301-656-7401, ext. 230



Researchers Warn That The Shortage Isn’t Over;
Increasing The Nursing Supply Is Essential To Averting Another Crisis

Bethesda, MD – A surge in older and foreign-born workers has temporarily slowed the growth of a severe shortage of hospital nurses that began in 1998. Researchers warn, however, that it is only a matter of time before the shortage worsens if policymakers fail to seriously address the challenges that led to it in the first place.

A study in the November/December issue of the journal Health Affairs shows that in 2002, hospital registered nurse (RN) employment and earnings rose dramatically, with more than 104,000 nurses entering the market. The demand for hospital RNs pushed earnings up nearly 5 percent – two times the rate of RN wages in non-hospital settings. Unlike previous years, older, married RNs over age 50 as well as foreign-born nurses accounted for practically all of the increase in employment.

“This was a very large infusion of RNs, but there is no evidence that the shortage is over,” says study co-author Peter Buerhaus, a professor and senior associate dean for research at the Vanderbilt University School of Nursing in Nashville. “We will need dramatic efforts to increase the production of new nurses into the workforce if we are to replace the large numbers soon to be retiring,” he says. These include:

• Increasing the flow of RNs into the workforce
• Retaining older RNs, and
• Recognizing the role that foreign-born RNs play in providing U.S. nursing care

Buerhaus and colleagues note that the rising proportion of people over age 65 and advances in technology will greatly accelerate the future demand for hospital-related services and RNs. Over the next 20 years, the federal government estimates that the demand for RNs will increase 40 percent, with the majority of this employment growth occurring in hospitals. Meanwhile, the number of older RNs is expected to peak in 2010 and decline thereafter as large numbers of nurses start to retire. “In the absence of a corresponding increase in the supply of RNs, further shortages and upward pressure on RN wages are likely in the future,” the authors warn.

The analysis was funded by the Robert Wood Johnson Foundation and conducted by Buerhaus, Douglas Staiger, a professor of economics at Dartmouth College; and David Auerbach, a health analyst at the Congressional Budget Office. The researchers attempted to examine whether any important trends had emerged in the past few years to temporarily reverse the nursing shortage. Researchers used data from the Current Population Survey, a household-based survey, which provides a large representative sample of nursing personnel across many years and can be used to analyze nurse employment and earnings.

A Changing Workforce

They found that from 1994 to 2001, the number of employed RNs age 50 and older had risen 4.7 percent per year, the fastest of all age groups. In 2002, the growth in employment among these older RNs rose 15.8 percent or by 63,111. Of the 104,425 RNs that hospitals added to their workforce in 2002, roughly two-thirds came from this fastest-growing segment of the RN workforce. The one-year surge in employment among this age group raised the average age of the hospital RN workforce by nearly a full year, from about 41.9 years to 42.7 years, according to the authors.

From the mid-1990s through 2001, employment among foreign-born RNs increased 6 percent a year, faster than for domestic RNs generally and faster than for any of the three age groups examined. In 2002, employment of foreign-born RNs increased 13.8 percent, or an additional 32,372 RNs. An estimated 42 percent of the increase in foreign-born RNs that year occurred among RNs who entered the United States after 1996.

Hospitals Respond To Demand

The increase in wages for nurses was attributable to several factors, including a rise in demand for RNs because more patients needed hospital care, and increased collective bargaining activity and labor strikes. Between 2001 and 2002, hospital spending surged, suggesting a rise in demand for hospital services, the authors add. Hospitals also might have felt pressure to hire additional RNs in reaction to media attention to studies showing a relationship between low-nurse staffing and adverse patient outcomes. A new law in California, set to take effect later this year, will require hospitals to hire at least one RN for every six patients – a move intended to make hospital care safer to patients.

In fact, each year between 1994 and 2001, RN employment in non-hospital settings grew at a much faster pace than in hospitals. That changed in 2002, as all of the growth in RN employment took place in hospitals. RN employment in non-hospital settings actually fell nearly one percent in 2002, according to the Health Affairs analysis.

Other highlights:

• Nearly all of the increase in RN employment between 2001 and 2002 occurred among married RNs. Married RNs account for two-thirds of the nurse workforce but they accounted for 94 percent of the increase in employment between 2001 and 2002. Buerhaus says that more married RNs entered the labor market because of a slow economy that cost spouses their jobs.

• In 1994, there were fewer RNs age 50 and older than ages 35-49 or under age 35. In 2002, the number of employed RNs age 50 and older had risen the fastest of all age groups, rising 15.8 percent or by 63,111.

The authors warn that the same forces that led to higher wages and an increased reliance on older and foreign-born RNs in 2002 are likely to remain for the next two decades. To address this problem, they suggest:

Rapidly increasing the flow of new RNs into the workforce. They say that this is essential to replace the large number soon to be retiring. “We have to rapidly increase the capacity of the nursing education system and ramp up production,” says Buerhaus. “We have a shortage of faculty, who are aging even more rapidly than the workforce,” he adds.

Many schools also are suffering budget problems and are having to turn away qualified nurse applicants. The American Association of Colleges of Nursing reports that nursing schools turned away more than 5,000 applicants in 2002 because of a shortage of faculty and space.

Retaining older nurses. Finding ways to retain older nurses, who bring a wealth of experience to the job, also should be a priority. “Efforts are needed to improve the clinical ergonomic environment of hospitals to minimize physical strain,” the authors say, including providing equipment that reduces wear and tear on nurses, rearranging schedules, developing new roles for older RNs, improving the way management treats nurses, and offering economic incentives to retain older RNs.

Embracing foreign-born nurses. Policymakers also need to accept that RNs from other countries such as the Philippines, the Netherlands, Australia, and India, are likely to play an increasingly large role in providing nurse care in the U.S. Although a policy to increase foreign-born RNs might be opposed for many reasons, the authors say that “health care workforce planners and policymakers need to encourage an explicit debate about what the guiding principles should be in using foreign-born RNs.”

Buerhaus agrees that nurse wages need to remain competitive but he doesn’t see this as the sole solution to the shortage problem. In a related analysis that appears in the same issue of Health Affairs, California researchers estimate that wages would have to increase 3.2-3.8 percent per year between 2002 and 2016, to end the nurse shortage, a move that would more than double total RN expenditures. They warn that the “the shortage will not end without sizable RN wage and graduation growth every year for at least the next 10 years.”

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Copies of the November/December 2003 issue will be provided free to interested members of the press. Address inquiries to Jon Gardner at Health Affairs at 301-656-7401, ext. 230, or via e-mail, press@healthaffairs.org. Selected articles from the November/December issue are available free on the journal’s Web site, www.healthaffairs.org.


©2003 Project HOPE–The People-to-People Health Foundation, Inc.