Nurses in High Demand as Cities Compete for Quality Health Care

Civic Leaders, Educators and Hospitals Urged to Work Together

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Peter McMenamin, Ph.D., a senior policy fellow and health economist with the American Nurses Association, is concerned about issues related to the economic value of nurses and nursing services.

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Posted: Wednesday, December 17, 2014 10:00 am

As Americans age and the Affordable Care Act makes health care accessible to more people, experts say communities across the country will need to compete more vigorously to attract a limited supply of nurses and other qualified health care workers.

More than ever before, health care is becoming a critical economic development and workforce concern for local communities and regions.

For career planners and job seekers, the health care field looks like a good path to choose. In fact, on the Bureau of Labor Statistics list of occupations with the most job growth in 2012 and projected into 2022 the No. 1 job with expected growth is a personal care aid, followed by a registered nurse. Fourth on the list are home health aides and sixth are nursing assistants.

But it isn’t just demand that is behind the projected growth of those careers. It is supply – and a shortage of skilled health professionals can affect communities beyond the hospital doors, as more Americans decide where they’ll spend their retirement years and consider health services as a large part of the equation.

According to the United States Registered Nurse Workforce Report Card and Shortage Forecast, the median RN age in 2000 was 42.4, rising to 45.4 in 2009. Some researchers project that the average age of RNs will continue to rise, not peaking until 2016. About half of registered nurses - more than a million - are within 20 years of retirement, according to the report.

There was a 2.6 percent enrollment increase in bachelor’s degree nursing programs in 2013, according to the American Association of Colleges of Nursing, but this increase will not meet the projected demand for nursing services. Part of the reason is that with the passage of the Patient Protection and Affordable Care Act in 2010, more than 32 million Americans will gain access to health care services. But U.S. nursing schools turned away almost 80,000 qualified applicants from nursing programs in 2012 because they lacked the capacity and faculty to train them.

Peter McMenamin, Ph.D., a senior policy fellow and health economist with the American Nurses Association, is concerned about issues related to the economic value of nurses and nursing services. There are ways that local governments and policy makers can take action regarding the flow of nurses into the employment pipeline, he said, but first he pointed out that what is coming isn’t a shortage, exactly.

On the one hand, he noted that nurses – especially registered nurses – are the No. 1 occupation sought in online health care help-wanted ads, especially in fast growing cities. At the same time, he said, hospitals are closing units or cutting back.

“So, is there shortage or overload?” he asked.

While December’s governmental economic growth report indicated that the economy added 320,000 new jobs nationwide, only 4,000 of those were in hospitals, he said. About 25-30 percent of hospital jobs are in nursing. Since about 60 percent of registered nurses work in hospitals, it is easy to wonder why, if there is a nursing shortage, hospitals aren’t snapping up those employees.

McMenamin addressed that question by considering the background of the problem. Most of the mainly female nursing workforce entered the profession in the 1970s and 1980s, in what he called a “super-cohort.” That came about because of federal funding through Title VIII of the U.S. Public Health Services Act signed in 1964, which put money into nursing education programs for training. But also around that time, traditionally female occupations were joined by other options available to women interested in earning a living. So now that the women in that super-cohort are getting closer to retirement, it feels like there is a shortage partly because fewer women have entered the profession since that boom.

“The ANA is encouraging people to enter the profession,” McMenamin said. “It is a good profession, with good salary and benefits. There are professional challenges but there are rewards.”

Nurses are the most patient-centered of health care providers because they are the most involved with the patients, providing patient education, family education and reassurance to people, he said.

In the first three quarters of 2014, McMenamin said, about 123,000 new nurses passed their qualifying exams to enter the profession. The Bureau of Labor statistics indicates 555,000 registered nurses will retire between 2012 and 2022, and that 574,000 new jobs will open up. That's a net gain of about 112,900 per year over that 10-year period.

“That’s why I encourage people not to talk about shortages,” McMenamin said. “If we sustain that rate there will be enough nurses to fill all the vacancies, although that is not guaranteed. It is possible some areas of the country and some fields within nursing will see shortages while others will not.”

For example, nurse practitioners and nurse midwifes work in fields that are newer, and therefore, the individuals in those fields tend to be younger.

Most employers would rather have experienced nurses instead of new nurses, McMenamin said, which is a concern for younger people in the profession. It might take young nurses a while to find a job in their desired location, he said, adding that more than 40 percent of nurses live within 25 miles of their high school, which he indicates is evidence that nursing is not a very mobile profession, even though there are jobs all over the country.

However, it isn’t just young women who are being looked at to fill the nursing void, if there is one. More men also are entering the profession, selecting specialties that are among the highest paying in the field. According to a 2013 U.S. Census report on men in nursing occupations, at one time most nursing schools refused to admit men, a practice deemed unconstitutional by the U.S. Supreme Court in a case brought against a state‐supported school in 1981. Schools are now actively pursuing higher male enrollment in their nursing programs.

In 1970, about 2.7 percent of registered nurses were men, compared with 9.6 percent in 2011. According to the report, men’s representation among licensed practical and licensed vocational nurses grew from 3.9 percent in 1970 to 8.1 percent in 2011. In 2011, 9 percent of all nurses were men. Men earned, on average, $60,700 per year, while women earned $51,100 per year.

Men’s representation was highest among nurse anesthetists: 41 percent were men. Male nurse anesthetists earned more than twice as much as the average for men in all nursing occupations, on average $162,900 per year, while men’s average for all nursing occupations was $60,700 per year. Regardless of how people find their way into choosing nurses as a profession, McMenamin said there are three things policy makers can keep in mind to be sure a nursing shortage does not hamper their ability to make their city a place where an increasingly mobile society might want to relocate for a job or for retirement.

“First, we need vocational funds for nurse training to be maintained because when there is funding, a whole bunch of new nurses enter the profession,” he said.

The original Title VIII funds have been supplemented over the years with other funding initiatives, but prospects for the next few years are unclear as the makeup of Congress shifts. The second thing policy makers can do, particularly mayors of cities where there are nursing colleges, is talk to those administrators about their long-term planning.

Nursing college faculty are naturally older than the incoming students they train, but they also are often older than the average nurse. That means that they also are planning retirement, some sooner than others. It’s relevant that faculty in nursing programs earn far less than faculty in other professional schools and some highly specialized nurses actually take a pay cut to go into teaching, McMenamin said. Those city and college leaders could “work together to improve and retain faculty and attract more to get them into the faculty pipeline.”

In addition, McMenamin said, “governors could be involved because state programs could offer additional placements, subsidies and funding opportunities for students to enroll in nursing colleges and one day become faculty members. Officials at the state level likely have more access to funding than small cities.”

The third solution involves hospitals themselves. They need to start hiring.

“They are in hunker-down mode,” McMenamin said, an approach he thinks is wrong based on the following fact – it isn’t just baby-boomer nurses that are heading into retirement, but a large sector of the American population that is aging into Medicare eligibility.

“Every year between 2011 to the end of this century, 2-3 million people will age into Medicare each year. About 20 percent of beneficiaries are hospitalized in any one year. Medicare kicks in when people are developing chronic illnesses or those existing illness are getting worse, he said. For new beneficiaries between the ages of 65-70, known as the “young old,” McMenamin said there is a bump up in utilization because people defer elective surgery until they enroll in Medicare. Such procedures include replacing hips, knees and treating other non-life-threatening conditions.

“Those people will need nurses,” he said. The other piece of the Medicare beneficiary increase is more subtle, he added.

“There will soon be a lot more people in Medicare dying. Death is expensive and requires a lot of nursing care. In terms of potential demand, there’ll be more demand for nurses in geriatrics and to care for those who are dying.”

Because changes in health care laws still create open questions, McMenamin said he thinks hospitals are taking a wait-and-see approach.

“As an industry, hospitals are banking resources, wondering about Medicare payments and penalties,” he said. “They’re not moving on employment. But it is time to create a human capital reserve, to hire new nurses. If each hired a few more new RNs than they might otherwise do, they could grow their own experienced work force. As the tsunami of retirement comes, they’ll have people in place, and the benefit of having more mature nurses to step into those positions. In the short run they’ll spend more money, but it’ll improve performance.”

McMenamin pointed out that when the nurse-to-patient ratio increases, patients get better care, meaning fewer hospital re-admissions.

“That’s something mayors could talk to their hospital executives about. Ask them what they are doing to attract new nurses into the area as the existing nursing stock is retiring,” he said. “Local leaders want their area to be a place where consumers and providers can count on having resources.”

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