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Recession Temporarily Easing Nursing Shortage

June 12, 2009

The recession may temporarily end an 11-year-long nursing shortage in many areas of the country according to a new study released by the health policy journal Health Affairs. However, this is only a respite for the nation’s health care system as the study also projected a nursing shortage of 260,000 registered nurses developing by 2025 — a shortage twice as large as any nursing shortage experienced since the introduction of Medicare and Medicaid in the mid-1960s.

Peter Buerhaus, Ph.D., of Vanderbilt University Medical Center and Vanderbilt’s School of Nursing

Peter Buerhaus, Ph.D., of Vanderbilt University Medical Center and Vanderbilt’s School of Nursing

The study, authored by Peter Buerhaus, Ph.D., of Vanderbilt University Medical Center and Vanderbilt’s School of Nursing, David Auerbach, Ph.D., of the Congressional Budget Office, and Dartmouth Economics Professor Douglas Staiger, Ph.D., focused on assessing the impact of the recession on current nurse employment, and on projections of the future age and supply of registered nurses in the U.S.

According to the study, during the current recession, hospital employment of full-time equivalent registered nurses increased by 8.6 percent, well above the 5.3 percent average increase during the previous four economic bust periods starting with the 1981 recession. In 2007-2008, registered nurse employment in hospitals increased by an estimated 243,000 (18 percent) full-time positions — the largest two-year increase in 30 years. This increase exceeded the 184,000 spike in employment that followed the eight-month recession in 2001.

The impact of the recession reversed a two-decade trend in which the total share of registered nurses employed in hospitals was decreasing. According to the study in 2008, 64 percent of registered nurses were employed in hospitals, up from 60 percent in 2006. The drop in employment of registered nurses among non-hospital settings — including clinics, long-term care facilities, schools, and home health care agencies — amounted to 50,000 full-time positions in 2008. This decrease is attributed to a combination of factors including the higher average earnings paid by hospitals compared to non-hospital settings ($27.60 per hour vs. $24.63 in 2008), more generous fringe benefits offered by hospitals, particularly health insurance, and the 12-hour shifts commonly offered by hospitals that enable a registered nurse to work three days per week, receive full-time benefits, and still having ample time to work overtime hours or a second job.

“The increase of hospital employment of nearly 250,000 RNs in such a short period of time is stunning.” said Buerhaus. “While we expected an increase in employment, we were surprised by the magnitude and by the shift from non-hospital settings into the hospitals. This surge in employment will ease, if not end, the hospital nursing shortage. Consequently, we anticipate it will be tempting for employers and policymakers to focus on other issues. However, relief is likely to be temporary and we need to focus on how the current workforce is changing and the implications for future imbalances in the nurse labor market in the years ahead.”

To back up this claim, the study found that the recession had induced older nurses to delay retirement and others to re-enter the workforce. Since 70 percent of registered nurses are married, many had little choice as spouses’ lost their jobs or feared they might. However, between 2001 and 2008, 77 percent of the increase in total registered nurse employment was accounted for by registered nurses over the age of 50, the age group that is growing the fastest among professional nursing.

Beyond getting older, more foreign-born nurses have entered the workforce. In 2008, 16.3 percent of the total registered nurse workforce was comprised of foreign-born nurses, compared with 9 percent in 1994. In 2008 alone, employment of foreign-born registered nurses increased by 48,000. Three times as many foreign-born nurses worked full time in hospitals as opposed to nonhospital settings.

In the long-term, the study points to the development of another nursing shortage, one that will be larger than any experienced in the past. Because registered nurses over age 50 will soon be the largest age group in the nursing workforce, their retirement over the next decade will lead to a projected shortfall developing by 2018 and growing to approximately 260,000 registered nurses by 2025.

The study uncovered a new and positive development in the nursing workforce.

Although most of the increase in the nurse labor market in recent years has come from older registered nurses, the study reports that the number of younger registered nurses (ages 23 to 25) entering the workforce increased by 130,000 full-time nurses in 2008. While a small number compared to the total size of the registered nurse workforce, this figure reverses a two-decade- long decrease in younger registered nurses participating in the workforce.

“This is a very encouraging finding and suggests that all the effort to promote the nursing profession over the past several years is beginning to pay off. We must find ways to sustain and strengthen this trend because, until we are able to increase the number of younger people becoming registered nurses over time, it will be very difficult to replace all those retiring baby boom RNs and prevent the long-term shortage that we expect will develop during the latter part of the next decade,” Buerhaus adds.

In the near-term many hospitals will report an end to their nursing shortage, and new nursing graduates will experience difficulty finding jobs, according to the authors, but they caution that a significant nursing shortage still looms.

“We need to take advantage of the current increase in nurse employment and easing of the shortage by strengthening the current workforce before the recession lifts and imbalances in the supply and demand for RNs reappear,” said Buerhaus. “A steady stream of new and well-prepared registered nurses is vital to fill the void that will be left by retiring nurses. It is ironic and disappointing that despite these projections, nursing education programs continue to turn away approximately 30,000 or more quality applicants each year.”

Buerhaus added that having a continuous supply of registered nurses is crucial to the overall health of the U.S. and an important part of any health care reform discussions.

The authors urge employers and policymakers to look closely at several issues they believe will lessen the severity of a future nursing shortage, specifically:

· Improving the ergonomic environment of the clinical workplace to keep older nurses from being injured on the job and increase retention.

· Conducting research on patient outcomes and safety to determine if policies are needed to improve communication skills among U.S. and internationally-educated registered nurses.

· Encouraging the Institute of Medicine (IOM) to conduct an analysis to determine the structural barriers that restrict nursing education capacity. Assess private and public sector options that will be most effective and inexpensive in expanding capacity quickly.

· Promoting nursing careers to men and Latinos, who are currently underrepresented in the nursing workforce.

The study, “The Recent Surge in Nurse Employment: Causes and Implications,” by Peter I. Buerhaus, David I. Auerbach and Douglas O. Staiger was funded in part by the Johnson & Johnson Campaign for Nursing’s Future. It can be reviewed in its entirety in the June 12 online issue of Health Affairs at


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