Nursing in an Era of Recession and Reform

November 2010Andrew Schwartz

A Discussion with Joanne Spetz of the Center for the Health Professions

Q: Describe the current state of the nursing shortage.

A: During this recession, we’ve continuously heard that the shortage has evaporated. Hospital demand went down because people lost insurance and put off procedures. I would also hazard that nurses planning to retire continued working – and nurses working part time ramped up to full time. There is a long, documented history of such behavior during recessions. Suddenly, new graduates are struggling to find jobs, and I would expect that wages would stay stagnant.

At some point, the jobs will come back because nurses will retire, other nurses will scale back to part time and the broader demographic issues in the patient population are still here.

Q: When the jobs do come back, will we have another shortage?

A: It seems likely. We’ve just gone through 11 or 12 years of reported nursing shortages in California, the US and most countries in the world, in part because it is hard to respond to the waxing and waning of demand.

Typically, the need for health care services in the US continuously changes. Managed care shortened lengths of stay and the recession caused people to put off care; these things drive the need for inpatient care down. SARS, swine flu and an aging population all push demand back up.

But in nursing, where even today the employment rate for RNs under 55 is 90 percent, when demand goes back up it’s not easy to produce enough new graduates to fill the gap. Its takes at least two or four years to get a nurse out the door, and a lot of nursing education is in the public sector and reliant on the government to expand slots.

Q: How will health care reform affect this situation?

A: It’s a bit of a wild card because Health and Human Services has latitude in exactly how they’ll implement the legislation.

If more people have insurance, which seems to be the law’s main intent, demand will go up. There are provisions that try to reduce demand, but I don’t think those have any teeth. Hospitals will still see people in the ER who are insured but don’t have good knowledge about alternative ways to get urgent care. If the primary care medical home is put in place, physicians will seem more likely to do things like recommend knee replacements because the ability to walk will also address weight issues. All of this should increase demand for nursing time.

Q: Will the law change the types of nurses needed?

A: Some incentives will create more demand for nurses with care management expertise. And there will be niches and nudges for nurse practitioners, depending on what specializations they bring to the table. The emphasis on primary care and the shortage of primary care physicians could increase demand for primary care nurse practitioners – where scope-of-practice laws will allow. And we will likely see more home health and palliative care nursing.

But while on the one hand, there will be a demand for higher-level nurse skills, I think nurses should be careful about arguing that those needs obviate the need for traditional hospital nursing skills. When you’re talking about an aging population, nursing shortages and huge retirements, the nurses needed to take care of patients postsurgery don’t uniformly need a master’s or even a bachelor’s degree. Many [without those degrees] do a great job and have managerial capacity. I think that the increasing needs mean there is room for the whole range of nurses, including LVNs.

Q: But what about research that indicates patients do better with bachelor’s-prepared RNs?

A: A few published studies have found that hospitals that have a higher share of RNs with a bachelor’s or higher degree have lower mortality rates. But we need to be cautious in how we use these findings. First, the studies measure the current level of education of nurses, not their entry-level education. So we don’t know how many of the BSN-and-higher nurses started with an associate degree or diploma. Second, and more importantly, we don’t know if the reason hospitals with better outcomes have more-educated RNs is that these hospitals foster a culture of lifelong learning and knowledge advancement – a culture that would likely lead to higher education levels and better outcomes. Maybe the education levels really are the key factor, but maybe the organizational culture is more important. Until we know if the relationship is causal, we need to be careful about changing policies or licensing requirements.

Q: Health care information technology is another major focus of health care reform. How does that affect nurses?

A: A growing body of research says that health care IT improves quality of care when done right. But it doesn’t save nurses any time; it just changes the rhythm of how they record and gather information. Bedside barcoding takes time because it negates shortcuts that people used to take – but those shortcuts are what may have led to medical errors. In general, it probably takes more time to use IT to enter and change data, but when a nurse needs to look at a patient history or what happened in the ICU, the information is there for immediate viewing and action.


Joanne Spetz is an associate adjunct professor in the Community Health Systems and Social and Behavioral Sciences departments at the UCSF School of Nursing, as well as a consultant to the Institute of Medicine Committee on the Future of Nursing. Her expertise includes nursing labor markets, quality of patient care, information technologies, hospital industry structure and finance, cost-effectiveness analysis, and econometrics.