Nursing Workforce: HHS Needs Methodology to Identify Facilities with a Critical Shortage of Nurses

Registered nurses (RN) are the single largest group of health care providers in the United States, with more than 2.4 million people employed as RNs in 2004. Basic RN training may be completed through a 2-year associate's degree, a 3-year diploma, or a 4-year bachelor's degree. RNs work in a wide variety of settings, including hospitals, nursing homes, physicians' offices, and public health clinics. Reports by government agencies and others have raised concerns about nurse shortages. In 2001, we reported on an emerging shortage of RNs to fill vacant positions across a range of health care settings. The Health Resources and Services Administration (HRSA), an agency in the Department of Health and Human Services (HHS), estimated that the supply of RNs nationally fell approximately 111,000 short of demand in 2000 (5.5 percent) and projected the gap would widen in the ensuing years. A shortage of RNs, like general workforce shortages, occurs when the demand for RNs exceeds supply. The supply of RNs, or the number of RNs employed, is influenced by multiple factors, including the size of the overall labor force, the number of licensed RNs choosing to work in nursing, the number of new RNs graduating from nursing school, the capacity of nursing schools, and funding available for higher education. Demand, or the number of RNs that employers would like to hire, is also affected by multiple factors, including demographic characteristics and health status of the population, economic factors such as personal income and health insurance coverage, and characteristics of the health care system such as nurse wages and health care reimbursement rates. Having an adequate supply of RNs is important because reports have established a positive relationship between the quality of care and RN staffing levels in settings such as hospitals and nursing homes. To support the recruitment and retention of RNs in health care facilities with a critical shortage of nurses, Congress passed the Nurse Reinvestment Act of 2002 (NRA). The NRA established the Nursing Scholarship Program (NSP) to provide scholarships for individuals to attend schools of nursing. The NRA also modified an existing program, the Nursing Education Loan Repayment Program (NELRP), which was established by Congress in 1992 to help repay education loans for RNs. Under both programs, awardees must agree to work for at least 2 years in a health care facility with a critical shortage of nurses, with preference given to qualified applicants with the greatest financial need. To implement this, HRSA, which administers both programs, designates several types of facilities as having a critical shortage of nurses for the purposes of the NSP and NELRP. The Secretary of HHS is required to report annually to Congress on various aspects of the programs including the locations where award recipients are fulfilling their service obligation. The NRA directed us to conduct several studies related to the nationwide shortage of nurses. As discussed with the committees of jurisdiction, in this report we are: (1) providing information on how the number of employed RNs and the shortage of RNs has changed since 2000, both nationally and across states; and (2) describing characteristics of NELRP and NSP awardees and examining whether these programs have improved the supply of RNs in facilities with critical shortages of nurses.