Nursing Workforce:

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

GAO-07-492R: Published: Apr 30, 2007. Publicly Released: Apr 30, 2007.

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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.

Between 2000 and 2004, the number of employed RNs in the United States grew by 10 percent, with a total of 2.4 million RNs employed in nursing in 2004. Most of the increase occurred in hospitals and ambulatory care settings, and the extent of employment growth varied widely among states. For example, among the 48 states where the number of employed RNs increased, the growth in employment ranged from 2 percent in Connecticut to 47 percent in New Hampshire. Despite evidence of growth in RN employment between 2000 and 2004, there are no data available for estimating the magnitude of changes in the shortage of RNs over this time period. Estimating changes in the RN shortage requires data on both the supply of and the demand for RNs in 2000 and 2004. Although there are data indicating that the supply or number of employed RNs increased, there are no data--either nationally or at the state level--on RN demand in 2004, because demand estimates have not been updated since 2000. However, several indirect measures suggest that the shortage of RNs has eased since 2000. For example, RN employment growth from 2000 to 2004 was generally strongest in those states that HRSA designated as having greater shortages in 2000. In addition, between 2000 and 2004 the number of employed RNs relative to the size of the general population increased from 782 per 100,000 people in 2000 to 825 per 100,000 people in 2004--reflecting an increase in RN supply relative to one measure of demand for RNs. Finally, the rate of unfilled RN positions in hospitals declined nationally from 13 percent in 2001 to 9 percent in 2005. Recipients of NSP and NELRP awards are more likely to be from a minority group and are more likely to have received or be pursuing a 4-year bachelor's degree rather than a 2-year associate's degree when compared to the overall RN workforce. In both programs, an applicant's minority status is not used as a criterion in making awards. In 2004, 11 percent of the overall nursing workforce was minority while minorities made up 36 percent of NSP awardees and 21 percent of NELRP awardees. NSP and NELRP awardees are required to be employed in one of the types of facilities identified by HRSA as having a critical shortage of nurses. However, HRSA does not have a sound basis for determining the number of RNs needed for that facility to be considered as one experiencing a critical shortage of RNs. Consequently, we cannot identify which facilities fall into this category. Furthermore, awardees may not be serving in facilities actually experiencing a nursing shortage. HRSA is working to develop an approach for identifying facilities with critical shortages of RNs, and researchers contracted by HRSA have produced a report detailing an approach that uses available county-level data to determine facilities that could be identified as having critical shortages of RNs. This report is currently under review, so HRSA's efforts at developing an empirically-based approach for identifying facilities with critical shortages of RNs have not been completed.

Recommendations for Executive Action

  1. Status: Open

    Comments: The Health Resources and Services Administration (HRSA) has published a report on the preliminary work done to develop a methodology for identifying health care facilities with a critical shortage of nurses. The Agency has has issued a contract to update, test and finalize the shortage designation methodology. According to HRSA, the contract will continue through 2009, and the results will then be turned into a proposed rule and submitted for Agency and Department clearance. That process is not likely to begin until fiscal year 2010 at the earliest, however there may be some concepts in the initial report may be considered in developing funding preferences in the meantime.

    Recommendation: In order to target funding effectively for the Nursing Education Loan Repayment Program (NELRP) and the Nursing Scholarship Program (NSP) to nurses working in health care facilities with a critical shortage of nurses, the Secretary of HHS should identify the specific steps and a time frame for implementing an empirical methodology for identifying health care facilities with a critical shortage of nurses.

    Agency Affected: Department of Health and Human Services

  2. Status: Open

    Comments: The Health Resources and Services Administration (HRSA) has not yet issued an Annual Report to Congress since this recommendation was made.

    Recommendation: In order to target funding effectively for the Nursing Education Loan Repayment Program (NELRP) and the Nursing Scholarship Program (NSP) to nurses working in health care facilities with a critical shortage of nurses, the Secretary of HHS should direct the Administrator of HRSA to include a description of steps taken and progress on its time frame for implementing such methodology in HRSA's annual report to Congress on these programs.

    Agency Affected: Department of Health and Human Services

 

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