Nurses have always been on the front lines of health care provision. Increasingly, they are on the front lines of health care reform. Almost all of the ideas put forward for US health care reform, from reducing treatment costs to improving patient safety to moving care into the community, involve a significant role for nurses.
There are real questions, however, about whether the economics will support the needed nursing care. Done right, nursing can be the lynchpin for a better, cheaper, health system. But if we make the same mistakes with nurses as we did with physicians, we will have wasted another shot at health care improvement.
The outlook for nursing is strong. Between 2008 and 2018, nursing employment grew by 1.7% annually, well above the 0.7% annual growth rate of the economy as a whole. The US Bureau of Labor Statistics forecasts that this will continue over the next decade. In many industries, the worry is about downsizing. In contrast, nursing leaders worry that we will face a nursing shortage. Fortunately, nursing supply is now expanding rapidly, and the fact that nurses can be trained more rapidly than physicians makes any shortage is likely to be short-lived.
It is not hard to figure out why nurses are in such demand. The population is aging and developing more chronic disease. Studies show that hospitals with a higher nurse-to-patient ratio have better patient outcomes. And the alternatives to nurses are more expensive. A nurse costs just more than $1 per minute, whereas primary care physicians cost about $3 per minute and a surgeon costs about $6 per minute. Any service that can be provided by a nurse instead of a physician should be reallocated to the nurse.
Too Much Specialization?
But nurses are not homogeneous. Just as some physicians offer primary care and others are provide specialty care, some nurses are generalists and others are specialists. One concern is that nursing will turn into a world of specialists, just as physician care has become. Registered nurses (RNs) earn about 50% more than licensed practical nurses (LPNs or licensed vocational nurses [LVNs]), and advanced practice nurses (APRNs, such as nurse practitioners and nurse anesthetists) earn more still. Not surprisingly, the flow of new APRNs is strongly outpacing the flow of new RNs, which is strongly outpacing the flow of new LPN and LVNs.
Even at these higher wages, APRNs are still worth it. The danger is not that nurses will price themselves out of the market. Rather, the danger is that so many will train to be specialists that there will not be enough generalist nurses. For example, hospitals disproportionately employ RNs instead of APRNs. If nursing supply concentrates in more remunerative specialists, hospitals could find themselves facing a shortage of RNs. The same is true for long-term care facilities, which often employ LPNs. Geographically, there are fewer advanced training facilities in rural areas than in urban areas. If potential nurses must travel to obtain degrees with higher pay, they are less likely to return to practice in areas that are underserved. One central challenge for nursing leaders and nursing schools is to ensure that the predominant area in which people receive nursing training is not for the specialized and best reimbursed areas of nursing.
Training in Change Management
It is also important that nurses learn how to respond to a changing health care system. Hospitals operating under accountable care organization (ACO) payment models are under pressure to meet quality goals, monitor specialist care, and reduce readmissions. But few nurses (or physicians) understand the economics of an ACO, let alone know how to manage to these goals. If nurses are going to be a part of the change team, they need to understand some health economics and change management.
To be sure, nurses needn’t become PhD economists or MBAs. But that doesn’t mean nursing can ignore these issues.
Fortunately, nurses are used to challenges. I have witnessed many hospitals taking part in internal change processes: developing and implementing a plan to prevent errors in one wing of the hospital or improve the patient experience in another. As part of this process, I have seen front-line nurses report to senior management about how their current processes are failing or how a new system is working out. In almost every case, the nurse—guided by a supportive team—has made a convincing case for action. Some of the basic economics and business management were learned along the way, and that is sufficient for occasional forays into change.
Other nurses will need to learn more about health economics and business management. If they do so, they will be able to work with financial leaders in designing new care processes, not be overwhelmed by them. At present, too few nurses (and physicians) are comfortable with these issues.
Who Will Care for Mom?
Perhaps the biggest challenge is bridging the gap between nursing and home care. For every nursing job anticipated to be created in the next decade, there are expected to be 2.4 aides—home health aides, personal care aides, and the like. This is not a surprise, given the growing number of impaired elderly people who wish to live at home.
If nursing falls under the “high end” part of the health care workforce, these health care support occupations are at the low end. Average wages for home health and personal care aides are only $25 000 annually, about one-third of an RN salary. Most aides have a high school degree at best; a large share are immigrants. Hours are long, work is physically demanding, and job benefits are scarce.
The low status of home care aides is a significant impediment to patients who care for them. And without appropriately trained workers, rules need to be enacted to govern most everything: whether home care aides can change a bandage (generally yes, if it is not a sterile dressing), dispense medications (no, but they can often bring the bottle to the patient), and take vital signs (yes, but not test glucose levels).
A beneficial trend would be to bring care aides closer to nursing. By closer, I do not mean increasing required training—though that might be appropriate in some cases. Rather, perhaps being a personal care aide could be an entrée into higher reaches of health care—maybe as an LPN or a medical assistant. Or perhaps personal care aides could be part of care teams with nurses and clinicians so that they can develop the skills needed to move into care management. Designing home care so that the focus is on quality and resource savings could potentially generate sufficient financial returns to allow home care to be paid better. A Dutch experiment suggests that such health care teams can save money and improve quality, and there is scattered evidence for similar economic benefits in the United States as well.
It is often remarked that nurses are the backbone of health care. What is increasingly clear is that nurses are the backbone of health reform as well. To align health care in the right way, we need to focus attention on the field of nursing.
About the author: David M. Cutler, PhD, is the Otto Eckstein Professor of Applied Economics in the Department of Economics and Kennedy School of Government at Harvard University and a member of the Institute of Medicine. He served on the Council of Economic Advisers and the National Economic Council during the Clinton Administration and was senior health care advisor to Barack Obama’s presidential campaign. He is a commissioner on Massachusetts’ Health Policy Commission. He is the author of the The Quality Cure (2014) and Your Money or Your Life (2004). He tweets at @cutler_econ. (Image: Ted Grudzinski/AMA)
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