Condition of Nursing and Nursing Education in the Commonwealth

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1 SCHEV Report Condition of Nursing and Nursing Education in the Commonwealth January 2004 STATE COUNCIL OF HIGHER EDUCATION FOR VIRGINIA ADVANCING VIRGINIA THROUGH HIGHER EDUCATION

2 ACKNOWLEDGEMENTS Representative members of the academic and professional nursing communities, the Advisory Committee to the Governor on the Future of Nursing Workforce, and the State Council of Higher Education for Virginia (SCHEV) prepared this report and contributed data on nursing workforce supply and demand. The Office of Research in the Center for Health Policy, Research and Ethics at George Mason University conducted the supporting research of registered nurse supply and demand in the Commonwealth of Virginia (Dr. P.J. Maddox, Principal Investigator). The following individuals, organizations, and state agencies are acknowledged for their contributions to the study and this report: Barbara Brown, Virginia Hospital and Healthcare Association; Nancy Cooley, Alan Edwards and Kimberly Waid, SCHEV; April Kees, Joint Commission on Health Care; P.J. Maddox, David Wong and Victoria Doyon, George Mason University; JoAnne Henry, Virginia Commonwealth University and Governor s Advisory Council; and Carol Seavor, Jefferson College of Health Sciences. Other significant contributors include Tim Dall of the Lewin Group. In addition, the 2003 Governor s Advisory Council on the Future of Nursing and members of the Virginia Partnership in Nursing are acknowledged for their participation and contributions in the preparation of this report. Data were obtained from a variety of agencies and organizations whose cooperation and assistance were invaluable: Gail Jaspen, Office of the Commissioner of Health; Nancy Hofheimer, Virginia Department of Health; Steve Hasty, Department of Human Resource Management; Richard White, Virginia Health Information; Jay Douglas and Paula Saxby, Virginia Board of Nursing; Mildred Owings, Virginia Community College Nursing Programs; Linda Berlin, American Association of Colleges of Nursing; the Virginia Health Care Association; Marilyn Biviano, Director, National Center for Health Workforce Analysis; and the American Health Care Association. SCHEV January 2004

3 TABLE OF CONTENTS EXECUTIVE SUMMARY...I LIST OF ACRONYMS, ABBREVIATIONS AND TERMS... II INTRODUCTION... 1 VIRGINIA S NURSE WORKFORCE... 3 NURSE DEMAND... 3 NURSE SUPPLY... 8 ADEQUACY OF REGIONAL NURSE SUPPLY ECONOMIC IMPLICATIONS OF RN SHORTAGE NURSING EDUCATION IN VIRGINIA IMPACT OF NURSING EDUCATION CAPACITY RECOMMENDATIONS INCREASE NURSE EDUCATION CAPACITY SCHOLARSHIPS AND LOAN REPAYMENT PROGRAMS RECRUITMENT OF NURSES IMPROVE DATA COLLECTION REFERENCES APPENDIXES APPENDIX A: METHODS COLLECTING AND ANALYZING INFORMATION ON NURSING SUPPLY AND DEMAND IN THE COMMONWEALTH OF VIRGINIA APPENDIX B: SCHEV NURSING SUPPLY & DEMAND PROJECT DATA SOURCES APPENDIX C: GMU NURSING PROGRAM SURVEY APPENDIX D: VIRGINIA POPULATION AND PROJECTED RN DEMAND BY SETTING AND REGION, APPENDIX E: NATIONAL COMPARISONS OF FACULTY SALARY DATA BY POSITION APPENDIX F: DETAILED DATA ON VIRGINIA NSM PROJECTIONS UNDER THREE SCENARIOS APPENDIX G: LIST OF VIRGINIA COUNTIES BY SIX SCHEV GEOGRAPHIC NURSING RECRUITMENT REGIONS SCHEV January 2004

4 EXECUTIVE SUMMARY The inadequate number of licensed nurses remains a persistent and escalating condition within the Commonwealth of Virginia. As the segment of Virginia s population above age 65 increases, so does the demand for qualified nurses. At the same time, factors both within and outside of the healthcare profession have rendered increasing the supply of nurses and nursing faculty difficult. Combined, these conditions have left Virginia with a nursing shortage that is anticipated to escalate. The State Council of Higher Education for Virginia (SCHEV) recognizes that in order to increase the supply of nurses, changes in nursing education must take place at the state and institutional level. Nurses play a critical role within the healthcare community. Meeting the existing and future demands for nurses is vital to the stability of Virginia s healthcare system. To lay a foundation and provide a catalyst for discussions concerning how to increase access to the state s nursingeducation programs, SCHEV, in collaboration with members of the healthcare and education communities, presents the report Condition of Nursing and Nursing Education in the Commonwealth. The formulation of actions to address the inadequate supply of nurses in the Commonwealth (as addressed in legislative mandate HB2818) necessitates an awareness of the status of both nursing and nursing education. Thus, the information and analyses contained within this report have been set forth for state and institutional policymakers in order to: (1) provide background information, including an overview of Virginia s nursing education infrastructure and data from prior studies on the condition of nursing in the Commonwealth; (2) illuminate the severity of the nursing shortage through an examination of RN supply and demand trends within the Commonwealth; and (3) introduce broad recommendations for increasing the number of nurses educated in the Commonwealth. Key findings: 1. The demand for nursing services in the Commonwealth is growing. Population growth, Virginia s aging population, and trends in healthcare service utilization are major causes of the increasing demand for qualified nurses. 2. The supply of registered nurses will become inadequate as demand continues to grow. More new nurses are needed to meet this demand and to replace those nearing retirement. 3. Numerous nursing programs are located in Virginia, but serious limits exist on the number of enrollees who can be accepted. Any expansion of nursing education programs is dependent on having an adequate number of well-prepared nursing faculties. General recommendation and areas for addressing the nursing shortage: 1. Increase nursing education program capacity in order to increase the supply of nurses. 2. Provide scholarships and loan repayment programs to promising nursing students who need financial assistance. 3. Develop and implement a comprehensive nursing recruitment plan for the Commonwealth targeted at populations that are currently under-represented. 4. Improve current data collection on nurse employment, age, and education level. SCHEV i January 2004

5 LIST OF ACRONYMS, ABBREVIATIONS AND TERMS AACN American Association of Colleges of Nursing Advisory Council Advisory Council on the Future of Nursing in Virginia AMCA American Health Care Association BHPr Bureau of Health Professions, HRSA BLS United States Bureau of Labor Statistics Board of Nursing Virginia Dept. of Health Professions, Board of Nursing Census United States Census Bureau CHPRE Center for Health Policy, Research, and Ethics at GMU DHHS Department of Health and Human Services DHP Virginia Department of Health Professions FTE Full Time Equivalent GMU George Mason University HRSA Health Resources and Services Administration NCHWA National Center for Health Workforce Analysis NCLEX National Council Licensure Examination NDM Nursing Demand Model NSM Nursing Supply Model SCHEV State Council of Higher Education for Virginia SREB Southern Regional Education Board VDH Virginia Department of Health VHHA Virginia Hospital and Healthcare Association VHI Virginia Health Information VPN Virginia Partnership in Nursing Nursing Degree References RN Registered Nurse LPN Licensed Practical Nurse ADN Associate Degree Nursing BSN Baccalaureate Degree Nursing Diploma/Dip Diploma Degree SCHEV HB 2818 Study Regions 1 Blue Ridge Central Hampton Northern Roanoke Southwest 1 SCHEV HB 2818 Study Regions are defined using the six regions and county codes as previously reported in Virginia Nurses Survey 2001, Virginia Department of Health Professions, Board of Nursing, Richmond, VA. October Virginia Tech Center for Survey Research, Blacksburg, VA. SCHEV ii January 2004

6 INTRODUCTION The supply of and demand for nurses in Virginia has become an issue of concern for healthcare providers and the public. As a result, in HB2818 2, the 2003 General Assembly tasked the State Council of Higher Education for Virginia (SCHEV) with the responsibility for developing, in cooperation with institutions of higher education, the Board of Nursing, and the Advisory Council on the Future of Nursing in Virginia, a strategic statewide plan to ensure an adequate supply of nurses in Virginia. SCHEV is also directed to recommend to the Governor and the General Assembly such changes in public policy as may be necessary to meet the state's current and future need for essential nursing services. The Advisory Council's statute was amended to require it to develop recommendations to resolve issues pertaining to nurse education, recruitment, and retention and to report its recommendations to and cooperate with the State Council of Higher Education and the Board of Nursing in the development of a strategic statewide plan to ensure an adequate supply of nurses. This research project was designed to analyze the supply of and demand for Virginia s nursing workforce using the best available data to inform policy and decision-making, with a particular focus on issues amenable to recommendations and actions suggested by SCHEV and the Governor s Advisory Council on the Future of Nursing (see Appendix A). In collaboration with representatives from across public and private sectors, and academic and practice communities, this project studied changes in projected supply of and demand for registered nurses (RNs) in the Commonwealth for the time period. The aim of this project was to inform public debate and assist state and local decision makers in responding to the strategic planning objectives of HB2818. The project utilized the most current and reliable data available. To support comparative analysis over time and across geographic regions and employment settings, standardized data were used from periodically updated sources such as federal agencies, professional nursing associations and the Virginia Board of Nursing. A complete list of the data sources utilized in this report is included in Appendix B. Key data sources for the project include: Survey data for all RN nursing schools in the Commonwealth. These surveys include: (1) the American Association of Colleges of Nursing (AACN) annual survey of Virginia collegebased nursing schools; and (2) a survey of Virginia nursing schools awarding Associate Degrees in Nursing (ADNs) and diplomas in nursing (schools not represented in the AACN survey) (see Appendix C). Data from the Virginia Board of Nursing on nurse licensure and nursing education programs. A database with information on the Commonwealth s population demographics (Virginia Department of Health, US Census), health service utilization (Virginia Health Information 2 HB 2818: Supply and demand for nurses in Va. (http://leg1.state.va.us/cgi-bin/legp504.exe?ses=031&typ=bil&val=hb2818) SCHEV 1 January 2004

7 [VHI], Virginia Hospital and Healthcare Association [VHHA]), and public sector employment of nurses (Department of Health Professionals). Information in this database includes regional population demographics, nurse employment and regional utilization of healthcare services. The Nursing Supply Model (NSM) and the Nursing Demand Model (NDM), developed by the National Center for Health Workforce Analysis (NCHWA) in the Health Resources and Services Administration (HRSA), were adapted to project RN supply and demand by region within the Commonwealth. SCHEV 2 January 2004

8 VIRGINIA S NURSE WORKFORCE NURSE DEMAND The demand for full-time-equivalent (FTE) RNs in the Commonwealth of Virginia is projected to increase by approximately 42% between 2000 and 2020, which is slightly higher than the projected rate of increase for the entire U.S. (Biviano et al., 2004). Major trends contributing to this surge in demand are the projected population growth especially the growth in the elderly population, economic trends, and changes in the healthcare operating environment. Population Growth and Aging. Across the U.S., states are experiencing an increasing demand for nursing services as community populations grow and age. The growth in demand for nursing services is especially high in nursing facilities and home health, settings that provide care to the elderly. The U.S. Census Bureau reports that the population of the Commonwealth of Virginia grew 14% between 1990 and Between 2000 and 2010, Virginia s population is expected to increase 12% (about 900,000 individuals). However, following decennial census trends, population growth will vary by region in the Commonwealth. The greatest regional growth will continue to be seen in Northern Virginia, the Richmond metro area, and the Tidewater/Hampton Roads regions. Some areas of the state, such as Southwest Virginia, are projected to experience a continued decrease in population (Figure 1). Figure 1. Projected Number Change in Virginia Population, ,123 to 150,351 2,995 to 14, to 2, to 320-6,1 90 to N ot A vailable Lee Wise Scott Dickenson Buchanan Russell Washington Tazewell Sm yth Bland Grayson Wythe Shenandoah Frederick Warren Clarke Fauquier Loudoun Fairfax Arlington Rappahannock Rockingham Page P rince W illiam Culpeper Stafford H ighland Madison Augusta Greene Orange K ing G eorge Bath Albem arle Spo tsylvania Westmoreland Louisa Caro line Richmond Rockbridge Essex Northum berland Fluvanna Nelson Hanover King And Q ueen Accom ack Alleghany Goochland K ing W illiam Lancaster Henrico Botetourt Am herst Buckingham Powhatan Middlesex Craig Cumberland C h e s te rfie ld New Kent Charles City Gloucester Mathews Roanoke Northampton Appom attox Am elia Jam es City Giles Bedford Prince Edward Prince George Campbell York M ontgomery Nottoway Surry D inwiddie Pulaski C harlotte Franklin Sussex Floyd Lunenburg Isle O f W ight Pittsylvania H alifax Brunswick Carroll M ecklenburg Southam pton Chesapeake City Patrick Henry Greensville Suffolk City Virginia Beach C ity Data Source: Virginia Employment Commission The age composition of Virginia s population is projected to change substantially by 2020, with the largest growth occurring among the elderly (age 65 and above) and the near elderly (age 45 to 64) (see Figure 2). Virginia s median age jumped from 32 years to 35 years between 1990 and As the largest cohort of Virginians is comprised of baby boomers aged 45 to 54 years, the median age will continue to rise. The effect of Virginia s population aging is significant. By 2010, baby boomers will move into the 65-and-older age group and push the percentage of SCHEV 3 January 2004

9 elderly in Virginia s population to 13% (up from 11%). Between 2000 and 2010, the number of those 65 and older will grow by 30%. At the same time, those in their most productive earnings years (ages 20 through 64) will grow by only 12%. Figure 2. Projected Change in Virginia Population by Race and Age, ,000 White Black Hispanic 360, , , , ,605 81,077 63,357 49,513 43,889 43,300 49,201 22,466 22,208 30,187-72, , ,555 0 to to to to and Older Source: US Census Bureau SCHEV 4 January 2004

10 The distribution and growth in the elderly population, however, is not uniform across the Commonwealth (see Figure 3). Interestingly, regions with declining population have the largest percentage of population over 65 years of age. For example, the percentage of those who are 65- and-older is only 7% of the population in Northern Virginia, while the proportion of elderly is nearly twice that in the Southwest (14%) and Blue Ridge (12%-13%) regions. Figure 3. Virginia Percent Population Over Age 65, by Region Data Source: 2000 Census The growing elderly population has a significant impact on health service utilization. According to the Virginia Hospital and Healthcare Association, those 65 and over represent 11% of the population, yet consume approximately 35% of hospital resources. At the other end of the age spectrum, the presence of an increased number of women of childbearing age in a region also increases utilization of health services. In Virginia, the most frequently cited reason for hospital admission is childbirth. The Commonwealth records about 80,000 births per year; the largest percentage of those (12% to 15%) is in Northern Virginia. Through 2010, this trend is expected to continue, with Tidewater/Hampton Roads reporting the second highest number of births, followed by the Richmond metro area. SCHEV 5 January 2004

11 In conclusion, a declining and aging population drives the projected increased demand for health services in the Southwestern region, while population growth and aging combine to create higher growth in nurse demand in other regions. Baseline RN Demand Projections. Key to understanding the adequacy of Virginia s RN workforce is an understanding of current and projected RN demand. For this study, the National Center for Health Workforce Analysis (NCHWA) Nursing Demand Model (NDM) was populated with data for each of six regions in the Commonwealth to produce regional RN demand projections through Aggregating the results across regions produced an estimated overall growth in FTE RN demand of 42% between 2000 and Total estimated RN demand for Virginia in 2020 (69,600) was derived by aggregating RN demand estimates; the aggregated total approximates the NCHWA projection of 70,300 RNs in Virginia (Biviano et al, 2004). National trends indicate that the majority of nurses are employed in hospitals where they represent 1 in 4 employees. An adequate supply of nurses is essential to quality health care. Recent studies have shown strong links between patient care outcome (safety and quality) and nurse education and staffing. 3, 4 Analysis of sector-specific demand in the Commonwealth of Virginia (see Table 1) indicates continued increasing demand for RNs in hospitals, and also indicates increasing demand over time in long-term care and ambulatory care settings. Growth in demand for each sector is projected to increase at rates similar to the national growth rate, with the exception of home health where the projected growth rate is somewhat lower than the national projected growth rate. Table 1. Projected RN Demand Virginia (FTE) Projected FTE RN Demand Projected Growth Setting to to 2020 Total 49,200 59,900 69,600 22% 42% Hospitals 30,500 37,200 43,600 22% 43% Nursing Facilities 3,000 4,200 4,900 40% 66% Doctor's Offices 4,300 5,100 5,700 19% 33% Home Health 2,500 3,300 4,200 37% 73% Other 9,000 10,100 11,100 13% 24% Data Source: Projections from National Center for Health Workforce Analysis Nursing Demand Model adapted for Virginia. Note: settings might not sum to total because of rounding. 3 For additional information see Aiken, L.H., Clarke, S.P., Cheung, R.B., Sloane, D.M., & Silber, J.H. (September 23, 2003). Education levels of hospital nurses and surgical patient mortality. Journal of the American Medical Association, 290, For additional information see J. Needleman, P. Buerhaus, S. Mattke et al., Nurse Staffing Levels and the Quality of Care in Hospitals, New England Journal of Medicine 346 (2002): SCHEV 6 January 2004

12 Table 2. Projected RN Demand United States (FTE) Projected FTE RN Demand Projected Growth Setting to to 2020 Total 2,001,000 2,346,000 2,822,000 17% 41% Hospitals 1,240,000 1,428,000 1,699,000 15% 37% Nursing Facilities 173, , ,000 30% 66% Doctor's Offices 155, , ,000 15% 32% Home Health 132, , ,000 42% 109% Other 302, , ,000 9% 18% Data Source: NDM projections, National Center for Health Workforce Analysis, BHPr, HRSA. Note: settings might not sum to total because of rounding. Additional demand analyses by region were also conducted. Results indicate that the real demand for nurses increases consistently over time as a function of: (1) population growth; (2) aging of Virginia s population; and (3) health service utilization trends. The projected demand by region (see Figure 4) follows the economic and population trends found in population projections. Figure 4. Virginia RN FTE Demand by Region ,000 20,000 # RNs 15,000 10,000 5, Blue Ridge Central Hampton Roads Northern Virginia Roanoke Southwestern Data Source: Projections from the National Center for Health Workforce Analysis, BHPr, HRSA, Nursing Demand Model adapted for Virginia. SCHEV 7 January 2004

13 Following state economic and demographic trends, demand for nurses is highest in Northern Virginia and Hampton Roads and is lowest in Southwest Virginia. Regional projections of nurse demand by employment sector are found in Appendix D. Table 3. Virginia Projected FTE RN Demand Setting Total 49,200 54,700 59,900 64,800 69,600 Hospitals (Total) 30,500 34,000 37,200 40,400 43,600 ST Hospitals, Inpatient 21,200 23,700 26,000 28,300 30,600 ST Hospitals, Outpatient 1,900 2,100 2,300 2,500 2,600 ST Hospitals, Emergency 1,900 2,000 2,100 2,100 2,200 All other hospitals 5,500 6,200 6,900 7,500 8,200 Nursing Facilities 3,000 3,600 4,200 4,600 4,900 Doctor's Offices 4,300 4,700 5,100 5,400 5,700 Home Health 2,400 2,900 3,300 3,800 4,200 Occupational Health School Health 1,500 1,600 1,600 1,700 1,700 Public Health 2,400 2,600 2,700 2,900 3,000 Other 4,300 4,700 5,000 5,300 5,600 VA Population 7,079,000 7,407,000 7,707,000 8,005,000 8,295,000 Data Source: Projections from the National Center for Health Workforce Analysis, BHPr, HRSA, Nursing Demand Model adapted for Virginia. NURSE SUPPLY Demographics of Virginia RNs. The demographics of registered nurses in the Commonwealth follow national trends. Currently, the average age of RNs in Virginia is over 45. Also consistent with observed national trends is the increasing age of nursing students and first-time licensed nurses. The cohort of RNs currently aged 45 is expected to begin retiring as they enter their sixties. Over the next 10 to 15 years, baby boomers will leave the workforce and become part of the population that will utilize health services at an increasing rate. Because nurses work both part time and full time, it is useful to define the supply of RNs in terms of full-time-equivalents. An RN working full time for the entire year is counted as 1 FTE, while an RN working part time or for only half of the year is counted as ½ FTE. RNs working in non-nursing positions and RNs not in the labor force are counted as 0 FTE. Consequently, the FTE supply of nurses in the workforce is significantly less than the number of licensed RNs. The Virginia Board of Nursing estimates that in May of 2001 there were close to 66,000 RNs licensed in Virginia. The 2000 National Sample Survey of RNs indicates that there were approximately 45,000 RN FTEs working in Virginia, so the FTE supply of working nurses approximates 70% of total licensed RNs. This estimate is similar to the national ratio of FTE to licensed RNs. This is not surprising since nurses are known to retain their licenses even after retirement. SCHEV 8 January 2004

14 The National Nursing Supply Model (NSM), was adapted to project RN supply by region in Virginia. Results indicate that Virginia s FTE supply of RNs will increase by a total of only 4% between 2000 and 2020 (see Table 4). Table 4. Virginia RN Full-Time-Equivalent Supply by Region Region % Change 2000 to 2020 Blue Ridge 5,000 5,700 6,300 6,800 7,100 42% Central 9,200 9,200 9,100 8,800 8,300-10% Hampton Roads 10,400 10,900 11,100 11,000 10,700 3% Northern Virginia 11,900 11,800 11,500 11,100 10,600-11% Roanoke 6,600 7,000 7,200 7,300 7,200 9% Southwestern 2,200 2,600 2,900 3,000 3,100 41% Virginia Total 45,300 47,200 48,100 48,000 47,000 4% Data Source: Projections from the National Center for Health Workforce Analysis, BHPr, HRSA, Nursing Supply Model adapted for Virginia. RN FTE supply is projected to increase slowly through approximately 2010 to 2015, at which time the number of RNs withdrawing from the workforce (either retiring or deciding to not practice full-time in nursing) will exceed the number of new RN graduates. This will lead to a gradual decrease in RN FTE supply. These projections were made using baseline assumptions for current trends in the number of new graduates, labor force participation rates, and net migration across states. The rate of change in RN FTE supply varies substantially by region (see both Table 4 above and Figure 5 below). SCHEV 9 January 2004

15 Figure 5. Virginia RN Full-Time-Equivalent Supply by Region 2000~ ,000 12,000 10,000 # RNs 8,000 6,000 4,000 2, Blue Ridge Central Hampton Roads Northern Virginia Roanoke Southwestern Data Source: Projections from the National Center for Health Workforce Analysis, BHPr, HRSA, Nursing Supply Model adapted for Virginia. Factors Affecting Nurse Supply Nurse Retention and Turnover. Recently, considerable attention has been given to the issues of nurse retention and turnover (particularly in hospital employment settings) as a possible means of ameliorating the shortage. Since 2000, the American Hospital Association, the Healthcare Advisory Board, and Robert Wood Johnson Foundation have issued reports recommending changes in the work environment to improve nurse satisfaction and retention. Nationwide, average turnover among RNs in U.S. hospitals is projected to be approximately 15% (Sherrod, 2000). While nurses may change jobs/employers frequently, they are not necessarily lost to the workforce. Findings from the 2000 National Sample Survey of Nurses (NSSRN) identified that 81.7 % of all licensed RNs were employed in nursing (HRSA, 2002). Nationwide, 69% of RNs not employed in nursing were 50 years or older. This represents a high level of workforce participation, up from rates of 76.7% to 80.0 % of licensed RNs since the 1980s. In Virginia, the highest proportion of nurses licensed and not working are age 65 and older (Virginia Tech, 2001). Nationally, GAO attributed the emerging US nursing shortage to be a SCHEV 10 January 2004

16 function of many interrelated variables affecting workforce participation: including premature attrition of RNs, and due to age related decreasing participation and retirement from the nursing workforce (U.S. General Accounting Office, 2001). The NSM projections for Virginia s nurse supply took into account the age and education level of RNs, which influence nurse workforce participation. Nationwide, hospitals are working to manage factors known to influence nurse dissatisfaction and thereby improve retention. Approaches to decrease inadequate staffing and inappropriate use of overtime, along with measures to improve working relationships, communication and job flexibility, are underway in hospitals nationwide, and also in Virginia hospitals. 5 Conditions in Neighboring States. The shortage of RNs in Virginia is not expected to result in a net inflow of RNs trained in other states because the shortage of RNs is a national problem. Because nurses may reside in one state but work in another, the demand for RNs in states neighboring Virginia was also examined. The demand for nurses in states bordering Virginia is important to understanding the overall competitiveness of the labor market for nurses in the Mid- Atlantic region. Findings indicate that among its neighboring states, only the District of Columbia has a higher proportion of unmet demand for nurses compared to Virginia. All states bordering Virginia have a shortage of nurses, which is projected to increase over time (see Figure 6). Figure 6. Unfilled Demand for RNs in Adjacent States 60% 50% 40% 30% 20% 10% 0% VA DC MD WV NC U.S D ata S ource: N ational C enter for H ealth W orkforce A nalysis, B H P r, H R S A 5 Personal communication Barbara Brown, Virginia Hospital and Healthcare Association, SCHEV 11 January 2004

17 ADEQUACY OF REGIONAL NURSE SUPPLY If current trends continue, the supply of FTE RNs in Virginia is projected to be 47,000 by Because demand for FTE RNs is expected to increase to approximately 70,000 in 2020, a shortage of over 23,000 FTE RNs (32% of demand) is projected. Age-related RN retirements will reduce the supply of RNs in Virginia s workforce at an increasing rate through The discrepancy between the projected Virginia RN supply and demand through 2020 is shown below in Figure 7. While the demand projections for Virginia are consistent with national projections from the Bureau of Labor Statistics (BLS), and the Bureau of Health Professions (BHPr), the Commonwealth s nurse supply per capita (per 100,000 population) ranks 40 th in the US. Also consistent with national trends, the Commonwealth s RNs are disproportionately white and female. SCHEV 12 January 2004

18 Figure 7. US and Virginia RN Supply and Demand FTE per 1000,000 Population Virginia Demand Virginia Supply U.S. Demand U.S. Supply Data Source: National Center for Health W orkforce Analysis, BHPr, HRSA The importance of an adequate supply of health professionals is critical to the availability and quality of health services in each region. An adequate supply of nurses is important for regional business and economic development and therefore is important for economic stability and growth. In summary, the supply of RNs in the Commonwealth is inadequate to meet the current and projected demand. The supply of RNs will become increasingly inadequate, as more nurses are required to meet growth in the demand for nurses and replace those who retire. To meet the demand for new RN positions and replace retiring nurses, Virginia will need to double its average number (1,900) of new licenses per year. Additional analyses of the adequacy of RN supply in Virginia, based upon current and projected educational scenarios, are introduced on page 22 of this report. Analysis of the regional trends indicates a growing shortage of FTE RNs in all regions except Southwest. Figure 8 illustrates the gap in projected RN FTE supply relative to projected demand through SCHEV 13 January 2004

19 Figure 8. Virginia RN FTE Shortage Projections Through ,000 10,000 8,000 # RNs 6,000 4,000 2, , Blue Ridge Central Hampton Roads Northern Virginia Roanoke Southwestern Data Source: Projections from the National Center for Health Workforce Analysis, BHPr, HRSA, Nursing Demand and Supply Models adapted for Virginia. ECONOMIC IMPLICATIONS OF RN SHORTAGE Economic Growth. Economic growth in the Commonwealth follows population growth trends. The greatest areas of growth are expected to be in Northern Virginia, followed by Tidewater/Hampton Roads. A sound healthcare system is a basic component of Virginia s infrastructure and is necessary for regional economic growth. Healthcare providers contribute significantly to regional economic conditions as employers. Across Virginia, employment in the professional, health, education and social services areas varies from a low percent population of between % and a high of 34-49% (see Figure 9). 6 Tim Dall, Vice President, The Lewin Group. Projections from the National Center for Health Workforce, BHPr, HRSA using the Nurse Supply Model (NSM). SCHEV 14 January 2004

20 Figure 9. Percent Employed in Virginia s Professional, Education, Health, and Social Service Sectors, % to 49.2% 28.6% to 34.0% 23.3% to 28.6% 21.0% to 23.3% 17.0% to 21.0% Frederick Clarke L oudoun Warren Fairfax Shenandoah Fauquier Arlington Highland Rappahannock Page P rince W illiam Rockingham Culpeper Stafford Madison King George Augusta Greene Orange Lee Bath Albemarle Spotsylvania Westmoreland Louisa Caroline Richmond Rockbridge Essex Northumberland Fluvanna Nelson Hanover King And Queen Goochland A lleghany King William Lancaster Accomack Henrico Amherst Botetourt Buckingham Powhatan Middlesex Craig New Kent Mathews Cumberland Chesterfield Roanoke Gloucester Appomattox Amelia Charles City Buchanan Giles Northampton J am es City Bedford Prince Edward Bland Campbell Prince George York Dickenson Tazewell Montgomery Nottoway Surry Charlotte Dinwiddie Pulaski Wise Franklin Russell Wythe Lunenburg Floyd Sussex Halifax Isle O f W ight Smyth Pittsylvania V irginia Beach City Brunswick Carroll Southampton Scott Washington Suffolk City Grayson Patrick Mecklenburg Henry Greensville Chesapeake City Virginia = 29.9% Data Source: 2000 Census Without an adequate supply of staff, health facilities have reduced revenue and increased risk of closing, thereby reducing access to health services within communities. Workforce shortages, especially for RNs, create financial strain on health service providers (employers) who must deal with increasing competition with higher wages and labor substitution. These trends come at a time when health service demand is increasing for most of Virginia s healthcare systems. Note that the cost of care increases as staffing shortages create wage-related expense inflation. Expense inflation is one of the foremost areas of uncertainty in the assessment of an organization s credit quality. Credit quality affects providers ability to upgrade current operations to meet regulatory or patient demands and/or to expand services in response to technological improvements or patient needs. As health care is a labor-intensive business, salary and benefit expenditures are key determinants of health facilities financial viability. An inadequate supply of nurses has been found to reduce or impede access to care, adversely affect patient safety and contribute to increases in the cost of care (Aiken & Fagin, 1997). The financial condition of healthcare providers affects ability to provide cost-effective, quality health services and in turn affects the health status and quality of life in communities. SCHEV 15 January 2004

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