Nursing shortages have been crippling the healthcare system since the pandemic. From 2020 to 2021, the United States Chamber of Commerce reported that the number of registered nurses in the workforce decreased by over 100,000. This was the most substantial decrease in nurses in the last forty years.
As of 2022, the nursing unemployment rate accounted for nearly 43% of the national unemployment rate in the entire United States. The nursing shortage has caused a ripple effect throughout the entire healthcare system and increased the costs related to healthcare. Due to the nursing shortage, hospitals and healthcare facilities are relying on the use of agencies to help bridge the gap with their nurse staffing shortages.
There are a number of factors that contribute to the nursing shortage in the United States. The factor most talked about is the lingering nurse burnout from the pandemic; however, there are other factors to consider. There are contributing factors such as; an aging population, inadequate nursing school capacity, prolonged delays in employment-based immigration, lower birth rates, and new state laws that prevent healthcare systems from paying out contracts for agency nurses.
The projected job openings for nurses over the next ten years stands around 193,000; however, there is no way that the demand for nurses can be met. The importance regarding the demand for nurses cannot be overlooked, as the shortage of nurses is one of the major contributing factors associated with hospital closures in recent years as reported by the Becker’s Hospital Review.
In 2023, as a number of hospitals closed their doors – there was also an increase in the closure of maternity wards due to low birth rates. In addition, the decline in births in 2023, brought the United States birth rate to the lowest that it has been in more than a century. This is an important statistic when you consider the number of nurses needed to fill the demand of the next decade.
To meet the demand and provide adequate care to patients and nursing home residents, hospitals and healthcare facilities are relying on the use of agency nurses to meet their staffing needs. The major downfall associated with meeting this demand is due to the fact that the cost is nearly double what it would be to hire a facilities own nursing staff. However, the appeal to be an agency nurse, or even a traveling nurse is lucrative due to the increase in pay. It is apparent that many hospitals and facilities cannot afford to take on the burden of such an increased cost, especially as reimbursements are considerably low.
The healthcare environment continues to see challenges as time presses on and has to adapt and adjust in a moments time. The focus for hospitals has now shifted to the thought of how they can convert agency nurses to their own staff. If a healthcare facility has a robust benefits package then that may be appealing to an agency nurse. Although, as long as there is an increased cost benefit to be an agency nurse, the challenge may be difficult.
By 2022, nearly 50% of nursing facilities utilized agency nurses. This number has doubled over the last five years and because the majority of nursing home revenue comes from Medicare and Medicaid reimbursement rates, facilities are now facing the lack of appropriate funding. These facilities are often left with little to no other option, as they have an obligation to meet the minimum staffing requirement.
Directly, as the increase in agency nurses presses forward, the decrease in healthcare facilities will be faced with an increased pressure to meet the growing demand. Those that cannot meet these challenges will continue to close their doors for good as this inverse correlation continues to grow throughout the United States.