Following the Money in Nursing Education
In the December 2011 issue of Health Affairs, Peter Buerhaus and colleagues surprised a number of people with a finding that there had been a resurgence in the number of relatively young RNs entering the health care workforce. They had analyzed Census data from the Current Population Surveys and the American Community Surveys (CPS/ACS) that include individuals’ occupations. Lead author David Auerbach was quoted, “Back in 2000, we published a paper in the Journal of the American Medical Association that predicted an acute nursing shortage. Organizations such as Johnson & Johnson and HRSA started gearing up to promote nursing. It’s unusual to see a turnaround like this, and what that points to is an incredible policy story: We forecast a problem, and it got fixed.” Their Exhibit 1 is reproduced below.
In fact, there are a variety of other nursing related data that are consistent with the CPS/ACS results for the years following the turn of the 21st Century. Perhaps more importantly, however, there is what appears to be a strong association between changes in funding for nurses’ education and subsequent changes in nursing student enrollments, graduations, and successful completion of NCLEX examinations leading to RN credentials. Further, this association is not new in the 21st Century but could also have been observed during the 1960s and 1970s.
There are many factors affecting individuals’ decisions to pursue and complete the educational requirements to become a registered nurse. As Dr. Auerbach mentioned, there was a substantial effort by the Johnson & Johnson Company to encourage young people to become registered nurses. The Johnson & Johnson Campaign for Nursing’s Future, was a public-awareness campaign launched by Johnson & Johnson in 2002, to address the nursing shortage in the U.S. by recruiting new nurses and nurse faculty and help to retain nurses currently in the profession. The VA also had started a program in the early 2000s to increase the educational requirements for RNs it employed. Another type of program started to appear early in the century and later in that first decade to allow military medical corpsmen to receive accelerated retraining to become RNs. One example was at the University of Maryland in 2002. Many “Second Career” programs to encourage career switches to nursing were also started by colleges and universities around that time.
But one also needs to review the primary source of funding for nurse training: Title VIII, the legislation that covers nursing education and practice. Originally referred to as the Nurse Training Act, Title VIII was added to the Public Health Service Act in fiscal year 1964 initiated with funding at $9.9 million. This Act was a response to a 1963 report of the Surgeon General’s Consultant Group on Nursing. The report, Toward Quality in Nursing, Needs and Goals, anticipated a shortage of nurses and recommended that the supply of nurses be increased from a total of 550,000 professional nurses in practice, to a total of 850,000 by 1970. There were relatively rapid increases during President Johnson’s term to $66.7 million in fiscal 1968. Funding during the next two years under Nixon dropped, but saw increases in 1970 and 1971.
There was a very important change in 1971. The Comprehensive Health Manpower Training Act of 1971 significantly amended the Health Professions Educational Assistance Programs contained in the Public Health Service Act. With respect to Title VIII, funding increased by $15 million in fiscal 1971 to $69.4 million. Funding nearly doubled in fiscal 1972 to $138 million, and increased again to $160.6 in fiscal 1973. There was a decline in funding from $160 million in fiscal 1973 to the $50 million range in 1983 and Title VIII funding continued at relatively unchanged levels between 1985 and 1995. Minor increases in funding could be observed over the remainder of the decade.
In fiscal year 2001 Title VIII funds were increased by 20% over the prior fiscal year. Subsequent Congressional deliberations led to the passage of the Nurse Reinvestment Act of 2002. The 2002 law reauthorized programs for Basic Nurse Education and Practice, Advanced Education Nursing, Nurse Education Practice and Retention and Nursing Workforce Diversity and created new ones, including the programs for Nurse Faculty Loans and Comprehensive Geriatric Education. Funding increases continued through 2005, although Title VIII funding remained flat for the remainder of the Bush Administration.
In 2010 President Obama announced his intentions to increase funding for training of primary care clinicians. Support would be provided to train an additional 500 primary care physicians, 500 physician assistants, and 500 registered nurses, reallocating public health funds available under the Affordable Care Act. Title VIII funding was increased by nearly $73 million to $244 million in fiscal 2010, a 43% increase. Subsequent funding has been somewhat reduced but the fiscal year 2012 amount was nearly $232 million.
What one observes in Figure 1 is that while increases in new nurses followed (with a lag) funding increases during the first decade of the 21st century, the same phenomena was observed during the 1970s. The substantial funding increases of 1972 and 1973 can be associated with the subsequent increases in the stock of nurses ages 23 to 26 observed in 1978 and 1979. (The four year cohorts used by Auerbach, Buerhaus, and Staiger may appear to elongate the lag time.) In fact, it appears that the decline in funding from $160 million in fiscal 1973 to the $50 million range in 1983 is also matched (with a longer lag) in the decline in young nurses observed between 1985 and 1995. Further, the mainly level funding for Title VIII from 1987 to 2000 is mirrored in the relatively stable new nurse cohorts observed from 1991 to 2002. Not everything in the U.S. health care economy can be linked to the money involved, but the associations in these data are mainly supportive of those kinds of hypotheses.
Toward the right hand side of Figure 1 one can observe that there are ample data from the 21st Century exhibiting an alignment with the increases in Title VIII funding. The National Council of State Boards of Nursing (NCSBN) website posts quarterly statistics on the number of persons who have taken the NCLEX exam and the percentage of those who have passed the exam. In fact, in calendar year 2000 not quite 70,000 U.S. RNs had passed the NCLEX exam. By 2012, the analogous number passing the NCLEX was 149,571. The increase over the prior calendar year was 7,181 additional passers, the biggest increase since 2008. The Auerbach, Buerhaus, Staiger numbers from the American Community Survey certainly appear consistent with the new nurse numbers from NCSBN.
Data from the American Association of Colleges of Nursing (AACN) on total students enrolled in baccalaureate nursing programs and the number of graduates from 2000 to 2011 also fit this pattern. Baccalaureate RN graduates are approximately 40% of total RNs passing the NCLEX each year. (This percentage has increased from 36.5% in 2000 to 40.8% in 2011.) The most distinct phenomenon observable is the substantial growth in nursing students and new nurse graduates that appeared early in the 21st century, particularly around 2002 and 2003.
There is one last part of the story, and that does involve a different perspective on money. In Figure 2, we replicate the Title VIII funding history but also show that history adjusted for inflation (using the CPI). In nominal dollars Title VIII funding peaked in 1973 at $160.6 million and did not reach that level again until 2009 when it came to $171 million. When adjusted for inflation it is clear that current Title VIII support of nurse training comes nowhere close to the real funding levels of the 1970s. The funding increases of the George W. Bush first administration and the first two years under Obama were very useful, and have helped reverse the flat real funding course for nurses’ education of the 1980s and 1990s. Under Obama’s primary care training initiative equal numbers of new primary care providers would receive financial assistance. However, because of the substantially greater cost of physician training, the nurse training funds were closer to 20% of the total rather than 33%. Given the impending retirement of many of the current nurse educators (who entered practice during the late 1970s), a larger increase in real spending on nurse training might have been an opportunity lost to mediate the expected return of nursing shortages as well as the projected shortage of primary care clinicians.
The bulge in young nurses observed in the Auerbach, Buerhaus, Staiger data from 1973 to 1991 has been analogous to the “pig in the python” metaphor associated with the baby boomers in this country. With Title VIII those individuals were able to pursue a nursing education and they have stayed with the profession. In 2008 HRSA’s National Sample Survey of Registered Nurses found that 40% of all U.S. RNs were aged 50 years or older. Many have been deferring retirements due to the 2007-2009 recession and the subsequent very slow recovery. As the recovery accelerates many of those retirements will become undeferred even if hospitals and other health employers find successful strategies for helping mature RNs prolong their careers. Whether the recent Title VIII funding levels will be sufficient to continue to generate substantial numbers of replacement RNs is uncertain. To return to the real value of 1973 peak funding that provided the current strength in numbers for registered nurses would require a fiscal 2013 Title VIII budget on the order of $840 million; well more than triple the most recent funding level.