The national nursing shortage is well documented and has been felt acutely throughout our country’s hospitals. What is especially troubling is that if nothing is done to remedy the problem, the national supply of registered nurses will remain virtually unchanged by 2020. In contrast, the demand for nurses will soar by 2020: the 6 percent shortfall could grow five-fold to 29 percent.

The shortage is even more severe in California, which ranks 50th out of the 50 states in terms of nurses per 100,000 population. The shortage of registered nurses in our state is estimated to be 22,500 full-time equivalents (FTEs) and could grow to 116,000 FTEs by 2020–a 45 percent shortfall.

The changing health care delivery system directly impacted the demand and supply of nurses. During the 1970s and 1980s, California moved into the managed care arena; health maintenance organizations began to overtake traditional fee-for-service medicine. Hospital reimbursement fell dramatically, forcing hospitals to make drastic budget cuts. Patients were discharged earlier, and hospitals began to lay off nurses. New nursing graduates found it harder and harder to find hospital jobs.

By the mid 1990s, nursing schools had responded accordingly. Some decreased the size of nursing programs; others closed programs entirely.

Exacerbating the drop in nursing school capacity is the aging workforce. Half of the nation’s nurses will reach retirement age by 2020. In California, the average age of the working registered nurse is one year older than the national average of 47 years.

Most importantly, what may no longer be unique to California is our mandated nurse staffing ratios. When the legislation became effective in 2004, it was roughly estimated that the hospital demand for nurses would increase by approximately 20,000 in the state.

In 2006, the California Institute for Nursing & Health Care (CINHC) commissioned a study called the California Registered Nurse Regional Workforce Report Card. The study depicts the nursing shortage through the ratio of RN jobs per 100,000 population in the state’s metropolitan areas compared to the national utilization of RNs.

The California average RN job ratio was 622 per 100,000 population compared to the national average of 787 per 100,000 population.

Recruitment of new nurse graduates continues to be a major cost for hospitals. Just the cost for orienting a recent graduate is reported to be anywhere from $15,600 up to $31,100 for certain specialty hospital areas.

Foreign recruitment is a strategy employed within the last two years by 43 percent of the state’s hospitals. Of these, 30 percent are actively recruiting from abroad. The price for recruiting immigrant nurses is steep. The average cost is close to $20,000 and can go as high as $80,000.

Nursing school capacity reached a low in 1999. Beginning in 2002, schools began building up their educational capacity so that by 2005, the state once again enrolled the same number of nursing students as in 1995. According to the California Board of Registered Nursing (CBRN), the last academic year (2004-2005) saw an increase of 749 students (8.7 percent) over the previous year. Capacity is also continuing to grow.

What is especially encouraging is that interest in nursing as a career is booming. Unfortunately, nursing school waiting lists are long. Applicants may experience a wait time of two to eight years.

Building educational capacity is the state’s most urgent nursing workforce need. According to the CBRN, the top five barriers most often cited are:

• Faculty salaries not competitive
• Insufficient number of qualified clinical faculty
• Insufficient number of clinical sites
• Insufficient funding for faculty salaries
• Insufficient number of qualified classroom faculty

Clearly, recruiting and retaining faculty is a major obstacle.

A major challenge is the significant pay disparity between practicing nurses and nurse faculty. The top ten percent of full-time nursing faculty in the United States earns $85,600 (higher in California). An RN with a four-year degree in this state can earn $90,000 as a staff nurse with differentials, bonuses and overtime. Nurse managers can earn $90,000 to $115,000 in a hospital setting. The lowest 10 percent of nursing faculty earns $42,000, compared to $49,999 for the lowest 10 percent of practicing nurses.

Faculty pay is part of a larger funding issue. The average in-state allocation to public colleges to fund nursing programs is only 50 percent of the cost of the program.

In April 2005, the Schwarzenegger Administration announced a $90 million plan to expand nursing education over the next five years. Including grants requiring a 2:1 match from public and private partners, this plan is expected to provide a significant boost for nursing programs throughout the state.

Hospitals and health systems are also contributing large sums of money to nursing education. The CBRN reported that 62 schools received $19.1 million from hospitals and health systems during 2004-2005–five times the amount donated by charitable foundations.

Much more is needed. Today we are graduating about 6,000 new nurses each year in California. We need to double that amount in order to meet our current and future needs.