Help Wanted: Doctors and Nurses

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There are more doctors and nurses today than ever before, but they are not being trained, distributed or deployed efficiently, according to PricewaterhouseCoopers' Health Research Institute in an analysis of the changing medical workforce and how it will affect the quality and delivery of health care in coming years. According to PwC, a majority of doctors and nurses is nearing retirement just as the American public will need them most, and health care organizations are left with a diminishing pipeline of primary care physicians, new competition for nurses and a generation of young clinicians who have different expectations about work-life balance than their predecessors.

The federal government is projecting a shortage of one million nurses and 24,000 doctors in the U.S. by 2020, but the PwC report "What Works: Healing the Healthcare Staffing Shortage" asserts that these projections are built around a broken, dysfunctional medical workforce model. It calls for major changes in the way doctors and nurses are trained, formation of public-private partnerships to promote and redeploy physician and nursing programs and new thinking about how, where and by whom health care will be delivered in the future.

Highlights of PwC's analysis of the changing medical workforce include:

  • The total number of registered nurses has increased by 75 percent since 1980, but will begin to decline in 2010, the first decrease in decades. The absolute number of physicians also has increased steadily over the years, but there are serious maldistributions of physicians by specialty and geography. Only 20 percent of internal medicine residents are now choosing primary care internal medicine, and the rest are pursuing higher-paying subspecialties. Meanwhile, 20 percent of Americans live in areas with a shortage of primary medical care.
  • The roles of nurses and physicians are blurring in primary care. According to PwC's research, hospitals in the U.S. now rely more heavily on physician extenders, such as nurse practitioners and physician assistants. Competition for these clinicians is increasing, particularly with the advent of retail health clinics, which heavily employ physician extenders. By 2009, 1,500 retail clinics staffed by registered nurses are scheduled to be open.
  • Hospital nurses will be elevated in stature from "overhead" to "rainmaker." Whereas physicians have traditionally been the revenue rainmakers in hospitals while nurses were considered overhead, new pay-for-performance programs that focus on clinical quality and patient satisfaction will give nurses significant ability to influence the measures that drive revenue.
  • Technology is shifting what is done and by whom. Radiologists are now doing work that cardiologists used to do, and cardiologists are now replacing surgeons in some procedures as more people choose less-invasive treatments such as stents instead of coronary bypasses.
  • Physicians are moving toward hospital employment while nurses are moving away. Two-thirds of hospital executives surveyed recently by PwC said their physicians now want to be employed by the hospital and nearly 75 percent say physicians are asking for on-call pay. On the other hand, the percentage of nurses working in hospitals has been dropping steadily. Nurse vacancy rates are running between 7 percent and 10 percent, and hospitals are now regularly turning to temporary workers to fill nursing shoes.
  • International recruitment has been filling the gaps in the U.S. medical workforce. In 2005, approximately 13 percent of all new licensed nurses in the U.S. and 25 percent of all practicing physicians were international recruits.

Medical Training Process Must Change

One of PwC's key conclusions in its report is that the process of educating clinicians, particularly nurses, must change. The number of denied applicants for nursing schools is at its highest level ever, increasing more than sixfold since 2002. PwC cites several reasons for this, including a shortage of qualified nursing faculty, financial disincentives to offer nursing education, particularly among state schools, and a scarcity of clinical training sites.

"Despite the growing importance of nurses in the health care continuum, there is a lack of broad-reaching financial incentives to bolster nursing education," said Bill Dracos, director in PricewaterhouseCoopers' Health Advisory Practice. "Hospitals receive significant federal funding for medical education, but they are not similarly subsidized for training nurses. Nursing education programs can lose money for colleges, limiting colleges' willingness to expand their programs and raise faculty salaries."

The report found that the number of allopathic medical school graduates has remained static for nearly 25 years from 1980 to 2005, in part because of projections in the 1980s and 1990s of a forthcoming surplus of physicians based on expected efficiencies from managed care. In fact, as the population has grown, the number of medical school students per capita has declined. According to PwC, after two decades of status quo, a record number of new medical schools are slated to open in the next five to 10 years, which could repair the imbalance of physicians in undeserved areas and specialties.

"An aging population, a growing census, and a maldistribution of care all call for more medical school graduates," added Dracos. "That call is being answered by expansions of current medical schools, as well as a crop of new medical schools." As more U.S. medical students graduate, they'll likely displace some international medical graduates who have been filling the gaps.

Today's Generation of Doctors and Nurses Want a Life

"Unfilled positions and continuous turnover of staff are stressing the financial and cultural fabric of health care organizations," said Deedie Root, Managing Director in PricewaterhouseCoopers' Healthcare Advisory Practice. "Too many health care workers leave the field because of burnout. They are trained to sustain life -- but they also want their own life. It is telling that nearly half of all nurses do not work in direct patient care, and a growing number of physicians are retiring early."

For a new generation of health care workers, schedule trumps salary. Work-life balance is now the top influencer of how medical students pick a specialty. Nurses say that culture and schedules are the greatest influences on their job satisfaction. According to PwC, organizations that focus more on work-life balance issues for physicians and nurses will have a competitive edge in recruiting and retaining top talent.

Only 23 percent of people who wanted to become nurses are currently working as nurses. Only about 45 percent of those who apply for nursing school are accepted, and, of those, only about half graduate. Furthermore, half of new nurses leave their first job after just two years. The high turnover is extremely costly to hospitals. Analysis conducted by PwC found that every one percent increase in nurse turnover costs a hospital about $300,000 a year. Furthermore, hospitals that perform poorly in nurse retention spend, on average, $3.6 million more than those with high retention rates.

PwC concludes that hospital executives are in a state of denial about nurse dissatisfaction within their organizations. In a survey of 240 hospital executives recently conducted by PwC, many said they believe that the nurse workforce in general is dissatisfied. They cited excessive administrative paperwork, patient workload strains due to rising patient acuity levels and inadequate staffing as the top three factors for nurse dissatisfaction and nursing turnover. However, almost none of these executives recognized any of these complaints as a "very significant" problem in their own organizations.

"On the long list of priorities hospital administrators face, workforce issues are often pushed down. But denial is no longer an option. The medical staffing shortages create the risk of compromising the treatment provided to Americans -- in essence, the very health of our country," said Root.

You can read a full copy of the report.

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