Financial Impact of the Nursing Shortage on the Health Care Industry
The healthcare industry is significantly affected by the issue of nursing shortages. There are several ways in which nursing shortages bring financial constraints to the industry in general and particular healthcare organizations. Firstly, the issue of retaining the nurses who still have not left the job leads to the necessity of increasing their salary or adding sign-on bonuses.
Increased staffing costs are also necessary to attract new employees, as it is the most effective way to expand personnel. This reduces a healthcare organization’s profitability. The same goes for the need to increase overtime expenses, as the nursing shortage leads to an elevated workload for nurses. Existing employees must work more to cover the shifts, with extra hours paid more than regular hours.
Another negative consequence is a worse quality of healthcare services due to personnel shortage, which affects patients’ satisfaction and an organization’s profitability in the long run. Finally, nursing shortages also cause higher turnover rates, forcing organizations to increase the training costs to properly train newcomers.
Supply and Demand Challenges in Health Care Services
Changes in society’s structure and emerging difficulties that healthcare personnel face create new supply and demand challenges that contribute to the nursing shortage. One of the most critical demand challenges is the aging population. Life expectancy has been growing consistently in recent decades, and as life expectancy grows, so does the demand for healthcare services. This makes it necessary to hire more nurses when the nursing supply is not particularly high. The pandemic was another supply challenge that made the nursing shortage issue particularly obvious (As COVID-19 worsens the nursing shortage, Madison hospitals and schools step up, 2022).
Another challenge is the low level of enrollment in nursing programs. This causes a disproportion between the high demand for healthcare and a low personnel supply, as there are not enough new nurses who would enter the workforce. A severe shortage is created with experienced nurses leaving the field and no new nurses to replace them. Moreover, the retirement of experienced nurses leads to a loss of expertise, lowering the quality of healthcare services. Competition from other industries that provide better working conditions to employees poses another supply challenge to healthcare organizations.
Regulatory Issues on Personnel, Supplies, and Technology
Several regulatory issues can affect healthcare organizations in the area of personnel. First, there is a problem with the required staffing ratios. Staffing ratios, which are sometimes required on a state level, can include maintaining a set number of employees. This requirement may be hard to maintain, especially in a nursing shortage. Laws regarding minimum wages and regulations regarding overtime work can also challenge healthcare organizations when managing personnel. Nursing shortages lead to an increased workload and elevated overtime work, so the latter’s regulations can be challenging.
The same goes for immigration policies; nursing shortages may require healthcare organizations to employ foreign employees, and immigration policies may complicate this process. Another issue is the requirements regarding licensure and staff training. When these requirements change, it can be particularly hard to implement them. This issue can be particularly challenging because the nursing shortage requires organizations to provide more training.
Strategies to Address the Financial Issue
Solving the nursing shortage issue might require implementing several strategies. One long-term strategy is to increase the attractiveness of nursing programs and improve nursing education. This can be done by providing more funding to these programs. Education is the basis of a reliable and qualified workforce; thus, starting from the basis will help to solve the issue in the long run.
It is difficult to increase the attractiveness of the nursing profession and nursing education programs. Still, this strategy would be the most effective over the long term. At present, the importance of the nursing profession is understated; thus, it is necessary to increase awareness of its significance. This requires expanding the nurse’s scope of practice and working with the public, demonstrating the profession’s value to them. Another way to demonstrate the importance of nurses is by raising their wages. The more a professional earns, the more likely they are to enter and stay in the field.
Expected Outcomes of Implemented Recommendations
If these recommendations are followed, the nursing shortage issue will start losing severity. More people will desire to enter the profession when the foundation for this desire is solid. This strategy requires a comprehensive approach, but the result will also be solid. First, there will be no low enrollment in the nursing programs; thus, enough specialists will enter the workforce after graduating. If the quality of the education is high, the newcomers will be more likely to provide better healthcare services. If the value of the nursing profession is elevated along with salaries, the retention problem will not be as acute.
References
As COVID-19 worsens the nursing shortage, Madison hospitals and schools step up. (2022). WI State Journal [Madison, WI], NA. Web.