Is the Nursing Market Malfunctioning?
Studies of the nursing market forecast that the shortage will get worse in the coming years. But the real question is this: has something happened to the price mechanism in the market for nurses? To assert that the United States is suffering from a nursing shortage that will not only persist but grow worse for years to come is to assert that the nursing market is malfunctioning. Is the price mechanism in the nursing market broken?
Contrary to the many articles and studies, the price mechanism in the nursing market is not malfunctioning. It is working in textbook-like fashion. The increasing demand for nurses is driving nursing compensation up, which in turn is bringing more nurses into the market. Such is not the stuff of shortages but of market prices coordinating the allocation of scarce resources exceptionally well -- and in reality, not just theory. FULL ARTICLE





Comments (11)
No such thing as a long term labor shortage.
The government with an agenda missed the boat as usual. There are better ways that markets handle labor shortages. One is that the buyers of labor find substitutes. In other words hospitals will and have been using technology to reduce hospital stays and the like thus reducing the necessity for nurses.
Look at the increasing numbers of specialty outpatient care centers. Doctors are building these for heart procedures and the like. These do not normally involve overnite stays so they do not need 24 hour nurse and doctor staffs.
Also look at the increasing number of travelling nurses who take care of patients for short periods of time in their homes.
Then the biggest reliever of the need for labor is the pharmaceutical industry that reducing the need for surgeries and other complex procedures.
Published: May 2, 2008 9:17 AM
David Spellman
Actually, the government is right about a nursing labor shortage--there will be a chronic shortage of nurses willing to work at the low wages the government wants to pay.
Private healthcare paid for by the recipients will never suffer any shortage of resources, but government operated healthcare will always suffer from chronic shortages of everything.
So the HRSA is right because they are making their projections based upon government meddling in the market, which we all know is the realistic assessment. At least the government is admitting their failure (obliquely as that may be)--in Soviet Russia they simply declared that there were enough nurses.
Published: May 2, 2008 9:48 AM
fundamentalist
Probably the most important thing the healthcare industry in general could do is use computers more effectively and raise the productivity of doctors and nurses. A few years ago the WSJ ran a series on the industry and labeled it the least “computerized” industry in the nation. Yet technology has existed for years that would enable computers to do the routine work of nurses, especially the collecting and monitoring of vital signs, that would free nurses for work only they can do. Increasing the productivity of existing nurses would reduce pressure on demand.
Published: May 2, 2008 10:11 AM
newson
not sure about america, but here in australia, the nurses have long suffered from a chronic case of "doctor envy". they got all the crap jobs, did a lot of the heavy lifting (literally and figuratively), often had better clinical skills than junior doctors, and yet got none of the prestige of a profession.
so the nursing unions and the state got together to make nursing a university course. sort of medicine-lite.
not surprisingly, this has seen enormous wastage of state-subsized education - those dreamers who saw florence nightgale and not the rank bedpan, end up quitting after a three year degree of mainly theory.
in the good ol' days, clinical experience started day one at work. usually scrubbing dentures or suchlike. screened out the less committed very quickly.
Published: May 2, 2008 11:49 AM
David Hillary
The article also misses out the supply of nurses from foreign labour pools: in the Philippines many doctors are re-training as nurses in order to go to the USA -- apparently the nursing labour market is less protected from foreign labour than the doctor labour market.
Published: May 2, 2008 6:38 PM
cipher
David Hillary raised an important point. Hospitals are responding to the alleged nursing shortage by importing lower priced nurses from overseas (labor arbitrage). I wouldn't recommend betting one's health that many of today's pretty Philippine nurses were, in another life, Philippine M.D.s.
Published: May 3, 2008 9:21 AM
Arend
In the great socialistic country of the Netherlands, with it fantastic public education (wherein theory is much more important than practice), we have arrived in the situation that plumber school graduates earn more than higher education (college) graduates in their first job because of the shortage in (high quality) manual labor services.
I think this fact is a good example on how a failing supply market for plumbers (public education) is countered by the price-system (which even 'works' under economic fascism) higher relative wages for starting plumber which will work as a signal/incentive for more young people to choose an education for high quality manual labor services.
Published: May 3, 2008 1:35 PM
Joshua Katz
Yet the analysis does leave a few things out. If the market is unable to provide the "needed" nurses, what will be the cause? How about:
Ever-increasing unemployment and welfare benefits, making it harder for wage increases to attract more workers?
Absurd licensing requirements, which require 2 years of study at an accredited school? A market mechanism would surely grant recognition for comparable credentials and experience, but nursing does not?
In a country where 1/9 of the population are convicted criminals, the fact that you can't become a nurse with a felony, or with most misdemeanors?
The difficulties moving a license from state to state?
The high pay scales for nursing instructors at state universities, moving nurses from practice to teaching?
Published: May 3, 2008 1:56 PM
C.V. Compton Shaw
Monopoly capitalism and affirmative action for women and discrimination against men in nursing by law are primarily responsible for the nursing shortage.
In "monopoly capitalism" capital is exported from a country rather than the products produced by a nations citizens. What is capital? Capital is labor, industry, and money. In the case of nursing, labor is exported in the form of the massive immigration into the USA of foreign born nurses which now make up approximately 30% of all nurses. "Monopoly capitalism" tends to destroy true capitalism which is characterized as having "free enterprise" and competition. "Monopoly capitalism" tends to concentrate both economic and political power in a few entities and individuals while, also, tending to impoverish the general population (nurses in this instance).
"True capitalism" (normal market functioning in a competitive-free market economy) tends to increase and more widely distribute both wealth and political power amongst the general populace.
Thus, the nursing market is malfunctioning as it is in the grips of "monopoly captialism".
Economic theorists assert that severe labor shortages eventually result from monopoly capitalism and that monopoly capitalism is the last stage of capitalism before some form of socialism replaces the same.
With regard to "affirmative action", the same gives women preferential treatment in employment in all of the employment field and education over men, especially caucasian men while, at the same time, encouraging and promulgating discrimination against men, especially caucasian men, in employment and education even those fields which have historically been dominated by women (nursing).
The same discrimination against men in nursing concommitant with affirmative action for women in nursing and all other fields increases the nursing shortagte.
All of the aformentioned should be addressed to ameliorate the nursing shortage.
Published: May 3, 2008 2:25 PM
fundamentalist
C.V. "...monopoly capitalism is the last stage of capitalism before some form of socialism replaces the same."
Your views agree with the great French historian Braudel, who saw capitalism as consisting of large international corporations. He believed that those corps have so much power that they operate above competition.
Austrian econ looks at the situation differently. It teaches that government interference in the economy is the problem, not large corporations because those corps wouldn't have the power they enjoy if they didn't have politicians to bribe. And they bribe politicians because the state controls much of the economy. If the state got our of managing the economy, then corps wouldn't benefit from bribing politicians and they would lose the power that the state gives them.
Archer Daniels Midland is a good example. It, along with other corporate ag businesses, bribed congressmen to limit sugar imports, for the "public good" of course and to help struggling family farms. But the quotas make imported sugar more expensive than ADM's corn syrup, so guess which sweetener is in all of our processed food? In the same way, ADM and its peers bribed politicians to subsidize ethanol production from corn, all in the name of the "public good" of course, and to rescue us from the terrorist Arabs. It didn't make any difference that corn is an inferior source of ethanol while sugar cane, which Brazil uses, is a far better source; ADM doesn't grow sugar cane.
Braudel, I believe, would insist that the state regulate corporations more, but Austrians are certain that would only provide more opportunities for bribes. The key to ending what you call monopoly capitalism, and what Austrians see as corruption, is to eliminate the state's intervention in the market.
Published: May 4, 2008 10:17 AM
How to start a nursing agency
There are better ways that markets handle according to the articles and studies, the nursing shortage is not temporary
Published: March 2, 2009 9:57 AM