1 Forecasts of the Nursing Shortage in the Los Angeles Area Joanne Spetz, Ph.D. University of California, San Francisco July 2006

2 Goals of this project Forecast the supply of nurses Forecast the demand for nurses Compare the supply to projected demand Based on the projected shortage/surplus, we can… Understand the short-term and long-term needs for nurses in each region of California Identify strategies to address future shortages

3 Why is this so hard? What should demand really be? Are hospitals employing enough RNs now? Are they employing too many? How do you know if they are employing too few or too many? How will supply change with market changes? Will more nurses work with rising wages? Fewer? What about traveling nurses? What is a labor market? How far will nurses travel for jobs?

4 Measurement is even harder Nurse-to-population ratios don’t measure shortage Are the nurses working? Population health needs are important Organization and delivery of care matter Surveys on vacancies and shortages are not accurate Surveys not collected consistently Respondents can say nearly anything they want

5 Our strategy… Measure the current supply of nurses Using known factors in RN supply, forecast future supply Measure the current demand for nurses This is very hard! Forecast future demand Look at the gap between supply and demand

6 A model of the supply of RNs Nurses with Active Licenses Living in California Outflow of nurses Inflow of nurses Full-time equivalent supply of RNs Share of nurses who work, and how much they work

7 Inflows of RNs Graduations from regional nursing programs Immigration from other countries Migration from other states Migration from other regions Transition from inactive license

8 Outflows of nurses Migration to other states Migration to other regions Transition to inactive or lapsed license

9 How do I define “Los Angeles”? LA Region: Los Angeles county Orange county Ventura county Inland Empire: San Bernardino county Riverside county The 2006 Survey of RNs will help us understand the labor markets

10 Shares of nurses who work Workforce participation calculated from 2004 BRN Survey, Los Angeles region & Inland Empire region Average hours per week: over 34 hours until oldest age group! age groupLA regionInland Empire <3094.7%100% %96.4% %96.4% %90.5% %94.1% %95.2% %84.9% %75.9% %31.8%

11 How does the supply forecast work? The supply of actively licensed RNs next year for an age group will equal…. 4/5 of the nurses in the age group (1/5 will “age up” to the next group) 1/5 of the nurses from the younger age group Inflow of nurses in the age group Outflow of nurses in the age group Multiply the number of actively licensed RNs by the labor-force participation data to get Full-Time Equivalent Supply

12 Forecasted supply of Full-Time Equivalent RNs

13 A model of the demand for RNs California Population Size of population Age distribution Health characteristics Wealth Demand for Health Care Inpatient care Outpatient care Health Financing Insurance coverage Public programs Uninsured Payment levels for care The Economy Unemployment Income Tax revenue Regulations on Health Care Providers Licensure of facilities Licensure of staff Staffing requirements Demand for Licensed Nurses How many What types (RN, LPN) Special skills needed New Technologies Labor-saving Labor-demanding

14 How do we estimate demand? Compute hospital patient days for age groups in California using OSHPD hospital discharge data Project future hospital patient days using Department of Finance projections of population growth for age groups

15 …the budgeted positions approach HASC-CINHC-NWI surveys of Chief Nursing Officers: budgeted FTEs averaged Compute hospital FTEs per patient day in 2004 Project future hospital FTEs using the forecast of patient days Project future total FTEs with hospital FTEs being 60% of total

16 Forecasted demand for FTE RNs

17 Forecasted shortage in LA Region

18 Forecasted shortage in Inland Empire

19 What does this mean? Shortages exist now Large shortage in LA Region Probable understatement of shortage in Inland Empire RNs commute to LA Richer hospital RN staffing requirements not in model yet Shortages will get worse without action