The Nursing Crisis Is Here. What Does It Mean for Your Clients?

Why Is There a Nurse Shortage?

The nursing shortage exists even though the median annual wage for registered nurses is $81,220 and 10% of registered nurses earn more than $129,400, according to the Bureau of Labor Statistics.

The COVID-19 nightmare chased many nurses out of the field.

But hospitals, clinics and nursing homes are also having trouble getting nurses because colleges and universities have long had trouble finding seats for all of the people who would like to study nursing.

U.S. colleges and universities enrolled 253,060 bachelor’s degree, master’s degree and doctorate-level nursing students in 2022, the latest year for which numbers are available, but the schools also rejected 78,191 qualified applicants, according to the American Association of Colleges for Nursing.

“The primary barriers to accepting all qualified students at nursing schools continue to be insufficient clinical placement sites, faculty, preceptors and classroom space, as well as budget cuts,” the group says.

In other words: Higher pay and relaxed standards might pull some nurses out of retirement, but the country is suffering from decades of failure to train enough nurse educators or to create enough infrastructure for training nurses.

Of course, the barriers to entry for the neurologists who will be needed to care for older people with dementia and the primary care gerontologists who will manage the older patients’ overall care are immense.

Would-be doctors must compete to get into undergraduate colleges, struggle to get into good medical schools — and then scramble to find the residencies they need to become board-certified physicians.

Medicare Gaps

Gaps between the supply most observers believe that we need and the actual supply show up in many other places in the U.S. health care system.

One is in the relationship between the prices Medicare Advantage plans hope to pay physicians and hospitals for care and the pay the physicians and hospitals believe is adequate.

At the ECU Health Medical Center, “we’ve decided to stop taking Medicare Advantage,” Murphy told Becerra. “We have to fix this system. We’re adding 10,000 seniors to the Medicare rolls every day, and we’re not providing them with care…. I’m very disappointed that we’re not being presented with a plan, even an offer of a plan, to fix the disaster that’s going to happen with Medicare.”

So How Do We Fix It?

Some policy specialists say the best cure for what ails the U.S. health care system is free markets.

One obstacle, in the short term, is that the U.S. health care system is angled in regulatory ropes, wires and chains and is not easy to free.

Another obstacle is that some of the supply chains are complicated and depend on specialized knowledge that’s difficult to extract and spread quickly, not matter how much would-be buyers are willing to pay.

Artificial intelligence-based systems could come to the rescue, by speeding up the process of pulling and structuring information from the minds of today’s experts and putting that information in the heads of the nurses, doctors and other knowledge workers of the future.

Maybe robots could begin to take over some of the routine tasks now handled by people.

What It Means for Clients

For retirement planning clients, the takeaways may be:

Having more cash in the health care expense bucket is better than less.
The best retirement locations may be communities that have a relatively easy time attracting doctors and nurses.
Medicare plan shoppers need to think about the age of the physicians in a plan network as well as the number of physicians. Is the plan able to recruit some physicians under 45, or are most of them about three years from moving on to second careers as bait shop owners?

The Bigger Picture

For advisors and agents, the takeaway is that their clients move in a world slowed by market rust, in every area from health care to housing. They have to do their best to help clients deal with the rust, and explain that, no, there is no magic wand that can instantly clear away the effects of decades of leaving the country’s economic machinery out in the backyard in the rain.