SOUTHERN CALIFORNIA JOB MARKET: WORKING INTO THE NEXT CENTURY : OPTIONS : NURSES ON CALL : RNs and Other Nursing Workers Are in Demand and Calling the Shots

In 1983, the Institute of Medicine sent a special report to the Congress that forecast there would be plenty of nurses for the rest of the decade.

The prediction, virtually everyone now agrees, was wrong.

Anyone who picks up the want ads of this newspaper any weekend can see that nurses are very much in demand and that there apparently aren’t enough of them--at least at the salaries currently being offered.

“There very definitely is a shortage in the nurse arena,” said Alan Ewalt, senior vice president of human resources for Los Angeles-based National Medical Enterprises, a company that employs 15,000 nurses in 500 facilities around the country.

“We feel this very definitely in the recruiting process, where we have a number of vacant positions we are unable to fill,” he said. It takes the average hospital 60 days to recruit one new medical-surgical nurse, he noted, and 90 days to recruit a critical-care nurse.

Boom and bust, gluts and shortages. It has happened with teachers, it has happened with engineers, and it is certainly a situation that nurses have come to know well.

And at the same time that nurses are in demand, the job of nursing itself has become more demanding.

One reason has been the federal government and its efforts to reduce hospital costs. New regulations seek to limit hospital stays to only the minimum time necessary for treatment. As a result, hospital patients tend to be sicker, they need more care and the pressure on nurses is more intense.

And as hospital nursing has become more intense, the alternatives for nurses have increased. There is a greater need for home health care, and more nurses work through so-called nursing registries, which are in essence personnel brokers for hospitals.

Ewalt of National Medical Enterprises said he is particularly concerned about the growing use of registry nurses. “If it continues at the present rate,” he said, “it will be disastrous for the industry.”

But one labor expert suggests that hospitals can--to some degree--blame themselves for what is happening. Daniel J. B. Mitchell, director of the Institute of Industrial Relations at UCLA notes that hospitals have traditionally been the predominate employer in the market. As a result, he said, it has been in their interest to hold down wages.

“Hospitals are a monopsony in the labor market,” he said. A monopsony is the word economists use to describe a situation in which there is only one buyer for a particular commodity or service. As a result,he said, the buyer--in this case, hospitals--have abnormal ability to control wages. “If you’re a nurse, there’s not that many kinds of alternative employment,” Mitchell said. “It’s not like the market for secretaries.”

Ewalt of National Medical Enterprises acknowledged that “we need to get the income levels up so people find a nursing career financially attractive over other alternatives.”

But he also said the pressures from government to keep wages down is a significant impediment to improving salaries to the point where a significantly greater number of people would want to become nurses. He would not try to predict when those conflicting pressures would be reduced.

Richard Belous, an economist with the Conference Board, a business research organization, said the changing situation of women workers and other so-called “external factors” also have been causes of the shortage.

“All of a sudden, women have other occupational choices, not just becoming teachers or nurses,” he said. “You’re seeing the supply going down.”

There are other significant causes, as well, said Ewalt. In the early part of the decade, he said, there was “an abundance of nurses, and we dropped our guard, the nursing profession dropped its guard.” He said there were some inaccurate forecasts about future supplies of nurses, a reference to the Institute of Medicine study. The institute is part of the National Academy of Sciences in Washington, D.C.

The study said no specific federal support was needed to increase the supply of registered nurses because the aggregate supply and demand would be in reasonable balance the rest of the decade, Ewalt said.

“This resulted in a major decline in support for nursing education,” Ewalt said. “Federal funding support for nursing education fell from $150 million in 1973 to $53 million in 1987,” he said.

By 1986, he said, a new study predicted that requirements for full-time nurses with bachelor’s degrees would be about twice the projected supply for 1990 and 2000.

On the demand side, Belous said employers are now faced with spending reduction pressure from government agencies concerned about the costs of Medicare, prompting hospital administrators to try to hold down wages.

To attempt to respond to the problem, some employers have endeavored to increase supply by hiring people with fewer skills than normal, starting them at a lower rank and then trying to train and upgrade them over time, Belous said.

But that approach is an unsound solution, asserted Roseann DeMoro, an organizer for the California Nurses Assn. in Los Angeles. “De-skilling and fragmentation of jobs” will simply create a surplus of unskilled workers, not create a solution to the nursing shortage, DeMoro said. In fact, she contended, such a strategy will exacerbate the problem in the long run.

It might generate greater short-term profits for hospitals, she said, but it also will tend to drive down wages and make nursing a less attractive profession.

She also was critical of the increasing tendency of hospitals--both public and private--to hire part-time workers from outside firms as a way of dealing with their personnel shortages. These workers are hired through so-called nursing registries, which are in essence personnel brokers for hospitals.

Because they are frequently called on to meet pressing needs and because service fees are charged, registry nurses generally are paid more, sometimes considerably more, than a hospital’s full-time workers. DeMoro said that in some hospitals where the CNA represents workers, full-time nurses who are paid $16 an hour work alongside registry nurses paid more than twice that much.

Between November, 1986, and August, 1987, she said, the five major medical centers of the University California, plus a small UC hospital in Berkeley, spent $6.9 million on registry fees.

Some hospital administrators say using registries gives them greater flexibility in staffing, meaning that they don’t have an excess of full-time people at slow periods, and they are able to get as many people as needs warrant.

However, Ewalt of National Medical Enterprises said the increased use of registries is becoming part of the problem rather than a solution.

“Registries are becoming much more aggressive in recruiting nurses away from hospitals and selling them back to us at a higher price,” he said. “We now have to turn to them to do a larger and larger portion of our regular staffing. We wind up paying a premium for that portion of labor, and it is becoming a continuing trend. If it continues at the present rate, it will be disastrous for the industry.”

Another approach hospitals are using to ease the nursing shortage is the recruitment of foreign nurses from Ireland to the Philippines.

The nursing shortage and others like it arise periodically in a host of occupations ranging from engineers to educators, from sushi chefs to shortstops. “It might be considered the fundamental question of people who study the economy,” said Mitchell, director of the UCLA Institute of Industrial Relations.

Professor Mitchell said it could be some time before the nursing shortage is solved and compared it to the boom and bust cycles that have been prevalent in engineering.

“In the mid-1960s,” he said, “engineering was the field to get into. It reflected a lot of things--government interest in keeping up with the Russians, money going into defense, aerospace, Vietnam.

“Then suddenly there was a big contraction in aerospace which coincided with a general economic downturn (in the early 1970s) but more severe. Suddenly, there were gluts of engineers who couldn’t find work. Engineering school enrollments began to fall as a result.”

Gradually, a shortage arose, Mitchell said, which created a secondary problem. The engineers who were available got snapped up by industry, and there were no engineering school graduates available to teach future engineers when the demand rose.

And he said wages did not rise fast enough to take care of the problem. “You get these things called cobweb cycles,” where it takes longer than anticipated to turn out new people to meet shortages.

“You can’t turn the nursing shortage around overnight,” said Harley Shaiken, a labor and technology specialist at the University of California at San Diego. And he asserted that the fact that overall union representation in the U.S. had declined was an impediment to solving the problem. The reason, he said, is that a weakened union movement had the overall consequence of holding wages down, even in cases where there are shortages of workers.

“If you have a situation where wages and working conditions appear fixed, people become more reluctant to invest training and that contributes to unevenness in labor markets,” Shaiken said. “The irony is that, in the name of competitiveness, wages remain depressed--and that ultimately can depress competitiveness, because you can have a scarcity of critical workers.”

THE STATE OF NURSING PAY

A survey of 558 hospitals nationwide by the San Diego office of the Wyatt Co., a international compensation and benefits firm, found the following:

Vacancy rate . . . for all nurses in all specialties averaged 15% nationally in 1987.

Top pay . . . for directors of nursing is rarely paid on par with other department directors in hospital management.

Average raise . . . for nursing managers was 6.3%, compared to 7.3% for other hospital managers.

Performance incentives . . . are rare in nursing.

Average base salary . . . for director of staff development is $33,300; head nurse psychiatric, $32,400; head nurse recovery room, $31,800; head nurse medical-surgical, $31,100; head nurse home health, $30,600; patient review coordinator, $27,500; nurse practitioner, $26,700.

Source: The Wyatt Co.