Write a brief 2-3 page report about a health care economic issue that you have identified. Address the reasons why you selected the issue you did; identify how this issue impacts the work of you, your colleagues, and your organization; and describe the gap that you see contributing to this issue.
Title: The Economic Impact of Nursing Shortages in Healthcare Organizations
Introduction
One of the most pressing economic issues currently impacting the healthcare sector is the persistent shortage of registered nurses (RNs) and advanced practice registered nurses (APRNs). I chose this issue due to its direct and significant impact on the quality of patient care, staff morale, healthcare costs, and operational efficiency within healthcare organizations. As a nurse and future Psychiatric Mental Health Nurse Practitioner (PMHNP), I witness firsthand the strain this shortage places on both clinical and administrative staff. Addressing this economic issue is crucial for ensuring safe, efficient, and cost-effective healthcare delivery.
Why This Issue Was Selected
The nursing shortage has intensified over the past decade due to several factors: an aging population requiring more care, increased prevalence of chronic diseases, an aging nursing workforce approaching retirement, and insufficient capacity in nursing education programs to meet demand. According to the U.S. Bureau of Labor Statistics, employment of registered nurses is projected to grow by 6% from 2021 to 2031, with about 203,200 openings each year, primarily due to retirements and workforce transitions (BLS, 2023).
This shortage affects all facets of healthcare, from hospitals and outpatient clinics to long-term care and community health settings. The economic implications include increased overtime costs, higher turnover rates, and the frequent reliance on expensive travel nurses or temporary staffing agencies. These short-term fixes drive up operational costs and can compromise continuity of care.
Impact on My Role, Colleagues, and Organization
In my current practice setting, the shortage of nurses leads to higher patient-to-nurse ratios, increased workloads, and emotional exhaustion among staff. For instance, nurses are often expected to manage multiple high-acuity patients simultaneously, which increases the risk of errors and compromises patient safety. This level of pressure contributes to burnout, job dissatisfaction, and eventually, turnover—perpetuating a costly cycle for the organization.
As an advanced practice nurse in training, the shortage also limits mentorship and clinical preceptorship opportunities, creating barriers for students and new graduates entering the workforce. This bottleneck in training further exacerbates the supply-demand imbalance.
Moreover, the financial burden on the organization is significant. Overtime pay and recruitment costs are continually rising. The need to hire contract or agency nurses—who can be 1.5 to 2 times more expensive than full-time staff—has become the norm rather than the exception. This strains hospital budgets and diverts funds that could be allocated to staff development, patient programs, or infrastructure improvement.
Identified Gap Contributing to the Issue
One critical gap contributing to this economic issue is the lack of investment in long-term workforce planning and retention strategies. Many healthcare organizations focus on short-term solutions like offering sign-on bonuses or paying travel nurses, rather than addressing systemic issues such as poor work-life balance, lack of professional development, or insufficient staffing models that prevent burnout.
Additionally, there is a notable gap in nursing education funding and faculty availability. According to the American Association of Colleges of Nursing (AACN), more than 91,000 qualified applications were turned away from nursing programs in 2021 due to faculty shortages, lack of clinical sites, and limited classroom space (AACN, 2022). Without addressing these upstream issues, the downstream effects—such as staffing shortages and their associated economic toll—will persist.
Conclusion
The nursing shortage is not merely a staffing problem; it is a profound economic issue that impacts healthcare delivery, financial sustainability, and workforce well-being. Its ripple effects are seen across every level of the healthcare system—from increased operational costs and reduced quality of care to delayed onboarding of new nurses. Closing the gap requires a multi-faceted strategy: increasing funding for nursing education, offering robust retention programs, redesigning workloads to reduce burnout, and creating supportive environments for nurses to thrive.
As a future PMHNP, I am committed to advocating for these systemic changes, not only to improve care outcomes but also to ensure economic sustainability within our healthcare system.
References
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American Association of Colleges of Nursing (AACN). (2022). Enrollment and Graduations in Baccalaureate and Graduate Programs in Nursing. https://www.aacnnursing.org
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U.S. Bureau of Labor Statistics (BLS). (2023). Occupational Outlook Handbook: Registered Nurses. https://www.bls.gov/ooh/healthcare/registered-nurses.htm