Managed Care and the Nurse Workforce

Abstract

To identify recent national trends in the employment and earnings of nursing personnel and determine whether managed care is associated with changes in the employment and wage growth of nursing personnel. Retrospective analysis of trends in data on employment and earnings of nursing personnel based on monthly US Bureau of the Census Current Population Surveys between 1983 and 1994, and comparison of trends between states with high and low rates of enrollment in health maintenance organizations (HMOs). Registered nurses (RNs), licensed practical nurses (LPNs), and nurse aides/assistants, orderlies, and attendants (referred to collectively as aides) between the ages of 21 and 64 years. Full- and part-time employment, unemployment, percentage of nursing personnel employed in key sectors of the nurse labor market, and inflation-adjusted hourly wages. From 1983 through 1994, there was strong overall growth in both RN employment (37%) and inflation-adjusted wages (22%). Beginning in the early 1990s, however, RNs experienced stagnant wages and a small but steady shift toward employment in lower-paying nonhospital settings, particularly in home health care. In states with high HMO enrollment, RN and LPN employment has grown more slowly since 1990, and the shift of RN employment out of the hospital was strongest. For aides and LPNs, the shift out of hospital employment occurred years before that of RNs and at a much greater rate. Since 1990 the employment of aides has grown rapidly in nursing homes and in home health care settings, whereas employment of LPNs has shifted primarily into physician offices and nursing homes. Overall, the movement toward nonhospital employment has had a modest negative impact on wages for all nursing personnel. Managed care is associated with slower employment growth for RNs in hospitals and a shift toward employment in nonhospital settings, but its effect on earnings has been overshadowed by other forces impacting nurse wages.