2. STATE SUPPORT FOR NURSING EDUCATION

Every State studied here gives financial and other types of support for expanding nursing education programs.  Certain States are doing better than others at expanding their pipeline of nurses. This chapter examines how States and other stakeholders fund and support nursing education—directly and indirectly—and what effect those strategies are having on the State’s nursing supply. 

INTRODUCTION

Schools of nursing receive funding from various sources, including State appropriations; other Federal, State and local funds; student tuition; and direct financial assistance from private and foundation sources.  In addition to State appropriations to higher education, States also channel additional Federal or State funds to nursing education, and some earmark certain funds—such as lottery or gaming funds—for a specific purpose, such as increasing enrollment or supporting faculty salaries. 

States are not alone in supporting nursing education.  Schools of nursing rely heavily upon contributions from the private sector—including hospitals, health systems and foundations—to expand their capacity.  These groups invest financial and human resources in nursing education in each of the five States.  For example, a group of Texas hospitals in the Gulf Coast region are working together to “loan” their staff to teach in area schools of nursing.  This arrangement provided approximately 18 full-time instructors for an overall contribution of almost $2 million annually. ^[1]

Coupled with targeted State investments in nursing education, some States are seeing improvements in their nursing supply.  This chapter describes State and other support for expanding the pipeline in each of the five States.  The first section gives an overview of State financing for higher education: how higher education is funded and how decisions are made about allocating funds.  The next section examines other, more direct, funding for nursing education, including State support and public and private support for expanding the nursing pipeline.  The final section examines nursing education trends in each of the five States and, whenever data exists, ties State and other investments to outcomes, such as increased enrollment and graduations.

State Funding of Higher Education

States fund higher education through appropriations of State taxes, non-tax appropriations and other methods.  Although State funding of higher education does not indicate how much funding actually reaches schools of nursing, it does describe the funding pool from which nursing education—among other disciplines—receives a large portion of its funds.  In Texas, for example, formula funding accounts for approximately 95 percent of all State funding of professional nurse education in 2004-2005. ^[2]   Therefore, the State’s overall funding of higher education is a rough measure of its funding for nursing education. 

State budgets are showing signs of improvement; however, the American Association of State Colleges and Universities reports that colleges and universities “ … top the list of State spending cuts, with total State appropriations for higher education down for a second year in FY 04.”  Enrollment levels are up in many States, leading colleges and universities to increase tuition and fees and implement program cutbacks. ^[3]    

Higher education institutions rely heavily on State funding sources.  State and local governments provided nearly $68 billion to public and independent higher education in 2003, accounting for 71 percent of all tuition revenue.  The remaining $28 billion from net tuition revenue (that is, money from student tuition and fees) brought to $95.5 billion the amount available from State, local and student sources.  The proportion of funding from State and local appropriations and student sources (i.e., fees and tuition) are illustrated in figure 26. 

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Among the five States studied here, the proportion of State support varies from a low of 57 percent in Indiana to a high of 86 percent in Georgia.  As shown in Table 4, Indiana receives a higher percentage of total revenues from tuition than do other States, while California receives the smallest percentage.

Table 4.  State, Local, and Net Tuition Revenue, by State, FY 2003

Source: State Higher Education Executive Officers, State Higher Education Finance Report, 2003.

Appropriating State Funds to Higher Education

Beginning in the 1950s, State legislatures began providing support to nursing programs offered at higher education institutions.  A variety of mechanisms are used to appropriate funds.  In many States, funds are allocated to an institution as a block grant to support several disciplines, including nursing.  The amount of these block grants is based on a number of factors, such as the historical and actual costs for existing faculty and academic programs, plus a percentage for support services and administration.  Once a college or university receives the grant funds, local institutional policies and procedures determine the allocation of the block grant among the schools, colleges and departments.

Recognizing the needs and costs associated with various types of programs and institutions, many States developed a formula funding mechanism that attempts to objectively and fairly distribute State funds to educational institutions that teach similar disciplines but have different missions. ^[4]   The factors in a State’s formula might include head count, number of positions, full-time students, and staff and credit hours.

On the one hand, formula funding is an equitable process for distributing State funds and minimizing the political battles over limited State resources.  On the other hand, however, some argue that formula funds do not allow States to direct funding to programs and initiatives that reflect the State’s needs and priorities.  In response, many States determine a “base” level (based on quantitative factors, such as number of students or credit hours) and then use different non-formula means to provide additional funds.  The five States’ processes for funding higher education are described below.

California

The three separate public systems in California include the University of California, California State University and the community college system.  The State provides about 75 percent of the necessary funding to support these three systems.  According to the Legislative Analyst’s Office, funding for the University of California and California State University is developed by using the previous year’s base funding and adjusting it to reflect inflation.  A formula is then used to determine the cost of funding enrollment growth, and this cost is added to the base appropriation.

In addition to State appropriations, the systems receive student fees that supplement the State’s contribution and account for about 40 percent of total funding for education.  The regents of the university system set fees for the University of California and the California State system, while the Legislature sets fees for the community colleges. ^[5]

California differentiates funding by credit status and institution.  Therefore, students enrolled in noncredit courses—such as basic skills and English as a Second Language—receive a lower per-student funding rate than those enrolled in credit courses. Moreover, the State provides a different per-student funding rate for each system, with the highest funding rate for students at the University of California, a lower rate for students enrolled in the California State University system, and the lowest for California community college students.

California does not have different funding rates for different educational levels and programs; therefore, a student enrolled in a school of nursing is funded at the same level as a student enrolled in English, and a graduate student is funded at the same rate as an undergraduate student. ^[6]   Although this process may result in under-funding of certain higher-cost programs, it also over-funds other lower-cost programs. As a result, funds from lower-cost programs subsidize higher cost programs.^[7]

Georgia

In Georgia, State appropriations for higher education include appropriations to the University System of Georgia, the Georgia Student Finance Commission (which provides State scholarship programs) and the Department of Technical and Adult Education.   The majority of the budget is calculated according to a quantitative formula that includes enrollment, faculty salaries and square footage.  The remaining non-formula portion funds special initiatives at institutions. ^[8]  

Following budget cuts in higher education—totaling $68.7 million in 2004 ^[9] —the Governor’s 2006 budget proposal would invest more than half the State’s budget in education.   Among the Governor’s recommendations: fully funding the university system’s enrollment growth and maintenance and operation of the system’s facilities. ^[10]  

The State Board of Regents also provides financial rewards to innovative and efficient programs.  These “Best Practices” awards reward programs of excellence in finance and business, academic affairs, student services and information technology.  Among the recipients in 2004 was the Georgia Perimeter College’s Hybrid Fellowship Program, which combines face-to-face classes with on-line instruction, reducing classroom space requirements by 50 percent. ^[11]

Indiana

Indiana uses a mix of block grant and formula funding for its institutions of higher education.  The budget is based on previous appropriations and these funds are added to (or subtracted from, in cases of enrollment decreases), based on several formula and non-formula components, such as growth in enrollment, research expenditures, new facilities operations and other items.  In addition, the legislature sometimes provides additional appropriations for new or expanded programs; in 2005, when it added $1.5 million to Ivy Tech State College’s base appropriation to expand its associate degree nursing program Statewide. ^[12]    

Texas  

The Texas Higher Education Coordinating Board administers traditional formula funding for 62 nursing education programs.  The main mechanism for funding public higher education is driven by a formula based on several factors, such as instructional cost and institutional support.  In addition to the formula-driven funding base, State appropriations also provide non-formula-based supplemental funding for special items. ^[13]   Formula funding for community colleges, academic universities and health-related institutions increased from $197 million in 2002-2003 to $207 million in 2004-2005. 

Utah 

In Utah, institutions of higher education distribute funds to nursing programs based on a State funding base that also accounts for credit hours.  If a program grows over the base level, the program will receive additional funding for the growth.  However, the State has not been fully funding growth to higher education institutions; thus, the nursing programs are not receiving full funding for the growth.

Other State Processes

In response to concerns that State appropriations be directed toward specific priorities and outcomes—such as meeting the State’s economic and workforce needs—some States have considered funding based on institutional performance.  In 2002, the New Mexico Commission on Higher Education named a Blue Ribbon Task Force to evaluate the current funding method and recommend changes to reward successful institutions that are meeting the State’s economic needs.  The task force developed a base-plus-incentives funding model—comprised of several base or formula factors—that includes current appropriations, compensation and inflation.  In addition to the base funding, the formula would provide incentives to address the nursing and teacher shortage and would allocate funds to institutions through a competitive proposal process.  Virginia developed a similar funding formula that offers incentive funding for performance on outcome measures such as graduation and retention rates, exam passing rates, post-graduate placement and faculty productivity.

In California, the Legislature recently directed the Chancellor of California State University to provide supplemental funds to universities to establish an entry-level master’s program in nursing.  The Governor signed into law the Entry Level Master’s Nursing Programs Act in 2004.

A Closer Look at State Funding for Nursing Education

The methods by which States fund higher education and specific disciplines such as nursing vary considerably.  In some cases, for example, schools of nursing receive more funds than other programs because they are costly to operate; in other cases, nursing is funded at the same level as other disciplines. 

Targeted Funding and Support for Nursing Education

Although State appropriations to higher education account for the majority of nursing education funds, many States are finding ways to channel additional State funds directly to nursing education to help programs increase their capacity and to help recruit and retain students and faculty.  

Assessing the effects of State programs and resources on the nursing supply is difficult for two major reasons.  First, many examples of targeted State support for nursing education have occurred recently; therefore, not enough time has elapsed to evaluate the effect of State funding on supply.  Second, as described earlier in this section, States are implementing strategies in conjunction with other public and private stakeholders, including hospitals and other employers, schools of nursing and higher education, and the Federal government.  Although these partnerships are proving successful, detecting the effect of State funds or other support is difficult. Some concrete examples exist where a State’s investment is producing positive outcomes.  Georgia’s Health Professions Initiative, for example—a public-private partnership—is expected to produce more than 1,300 new nurses. 

This section examines pertinent trends in the nursing supply in each State—specifically in admissions, enrollment and graduations—and, whenever possible, identifies successful approaches.  The section also includes summaries of the major challenges and opportunities present in each State.

Expanding Program Capacity

Demand for nurses is high; so, too, is the demand for nursing education “slots.”   At the center is a bottleneck that turns away qualified students on the one end and that fails to produce the number of nurses needed by tomorrow’s health care system on the other.  To address this bottleneck, States are attempting to expand nursing school capacity to allow for expanded enrollments.  Standing in the way of program expansion, however, is a lack of faculty to teach the increased numbers of courses and students.  Lacking more qualified faculty, programs continue to limit enrollment (since the faculty-to-student ratio largely determines program capacity).  As a result, some States are taking legislative and other steps to increase the pool of current and future faculty members. 

States also are targeting funds to increase financial assistance for potential nursing students, and therefore, remove a formidable obstacle for many.  By offering certain incentives—such as loan repayment and scholarships—States are attracting a larger and more diverse pool of students.  In addition, these programs can help to ensure that recipients practice in shortage areas or work for a certain number of years in order to receive all the financial benefits. 

Faced with serious budget constraints, many States are finding ways to direct existing Federal funds into nursing education efforts.  For example, most State Medicaid programs voluntarily pay for graduate medical education (GME) as part of their service payments to teaching hospitals (similar in methodology to how Medicare pays for physician training).  Medicaid programs in as many as 12 States—Iowa, Indiana, Louisiana, Maine, Minnesota, Mississippi, Missouri, New Hampshire, New Jersey, North Dakota, Oregon and South Carolina ^[14] —also allow or require that such payments be directed to support clinical training of graduate nurses in programs affiliated with or operated by teaching hospitals.  This precedent provides the opportunity in many States for Medicaid to pay for graduate nursing education, particularly if a State uses the intergovernmental transfer of State funds to capture additional Federal Medicaid matching funds for this purpose.

The following are examples of strategies States are using to invest directly—with Federal and State funds— in nursing education.

California.  The California Health Professions Education Foundation is a nonprofit organization that administers scholarships and loan repayment grants to underrepresented and economically disadvantaged students.  The foundation awards scholarships and loan repayment grants through two funds: the Health Professions Education Fund, which is largely funded through private and foundation sources, and the Registered Nurse Education Fund, supported through a $10 surcharge on RN license renewals.  The RN Education Fund pays for the following three scholarship and loan repayment programs:

• The Associate Degree Nursing Scholarship Program, established through a 2003 law, provides recipients up to $8,000 per year to help associate degree students located in shortage areas obtain a B.S.N. degree within five years of obtaining an associate degree. 
• The Registered Nurse Education Scholarship Program offers up to $10,000 to students in baccalaureate degree nursing programs who agree to practice in underserved areas.
• The Registered Nurse Education Loan Repayment Program provides up to $10,000 over a two-year period to repay loans in exchange for practice in an underserved area.

California also directs significant Federal funding to nurse and health care worker training.  All States receive Federal Workforce Investment Act (WIA) funds and allocate the money to support worker training programs for entry-level occupations.  Many of the program’s recipients are displaced workers or are enrolled in welfare programs.  States are actively working to help these individuals secure employment through training or retraining.  Among the job classifications targeted for the training programs are nurse aides and practical nurses (As many as 12 States also have used WIA funds to provide job training for RNs.).

In 2002, the Governor announced a $60 million Nurse Workforce Initiative that used Federal WIA funds to address the State’s growing nurse shortage.  The State distributed $27 million in grants to 21 regional partnerships with the goal of producing 5,000 new vocational and registered nurses.  In addition, the initiative provided $6 million to address local needs for psychiatric technicians in the Central Valley. 

The WIA funds continue to be an important and stable source of funding for nursing education efforts in California.  The California 2005-2006 budget proposes to use $35.8 million of WIA funds to train nurses and other health care workers.  Specifically, the Governor proposes using the funds to expand the capacity of community college nursing programs and to expand the supply of nursing faculty. ^[15]

Georgia.  In Georgia, the State Department of Labor and the Woodruff Foundation combined funds to provide service cancelable loans to prospective nurse faculty.  The Georgia Nursing Faculty Scholarship Program, managed by the Georgia Student Finance Authority, is “ … designed to encourage Georgians to enter—and remain in—the nursing education profession.” ^[16]   Funded with $1.1 million from the Department of Labor, $500,000 from the Woodruff Foundation and an in-kind contribution from the Georgia Student Finance Authority, the program provides funding for students to enroll in graduate level programs at public or private universities in Georgia.  After graduating, recipients can repay the loan by serving as a faculty member in Georgia; for every year of teaching, they are eligible to cancel $2,500 in loans.  Over a five-year period, this public-private partnership will produce an additional 25 faculty.  Another positive outcome is that, since programs are spread throughout the State, the program should provide faculty members ready for hire across Georgia, particularly in shortage areas.

In an effort to expand faculty and student enrollment in Georgia, lawmakers directed State funds into nursing education through the State’s Intellectual Capital Partnership Program (ICAPP).  Beginning in 2002, the program leveraged $2.1 million in State funding with $2.4 in private funding, resulting in a $4.55 million public-private partnership between Georgia health care employers and State universities.  The program matches employers with public colleges and universities to produce graduates in nursing and other fields.  State funds are used for instruction and expenses, while schools of nursing provide the education and clinical experiences.  Health care providers make in-kind contributions of equipment, staff time, laboratory and classroom space—valued at $2.45 million—and agree to hire graduates when they complete the program. 

State and private sector investments, joined through the ICAPP Health Professions Initiative, are producing more nursing graduates in Georgia.  The Intellectual Capital Partnership Program is expected to produce more than 1,300 new graduates by 2006.  As shown in Table 5, schools of nursing will produce up to 635 nurses and other specialists as a result of the State’s first-year, $2.1 million commitment.  With the 2004 announcement of the State’s $2.05 million investment in the program’s second phase, another 700 nurses are expected to be ready for hire in 2006. ^[17]  Employers will hire these program graduates in 19 communities throughout the State at program completion. 

Table 5.  Georgia Nursing Graduate Outcomes: Phase One and Phase Two

*Includes graduates who have already completed program and those expected to complete by program’s end.

**In phase two, Floyd College will create 30 associate degree graduates and another 25 in partnership with Kenn esaw State University.

Source: Board of Regents of the University System of Georgia, August 2004.

Georgia invests significant funds in raising academic performance in all educational phases and targets resources to boost achievement among racial and ethnic minorities.  The University System’s P-16 Initiatives received a $34.6 million grant from the National Science Foundation to fund the Partnership for Reform in Science and Mathematics (PRISM) Program.  Its goal is to improve educational achievement levels and close the performance gaps in science and math among Georgia’s students

Georgia also earmarks a portion of State lottery funds for higher education, including nursing education, through its Helping Outstanding Pupils Educationally (HOPE) scholarship program and its service cancelable loan program. The HOPE scholarship program is funded completely through lottery funds. Eligible residents may receive financial aid plus a $300 book allowance (up to $3,000 annually for those enrolled in an eligible private college or university in the State).

Although it is difficult to attribute State actions to specific outcomes, it does appear that the combined efforts of the public and private sectors are making a difference in Georgia.  As a result of increased admissions standards and the HOPE scholarship, students who enter the University System of Georgia are more qualified and more diverse than in years past.  Specifically, more students who enter the system have completed the college preparatory curriculum course requirements, thus reducing the demand for learning support and remedial courses. ^[18] Nearly 4,000 more students were enrolled in nursing programs in 2002—an increase of nearly 50 percent from 2000.  This upward trend reverses an eight-year trend of declining enrollments. 

As shown in Figure 27, 11,698 students were enrolled in 2002, driven by significant increases in both associate and bachelor degree programs.  During that two-year period, nearly 1,300 more students enrolled in bachelor degree programs, and more than 2,600 students were enrolled in associate degree programs—gains of 33 percent and 65 percent, respectively.  For the first time, baccalaureate level enrollment exceeds 5,000. ^[19]

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Although these trends are promising, they illustrate the uphill battle many States face as they attempt to change courses and restore enrollments to previous levels. Although 2002 enrollment is higher than any year since 1995, it still falls short of 1993 enrollment, which peaked at more than 14,000.  

Still, the trend is now moving in the right direction and, as a result of increasing enrollments, the number of graduates and licensed nurses is expected to see similar increases as these students move through the system.

Although enrollment levels have risen in recent years, the number of graduates has not.  During the past decade, the number of nursing graduates from university system programs has dropped by more than 42 percent, while the number of LPN graduates from the State’s technical school system has dropped by 21 percent (see Figure 28).

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This trend is expected to reverse as the higher number of students enrolled in programs (Figure 27) moves toward graduation.  As long as programs retain their students, the graduation trends should begin to more closely reflect the increasing numbers of students enrolled in programs.

Obtaining a license is the final step in becoming a nurse; therefore, licensure data gives an estimate of the number of new nurses available for work.  According to Georgia’s Health Care Workforce Policy Advisory Committee’s 2002 report, “ … increasing the rate of licensure through exam is critical to Georgia’s ability to meet the long-term health care needs of her citizens.” ^[20]

As shown in Figure 29, the overall licensure trend is positive—in 2001, the State issued about 500 more licenses than in the previous year.  However, a closer look shows that the number of licenses issued through examination continued a steady five-year decline.  In 2001, 1,775 new graduates passed the examination (a prerequisite to obtaining a license), down by more than 1,000 from 1996. 

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Indiana.  In 1990, the Indiana General Assembly created the Nursing Scholarship Fund, funded through the general fund, which encourages more people to pursue a nursing career in Indiana.  The State Student Assistance Commission administers the program and allots the funds to approved colleges and universities.  To qualify, students must be Indiana residents and agree to work as a nurse in Indiana for at least the first two years following graduation.  In return, students are eligible to receive up to $5,000 annually for tuition and fees.

In 2001, the General Assembly adopted many of the recommendations made by the Health Care Professional Development Commission, including one that created the Indiana Health Care Professional Recruitment and Retention Fund.  The fund provides loan repayment for professionals, such as primary care nurse practitioners and certified nurse midwives, who agree to practice in shortage areas.  In addition, the legislation allowed the State Department of Health to apply for grants from Federal or private sources to supplement the State’s contribution.  As a result, the State received matching Federal grant funds from HRSA.

Texas.  In response to growing concern about a worsening nursing shortage and lagging enrollments, Texas lawmakers found ways to channel additional State funds—above and beyond the State’s formula funding—into schools of nursing that demonstrated high enrollment increases.  In 2001, the Legislature passed the Nursing Shortage Reduction Act, which provided new general revenue to expand nursing enrollments in the State’s community colleges, universities and health science centers.  The goals of the legislation were to: ^[21]

• Provide resources to increase enrollments and support faculty salaries;
• Encourage innovative ways to recruit and retain students;
• Amend the nursing financial aid program to allow more flexibility in how funds are administered to reach most successful recruitment and retention strategies;
• Increase the pool of qualified faculty by expanding financial aid available for students to pursue post-graduate education and enter teaching;
• Establish a nursing workforce data center to help policymakers plan and monitor nursing workforce; and
• Reallocate money from the tobacco settlement fund to use exclusively for nursing education.

The legislation created a Dramatic Growth Fund to channel up to $22.5 million of existing State funds to fast-growing nursing programs to help increase enrollments and faculty recruitment and retention.  Although this money already was available to universities, the law specified that nursing programs that met certain growth levels now had first claim to the funds.  Schools could use the funds to support faculty salaries and operating funds.  To help fill the faculty need, for example, the legislation permitted nursing programs to give in-State tuition to out-of-State nurses who wanted to pursue a post-graduate degree in Texas; in exchange, they had to agree to teach at a nursing college in the State. 

In addition to the Dramatic Growth Fund, the law reallocated tobacco settlement funds into nursing innovation grants that provided $3.1 million for enrollment and faculty recruitment and retention.  All the tobacco settlement funds were awarded in 2001-2003.

In 2003, lawmakers passed legislation that continued dramatic growth funding for community colleges and academic universities.  Facing a growing budget deficit, the amount of dramatic growth funds available to schools of nursing dropped significantly in the 2003-2005 biennium—to $5.6 million, of which $1.6 million is available for community colleges and $4 million for general academic institutions.  During this biennium, the amount available from the tobacco settlement funds, however, increased slightly to $4.9 million. 

In addition to regular formula funding—totaling $207 million in 2004-2005—the State provides special item funding for professional nurse education.  As shown in Table 6, more than $10 million in dramatic growth funds were available in 2002-2003, along with $3 million in tobacco fund earnings.  Up to $22.6 million in Dramatic Growth funds were available in the 2001-2003 biennium; however, schools did not receive the maximum amount available because, in part, they did not increase enrollment enough to earn all the allocated funds.  To be eligible, institutions had to increase enrollment by 3 percent over 2000 levels in 2001, and by 6 percent over fall 2000 levels in 2002.   Table 6 shows the amount of dramatic growth funds available to schools of nursing and the actual amounts awarded. 

Table 6.  Texas State Funding for Professional Nurse Education (in millions)

Source: Texas Higher Education Coordinating Board and the WorkSource for the Gulf Coast Region's Health Services Steering Committee, January 2005

Although it is too soon to evaluate the effect of the additional special item funds on expanding the nursing supply, anecdotal evidence suggests that the increased funds have made it possible for schools of nursing to increase enrollment. ^[22] According to the Texas Higher Education Coordinating Board, the State’s nursing programs “ … have done a good job of increasing interest in nursing, admitting more students, and graduating more RNs.” ^[23]  

Moreover, the trends indicate that the State’s schools of nursing have seen a turnaround in enrollments and graduations.  According to the Texas Nurses Association, enrollment levels began climbing between 2000 and 2003, from 11,589 to 14,850—for a growth of 28 percent.  This followed a 3 year decline in enrollment from 1997 through 2000, as shown in Figure 30.

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Entry level gains are occurring in all RN levels, including diploma and associate degree programs, where first-year enrollment nearly doubled from 2,653 in 1999 to 5,181 in 2003.  Among BSN programs, first- year enrollment jumped from 1,434 to 3,404.  When combined, first-year entering enrollment in RN programs increased by 87 percent between 1997 and 2003, according to the Texas Higher Education Coordinating Board.   

Similarly, as shown in Figure 31, graduation levels in programs leading to initial RN licensure—that had declined every year from 1997 through 2002—increased between 2002 and 2003, when graduations jumped by 17 percent, from 4,495 to 5,243. 

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Source: Data prepared by the Texas Nurses Association and presented by Carolyn Gunning, Texas Woman’s University at July 2004 NCSL conference.

In the 1 year period between 2002 and 2003, the AACN reported that enrollment in Texas nursing programs increased significantly, by almost 11 percent in entry-level programs, by 16 percent in master’s degree programs and by 25 percent in doctoral programs.

Despite the good news, the faculty shortage persists in Texas.  According to the Texas Higher Education Coordinating Board, graduates from master’s and doctoral programs declined by 23 percent between 1994 and 2003.  So, although enrollment in graduate nursing programs is increasing, the “total number of graduates is at a 10 year low.” ^[24]   Moreover, of those seeking higher degrees, just 1 percent is pursuing teaching.  In sum, the faculty shortage persists.

• Three health-related institutions that offer doctoral degrees graduated only 44 graduates between 1994 and 2003, according to the Texas Higher Education Board. ^[25]  (These three institutions represent half of all the state institutions that offer a doctoral degree in nursing.)
• Average entering class size of RN licensure programs increased by 108 percent from 1999 to 2003; however, the average FTE faculty increased only by 13 percent.
• A coordinating board survey of State nursing deans and directors found that the ability to hire new faculty was the greatest impediment to increasing enrollments in nursing programs. Specifically, the disparate salaries between nurses in academia versus those in clinical practice was seen as the greatest hiring obstacle.

Utah. In 2004, the Utah Legislature dedicated funding to Utah’s seven State-funded nursing programs.  The $675,000 appropriation—the first dedicated to nursing education—was distributed in varying amounts to associate and baccalaureate programs with the goal of expanding the number of nurses in Utah.  The Legislature required schools to match State funds. 

The State’s largest beneficiary, the Utah College of Nursing, plans to use its appropriation of $150,000 to hire two new doctoral-level faculty who will be able to train 20 additional people to be nurse educators. ^[26]

Utah provides grants to help LPNs and RNs repay their educational loans in exchange for practicing in a shortage area for at least two years. The average grant amount under the Statewide Nurse Education Financial Assistance Program is $15,000.  The program is funded by State and Federal funds, including the National Health Service Corps’ State Loan Repayment Program (NHSC SLRP).

In addition, the Utah State Office of Education administers the School Nurses Incentive Program, which provides grants of from $200 to $26,500—averaging $15,000—to improve the availability of RNs in public schools. The State funds do not exceed one-third of program costs; local districts provide at least two-thirds of program costs. 

Other Resources for Nursing Education

Schools of nursing are expanding their capacity and increasing the diversity of their students and faculty with the help of several Federal programs.  The Nursing Reinvestment Act of 2002 (NRA, PL 107-205) amended the Nursing Education and Practice Improvement Act of 1998.  The legislation., which provides support for workforce development, includes nurse faculty loans, loan repayment and scholarships, funds for nursing workforce diversity, and funds for advanced education nursing. 

The 2004 nurse reinvestment appropriations totaled $141.9 million and funded six major efforts, including:

• Advanced Education Nursing, $58.6 million;
• Nursing Workforce Diversity, $16.4 million;
• Nurse Education, Practice and Retention, $31.8 million;
• Loan Repayment and Scholarships, $26.7 million;
• Nurse Faculty Loan, $4.9 million; and
• Comprehensive Geriatric Education, $3.5 million.

Among the types of programs funded through the NRA are Web-based accelerated BSN programs, distance education programs designed to remove barriers for RNs who do not live close to a school of nursing, nursing residency programs to help RNs entering specialty fields, and career ladder programs.

Each of the five States received funding from one or more of the above programs.  Some examples of Federally funded programs in the five States follow.  For example, the Loma Linda University School of Nursing in California received funds for its Pipeline to Registered Nursing program, which has as its goal the creation of a more diverse workforce.  The university uses the funds to encourage young, ethnically diverse elementary, middle and high school students to pursue a nursing career and also provides retention activities to help students succeed in their nursing programs. 

The Medical College of Georgia’s School of Nursing—the State’s “primary institution for the training of health professionals”—uses Federal workforce diversity grant funds to support various activities aimed at increasing diversity in the school’s baccalaureate nursing program.  The school uses funds to help recruit and prepare future nursing students—in high school and a pre-nursing program at Paine College—by exposing them to the profession and providing academic guidance and support.  In addition to recruitment strategies, the grant also funds retention strategies aimed at helping students succeed.  One example is a supplemental instruction course that helps to increase academic performance and retention through study strategies and tutoring. ^[27]    

The Ivy Tech State College in Indiana received funds for its Nursing Careers Advancement Program, which helps nurses advance their education.  In addition to helping RNs advance, the program also focuses on attracting nontraditional students into the nursing pipeline, including males and racial and ethnic minorities.  In addition, students in rural areas will participate via distance education. 

Federal funds also support the Consortium to Advance Nursing Diversity and Opportunity at the University of Texas Health Sciences Center at Houston, as well as a Closing the Gap project at the University of Texas at Arlington, which aims to increase nursing education opportunities for racial and ethnic minorities, and for individuals from disadvantaged backgrounds.

In 2004, HRSA provided $736,831 to the Utah College of Nursing for its Diversity Recruitment, Retention and Leadership Development Program.  With these funds, the program will offer stipends and scholarships of from $3,000 to $5,000 to 44 baccalaureate students during the next three years. ^[28]

In addition to funding from U.S. DHHS, States also are benefiting from Federal workforce development support from the U.S. Department of Labor (DOL).  Georgia was one of four States to receive a Federal grant for $754,000 to train dislocated workers for health care jobs where there are shortages.  The Healthcare Retraining Partnership Initiative Demonstration Grant will support a number of activities, including attracting new individuals to the health professions, providing so-called bridge training (helping current health care workers upgrade their skills), faculty training and various youth activities designed to attract more students into the pipeline.  They also are working with the Department of Workforce Services to explore using Federal DOL funding.

Private and Other Support for Nursing Education

Each of the five States has benefited from private sector and foundation support.  In California, one media source reported that hospitals alone have helped California’s community colleges and universities expand enrollment in nursing programs by up to 20 percent between 1999 and 2000.  These contributions have resulted in improved enrollment and retention.  Some examples include the following.

• In 2003, the Gordon and Betty Moore Foundation approved a $110 million Betty Irene Moore Nursing Initiative to “improve the quality of nursing-related patient care” in the San Francisco Bay area.  The foundation is funding projects that help increase the supply of RNs and increase the number of training programs.  In 2004, the initiative awarded a $5.5 million grant to the San Jose State University School of Nursing to increase the number of graduates and educate additional nursing faculty.  Among the outcomes of this project will be an additional 45 faculty members over a five-year period. ^[29]  
• The Washington Hospital District’s board awarded a $1.5 million grant to Ohlone College for its nursing program.  The college will use the money to hire two full-time faculty members, allowing it to enroll at least 18 additional students per year. 
• California’s Sutter Roseville Medical Center donated $750,000 to Sierra College to expand its online nursing degree program—enabling the program to add 20 more students per year for two years to its on-line associate nursing degree program, beginning in 2006.  This donation follows a $15 million pledge Sutter made to help Sacramento City College educate hundreds of new nurses. ^[30]

A group of Georgia hospitals contributed funds to nursing schools for scholarships, faculty salaries, tuition reimbursement, lab supplies and other educational resources.  From 1999 to 2002, they provided more than $21 million in educational support for nursing students and programs.

The Health Care Summit Commission in San Antonio, Texas—a partnership of local and State governments, foundations, hospitals and others—committed to raising $750,000 to increase the number of graduating nurses at area schools by 500.  These funds are used to finance student scholarships and new Faculty salaries.

In Utah, a group of hospitals provided one-time funding to help fund more nursing program slots. ^[31]   In addition, the Emma Eccles Jones Foundation donated $1 million to renovate the college for nursing research. 

States and others are addressing the nursing shortage on various fronts.  In addition to the above financial strategies, States, health care providers, educational institutions and others also are attempting to expand the nursing supply through other approaches, including improving the workplace, enhancing data collection and planning efforts, and streamlining educational requirements.

Strategic Planning and Data Collection

In 1999, California lawmakers passed Assembly Bill 655 (1999 Cal. Stats., Chap. 954), which required the chancellors and presidents of the four higher education systems in California to develop a joint strategic plan for expanding enrollment in basic RN education programs.  The California Strategic Planning Committee for Nursing prepared the report in 2000.  In response to the report’s recommendations for more funding, the Legislature earmarked $18.5 million for implementation; however, the governor vetoed this increase in July 2000. ^[32]

Also in California, the Office of Statewide Health Planning and Development operates the Health Careers Training Program, which is designed to promote public and private partnerships and develop training and funding resources and jobs for unemployed and dislocated workers. The program’s goals include promoting community collaborations, identifying funding sources for recruitment and retention activities, identifying curriculum and training needs, and developing innovative employment opportunities. ^[33]

Several States, including Georgia, established workforce commissions or advisory groups to gather information about nursing supply and demand and to develop strategies for workforce planning.  The General Assembly passed legislation in 2001 creating the Healthcare Workforce Policy Advisory Committee.  The committee was charged with monitoring and addressing the workforce supply, demand, distribution, mix and quality of health care professionals.  By the end of its first year, the committee published a report, Promoting Health Care Workplace Excellence and includes among its accomplishments action by the legislature to permit a tripling of available funding for service cancelable loans for health professions students.

In 1995, the Indiana General Assembly directed the Indiana Health Care Professional Development Commission to study the current and future health care needs, develop long-range planning goals, and submit recommendations to the General Assembly on how to best “ … achieve a continual flow of health care professionals, appropriately distributed geographically and by specialty and type.” ^[34]   At the commission’s recommendation, for example, in 1997 and 2001, the Indiana State Department of Health (ISDH) and the Indiana Health Professions Bureau (HPB) conducted the Indiana Registered Nurse Survey.  The goal of the project was to gather data on the supply and distribution of RNs in Indiana.

In 2003, the Indiana Nursing Workforce Development Steering Group, a volunteer body, underwent a planning and development phase and became the Indiana Nursing Workforce Development Coalition Inc.  The coalition’s vision is to develop a “ … collaborative strategic Statewide plan for nursing resources and for communicating a consistent message regarding nursing.” ^[35]

The Department of Health set up the Indiana Health Care Professional Development Commission to come up with a strategic plan to ensure an adequate supply and distribution of health care professionals, including nurses.

In Texas, the Nursing Shortage Reduction Act of 2001 created a nursing workforce data center to inform policymakers about nursing supply and demand and to help guide workforce planning efforts.  (The workforce center was authorized but was not funded until 2003 when lawmakers funded it through increased licensing fees for nurses.)

In Utah, the Nursing Leadership Forum is comprised of representatives from various organizations—including deans from all nursing schools, chief nurse officers from several hospitals, the Utah Nurses Association, the Board of Regents, the Utah Nurse Managers and the State Health Department. 

Schools of Nursing streamlining requirements

Streamlining and simplifying academic requirements represent one approach for expanding the supply of nurses.  By ensuring a standard set of required courses, States not only facilitate transfers among State schools of nursing, but also eliminate redundant coursework and thus reduce the time needed to complete a degree for individuals who switch institutions or upgrade their degree (from a licensed practical nurse to registered nurse, for example).

In 2002, the California Legislature passed a law that encouraged community colleges and universities within the California State University system to standardize all nursing education program prerequisites and establish articulation agreements with campuses. 

The Georgia Perimeter College offers two tracks for students to receive an associate degree in nursing: a generic, two-year track and an accelerated bridge track for applicants who are already LPNs.  In addition, graduates can pursue a BSN degree at a University System of Georgia College  through an articulation program that facilitates credit transfer and recognizes the class and clinical experience graduates bring. ^[36]

Similarly, the community college system in Indiana is working to improve articulation across programs, from LPN to RN, associate to baccalaureate, and baccalaureate to master’s degree. ^[37]

In Texas, the State coordinating board approved a standard set of courses—the Field of Study Curriculum—that helps students transfer to other schools without having to repeat courses.  These changes alone save as much as two years of repetitive coursework. ^[38]

Utah schools have enacted numerous administrative changes to expand the number of nurses who go through the system, including:

• Develop RN refresher and reactivation courses, delay retirements, increase retention, and encourage industry investment in educating more nurses;
• Accelerate programs, remove barriers to obtaining degrees, and import more nurses;
• Add summer semester and examine shortening the curriculum (LFA Report);
• Offer nurse re-entry program as a joint effort of the UHA and Weber State to help former nurses whose licenses have lapsed regain licensure.

Similarly, many schools in Georgia have found ways to enroll more students through fast-track, slow-track, year-round admissions, satellite locations, nontraditional schedules and distance learning. ^[39]

Workplace Improvements

Several States have taken steps to improve the nurse work environment.  Many argue that these measures are critical because they help retain nurses who are currently in the workforce, bring back those who have left, and, further, help with recruiting efforts by making nursing an attractive field to pursue.  California lawmakers, for example, passed legislation to improve work conditions for nurses who already are in the workforce and thus aid in retention.  Separate laws enacted restrictions on mandatory overtime and a 1999 law established minimum nurse staffing ratios.  The Texas Legislature also enacted whistleblower protections and workplace safety measures.

Hospitals and other health care employers also are taking an active role in improving the overall working environment.  As part of its recruitment and retention campaign, the Candler Hospital in Georgia, for example, sought credentialing as a magnet hospital in 2002.  (Hospitals achieve magnet status after they meet several quantitative and qualitative standards developed by the American Nurses Credentialing Center.  They are associated with increased job satisfaction and improved health outcomes.)  Among the recruitment and retention efforts implemented by the hospital: flexible staffing, financial incentives for nurses that move from part-time to full-time, referral bonuses and tuition reimbursement.  

Conclusion

Each of the five States faces nursing shortages brought on by a rapidly aging population and a declining nursing workforce.  They are addressing these problems through a variety of legislative and other approaches.  Table 7 summarizes the challenges and opportunities facing each State, which leads to the next chapter on policy options and recommendations.  Solutions that work in one State may not be the top priority of another, so an understanding of the critical challenges facing each State—as well as their strong suit—helps to determine which policy courses they should pursue.

Table 7.  Five States’ Challenges and Opportunities

Despite the fact that each of the five States has different shortage characteristics, each State faces the same conundrum: they need to expand their nursing supply, but their current nursing education resources are not sufficient to permit the needed expansion.  Standing in the way of this badly needed expansion is a faculty shortage that limits the number of students who can enter the system, as well as other factors, such as limited State and private funds to add new nursing programs or expand existing ones.  States have been adapting to fill some of the gaps—by importing nurses from other States and countries as Georgia and California do, for example—but most recognize that these measures are not long-term solutions. 

Chapter 3 outlines policy options and solutions that have worked in these five States and others to expand the nursing pipeline and, ultimately, to achieve the goal of increasing the nursing supply to meet future demand.  What works in one State may not be the best approach in another.  In California, for example, where schools of nursing across the State are turning away qualified applicants, expanding program capacity may better meet short- and long-term needs than recruiting more potential students.  Moreover, each State faces specific shortfalls: while California policymakers may identify a need to increase the numbers of baccalaureate trained nurses, policymakers in Texas, for example, may focus resources on increasing enrollment in master’s and doctoral-level programs leading to a teaching career.

[1].  Carolyn Gunning, “The Gulf Coast Healthcare Collaborative” (presentation made at the NCSL annual meeting, July 2004).  

[2].  Texas Higher Education Coordinating Board, “State Funding for Professional Nurse Education” (Austin, Texas: Texas Higher Education Board, January 11, 2005, e-mailed spreadsheet).

[3].  American Association of State Colleges and Universities, State Fiscal Conditions: Options Narrow, Pressures Mount as Budget Crunch Drags On (Washington, D.C.: AASCU, 2003), 4.

[4].  Deborah Greene, Janet Allen and Tim Henderson, The Role of States in Financing Nursing Education (Washington, D.C.: NCSL, 2003).

[5].  Steve Boilard, California Legislative Analyst’s Office, e-mail message to author, February 5, 2005.

[6].  California Legislative Analyst’s Office, An Assessment of Differential Funding, (Sacramento, Calif.: LAO, September 2004), http://www.lao.ca.gov/2004/diff_funding/Differential_Funding_Report_091504.pdf.

[7].  Boilard, e-mail message.

[8].  Kathy Reeves Bracco, State Structures: Georgia Case Study: Work Processes (N.p.: The California Higher Education Policy Center, 1997), http://www.capolicycenter.org/georgia/georgia4.html.

[9].  The University System of Georgia, Why We Are Where We Are, (Atlanta.: USG, September 2004), http://www.usg.edu/pubs/budgetdocs/whywhere.pdf.

[10].  University System of Georgia, “Legislative Update: Governor Recommends Full Formula Funding, 2% Pay Raises” (Atlanta: USG, January 18, 2005, press release), http://www.usg.edu/pubs/lu/2005/01.18.05.pdf.

[11].  The University System of Georgia, “Regents Recognize ‘Best Practices’ Within University System” (Atlanta: USG, November 17, 2004, press release), http://www.usg.edu/news/2004/111704.phtml.

[12].  Michael Baumgartner, Indiana Commission for Higher Education, e-mail message to author, February 3, 2005.

[13].  Kathy Reeves Bracco, State Structures: The Texas Case Study: Coordinating Processes for Texas Higher Education (N.p.: The California Higher Education Policy Center, Spring 1997). 

[14].  National Conference of State Legislatures, Medicaid Direct and Indirect Graduate Medical Education Payments: A 50-State Survey (Washington D.C.: NCSL, December 2003).

[15].  California Department of Finance, Budget Summary 2005-2006, http://govbud.dof.ca.gov/BudgetSummary/BUDGETSUMMARYOVERVIEW/section1_1.html.

[16].  Georgia Student Finance Commission, Education Loans with Service Cancelable Benefits (Tucker, Ga.: GSFC, 2004) http://www.gsfc.org/Main/publishing/pdf/2004/scl_brochure.pdf

[17].  The University System of Georgia, “USG Distributes $2.05 Million to Keep Tackling Health-Care Shortage,” (Atlanta: USG, August 8, 2004, press release).

[18].  The University System of Georgia, “10-Year USG Admissions Analysis Shows Good Progress in Attracting Strong Students” (Atlanta: USG, January 11, 2005, press release).

[19].  Georgia Department of Community Health, Healthcare Workforce Policy Advisory Committee, Condition Guarded, Fiscal Year 2003 Annual Report (Atlanta: GDCH, August 2003).

[20].  Georgia Department of Community Health, Healthcare Workforce Policy Advisory Committee, What’s Ailing Georgia’s Health Care Workforce?  Serious Symptoms. Complex Cures (Atlanta: GDCH, August 2002).

[21].  Alexia Green et al., “Addressing the Nursing Shortage: A Legislative Approach to Bolstering the Nursing Education Pipeline,” Policy, Politics & Nursing Practice 5, no. 1 (February 2004): 41-48.

[22].  Karen Love, the WorkSource, e-mail message to author, January 2005.

[23].  Marshall Hill, “Increasing Capacity and Efficiency in Programs Leading to RN Licensure in Texas” (presentation at the SHEEO Professional Development Conference, August 14, 2004).

[24].  Ibid.

[25].  Texas Higher Education Coordinating Board, Increasing Capacity and Efficiency in Programs Leading to Initial RN Licensure in Texas (Austin, Texas.: THECB, July 2004), http://www.thecb.State.tx.us/UHRI/reports.cfm.

[26].  Andrew Kirk, “U Nursing Initiative Gets What it Needs,” The Daily Utah Chronicle, March 4, 2004, http://www.dailyutahchronicle.com/global_user_elements/printpage.cfm?storyid=626260.

[27].  Medical College of Georgia School of Nursing, Nursing Workforce Diversity Grant Web page, http://www.mcg.edu/son/diversity/index.htm.

[28].  University of Utah, “Grant Boosts U College of Nursing’s Diversity Efforts” (Salt Lake City: UU, November 19, 2004, news release), http://www.utah.edu/unews/releases/04/nov/nursing.html.

[29].  Gordon and Betty Moore Foundation, “Gordon and Betty Moore Foundation to Fund Betty Irene Moore Nursing Initiative” (San Francisco: November 2003, news release),  http://www.moore.org/news/2003/news_pr_111303nursing.asp.

[30].  Lisa Rapaport, “Sutter Gives Funds for Nurse Education,” The Sacramento Bee, November 17, 2004, http://www.sacbee.com/content/business/story/11449967p-12364137c.html.

[31].  Maureen Keefe, University of Utah College of Nursing, telephone interview by author, November 2004.

[32].  Janet Coffman, “States’ Options for Addressing Nursing Workforce Challenges” (presentation at annual meeting of the National Conference of State Legislatures, August 2001).

[33].  California Office of Statewide Health Planning and Development, Healthcare Workforce and Community Development Division, “The Health Careers Training Program,” Web page, http://www.oshpd.cahwnet.gov/HWCDD/professions/hctp.htm.

[34].  Indiana Health Care Professional Development Commission, 2001 Annual Report (Indianapolis, Ind.: ISDH, 2001), http://www.in.gov/isdh/publications/2001report/toc.htm.

[35].  Indiana Nursing Workforce Development Steering Group, The Nursing Workforce Shortage in Indiana: Current Status and Future Trends (Indianapolis, Ind.: INWD, 2002), www.indiananursingworkforce.org.

[36].  Georgia Perimeter College Nursing Department, home Web page, http://www.gpc.edu/~nursing/.

[37].  Indiana Nursing Workforce Development Steering Group, The Nursing Workforce Shortage in Indiana: Current Status and Future Trends (Indianapolis, Ind.: Indiana Nursing Workforce Development Steering Group, 2002).

[38].  Texas Legislature, Senate Subcommittee on Higher Education, “Request for Information From March 29, 2004 Hearing” (Austin: Texas Legislature, 2004). http://www.thecb.State.tx.us/HealthRelated/NursingShortageHearing032904.pdf.

[39].  Valerie Hepburns, “Nursing Education and State Policy: The Georgia Experience” (presentation at the National Conference of State Legislatures State Nursing Education Summit, San Diego, Calif., September 2003).

[40].  Janet Coffman, Joanne Spetz, Jean Ann Seago, Emily Rosenoff and Edward O’Neill, Nursing in California: A Workforce Crisis (San Francisco, Calif.: California Workforce Initiative and the UCSF Center for Health Professions, January 2001).

[41].  Ibid.

[42].  Georgia Department of Community Health, Healthcare Workforce Policy Advisory Committee, Condition Guarded, Fiscal Year 2003 Annual Report (Atlanta: GDCH, August 2003).

[43].  Georgia Hospital Association, Economic Analysis of Hospital Providers in the State of Georgia (Marietta, Ga.: Deloitte Consulting, October 2004).

[44].  Indiana Nursing Workforce Development Steering Group, “The Nursing Workforce Shortage in Indiana: Current Status and Future Trends” (Indianapolis, Ind.: INWD, 2002), www.indiananursingworkforce.org

[45].  Marshall Hill, “Increasing Capacity and Efficiency in Programs Leading to RN Licensure in Texas” (presentation at the SHEEO Professional Development Conference, August 14, 2004).

[46].  Ibid.