The future holds fewer, lower-paying hospital nursing jobs as health care consolidation progresses but growing demand for nursing skills outside hospitals presents promising opportunities, say health care educators and researchers.
Betty Rambur, University of Rhode Island’s College of Nursing’s Routhier-endowed chair for practice, said overall market concentration in the U.S. hospital sector has grown 40 percent since the mid-1980s, both horizontal (hospitals buying hospitals) and vertical (hospitals buying physician practices and post-acute facilities). Sixty percent of hospitals are now part of health systems, up 7 percent over 10 years.
Locally, that trend seems poised to continue with the planned merger of Care New England Health System and Partners Healthcare of Massachusetts, and the announcement in February that Lifespan Corp. had entered collaborative talks with the companies. The announcements foreshadow the alignment of the market power of the state’s two largest health care systems, all its hospitals and much of its health care infrastructure.
Within hospitals, such consolidation has been shown to decrease the number of nursing jobs and the pay such jobs command, said Patricia DePasquale, assistant professor of economics at Emory University. As consolidation continues, she said, competition will decrease, including competition for employees, with fewer independent parties seeking the same applicants.
“You should expect to see an increase in concentration in the labor market,” DePasquale said.
DePasquale, who studied the effect of consolidation on nursing employment in a 2015 paper, “Hospital Consolidation and the Nurse Labor Market,” wrote at the time that registered-nurse employment decreases by an average of 12 percent after a merger and that this effect persists five years after a merger. Licensed professional nurse employment experiences an even larger decrease following a merger, falling by 18 percent on average. The decreases were the result of efficiency gains, she noted in the report.
Locally, DePasquale said, the health care labor market could see a 10-20 percent decrease in employment for registered nurses and licensed practical nurses, since there has been no indication that any additional hospitals besides Memorial Hospital will be closed after the proposed mergers. DePasquale said when hospitals merge and don’t close facilities, the demand hasn’t changed, competition has.
“We’re not competing against each other anymore” in those cases, she said.
That contributes to a monopsony effect, she said, where there is only one buyer for a service; in this case, a single or few entities hiring nurses.
‘When I am the only buyer of their service, that puts me in the driver’s seat.’
PATRICIA DEPASQUALE, Emory University assistant professor of economics
“When I am the only buyer of their service, that puts me in the driver’s seat,” DePasquale said. “I know I can reduce the wage and you’re going to keep working for me.”
Rambur said the effect of monopsony on hospital employment may not be a long-term worry for nurses, since health care services are moving out of hospitals and into clinics and at-home care. Increasingly, Rambur said, health care is seeing greater demand for care rather than cure, as focus shifts from nursing sudden ailments to caring for people’s long-term conditions such as diabetes, Alzheimer’s disease and the challenges of aging.
“I think that this is going to be an enormous shift, whether or not care organizations consolidate,” Rambur said.
Nurses outside hospitals make less, according to figures from the U.S. Department of Labor’s Bureau of Labor Statistics. Registered nurses working in hospitals nationally make $36.45 per hour, whereas home health care nurses make $33.77 per hour, and nursing-facility nurses make $31.59 per hour.
R.I. Department of Labor and Training figures show registered nurses in Rhode Island hospitals also command higher wages at an average $38 per hour, while social-assistance registered nurses make an average of $30.05 per hour.
At URI, hospital consolidation’s potential effect on the local labor market doesn’t seem to be a big concern.
“Not from what we have seen, at least as it pertains to URI graduates,” said Barbara Wolfe, dean of the College of Nursing at URI. “We see a continued high demand for nurses with professional nursing degrees, as opposed to a two-year associate degree.
“From our view, the job market in health care is very robust; there’s a high demand for individuals with professional nursing degrees,” she continued. “Our graduates leave URI with a baccalaureate degree and are generally optimistic about their job prospects.”