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F I S C A L I M P A C T R E P O R T

SPONSOR King

DATE TYPED 2-22-05

HB 788

SHORT TITLE Nursing Leadership and Retention

SB

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

$250.0

Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB 84, SB 119, SB 394, HB 301, HB 509, HB 639

Relates to Appropriation in the General Appropriation Act

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Health Policy Commission (HPC)

Board of Nursing

SUMMARY

Synopsis of Bill

House Bill 788 appropriates $250 thousand from the general fund to DOH for the purpose of

contracting with a statewide nonprofit organization to expand the nursing workforce in New

Mexico. The bill calls for establishment of a clinical teaching institute to support ongoing lead-

ership development and best practices to increase retention among nurses in New Mexico.

Significant Issues

DOH indicates New Mexico has a serious nursing shortage, which has a direct effect on the

health of patients and on the economic stability of the health care delivery sector of the economy.

Additionally, the federal Department of Health and Human Services estimates that vacant nurs-

ing positions in New Mexico will reach 25 percent in 2005, 36 percent in 2010 and 57 percent in

House Bill 788 -- Page 2

2020. According to the New Mexico Consortium for Workforce Development (NMCWD), one-

third of New Mexico nurses are over 50 years of age. New Mexico currently produces 500 new

registered nurses each year, and the Articulation Committee of the New Mexico Center for Nurs-

ing Excellence has a goal of doubling that number by 2008. New Mexico continues to experi-

ence escalating vacancies in health care facilities at a rate double the national average.

HPC indicates this bill is one of many strategies that may be needed to address the current and

future nursing shortage in New Mexico. The bill is different from other nursing bills in that it

specifies uses of the monies for establishing a clinical teaching institute to support leadership de-

velopment and promote mentoring of best practices to retain nurses.

The Board of Nursing supports the efforts that would be made to have funding for these initia-

tives. The board has supported expansion of the nursing workforce for several years; more re-

cently providing $250 thousand over the last three years to develop a Nursing Center for Excel-

lence for New Mexico that has the “clinical teaching institute” as a component. The Nursing

Center has begun coordinating efforts to establish the goal of development of a “clinical teaching

institute” but lacks the continued funding to do so. This bill would enable the progression of al-

ready begun work and would directly enhance the state of the nursing profession in New Mex-

ico; thus, hopefully, retaining nurses.

FISCAL IMPLICATIONS

The appropriation of $250 thousand contained in this bill is a recurring expense to the general

fund. Any unexpended or unencumbered balance remaining at the end of FY06 shall revert to the

general fund.

The Board of Nursing, per statute, sets aside $5.00 from every renewal fee specifically directed

for providing “strategies to enhance recruitment and retention of professional nurses, increase

career and educational opportunities and improve interaction with health facilities administra-

tions, the medical profession and institutions of higher education.” A “nursing excellence fund”

was statutorily created to support the nursing excellence program and is to be administered by

the board. Even with this fund, the anticipated revenue, if disbursed to a “nursing excellence

program”, would not cover costs for a “clinical teaching institute”. Thus the need for additional

funding mechanisms, such as this bill provides.

ADMINISTRATIVE IMPLICATIONS

DOH indicates current resources could manage the activities, including the Request for Proposal

process, required in this bill.

RELATIONSHIP

House Bill 788 relates to Senate Bill 84, which authorizes an appropriation of $500 thousand to

the Board of Regents of New Mexico State University (NMSU) to increase the number of nurs-

ing education options in New Mexico; Senate Bill 119, which amends the Nursing Practice Act

to unify Certified Medication Aide programs that currently operate in a variety of settings into

one statewide program, under the regulatory control of the Board of Nursing; Senate Bill 394,

which appropriates $2 million to the Commission on Higher Education for nursing programs;

House Bill 301, which appropriates $584.4 thousand to the Board of Regents of Western New

House Bill 788 -- Page 3

Mexico University to expand the Bachelor of Science nursing program; House Bill 509, which

creates a $100 thousand “Nurse Educators Fund” in the Commission on Higher Education; and

House Bill 639, which amends the Nursing Practice Act to unify Certified Medication Aide pro-

grams that currently operate in a variety of settings into one statewide program, under the regula-

tory control of the Board of Nursing.

House Bill 788 also relates to House Bill 7 which includes the following: University of New

Mexico (UNM) main campus nursing expansion balances of $1,418.2 thousand, UNM-Gallup

nursing expansion balances of $34.9 thousand, NMSU main campus nursing expansion balances

of $105.3 thousand, NMSU-Grants nursing expansion balances of $425.7 thousand, NMSU-

Carlsbad nursing expansion balances of $35.7 thousand, NMSU-Alamogordo nursing expansion

balances of $28.4 thousand, San Juan College nursing expansion balances of $339.3 thousand,

New Mexico Junior College nursing expansion balances of $72.7 thousand, Northern New Mex-

ico Community College nursing expansion balances of $28.5 thousand, Luna Vocational Techni-

cal Institute nursing expansion balances of $ 36.1 thousand, Eastern New Mexico University

(ENMU) nursing expansion balances of $42 thousand, ENMU-Roswell nursing expansion bal-

ances of $71 thousand, Clovis Community College nursing expansion balances of $70.6 thou-

sand, Santa Fe Community College nursing expansion balances of $35.6 thousand and Western

New Mexico University nursing expansion balances of $142.7 thousand.

TECHNICAL ISSUES

The Board of Nursing notes where would the efforts for a “clinical institute” be directed.

OTHER SUBSTANTIVE ISSUES

DOH states, based on New Mexico Department of Labor and Board of Nursing data, 91 percent

of the registered nurse workforce is currently employed. As a direct result of the shortage and

nursing vacancies, as reported in the NMCWD survey in 2002, 72 percent of the hospitals cur-

tailed services; 38 percent of home care agencies refused referrals; 15 percent of long-term care

facilities refused admissions, and public health offices curtailed services. In spite of the reduc-

tion in the number of beds, health care facilities reported 494 vacant nursing positions.

A New Mexico Clinical Teaching Institute (CTI) was proposed at the Nursing Shortage Strategy

Sessions in 2003. These sessions consisted of employers of nurses, all schools of nursing, some

legislators, nursing organizations, New Mexico state personnel and some public health leaders

over a three-month period in 2003. This report is posted on the New Mexico Center for Nursing

Excellence web site at

www.nmnursingexcellence.org

.

The purpose of the CTI is to enhance nurse retention by supporting students and practicing

nurses throughout New Mexico in their career development, particularly targeting best practices

and skills needed as they assume roles as mentors/preceptors, managers, and leaders. The goal

of CTI is to provide nurses with the skills necessary to create and support positive work envi-

ronments. Because of New Mexico’s culturally diverse population, cultural diversity is a critical

component of the curriculum. Appreciative inquiry and cultural diversity are not only specific

education modules, but are foundational threads that run through all the other educational topics.

DOH indicates data would be collected on overall nurse retention, the retention of those attend-

ing the program, clinical care indicators, and the diversity of the workforce. An independent re-

House Bill 788 -- Page 4

viewer would be identified who would conduct data analysis. The CTI would be piloted in a

major hospital with statewide facilities. The long term goal would be to deploy this initiative

throughout the state, with targeted focus on rural areas and all areas of nursing practice to in-

clude acute, clinics, home health and long-term care. Best practices data from all professions

have acknowledged that mentors are a key factor in retention of students and new employees.

The CTI has been endorsed by New Mexico Organization of Nurse Executives, New Mexico

Hospital and Health Services Association, The New Mexico Nurses Association, New Mexico

Center for Nursing Excellence, the New Mexico Association for Home Care, and the schools of

nursing in the state.

HPC notes there is no single answer to the nursing shortage. It is a complex, multi-dimensional

problem. According to the newly formed New Mexico Center for Nursing Excellence, resolution

to the shortage issues “hinges on retaining the nurses we have, recruiting more people into the

profession, and supporting the academic programs that educate tomorrow's nurses.”

Addressing retention issues is an important part of resolving the nursing shortage. According to

the Nursing Center, “it usually costs 100 percent to 200 percent of a nurse's annual salary to fill a

vacant nursing position. A turnover rate of 16 percent to 20 percent (the national average) would

result in a hospital that employed 600 nurses to spend $5.5 million to $11 million a year in re-

placement costs alone.”

HPC notes no recent comprehensive study has been done on New Mexico’s 18,000+ nurses re-

garding what factors lead to retention of nurses in New Mexico. Also, studying the current nurs-

ing students view regarding important recruitment variables would be a critical finding.

Having information on the success rate of the various programs across New Mexico in keeping

their graduates in the state would be helpful for other programs to duplicate, once the findings

are documented.

ALTERNATIVES

HPC notes workforce studies involved with retention of health professionals are HPC responsi-

bilities. HPC enabling statute reads “perform needs assessments on health personnel, health

education and recruitment and retention and make recommendations regarding the training, re-

cruitment, placement and retention of health professionals in underserved areas of the state.” For

example, the 2003 report on physicians, conducted by HPC, did provide solid fact driven data

from thousands of New Mexico physicians on why they were considering leaving New Mexico.

HPC expresses interest that the work done by the proposed clinical teaching institute could be a

collaborative project with HPC.

HPC also indicates a Con Alma grant application was submitted by the New Mexico Center for

Nursing Excellence to pilot a mentoring and management course for nurse-managers, and to in-

crease staff nurses’ satisfaction in the workplace. An application for a Health Resources and

Services Administration grant will be submitted to establish and fund ongoing training through

academic and service partnerships.

KBC/yr