Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Grubesic

DATE TYPED 2/23/05

HB

SHORT TITLE Study Nurse Staffing and Retention Issues

SB SJM 37

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to SB 84, SB 394, HB 301, HB 509, and HB 519

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Health Policy Commission (HPC)

Office of Workforce Training and Development (OWTD)

Board of Nursing

SUMMARY

Synopsis of Bill

Senate Joint Memorial 37 asks HPC study the impact of nurse staffing and retention on work-

force development. The study will address standards of nurse staffing and recommend nurse to

patient ratios, the effects of long hours on quality of patient care, environment of care issues as

they relate to both nurses and patients, and methods of recruitment and retention of nurses in all

settings.

The joint memorial asks HPC consult and confer with others having knowledge and interest in

nursing including DOH, state associations, physicians, nurses, home care providers, nurse execu-

tives, nursing homes and the Center for Nursing Excellence.

The commission is to report its findings and recommendations to the legislative Health and Hu-

man Services Committee in October 2005.

Senate Joint Memorial 37 -- Page 2

PERFORMANCE IMPLICATIONS

HPC indicates the memorial asks HPC to conduct a study that has broad implications for the

HPC and potentially broad implications for the nursing profession in New Mexico, as well as the

delivery of direct care services. A study of this type and magnitude is not currently in the strate-

gic plan of HPC.

FISCAL IMPLICATIONS

HPC indicates it has had five consecutive years of budget and staff reductions though the re-

quests for work beyond what is legally mandated to be carried out by the commission have in-

creased. To conduct a thorough study on such an important issue as nursing in New Mexico will

require resources not currently in the commission’s budget request.

ADMINISTRATIVE IMPLICATIONS

HPC notes workforce development issues, such as the nursing shortage in New Mexico and how

it can be rectified, are important pieces of research and study. Study of staff and retention issues

might be accomplished through a variety of methods including: mail surveys, research on best

practices, literature searches, and focus groups of nurses. The memorial is not specific as to the

expected methodology that would be utilized in formulating the study’s conclusion. As such, the

implication to HPC and its activities over the next year would be substantial in the absence of

better definition of the expected methodology and outcome from the study. HPC also indicates

there would be a considerable amount of staff time and, potentially, contract expense to do such

a study. The commission believes this may be difficult to accomplish given another proposed

reduction in HPC’s budget for FY06.

RELATIONSHIP

Senate Joint Memorial 37 relates to Senate Bill 84, which authorizes an appropriation of $500

thousand to the board of regents of New Mexico State University to increase the number of nurs-

ing education options in New Mexico; 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 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 519 which appropriates

$301.9 thousand to the Board of Regents of New Mexico State University to expand the Alamo-

gordo branch campus associate nursing program.

TECHNICAL ISSUES

HPC notes the joint memorial asks that HPC address standards of nurse staffing and recommend

nurse to patient ratios. The memorial is not specific with respect to which facilities or operations

would be studied. For example, home health agencies, ambulatory surgical centers, county health

offices, nursing homes, school based health centers, primary care clinics, rehabilitation hospitals,

private physician offices, case management agencies, prison clinics and infirmaries all employ

nurses. The memorial seems to focus primarily on hospitals, but is not specific if hospitals were

the only location that the study should consider. HPC also recommends consideration of addi-

Senate Joint Memorial 37 -- Page 3

tion of OWTD as a collaborating agency for the study, along with the agencies already docu-

mented.

OWTD suggests they assist HPC as the state workforce development agency in conducting the

study and evaluating the study and providing training and employment recommendations.

Similarly, while the Board of Nursing and other regulatory agencies that collaborate with nursing

are not mentioned specifically in the joint memorial, the Board of Nursing requests representa-

tion during this study.

OTHER SUBSTANTIVE ISSUES

HPC notes the following nursing shortage statistics:

.

New Mexico is below the national average for active registered nurses per 100,000 popula-

tion.

.

Nationally, there was a 26 percent decrease of registered nurse graduates between 1995 and

2000.

.

Recent forecasts speculate a national shortage of 800 thousand nurses by 2020. From the Bu-

reau of Health Professions National Center for Health Workforce Analysis study, it is re-

ported that the national supply of registered nurses was 6 percent less than demand in 2000.

The national supply is projected to grow to 7 percent less than demand in 2005, 12 percent

less than demand in 2010, 20 percent less than demand in 2015 and 29 percent less than de-

mand in 2020. New Mexico exceeded the national shortage rate in 2000 with 7 percent less

supply than demand. HRSA’s projections for New Mexico greatly exceed their national pro-

jections: 25 percent less than demand in 2005, 36 percent less than demand in 2010, 47 per-

cent less than demand in 2015, and 57 percent less than demand in 2020.

.

In 2001, national hospitals reported vacancy rates of 13 percent for registered nurses and 12.9

percent for licensed practical nurses.

.

The state is significantly impacted by the nursing shortage with health care institutions hav-

ing 494 registered nurse (RN) and licensed practical nurse (LPN) positions they cannot fill.

The Health Resources and Services Administration (HRSA) predicts that New Mexico will

not be able to fill 57 percent of its nursing requirements by 2020.

.

In July of 2002, the Commission on Higher Education and the UNM Health Sciences Center

convened stakeholders to address the nursing shortage in New Mexico. The Nursing Short-

age Statewide Strategy Sessions (NS4) group produced a report in October 2002, which pro-

vides analysis of and strategy to address the state’s nursing workforce issues.

.

According to the NS4 report, the national lack of nurses has forced 72 percent of hospitals to

restrict provided services and 38 percent of home health agencies and 15 percent of long term

care facilities to refuse patients. Since 2001, as a direct result of the nursing shortage, 75

percent of New Mexico hospitals have curtailed services by reducing staffed beds, diverting

emergency patients, and reducing services or hours of operation.

.

The number of licensed RNs in New Mexico has fluctuated by about 1,100 over the last four

years, ranging from 15,342 in 1999 to 16,435 in 2002. The state’s licensed LPNs have num-

bered about 20 percent of the number of RNs, but have decreased by 10 percent from 3,484

in 1999 to 3,140 in 2002. For nurses retaining active licenses, the rate per 1,000 population is

8.72 for RNs and 1.67 for LPNs in 2002.

.

In December 2000, the HRSA State Health Workforce Profile for New Mexico, provided a

1996 national RN rate per 1,000 population of 7.98 and a national 1998 LPN rate per 1,000

Senate Joint Memorial 37 -- Page 4

of 2.49, ranking New Mexico 44th highest of the 50 states in nursing/population rates.

.

Nationally, the average age of RNs was 43.3 in 2002, and the average age will be 50 by

2010. Of the national RN workforce, only 12 percent were under the age of 30 in 2002.

.

In New Mexico, the average age of licensed RNs in 2002 was 46, and the average age of

LPNs in 2002 was 45. For the same year, 2002, 14 percent of licensed LPNs and 7 percent

of licensed RNs were under 30 years of age.

HPC notes the following mandated ratios:

Although a requirement for hospitals to base their staffing on specific nurse-to-patient ratios was

signed into law in 1999, the California Department of Health Services did not finalize the nu-

meric ratios or the regulations needed to implement them until September 2003. These new

regulations, which took effect in January 2004, were controversial and have resulted in hospitals

throughout California closing beds, denying patient transfers even to the point of risking

EMTALA (Emergency Medical Treatment and Active Labor Act) violations, increasing ambu-

lance diversions and requiring longer waits in the emergency room. The major reason for hospi-

tals' inability to meet the nurse-to-patient ratio regulations: the shortage of nurses and the state’s

interpretation of the ratios regulation that the ratios must be met "at all times."

Other research into nurse-staffing levels has shown that there is a relationship between nurse-

staffing levels and patient outcomes and patient satisfaction, as well as with nurse satisfaction.

Research has also shown there is a significant relationship between nurse-staffing ratios and pre-

ventable patient deaths.

However, research has concluded that there is no data that shows how many nurses are needed to

care for patients, nor is there data which points to some maximum ratio of patients per nurse.

ALTERNATIVES

HPC suggests convening a work group of nursing leaders to identify ways to validate, collect and

disseminate best practices in the areas of Recruitment, Retention, Staffing and Patient Safety

Practices. This could be similar to DOH’s June 2001 study on physician recruitment and reten-

tion. Identify and implement effective mechanisms to share these practices and create ways for

nursing leaders to share information quickly and easily among themselves.

Additionally, HPC suggests improving state health workforce data systems. Coordinate and im-

prove the ongoing health professional data collection systems of the state’s licensing agencies

and related organizations, both public and private.

KBC/sb