Ratios: Collapse of Non-Hospital Healthcare Sector

The president of an assisted living facility in Milford last week offered an “Economics 101” lesson on the nurse staffing ratio ballot question; he said if the ballot passes and the state’s hospitals instantly need 5,900 additional RNs to fulfill the ballot’s requirements, then RNs will flock to hospitals from long-term care, assisted living, and adult day care, thereby exacerbating a “horrendous” workforce shortage.

Blaire House of Milford President Frank Romano made the comments at a legislative breakfast at his facility last Tuesday. It was reported in the Milford Daily News.

Romano said federal immigration policies have reduced the pipeline of foreign healthcare workers coming to the U.S.  “The [current] labor shortage is just horrendous,” he said, adding that the proposed mandated ratio ballot question scheduled for November would result in 5,900 nurses moving away from non-hospital healthcare.

The economic reasons behind the shift of RNs to hospitals is clear: hospitals that fail to meet the rigid ratios could face fines of $25,000 per day.  Hospitals will then compete aggressively against each other to hire nurses from wherever they can – including out of state – and will be forced to poach RNs from other sites, such as assisted living facilities.  Some RN wages will spike. But because resources are finite, hospitals will close services or reduce beds. In any event, hospital and healthcare costs will skyrocket, and as RNs pursue higher hospital salaries, non-hospital RN jobs will go unfilled.

An independent study of mandated nurse staffing ratios found that the proposed ballot question will conservatively cost the state’s healthcare system $1.31 billion in the first year, and $1 billion annually thereafter (including costs to the state).  The study specifically cited the nurse shortage as an area of great concern, stating:

“The healthcare industry already faces significant nursing shortages, with a current vacancy rate of roughly 5.3%, or at least 1,200 RNs. Data indicate that to comply with the proposed MNSR [Mandatory Nurse Staffing Ratios], hospitals will need to hire more than 4,500 RNs for compliance alone, while also filling all existing vacancies. This means that in just two months, Massachusetts’ will need to supply 5,911 new RNs across the state’s healthcare system to both relieve the current nursing shortage and meet the MNSR. This would occur during a time of record unemployment and an environment that has already seen wage inflation for RNs of about 2% per year since 2013, bolstering the pay of RNs which already earn the third highest average wage of any state.”