Introduction

The American Nurses Association (ANA) is the only full-service professional organization representing the nation’s 2.6 million registered nurses, including staff nurses, nurse practitioners, clinical nurse specialists, certified nurse mid-wives, nurse educators, nurse managers and certified registered nurse anesthetists through its 53 state and territorial nurses associations.

We appreciate the opportunity to submit this statement on graduate nurse education. There is clearly a growing consensus about the need to establish more appropriate policies to better match the supply of health professionals with the changing requirements of our health delivery system.

We have frequently sought to draw the attention of policy makers to the importance of strengthening public support for the education of registered professional nurses (RNs) and advanced practice registered nurses as a means for increasing access to health care services in institutional and community settings. We believe nurses are well positioned to fill many of the gaps in our current workforce, especially in meeting the health care needs of our citizens including those vulnerable populations in under-served urban and rural areas. However, all too often workforce policies have been shaped entirely around the goal of providing access to physician services without taking account of the role of other practitioners who can and do substitute for physicians.

In this statement, we would like to briefly describe the educational and practice environments for RNs and advanced practice nurses, review current federal policies — Medicare and Title VIII of the Public Health Service Act — related to the financing of nursing education, and offer our recommendations for broad-based public support for the clinical education of nurses.

Nursing Education and Practice

There are multiple points of entry for the individual who desires to become a professional nurse. Most RNs (about 65 percent of the recent graduating classes) have been prepared in programs based in community colleges leading to an associate degree or in hospital-based diploma programs. The remainder receive their education in universities that confer a baccalaureate degree in nursing. Advanced practice nurses, including nurse practitioners and clinical nurse specialists are generally required to obtain a masters degree from an accredited graduate school.

Financial support for undergraduate and graduate nursing education comes primarily from tuition payments, state appropriations, and university endowments. Student loans, scholarships, employer tuition grants, and personal resources comprise the bulk of funds available to students. The Medicare program does make payments to certain hospitals that operate nursing programs and to a small number of other hospitals with linkages to college or university-based nursing education programs. Finally, some undergraduate and graduate nursing education support comes from grants authorized by the Nurse Education Act (Title VIII of the Public Health Service Act).

Data from the Health Care Financing Administration (HCFA) show an estimated total of $290 million in Medicare direct medical education (DME) payments to hospitals in 1997 for the support of nursing education programs, primarily hospital-based diploma schools. In contrast, total appropriations for FY1998 for Title VIII is about $65 million, the bulk of which is spent on grants and loan interest programs at the graduate level. Because of the restrictive policies of Medicare, no funds are available to support clinical training of advanced practice nurses in hospital or other training sites, and most of the support for diploma programs goes to private, non-teaching hospitals located in five states. Most university-based programs and community college programs are not eligible for any Medicare support either at the undergraduate or graduate level. It is our understanding that no new jointly operated programs between hospitals and educational institutions have been approved for Medicare reimbursement.

While hospital-based diploma programs have been an important source of RNs who provide care to Medicare hospital patients, many other nursing disciplines — such as nurse practitioners and clinical nurse specialists — are increasingly in demand to meet the needs of Medicare beneficiaries. An IOM report on Nurse Staffing in Hospitals and Nursing Homes released January 1996, found that "more advanced, or more broadly trained, RNs will be needed in the future.....Such training is essentially like that now provided for RNs who receive certification as, for example, advanced practice nurses."

We strongly support the IOM finding, that there is an increasing demand for advanced practice nurses. This demand reflects the findings in a number of studies that document the effectiveness and affordability of advanced practice nurses in providing primary and preventive health services. For example, in a 1993 meta-analysis assessing the effectiveness of nurse practitioner (NP) care when compared to physician care, NPs were found to provide more health promotion activities and scored higher on quality of care measures than physicians. Nurse practitioners ordered laboratory tests for 36 percent of their patients but the cost of these tests was 8 percent lower than the tests ordered by physicians. With respect to clinical outcomes, NPs achieved equivalent outcomes or scored more favorably than physicians on most variables. The patients cared for by NPs compared to those under physicians’ care demonstrated equivalent:

1. satisfaction with their health care provided;
2. compliance with treatment recommendations; and
3. knowledge of their health status and treatment regimen. Finally, the patients of NPs experienced slightly fewer hospitalizations and the cost per visit was 39 percent lower than physician visit costs.

In its report, "Critical Challenges: Revitalizing the Health Professions for the Twenty-First Century," (1995) the Pew Health Professions Commission noted a need for the health care system to be "more accountable to those who purchase and use health services." While recognizing the value of multiple points of entry into nursing practice, the Commission called for baccalaureate preparation for nurses engaged in "hospital based care management and community based practice." While the Commission did recommend closing some nursing education programs, it suggested these closures should be focused on diploma and associate degree programs.

The Pew Commission also noted a need to advocate for increased access of currently practicing nurses to the programs required to assist them in the transition to new roles outside the inpatient hospital setting. ANA believes that it is imperative to provide nurses prepared at the diploma or associate degree level the opportunity to access baccalaureate and advanced degree programs in order to prepare them for practice in diverse settings. These are precisely the programs for which neither Medicare nor other purchasers of care currently provide financial support.

As the health care delivery system continues its transformation from a fee-for-service, illness episode model focused on hospital care to a community-based, continuous care model operated by capitated, integrated networks of providers, the demand for more highly educated nurses will expand. The baccalaureate degree is an essential element for career advancement within these new care systems, and, typically, it is the prerequisite for entry into educational programs at the advanced practice level. Integrated networks and managed care plans provide relatively unstructured practice environments for nurses that require a high degree of flexibility, critical thinking and problem-solving capabilities, and the exercise of independent professional judgement. Patients are increasingly those with chronic diseases and co-morbidities that require multiple skills and patient management abilities.

For all these reasons, it is critical that the educational programs for nurses have the resources to adapt their curricula and clinical training opportunities to the realities of today’s health care delivery system. Without support from the purchasers of health care, nursing education — particularly its clinical components — will not be appropriate for the kinds of practice environments in which nurses will be working. We believe that it is essential to expand the number of nurses enrolled in graduate level education programs in order to meet the needs of tomorrow’s patients. This requires a commitment of stable funding for the clinical component of these programs, not subject to the uncertainties of the annual Federal appropriations process, on a par with what is currently provided to post-graduate physicians-in-training.

Federal Support for Clinical Education

Federal support for clinical education comes from appropriated funds that support grants authorized under the Public Health Service Act and from special payments by Medicare to teaching hospitals. While the appropriated funds are a critical source of support for educational initiatives and faculty development, they are not designed to provide support for the clinical experiences of the nursing curriculum that are so essential to high quality educational programs. As noted earlier, the Medicare funds are limited essentially to hospital-based diploma programs that typically do not provide the broad range of clinical training that is necessary to prepare for today’s integrated health delivery models.

The need to reform Medicare policies related to support of health professions education is not limited to nursing education. It is widely recognized that current Medicare payments to teaching hospitals for the direct and indirect costs of clinical education contains counter-productive incentives. First, Medicare policy perpetuates the current emphasis on training physicians and other health professionals in the hospital setting. It is not surprising, then, that under a policy that increases support for each additional resident, there has been an explosion in the number of physician residencies — especially in the procedurally-oriented specialties — and an even greater increase in the number of clinical faculty involved in the educational enterprise.

This emphasis on hospital training and physician specialists is clearly not consistent with the demand for practitioners in post-acute and community settings who are prepared to care for chronic patients with significant limitations in the performance of the activities of daily living. In addition, Medicare funds for nursing education do not include any support for the student (stipends) as is the case for physician residents, or for faculty unless they are employees of the hospital. Thus, it is difficult and costly for many nursing programs to make available clinical experiences outside the hospital or to involve faculty from university programs in the supervision of nursing students in practice settings.

In reality, Medicare’s restrictive policies exclude 90 percent of all nursing education programs. For example, of all teaching hospitals receiving Medicare graduate medical education (GME) payments, only about a quarter of them receive any Medicare payments for nursing education. Since the nursing programs in these academic centers are those that do not provide masters degrees for advanced practice nurses, Medicare is not supporting the kinds of programs that are necessary to meet the needs of Medicare beneficiaries.

While there has been a great deal of discussion in the public policy area about support of clinical education for physicians, notably absent from much of this discussion is the need to support clinical education for nurses, particularly in light of the likely need for additional advanced practice nurses in settings where residency positions are eliminated. While there has been some attention to the need for transitional payments to clinical sites (primarily teaching hospitals) that experience cuts in support for graduate medical education, there has been little recognition of the need to increase the supply of advanced practice nurses in order to assure a transition that does not threaten patient access to needed primary and preventive care. Moreover, such a supply is critical to support the movement of care from inpatient settings to home and community-based sites.

At the same time that Medicare support for clinical education may be declining, other traditional sources of support for nursing education are also threatened. The cap on discretionary spending that is currently imposed at the federal level makes annual appropriations for Title VIII extremely vulnerable. Repeal of Title VIII or substantial reductions in appropriations would undermine many advanced practice programs that depend on this type of grant support. Further, as hospitals face cost pressures both by Medicare and Medicaid constraints and from competitive market pressure, their willingness to offer tuition support for nursing education programs for employees is diminishing.

For the most part, current Medicare policy does not take into account or adequately support the need for clinical nursing education. There is no provision for including nursing education costs in the formula for determining Medicare’s indirect medical education adjustment to inpatient hospital payments. Further, as noted earlier, the restrictions on Medicare’s recognition of nursing education costs in hospital settings severely circumscribes any opportunity for payments through the direct medical education per resident amounts. Ironically, these threats to the future of nursing education programs — particularly advanced practice programs — come at the very time that the demand for nursing professionals with special expertise in chronic and post-acute care is rising.

Recommendations

We strongly support the establishment of an all-payer trust fund to provide broad-based and stable funding for clinical training of post-graduate nurses as well as post-graduate physicians. Contributions to the trust fund should come from Medicare funds as well as from a broad-based revenue source such as a health plan assessment, an excise tax or a combination of sources that distributes the financing burden fairly and progressively.

We recommend that the Medicare contribution to a trust fund be based on a phased-in reallocation of current Medicare payments for hospital-operated diploma nursing programs to graduate nurse education programs that are accredited by a national accrediting body. However, since there is a continued need for four year BSN prepared nurses to play a variety of critical roles in the evolving health care system, we believe that the current Medicare funds reimbursing hospitals for those programs should be maintained. We believe that funding must be available to the programs offering what is termed an RN to MSN program. These are accelerated nursing education programs for diploma or associate degree nurses to become masters prepared and hence, better able to meet the primary health care needs of the nation. These programs allow for a readily available pool of skilled health professionals to become better educated as advanced practice nurses in a shorter period of time.

Allocation of the trust fund among the eligible health professions should be similar to the current allocation of Medicare direct GME payments. There must be a minimum of 11 percent for eligible nursing programs. We believe that it would be more appropriate to redirect up to 20 percent of GME funds to graduate nurse education to match the need for education of advanced practice registered nurses. However, there should be an adequate transition period so that those diploma nursing programs that would no longer be eligible for support have the opportunity to develop new partnerships or make orderly plans for closure.

Conclusion

In summary, we believe that the nursing profession is especially critical to a smooth transition from an episode-based, hospital centered delivery system to a an integrated continuum of care model. However, the following policies will be essential to ensuring an appropriately prepared nursing workforce: