Could the Commission for Nurse Reimbursement End the Nursing Shortage?
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“Society cannot function without nurses. It’s one of the oldest and most important professions. We are all going to need nurses at some point in our lives. So if we don’t solve this problem–if we don’t start caring for nurses–then we risk the health of the nation.”
Rebecca Love, RN, Co-founder of the Commission for Nurse Reimbursement
The nursing profession is in crisis. A rapidly aging population combined with medical innovations that allow people to live longer means a significant and sustained need for more nurses. Worse still, nurses are fleeing from their jobs at record rates. Hospitals experience extraordinary nurse turnover, with nearly 20 percent of new graduates leaving the profession within their first year.
This need for more nurses, combined with hospitals’ inability to retain the ones they have, reached a boiling point during the Covid-19 pandemic when nurses experienced record-high rates of burnout and left their jobs.
But what caused this nursing and retention shortage, and how can it be solved?
The way the issue has been covered in the mainstream media positions it as a simple supply and demand issue, but according to leading nursing experts, that isn’t true. To understand the full scope of this problem, you must first learn the history of nurse billing and how hospitals categorize nursing labor financially, which has led to this current problem.
A Historical Perspective on the Nurse Shortage
The nurse shortage is not new and, in fact, has plagued the profession for nearly a century. After the economic devastation wrought by the stock market crash of 1929, private duty nursing jobs–the most common position for nurses at that time–dried up overnight, according to Counting Nurses: The Power of Historical Census Data.
During the next decade, hospitals began hiring these private duty nurses, noting they provided better patient care than the beleaguered students they typically exploited. Once World War II started, however, the need for nurses skyrocketed once again, and training programs and federal funds were dedicated to increasing the number of nurses serving in both military and civilian sectors.
Since then, the nursing shortage has ebbed and flowed but always remained present and pressing.
During the two-decade transition between 1930 and 1950, hospitals began hiring nurses en masse to staff their units. They eventually moved into the current staffing model, filling all hospital nursing positions with paid nursing staff. What substantially changed was how those nurses were paid.
Though it’s not common knowledge, the first generation of American nurses, trained in the Florence Nightingale school of thought, were entrepreneurs who billed for their services just like physicians did.
Once the hospitals—run almost exclusively by male physicians—started hiring these nurses in the early years, they bristled at negotiating rates and discussing money with these women. To address this, they devised a way to “keep nurses far away from the money,” as famed nursing researcher, historian, and writer Donna Diers put it.
They did this by eliminating the ability for nurses to bill directly for their services and wrapping up the cost of nursing labor into the “room rate” (the same way that maids are paid for their work). Nursing labor then moved from a profit generator to a cost in the eyes of the hospital administrators, and the seed was planted for the nurse shortage.
The Current Nurse Staffing Crisis
If the current nursing shortage is not simply an issue of supply and demand, what factors drive it?
While it is true that the US does need more nurses overall, the crucial fact that often gets lost in the discussion is just how many licensed nurses could be working but have chosen to leave the profession. According to the 2022 National Nursing Workforce Survey, at least 11 percent (260,000 actively licensed nurses) were not currently employed as nurses.
To understand why nurses are leaving the profession, you need only ask them. In a 2024 State of Nursing Report, 57 percent of nurses reported feeling burned out, 52 percent felt unsupported at work, and 29 percent felt unsafe at work.
Most nurses who have left the profession cite burnout and a lack of safe staffing (and the poor patient outcomes they cause) as their top reasons for leaving, and they all stem from the same core issue: not enough nurses on shift to do the job well.
When nurses are understaffed, there are disastrous consequences for both them and their patients. For every additional patient a nurse must care for, there is a 7 percent increased risk of death for their patients.
Poor staffing combined with other issues like the rise in violence against nurses, criminal prosecution of medical errors, and the rising cost of education have turned many away from the profession.
Intentional Hospital Understaffing
With such decisive evidence proving how crucial nurses are to providing safe, high-quality patient care, the solution may seem simple: hire more nurses.
Yet the current hospital financial model actively disincentivizes hospitals from doing this. Under popular value-based care models, nursing rates are wrapped into the bigger hospital bill, making their contributions invisible. Hospitals are rewarded for minimizing overall costs by understaffing nurses because nurses are viewed as a cost—no different than the gauze they use to wrap a wound or the IV pool they hang medications on.
Conversely, physicians and all other healthcare providers, such as physical therapists, occupational therapists, and speech-language pathologists, all bill individually for their services and are therefore viewed as income generators by the hospital.
Nurses are the only healthcare workers categorized solely as an operational cost, which has directly created the current nursing shortage by encouraging hospitals to run their units short-staffed. This choice has made the work environment unsafe in many ways, which has driven burnout and, ultimately, caused tremendous nurse turnover.
Until that payment structure changes, hospitals have repeatedly shown that they will continue to staff nursing as minimally as possible to maximize profits.
The Commission for Nurse Reimbursement
To address this growing nursing crisis, nursing innovator Rebecca Love, RN, MSN, FIEL, and her fellow founders have created the Commission for Nurse Reimbursement to do just that.
After a long nursing career, Love moved into leadership and began founding businesses, working as a healthcare innovator. Though she moved away from clinical care, she never stopped worrying about the nursing shortage.
“Society cannot function without nurses. It’s one of the oldest and most important professions. We are all going to need nurses at some point in our lives. So if we don’t solve this problem–if we don’t start caring for nurses–then we risk the health of the nation,” Love said.
Love and her commission co-founders resolved to find a solution to the current nurse shortage, and they knew it would come down to money. Love says, “We need a financial model that supports nurses and reflects the irrefutable value we provide. Nurses are not a cost but rather the very reason why patients come to the hospital. Without nurses, there is no healthcare.”
The Commission comprises experienced nursing executives, clinicians, CEOs, and other healthcare leaders who recognize the precarious state of American hospitals and seek to create change with innovative solutions that center nurses and recognize how invaluable their contributions are to patient care.
“The current financial model is failing. We know it’s not working. So we devised multiple alternative models that hospitals can use, which incentivize appropriate nurse staffing and we hope will ultimately improve patient care and patient outcomes,” Love said.
How the New Nursing Payment Model Could Work
When the Commission began its work, it sought a solution that did not require foundational changes to current hospital operations, as that would lead to insurmountable industry resistance.
In May 2024, they published a new nursing payment model in Health Affairs that provided all the details on their proposed changes. The Commission for Nurse Reimbursement recommends unbundling the cost of nursing from the hospital operating charges, effectively just adding a new line to the hospital budget spreadsheet.
The Centers for Medicare and Medicaid Services (CMS), which sets all healthcare reimbursement rates, would then separately reimburse nursing costs after a geographic and quality adjustment related to patient outcomes. Nursing-sensitive patient outcomes, such as medication errors, pressure injuries, and inpatient falls, are already tracked under multiple CMS models, including the Value-Based Purchasing Program. This new model would utilize all the same tools and trackers that are currently in use.
By doing so, hospitals would face a much higher level of accountability to provide adequate nurse staffing, which we know improves patient outcomes, reduces medical errors, and leads to a better patient experience.
In addition, the quality adjustment factor proposed by the Commission disincentives hospitals from artificially inflating the cost of nursing, keeping labor costs and reimbursement reasonable while improving patient care and nursing satisfaction.
The Future of Nursing
Rebecca Love, RN, MSN, acknowledges the difficulty of implementing a healthcare policy change on this scale. Still, the Commission for Nurse Reimbursement remains undeterred because the stakes could not be higher.
According to Love, you need only look at the record numbers of nurses leaving the profession at dizzying rates to see the risk this crisis poses to the future of the nursing profession and healthcare overall.
“When I look at the state of healthcare today, I cannot understand why new generations would want to join our profession if we cannot empower nurses,” Love said.
The Commission for Nurse Reimbursement has begun the battle to get nursing labor recognized and reimbursed appropriately by changing the healthcare financial model to end the nursing shortage. Only time will tell if the healthcare industry embraces this solution, but something must be done to maintain the US healthcare infrastructure.
Meg Lambrych, RN
WriterMeg Lambrych is a registered nurse, writer, and nursing advocate from Upstate New York.
After leaving clinical care due to burnout, she dedicated her life to covering issues in healthcare, nursing, and health in the digital space. She reports on nursing culture, policy, and history and interviews nursing innovators and leaders shaping the profession and challenging the status quo.