President Obama is opposed to liberalizing restrictions on entry of foreign nurses (White House Forum on Health Reform).
He made the comment in response to a question at a health reform event at the White House last March:
REPRESENTATIVE CAPPS: ...we have a
huge shortage of nurses today. And estimates are that the U.S. will be
lacking over 500,000 nurses in the next seven years. Our nursing
schools are only able to admit a tiny fraction of applicants. The
great -- greatest bottleneck for educating more nurses comes from the
lack of nursing school faculty....
I'd love to hear your thoughts.... on how
we can further advance nursing education and faculty training...
THE PRESIDENT: ....The notion that we would have to
import nurses makes absolutely no sense. And for people who get fired
up about the immigration debate and yet don't notice that we could be
training nurses right here in the United States -- and there are a lot
of people who would love to be in that helping profession and yet we
just aren't providing the resources to get them trained -- that's
something that we've got to fix....
Capps didn't ask about immigration or importing nurses, but the
President must have been looking for an opportunity to make the point.
The shortage Rep Capps describes means that at current wages, the
quantity of nursing services demanded is greater than the supply. The
demand for nurses will only increase as baby-boomers approach their
endgame and as the numbers of persons qualifying for medical insurance
increases.
Foreign-sourced nurses are a substitute for American nurses. They
are not a perfect substitute; there are differences in the cultural
backgrounds of the nurses, in patient preferences, and in the costs of
acquiring information about abilities of foreign and domestic nurses.
Since they are substitutes, when the restrictions on the supply of
foreign nurses drive up the wages received by those foreign nurses who
actually can get jobs, the demand curve for domestic nurses will shift
to the right. As the domestic demand curve shifts, the equilibrium
wage will move up along the domestic supply curve and domestic nurses
will make more.
But that's not all:
- The nursing shortage will remain larger longer.
- Insurers and consumers will pay more for medical care.
- Insurance premiums will be higher.
- Insurance subsidies will be higher.
- People will purchase fewer medical services (because the price is higher).
- Doctors will be less productive (in the same way they'd be less productive if they had less capital to work with).
- The affluent, who will be able to pay more out-of-pocket, or who
will be able to afford larger insurance premiums, will not be hurt as
much as the less affluent.
- Working conditions for nurses will be poorer as employers try to
stretch their nursing staffs (I assume that working conditions are
easier the more nurses on a given shift).
- There will be an incentive to substitute technology for people to
economize on human nursing services (substitute monitoring technology
for nursing attention; exploit monitoring efficiencies associated with
moving older people out of their homes and into wards or nursing homes).
- Consumers will have additional incentives to go abroad for medical attention.
- Family caregivers are a substitute for certain types of professional nursing care. Expect greater use of family caregivers.
- If we're having trouble training more domestic nurses because of a
shortage of teaching faculty, maybe we should at least import teaching
nurses.
Rep. Robert Wexler (D-Fla) has proposed legislation to modestly relax current restrictions: HR 2536.
But right now unemployment is over 10%, shouldn't we reserve these
jobs for Americans? Unemployment is high right now, but its not
normally high. It should begin coming down later this year. Given
the long lead-time for training and deploying new nurses, reserving
jobs for nurses isn't likely to play much role in reducing unemployment
during this crisis. I assume, since there is big shortage of nurses,
that there are relatively few unemployed nurses in the U.S.
For related, somewhat broader, discussions of alternative health reform policy, see John Palmer's The Simple Economics of Health-Care Reform and Tyler Cowen's What should we do instead of the Obama health reform bill?
Edits: various during Nov 26.
Cross-posted from Ben Muse. Emmanuel added the following comment to that post:
Ben, also see the DHS report recommending that legislation be passed to ease the nursing shortage:
http://www.dhs.gov/xlibrary/assets/cisomb_recommendation_36.pdf
A number of AZ congressmen have introduced a Nursing Relief Act of 2009 but it's come to little avail due to the political contentiousness of the topic:
http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.1001.IH:
Unfortunately, I think it will take a major incident for this matter to be taken up in earnest.