Will Nurses Steal Market Share from Physicians?

Currently, physicians are the dominant force in determining how health care is provided in the United States today.  Nurses, however, also play a vital role in the provision of health care services.  Although there are about 660,000 physicians in the U.S., there are 2.6 million registered nurses and another 750,000 LPNs.

Leveraging the skills of these nurses the utmost capacity is vital to maximizing the efficiency of the health care system.  In a recent report from the Institute of Medicine (IOM), the policy recommendations focused on four main issues:

  1. Nurses should practice to the full extent of their education and training.
  2. Nurses should achieve higher levels of education and training through an improved education system that promotes seamless academic progression.
  3. Nurses should be full partners, with physicians and other health professionals, in redesigning health care in the United States.
  4. Effective workforce planning and policy-making require better data collection and information infrastructure.

In general, although the recommendations are sensible, physicians may fear that nurses will begin taking some of their market share.  A more detailed explanation of my views of these recommendations is listed below.

Workforce Licensing

The Healthcare Economist has been a persistent advocate of loosing state and federal restrictions on the occupation scope of work practices. For instance, nurse practitioners cannot prescribe medicine in many states. The IOM advocates that the Federal Trade Commission and the Department of Justice examine whether these laws are anti-competitive. Opponents will claim that healthcare quality will decrease, but I have not seen any empirical evidence of this claim. Further, by allowing nurses to replace primary care doctors for some types of care, the cost of care will decrease giving the poorest individuals increased access to the medical care they need.

Increasing Nursing Autonomy

The second and third recommendation areas deal with increasing the autonomy of nurses. By improving the education of nurses, the quality of care they can provide will increase. One of the advantages of using nurses rather than doctors to treat patients is that they are lower cost skilled professionals. Increasing educational requirements will increase the cost of nurses and nurses may end up being psuedo-physicians, who do not offer material cost savings. As medicine does become more complex, however, nurses may require more educations. An increase in the variance of the education may increase efficiency, offering providers the ability to choose from both very qualified nurses with a masters or Ph.D. to supervise other nurses or deal with more complex cases, as well as nurses with much less education which could focus on more routine tasks.

More education, however, isn’t an unambiguous good. More education is costly and reduces the supply of workers. Further, although learning in school is beneficial, learning on the job also imparts important skills.

The IOM’s 2nd and 3rd recommendation areas will likely cause complaints from physicians. Increasing nursing education will not only drive up the price for nurses, but may also make nurses competitors for the physician’s services. Allowing nurses to be full partners in the redesign of the healthcare system–although sensible–also infringes on the hegemony of physicians. Thus, these two recommendations will likely meet fierce resistance from the AMA and other physician organizations.

Improve Data Collection Processes

An unbiased observer would say that one should collect more data regarding the demand and supply of nurses only when the benefit of this information outweighs the cost. As a researcher who depends on high quality data to make logical inference, more data is almost always good. Free data is even better. There are significant fixed costs to collecting data; by providing these data for free, the benefits from the use of the data can be shared across many users.


  1. I strongly agrees with this analysis. Somewhere along the way health care has come to equal medical care. It takes a village to provide good health care & we need all team members to be empowered & contributing.

  2. I strongly agree with this analysis. Somewhere along the way health care has come to equal medical care. It takes a village to provide good health care & we need all team members to be empowered & contributing.

Leave a Reply

Your email address will not be published. Required fields are marked *