Healthcare and education represent the two largest segments of the U.S. economy. However, there is a deep chasm between the healthcare industry and the educational institutions that train the over 18 million healthcare workers in this country.

The Gap Between Healthcare and Education

America’s university system is the most expensive in the world – and training of health professionals is no different. The average cost of attendance at medical school is over $60K a year. Nursing degrees can range from around $10K to over $35K. Comparatively, the cost of a European medical education (which typically includes a low-cost bachelor’s degree in the bargain) is just under $10.5K a year. In many countries, nurses and doctors receive their education completely free, or close to it.

One would think that with such exorbitant spending, America would have the highest quality caregivers. The reality says otherwise. Despite years of preparation, only 10% of surveyed nurse executives believe that newly graduated nurses are fully prepared for clinical practice. New medical residents, too, are falling short of clinical competencies. Unfortunately, efforts from the AAMC to test clinical curricula will be in their pilot phase for another 1.5 years. Worse still, in the midst of a national nursing shortage, over 35% of new nursing graduates can’t find work 4 months after graduation – with the number reaching as high as 43% after 18 months in states like California.

The Implications

Who Is Responsible for Closing This Gap? We hear college presidents waxing poetic about partnering with employers to improve employment rates after graduation. Additionally, hospital system presidents insist that they are doing everything they can to improve the number and quality of professionals. Yet the fact is, few educators or employers have moved the needle when it comes to improving the quantity or quality of healthcare talent.

This talent gap has real consequences: despite our higher costs, Americans do not live longer or healthier lives than our peer countries. While access to the latest medicine and technology is important, having quality, clinically-trained healthcare professionals is often more valuable than CT scans.

The technology industry faces similar talent issues and has created a voice for action. Not a day goes by without articles about coding bootcamps as the solution to the projected 1.4 million unfilled coding jobs. By contrast, barely a peep is said about the 1.6 million workers we will need to train by 2020 to meet the demand for certified nurses alone – or about the merits of including the biological sciences in the broader STEM dialogue.

The Costs of This System

The fundamental problem with American health education is that students are shouldering the expenses of degree programs. Meanwhile, their ultimate employers merely await for a funnel of licensed, trained professionals to magically appear. Students, of course, are only reacting to their economic incentives, with the major incentive being the accredited degree allowing them to sit for licensure. And universities are doing the same – providing education focused on credentials and tests instead of on competencies, with the assumption that once licensed, every graduate will quickly find a high paying job.

The stark reality for recent graduates is different. Nurses are not deemed “floor ready” and fit-for-hire unless they have 6+ months of work experience. Yet being floor ready is a question of skills that should be taught in school. Universities need to teach everything from familiarity with electronic medical records to softer skills like conflict management and cultural competency. For doctors, the path is no less mysterious, with students racing to “match” with no sense until the final board scores are in what type of clinical capacity they will serve (neurosurgery at Johns Hopkins, for instance, will look a lot different than primary care in Idaho).

In healthcare, it all comes down to costs. Each year, approximately 20-25% of U.S. medical graduates do not match to residencies, at a loss of up to $500 million of potential income across unmatched graduates, and even greater losses sustained by the health system as a whole. The healthcare staffing industry that has developed in response to this talent crisis generates over $13.2 billion each year.

The Solution

The gulf between health care provider CEOs, university presidents and students has never been wider. But there are clear answers from other industries. The healthcare industry should rally to create a new contract between healthcare educators and employers. Universities should take employer concerns seriously and address the difference between competencies (e.g. being “floor ready”) and possessing a specific degree.

A few hospitals and universities are bridging the divide. Kaiser Permanente is building its own medical school, for example. However, these efforts are woefully short. All parties should be incentivized to more quickly and appropriately match healthcare talent to clinical jobs. It’s the only thing that will lead to faster and cheaper employment pathways for students.

Solving the healthcare talent crisis will require more than just talk from industry leaders. But the upside of real innovation in health education will be exceptional results – for future clinicians, their employers, and the nation’s quality of care.

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