Performance Improvement 1995. Advanced Practice Nursing Education: Strategies for the Allocation of the Proposed Graduate Nursing Education Account



Options were explored for paying for the education of advanced practice nurses (APNs) to increase their supply. Through policy analysis and original cost estimates, the study proposed four options for structuring and allocating a proposed account, put forward by the Administration's proposed Health Security Act, that would have established Federal support for graduate nurse training programs. Despite the failure of Congress to act on health care reform, the need for additional advanced practice nurses continues to grow, and this study has helped clarify the problem.


Purpose This study was undertaken to inform policy-makers about the growing need to finance the education of advanced practice nurses. In light of expected shortages in the supply of APNs, the study created and analyzed four options and their estimated costs for ensuring a stable source of funds.


Background APNs are trained at the master's level, while basic nurse training typically consists of 2 to 4 years of undergraduate education. Many States permit APNs to provide primary care and to refer patients to more specialized care, if necessary. Compared with physicians, APNs are less costly to educate, receive lower salaries, and more frequently practice in medically underserved areas. These features make APNs an attractive investment to policymakers interested in expanding access to primary care services.

There are four types of APNs: nurse practitioners, who are generally trained in primary care and have the authority in some States to write prescriptions; certified nurse-midwives, who deliver babies and provide primary care to women; certified registered nurse anesthetists; and clinical nurse specialists, who provide mostly hospital-based care in almost all medical specialties.

Shortages are projected in the supply of APNs, who, along with primary care physicians, are expected to be in greater demand because of the growth of managed care. The Administration's Health Security Act and other legislative proposals introduced in Congress in 1994 recognized the importance of providing funds for training nurse practitioners, nurse-midwives, and other types of APNs. This evaluation was undertaken specifically to assist in the implementation of a special account proposed by the Health Security Act to finance the education of APNs. The funds would have been drawn from a proposed tax on health care premiums and the account was devised as a capped entitlement. Bipartisan interest remains in cultivating the growth of APNs, despite the failure of global health care reform measures in the previous Congress.


Methods This study by the University of Pennsylvania provided an analysis of policy options and developed estimates for each. The policy analysis, compiled from published sources, contained data on APN student characteristics, supply, overall education costs, and financing. The analysis contrasted APN students with medical residents, since the proposed Health Security Act modeled the funding for APN education after that for graduate medical education. The impact of previous legislation was also documented. The study provided four alternative options
for structuring and distributing the proposed account. Each option contained a cost estimate based on published data on tuition, fees, stipends, and program costs.


Findings The available evidence suggests a scarcity in the supply of APNs under health care reform scenarios. For example, the University of Pennsylvania Division of Nursing estimated an additional 31,000 nurse practitioners would be needed by 2000, an increase of about 60 percent beyond the current supply. In 1986, a study by the Congressional Budget Office estimated that there were an estimated four job openings for every graduating certified nurse-midwife and nurse practitioner. The study documented that about 75 percent of APN students are enrolled part-time and pointed out that full-time status would hasten the flow of graduates.

The study highlighted important differences in the structure of educational programs for APNs and medical residents, which complicates the development of parallel financing programs. The most profound difference is that residents receive a stipend for their services and are not required to pay tuition. Students preparing to become APNs are charged tuition (averaging $4,316 per year, but ranging from $180 to $42,000). Their stipends are modest and vary from $10,000 to $12,000 per year. Unlike medical residents, APN students commonly enroll part-time and depend on some tuition reimbursement from their employers.

Past health professions training legislation has had a measurable impact on recruitment. After Federal support was initiated in the 1960s through Title VIII of the Public Health Service Act, the number of master's-level nursing students increased. When the funds began to decline in the 1970s, an increasing number of students enrolled part-time. The number of part-time students rose from about 2,000 in 1972 to 20,000 in 1992. However, the number of full-time students remained stable during this period at about 5,000.

The study examined four options for allocating the funds to targeted subsets of students. The four options, which students they cover, what charges they cover, and what they cost are presented in table 2. Advantages and disadvantages of the options are discussed in the study.

Table 2

Four Options for Allocating Funds in a Proposed Account Financing the Training of Advanced Practice Nurses


Number of Option Students Total Cost Option Pays

Full-time students only 7,204 $208,303,040 Tuition vs. Fees Stipend All full-time equivalents a 12,507 $348,294,936 Program costs b

Average tuition for full-time students 7,204 $208,303,040 Tuition vs. Fees Stipend Actual tuition for full-time students 7,204 $202,383,924 Program costs

Students in clinical programs only 5,381 $150,880,516 Tuition vs. Fees Stipend All full-time students c 7,204 $202,383,924 Program costs

Full-time students in 1-year programs 7,204 $190,391,300 Clinical stipend vs. Full-time students in 2-year programs 7,204 $236,512,800 Clinical faculty salary support

a. Full-time equivalents are estimated by the following formula: full-time students + .38 (part-time students). b. Program costs are used to pay college faculty salaries and indirect medical expenditures for hospitals. c. Students in clinical, administrative, and teaching programs.


The first option--restricting the fund to full-time students--had the advantages of administrative ease and producing graduates at a faster pace, especially those in nurse practitioner and nurse-midwife programs. These APN students are more likely than the other types to be enrolled full-time. The disadvantage was that it did not help those enrolled part-time, who constitute the majority of students. The second option was to offer students reimbursement based on average, rather than actual, tuition. While this option is increasingly favored by policymakers because it averages a wide range of costs (from $200 to $1,600 per year), it would have penalized so many private institutions that the negligible difference in total costs made this option unattractive. A third option estimated the cost of covering the two-thirds of APN students entering clinical practice, rather than teaching and administration. This option was found to have many disadvantages, including significant disruptions in how nursing programs determine program costs. The final option--limiting the account to the clinical portion of training through support strictly for clinical stipends and for clinical faculty salaries--was considered least attractive.


Use of Results The study results provide critical information to policymakers as they continue to consider options for ensuring the supply of advanced practice nurses as alternative primary caregivers.


Publication Aiken, L.H., M.E. Gwyther, and E.M. Whelan. "Federal Support of Graduate Nursing Education: Rationale and Policy Options." Health Affairs.


Agency sponsor: Department of Health and Human Services


Federal contact: Marcy Gross
Senior Associate
Office of the Assistant Secretary for Health
Department of Health and Human Services
Room 740G, Hubert H. Humphrey Building
200 Independence Avenue SW
Washington, DC 20201
(202) 690-5824 Fax: (202) 690-5432


Principal investigator: Linda Aiken, Ph.D, R.N., F.A.N.
University of Pennsylvania School of Nursing, Philadelphia, PA


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