care for the elderly (Aiken and Gwyther, 1995). Most of the funds are limited to hospital-sponsored diploma nursing schools which currently prepare less than 5 percent of new RNs annually. Also five or six states account for almost half of Medicare nursing education funding because of the location of the relatively few surviving diploma nursing schools.
A number of workforce studies and commissions, including a 1997 IOM committee, have called for the realignment of Medicare funding for nursing education to graduate nursing education (IOM, 1997). The health reform bill passed by the Senate proposes a small demonstration of up to five hospitals to test Medicare payments for graduate nursing education. While better than no progress at all, the proposed demonstration is too small to significantly advance a change in Medicare policy that is long overdue.
There is sufficient information available now as suggested by the Institute of Medicine in 1997 to realign Medicare nursing education funding to graduate nursing education. This could be a budget-neutral programmatic shift which would more than double current federal funding levels for graduate nursing education and serve as a significant stimulus for increased production of advanced practice nurses to meet the multitude of existing and emerging needs resulting from the continuously changing boundaries between nursing and medicine.
There is little effective health workforce policy-making at the federal level. The modest nursing policy capacity is located within the Health Resources and Services Administration, an agency within the Department of Health and Human Services (HHS) with little of its own funding and no authority to engage CMS which controls Medicare nursing education funding or the Department of Education, where the largest funding for nursing education resides in the form of Carl Perkins Act funding for community colleges.
Patterns of basic pre-licensure education for nurses have changed dramatically in the 45 years since the nation’s last major health reform—Medicare and Medicaid. In 1965, over 85 percent of nurses received their basic education in hospital-sponsored diploma programs; now less than 5 percent do. The percentage of registered nurses receiving training in associate degree programs was less than 2 percent in 1965 but is over 66 percent today. Baccalaureate nursing programs produced about 10 percent of new nurses in 1965, which increased to about a third of new nurses by 1980 and has been stable there for 30 years (Aiken and Gwyther, 1995). Current Medicare policies for support of nursing education as implemented by CMS are still based on nursing education patterns that existed when Medicare was passed but that are practically irrelevant today. CMS has been resistant to proposals to realign existing Medicare support for nursing education to graduate nursing education through multiple different administrations in Washington.