The Gap Between Supply and Demand Is Not Closing on Its Own
Approximately 11,400 Americans turn 65 every day through 2027. Adults 65 and older spend $22,356 annually on healthcare compared to $9,154 for working-age adults. That math compounds fast. And the workforce being asked to absorb that demand is shrinking at the same time it is being asked to grow.
This is the core tension that Scott Armstrong, Chief Revenue Officer at Supplemental Health Care, and host Alex Acton, Vice President of Marketing and Communication, work through in the debut episode of SHC’s Insights Series. This article focuses on one of those challenges: the staffing pipeline itself, why it is failing to produce enough qualified clinicians, and what health system leaders should do about it right now.
Why 80,162 Qualified Applicants Could Not Get Into Nursing School
The number that stops most healthcare leaders cold is this one: 80,162 qualified Bachelor of Science in Nursing (BSN) applicants were turned away from nursing programs in 2024, according to the American Association of Colleges of Nursing (AACN). These were not unqualified candidates. They met the academic requirements. There simply was not room for them, because nursing schools do not have enough faculty to teach them.
The faculty vacancy rate at nursing schools sits at 7.8%, and the pipeline to replace those faculty members is itself constrained. Over 13,000 graduate-level nursing applicants were also denied admission in 2024. The problem is not that people do not want to become nurses. The problem is structural: the educational infrastructure cannot process the candidates who are ready and willing.
As Alex Acton explains on the episode, the framing he heard that reoriented his thinking came from a State Hospital Association conference Scott Armstrong attended: it is not so much the pipeline as the pipe. The candidates exist. The pipe carrying them into the profession is too narrow.
“There’re people not even getting into nursing schools who are qualified because of the resources or nursing school closures across the country,” Scott confirmed.
That distinction matters for how leaders think about solutions. Recruiting harder does not fix a structural bottleneck in nursing education. The problem requires a different category of response.
The Exit Wave That Is Already Underway
The supply problem is not only about who cannot get in. It is also about who is leaving. The National Council of State Boards of Nursing (NCSBN) estimates that 40% of registered nurses (RNs) currently working intend to leave the profession by 2029. That translates to a potential loss of up to 1.6 million nurses. The national shortfall could reach roughly 400,000 nurses by 2030, according to the research materials. The median age of an RN today is 50 years old.
Physicians face a parallel trajectory. The Association of American Medical Colleges (AAMC) projects a physician shortage of between 13,500 and 86,000 by 2036. The Health Resources and Services Administration (HRSA) puts its own estimate at 140,000 by 2038. Surveys of practicing physicians show 85% report being overworked, and 45% are considering career changes or early retirement.
Specialist roles are under particular strain. Radiologic technologist vacancy rates reached 18.1%, and up to 42,000 radiologists may be needed by 2033, according to the briefing data. CT imaging volume is projected to grow 45% by 2055, with the majority of that growth driven by an aging population. Imaging studies are growing at roughly 5% annually while radiology residency positions grow at only about 2%.
The immigration pathway that historically helped fill these gaps is also narrowing. About 25.6% of active US physicians are international medical graduates, and approximately one in five registered nurses are foreign born. The immigrant healthcare workforce totals an estimated 3.4 million workers. Slower migration flows, visa bottlenecks, and workforce uncertainty for specific immigrant populations are reducing that source of replenishment at exactly the wrong moment.
Retention Has Become as Urgent as Recruitment
Scott Armstrong is direct on this point in the episode. When asked how important retention has become relative to filling new vacancies, his answer is unambiguous: massive.
Health systems that are managing this well are doing two things simultaneously. First, they are finding ways to extend the working lives of experienced nurses who are approaching retirement, moving them into roles that reduce physical demands or allow remote contribution, such as virtual coaching or telehealth support. The knowledge those nurses carry, built over decades of clinical experience, does not transfer automatically to new graduates. Losing it is a compounding loss.
Alex Acton describes a concrete example from the episode: a health system that had senior nurses providing virtual coaching via iPad found that younger nurses were significantly more willing to ask for help than when a preceptor was physically present. The psychological dynamic changed the quality of knowledge transfer. That is not a technology story. It is a human behavior story that technology made possible.
Second, health systems are investing heavily in the early-stage experience of new hires. Coming out of the pandemic, many systems rebuilt their onboarding and orientation processes from scratch, with more structured check-ins, clearer support structures, and intentional attention to whether new clinicians feel safe and supported in their work environment. The goal is to reduce the attrition that happens in the first year, before a new hire has had the chance to become a long-term contributor.
What Healthcare and School Leaders Should Do Differently
The data above describes a system under pressure from multiple directions at once. The practical question is what a CNO, a hospital CEO, a school district health services director, or a workforce planning executive should actually change about how they operate.
Several concrete actions follow from the evidence and the conversation on the episode:
- Audit your current staff’s retirement timeline now. If the median RN age nationally is 50, your own workforce may be skewing older. Knowing how many of your experienced clinicians are within five years of retirement gives you a planning window. Waiting until those departures are imminent removes your options.
- Build or deepen a nursing school partnership before you need it. Scott Armstrong notes that many of the health systems Supplemental Health Care works with have formal relationships with nursing programs, creating a pipeline of new graduates who move into their facilities as natural attrition occurs. That relationship takes time to build. Starting it during a vacancy crisis is too late.
- Rethink what retention actually costs. A KPMG study cited in the episode found that the fully burdened cost of a contingent laborer is actually about 5 to 6% less than that of a permanent staff member when all costs are accounted for. That does not mean contingent labor should replace permanent staff. It means the financial case for over-investing in retention of permanent staff, and for using contingent labor strategically rather than reactively, is stronger than many leaders assume.
- Sequence your staffing strategy deliberately. Scott Armstrong describes the order clearly: maximize permanent staff first, then local per diem and internal float pools, then direct sourcing, then contingent and travel labor. Each step in that sequence is less expensive than the next. Most systems that struggle financially are jumping to the most expensive option because they did not build the earlier layers.
- Demand market-specific intelligence from your staffing partners. A rural hospital in South Dakota and a large academic medical center in New York City face categorically different workforce problems. A staffing partner that cannot articulate those differences in specific terms is not actually a strategic partner. The conversation on the episode is explicit: one-size-fits-all solutions do not work, and the most successful relationships are built on deep understanding of each system’s specific pressures.
Work With a Partner Who Understands the Whole Picture
The staffing pipeline problem is not going to resolve itself. The educational bottleneck, the retirement wave, the immigration constraints, and the specialist shortfalls are all moving in the same direction at the same time. Health systems and school health programs that are managing well are doing so because they planned ahead, built the right relationships, and stopped treating workforce strategy as a reactive function.
Supplemental Health Care works with health systems across the United States on exactly these challenges, from permanent hiring support to per diem pools to contingent and travel staffing, with market-specific data and solution design built around each client’s actual situation. If the numbers in this post describe something you are already living, we would like to talk. Visit www.shccares.com to connect with our team about workforce planning and strategy.
For the full conversation between Alex Acton and Scott Armstrong, including their discussion of systemic challenges and reimbursement pressures, listen to the debut episode of Supplemental Health Care’s Insights Series, titled The Healthcare Crunch.
FAQs
Why are qualified nursing applicants being turned away from BSN programs?
Nursing schools turned away 80,162 qualified BSN applicants in 2024 primarily because of faculty shortages. The faculty vacancy rate at nursing programs sits at 7.8%, and the pipeline to replace those faculty members is itself constrained, creating a structural bottleneck that recruiting efforts alone cannot solve.
How many nurses are expected to leave the workforce by 2030?
The National Council of State Boards of Nursing estimates that 40% of currently working RNs intend to leave the profession by 2029, representing up to 1.6 million nurses. The national shortfall could reach roughly 400,000 nurses by 2030, with the median RN age currently at 50 years old.
What is the projected physician shortage in the United States?
The AAMC projects a physician shortage of between 13,500 and 86,000 by 2036. HRSA’s estimate reaches 140,000 by 2038. Surveys show 85% of physicians report being overworked and 45% are considering career changes or early retirement, compounding the supply constraint.
Is contingent or travel nursing still a cost-effective staffing option?
A KPMG study cited in the Supplemental Health Care’s Insights Series episode found that the fully burdened cost of a contingent laborer is approximately 5 to 6% less than a permanent staff member when all costs are included. Travel nursing rates have normalized significantly since pandemic-era peaks.
How should health systems prioritize their staffing strategy given pipeline constraints?
Scott Armstrong, Chief Revenue Officer at Supplemental Health Care, recommends sequencing: maximize permanent staff first, then build local per diem and internal float pools, then use direct sourcing, and finally contingent or travel labor. Each layer is less expensive than the next, and skipping ahead increases costs unnecessarily.
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