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Testimony of Ruth E. Levine, Senior Health Economist, World Bank
for Hearing on Rural and Urban Health Care Needs
May 22, 2001

Thank you for inviting me here today to discuss one aspect of the nursing shortage: the immigration of foreign-trained nurses.

My name is Ruth E. Levine, and I am currently a senior health economist at the World Bank, although the work I will speak about today was conducted while I was a researcher at the Urban Institute several years ago.

As you know, there have been periodic shortages of registered nurses since at least World War II. While each crisis period has its own features, there is much to be learned by looking back a bit in time.

Our last major nursing shortage was in the late-1980s. At that time, about 11 percent of nursing positions in acute care general hospitals were vacant, and about three-quarters of all hospitals reported problems filling posts. Urban centers were most severely affected, primarily in the Northeast, Southern Florida and the West Coast.

One of the several strategies used by hospitals during critical shortages has been the recruitment of nurses trained overseas-primarily, but not exclusively, from the Philippines. In 1989, largely in response to the needs of some large hospitals in New York City, Congress passed the "Immigration Nursing Relief Act" (INRA), which created a special temporary H-1A visa category for RNs. Its regulations included several provisions to reduce potential negative effects of foreign labor.

About 6,000- 7,000 nurses were granted H-1A visas in each year that INRA was in effect. While nurses remained on the Immigration and Naturalization Service's Schedule A (as a shortage occupation) after INRA ended in 1995, the number foreign-trained nurses entering the country declined significantly.

More recently, Congress passed the "Nursing Relief for Disadvantaged Areas Act of 1999," which created the H-1C visa category for nurses, strikingly similar to the H-1A designation. Once again, the legislation arose because of concerns from a small number of hospitals; and once again regulations attempted to ensure protection of U.S. workers.

With two colleagues at the Urban Institute (Tamara Fox and Sarah Danielson), and funded by the U.S. Department of Labor, I studied the impact of INRA-the 1989 legislation-on the nurse labor market in the Miami-Ft. Lauderdale area. This was part of a five-city study. Using statistical analyses and in-depth interviews, we tried to find out whether INRA allowed health care providers adequate access to foreign labor, while at the same time protecting the interests of U.S. workers.

What did we find, that may be of interest to you today?

First, we found that the entry of foreign-trained nurses did not harm U.S. workers' interests.

There was no evidence that the increased access to foreign labor under INRA had negative short-term effects on the wages, benefits or working conditions in area hospitals. This was because H-1A nurses made up a very small proportion of registered nurses, and were widely distributed in the labor market (both across institutions and specialty areas). In addition, and contrary to common beliefs, we found that foreign nurses were not paid less than U.S. nurses, and were not exposed to worse working conditions.

The presence of foreign nurses also had little chance of affecting RN wages or working conditions over the long term. This is again because of the small numbers of foreign nurses in the labor market, and the fact that nurse wages are not much affected by supply factors. Wages are much more affected by other forces in the market, including insurance reimbursement policy and the dynamics of the health care industry.

With respect to other possible negative effects of foreign nurses, such as problems with patient care, communication or the image of nursing as a "foreigners' occupation," none of these was evident. The typical foreign-trained nurse is more experienced than nurses coming out of training programs in the U.S., and has tremendous commitment to the profession. A standard certification process for foreign nurses, administered by the Commission on Graduates of Foreign Nursing Schools, in combination with state licensing exams, is effective in quality assurance.

In the in-depth interviews, most respondents said that hiring foreign nurses actually increased the ability of hospitals to respond to the needs of a diverse patient community. And fellow U.S. nurses consistently recognized that having some extra "hands on deck" made their lives better. It is, after all, nurses themselves who suffer most when there is a critical shortage.

These findings were echoed in similar studies in four other labor markets (Boston, Tampa, New York City, and Los Angeles). An earlier study by Booz Allen Hamilton also found no negative effects of foreign nursing labor on wages.

Second, we found that the INRA regulations were ineffective-little more than a bureaucratic exercise.

Hospitals filing attestations with the U.S. Department of Labor to permit them to hire H-1A nurses viewed the process simply as government paperwork. The regulatory language was ambiguous, leaving a lot of room for interpretation. For example, the terms "vacancy rate," and "timely and significant steps" to recruit and retain U.S. nurses were left undefined, and ultimately meant nothing. In addition, we found that virtually none of the attesting hospitals complied with the basic public information requirements of INRA.

It is safe to say that nothing in the law, its regulations or enforcement actively "protected" U.S. workers. The provisions were weak. But at the same time, as I stated earlier, there really was nothing to protect them from: the presence of foreign nurses was not doing any harm.

In the future, it would make sense to minimize regulatory paperwork. Any attestation process should focus on ensuring that the public is informed about which hospitals are hiring new foreign entrants, perhaps through low-cost vehicles like the Internet, as well as nursing journals.

There may well be a role for legislation in ensuring that the labor market "works" with respect to nurses' wages and working conditions, but on the basis of our research, it appears that trying to do this through regulatory provisions in immigration legislation has no benefits.

Thank you for your attention to my presentation. I would be happy to answer any questions you might have.

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