Nursing Shortage Projections by State

Hospitals are hemorrhaging billions to plug a leaky workforce pipeline. The U.S. is on track to be short 402,000 full-time registered nurses by 2036, creating an estimated $60 billion total addressable market (TAM) for any solution that can place or retain those nurses at the bedside. This TAM represents the value of avoiding agency markups, preserving care quality, and restoring operational stability. But unlike most supply-demand gaps in healthcare, this one is solvable—and relatively cheaply.

Assume every one of those 402,000 missing RNs needs upskilling, such as a bridge program, residency, or certification. At an average $20,000 per nurse, the cost to equip them for practice totals $8 billion. In parallel, retaining the nurses already inside the system—those who might otherwise leave due to burnout, pay gaps, or lack of mobility—requires strategic investment in education, advancement, and autonomy. Taken together, the cost to "plug the leaky bucket" (retain) and "add more water" (train new talent) is far lower than the economic loss of doing nothing. The return: up to 2.5× ROI, just from converting vacancy into value.

The waste in the current system is staggering. U.S. hospitals spend $60 billion annually on temporary contract staff, often paying $70,000 more per agency nurse than they would for a full-time equivalent. Each RN vacancy costs $52,000 to fill. And a single-point increase in RN turnover equates to $380,000 in lost productivity. With nurse turnover at 22% in 2023, it's no surprise that the staffing agencies—Aya, AMN, Medical Solutions, and others—are thriving while providers bleed money to backfill roles that shouldn't be open in the first place.

1. Where We Stand Today

Hospitals are under strain. About 35% of every hospital dollar goes to nursing, yet 80% of inpatient units are chronically understaffed. The industry faces a double bind: on one end, they can't recruit fast enough; on the other, they're losing experienced nurses to burnout and better-paying agency roles. Turnover is now the norm, not the exception, and with 193,000 new RNs needed annually through 2032 just to meet baseline demand, the labor gap is quickly becoming a care crisis.

COVID simply exposed what was already breaking. And while staffing agencies are supplying volume, they're doing it at a steep markup with no long-term stability. The labor market has shifted from a pipeline to a patchwork—reactive, transactional, and unsustainable. And yet, $60 billion continues to flow into that reactive system every year.

2. Where We're Headed (2036)

The problem isn't going away. In fact, it's accelerating. According to HRSA-backed projections, 402,000 full-time RNs will be missing by 2036. California alone accounts for 106,000 of those gaps, followed by Texas, Georgia, North Carolina, New Jersey, and Washington. That's not counting the 1.2 million new nurses the Institute of Medicine says we'll need by 2030 to support growing demand and an aging workforce.

What complicates matters further is geography. While some states project surpluses, those numbers are misleading. Many include urban centers with excess supply, while rural and underserved regions remain functionally short-staffed. The story isn't just about how many nurses are available—it's about where they are, and whether they're equipped to deliver care.

The chart below highlights the projected nursing shortages across U.S. states by 2036, ranking states by severity and estimating the market opportunity tied to solving the gap. It shows how much each state is expected to fall short in registered nurses and quantifies the economic value of addressing those shortages through education, placement, and retention.