The $60 Billion Nursing Shortage Problem
The Current Crisis
U.S. hospitals are losing billions to an unsustainable staffing model, with a projected shortage of 402,000 full-time RNs by 2036. This represents a $60 billion market opportunity for solutions that retain and place nurses, as well as programs that recruit internationally trained nurses and equip them through bridge programs, residencies, or certifications to fill critical gaps efficiently and sustainably.
Training this workforce would cost about $8 billion, and strategic retention efforts could prevent costly turnover and deliver up to 2.5× ROI. In contrast, hospitals currently spend $60 billion annually on agency staff, paying $70,000 more per nurse than full-time hires. Each RN vacancy costs $52,000 to fill, and a 1% turnover increase equates to $380,000 in lost productivity, making the case for building long-term pipelines over relying on temporary fixes. With nurse turnover at 22% in 2023, it's no surprise that the staffing agencies 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.
The pandemic simply exposed what was already breaking. While staffing agencies supply much-needed volume, they do so at steep markups without long-term sustainability. A once-steady pipeline has shifted into a reactive, transactional patchwork that is both costly and unsustainable, yet hospitals continue to pour $60 billion each year into this short-term fix.
2. Where We're Headed (2036)
The problem isn't going away — in fact, it's accelerating. According to HRSA 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. This does not include the 1.2 million new nurses the Institute of Medicine estimates will be needed by 2030 to meet growing demand and replace an aging workforce.
What complicates the situation further is geography. While some states appear to have surpluses, these numbers can be misleading. Many include urban centers with excess supply, while rural and underserved regions remain critically short-staffed. The story is not just about how many nurses are available, but where they are and whether they are equipped to deliver care. The chart below highlights projected nursing shortages across U.S. states by 2036, ranking states by severity and estimating the market opportunity tied to closing the gap through education, placement, and retention.
Nursing Shortage by State - 2036 Projections
| Rank | State | Code | Nurse Gap | Nurse Gap (%) | Market Size (M) |
|---|---|---|---|---|---|
| 1 | California | CA | -106,310 | -26% | $5,316 |
| 2 | Georgia | GA | -34,800 | -29% | $1,740 |
| 3 | Texas | TX | -32,100 | -10% | $1,605 |
| 4 | North Carolina | NC | -31,350 | -23% | $1,568 |
| 5 | New Jersey | NJ | -24,450 | -25% | $1,223 |
| 6 | Washington | WA | -22,700 | -26% | $1,135 |
| 7 | Michigan | MI | -21,870 | -19% | $1,093 |
| 8 | Maryland | MD | -14,700 | -20% | $735 |
| 9 | South Carolina | SC | -13,570 | -21% | $679 |
| 10 | New York | NY | -11,510 | -5% | $576 |
| 11 | Arizona | AZ | -7,730 | -9% | $387 |
| 12 | Louisiana | LA | -7,660 | -14% | $383 |
| 13 | Oregon | OR | -7,410 | -16% | $371 |
| 14 | Oklahoma | OK | -6,940 | -15% | $347 |
| 15 | Connecticut | CT | -6,280 | -15% | $314 |
| 16 | Tennessee | TN | -5,700 | -7% | $285 |
| 17 | Indiana | IN | -5,550 | -7% | $278 |
| 18 | Massachusetts | MA | -5,290 | -7% | $265 |
| 19 | Wisconsin | WI | -4,900 | -8% | $245 |
| 20 | New Hampshire | NH | -4,120 | -23% | $206 |
| 21 | Kentucky | KY | -3,810 | -7% | $191 |
| 22 | Idaho | ID | -3,650 | -16% | $183 |
| 23 | Arkansas | AR | -3,530 | -10% | $177 |
| 24 | Colorado | CO | -3,480 | -5% | $174 |
| 25 | Virginia | VA | -3,090 | -3% | $155 |
| 26 | New Mexico | NM | -3,070 | -14% | $154 |
| 27 | Hawaii | HI | -1,740 | -12% | $87 |
| 28 | Nevada | NV | -1,470 | -5% | $74 |
| 29 | Missouri | MO | -1,100 | -2% | $55 |
| 30 | Kansas | KS | -770 | -2% | $39 |
| 31 | Delaware | DE | -600 | -5% | $30 |
| 32 | Maine | ME | -390 | -2% | $20 |
| 33 | Mississippi | MS | -320 | -1% | $16 |
| 34 | West Virginia | WV | -250 | -1% | $13 |
| 35 | Vermont | VT | -230 | -3% | $12 |
| 36 | Alaska | AK | +200 | +3% | $0 |
| 37 | Montana | MT | +410 | +4% | $0 |
| 38 | District of Columbia | DC | +800 | +12% | $0 |
| 39 | Rhode Island | RI | +1,300 | +11% | $0 |
| 40 | Pennsylvania | PA | +1,430 | +1% | $0 |
| 41 | Nebraska | NE | +1,880 | +9% | $0 |
| 42 | Iowa | IA | +2,020 | +6% | $0 |
| 43 | North Dakota | ND | +3,550 | +42% | $0 |
| 44 | South Dakota | SD | +4,020 | +39% | $0 |
| 45 | Alabama | AL | +4,490 | +8% | $0 |
| 47 | Utah | UT | +6,180 | +17% | $0 |
| 46 | Wyoming | WY | +6,200 | +77% | $0 |
| 48 | Illinois | IL | +6,360 | +5% | $0 |
| 49 | Florida | FL | +8,550 | +3% | $0 |
| 50 | Minnesota | MN | +10,520 | +17% | $0 |
| 51 | Ohio | OH | +12,740 | +9% | $0 |
The Path Forward
3. Financial Stakes & Sensitivity
This is not just a workforce problem—it's a financial one. At $50,000 per nurse in revenue opportunity, the $60 billion TAM reflects only a conservative scenario. Add just $10,000 more in value per nurse—through increased retention, licensure speed, or expanded scope—and you raise the TAM by another $4 billion.
At the system level, every nurse retained prevents a $70,000 agency premium and protects against the $380,000 churn impact. The math is undeniable: solving the nursing shortage is cheaper than ignoring it. And because education is one of the most cost-effective interventions, investing $8 billion to upskill 402,000 nurses is not just practical—it's profitable.
4. Rethinking the Workforce Model
The nursing crisis isn't just a staffing issue—it's a systemic one. High turnover, rising costs, and burnout are symptoms of a reactive model that no longer works. But within the problem lies a massive opportunity: by investing in smarter, more scalable pathways that support, train, and retain nurses, health systems can reclaim billions in lost margin, improve care quality, and build long-term resilience. This isn't just about adding more nurses—it's about building the infrastructure to help them thrive.
Conclusion
Solving the nursing shortage is a $60 billion opportunity that requires only $8 billion in workforce education, making the ROI both clear and urgent. Hospitals that shift even a fraction of their agency spend into scalable training and retention will save costs, improve care, and strengthen long-term workforce resilience — proving that investing in nurses is one of the smartest moves a health system can make.