Hospitals Spent More Than $1 Trillion on Their Workforce in 2025. The Government Still Projects a Nursing Shortage Through 2038.
Summary
The American Hospital Association puts 2025 hospital workforce spending above $1 trillion, with registered-nurse pay growing more than twice as fast as inflation. The federal government's own workforce model still projects an 8% national RN shortage in 2028 — and in California, an 84,750-nurse gap in 2038 that no amount of spending has closed.
What hospitals are paying
Workforce is still the largest line on a hospital's budget, and it moved the least of the major cost categories in 2025. AHA's analysis of Strata Decision Technology benchmark data found total hospital expenses grew 7.5% in 2025 — more than twice the rate of growth in hospital prices over the same period, measured against Bureau of Labor Statistics producer-price data. Drug spending rose 13.6% and supply spending 9.9%, both outpacing the 5.6% rise in workforce costs. Pay still climbed fast in absolute terms: advertised salaries for registered nurses grew an average of 5.5% a year over the prior two years, AHA's analysis of Lightcast labor-market data shows — more than double the rate of inflation over that stretch.
View data as table
| Drugs | 13.6% |
|---|---|
| Supplies | 9.9% |
| Total hospital expenses | 7.5% |
| Workforce | 5.6% |
The government's own arithmetic on nurses
's NCHWA runs a Health Workforce Simulation Model that projects the national supply of and demand for registered nurses out to 2038. Its December 2025 brief puts national RN supply at 3.03 million full-time-equivalent nurses against demand for 3.30 million in 2028 — an 8% shortfall. That gap is projected to narrow as more nurses graduate and enter the workforce: 6% in 2033, and 3% — a shortfall of 108,960 nurses — by 2038. Licensed practical and vocational nurses are moving the opposite direction: NCHWA projects their national supply will cover just 70% of demand by 2038, down from 83% in 2028, for a shortfall of 245,950 FTEs.
View data as table
| 2028 | 8% | of national RN demand |
|---|---|---|
| 2033 | 6% | of national RN demand |
| 2038 | 3% | 108,960 FTEs |
Where the shortage doesn't narrow
The national trend hides a state-by-state split NCHWA's model quantifies directly. Nonmetro areas are projected to run a much larger RN shortage than metro areas at every interval — 24% versus 5% in 2028, narrowing to 11% versus 2% by 2038 — but the model's state-level projections show the single largest absolute gap sitting in the country's most populous state. California's projected 2038 supply of RNs covers only 78% of demand, a 22% shortfall equal to 84,750 full-time-equivalent nurses — more than three times the gap of any other state in NCHWA's ranking.
View data as table
| California | 84,750 | FTE RNs short, 2038 |
|---|---|---|
| North Carolina | 25,710 | FTE RNs short, 2038 |
| Georgia | 25,110 | FTE RNs short, 2038 |
| Michigan | 20,290 | FTE RNs short, 2038 |
| Washington | 15,020 | FTE RNs short, 2038 |
| Maryland | 10,890 | FTE RNs short, 2038 |
| Virginia | 8,020 | FTE RNs short, 2038 |
| South Carolina | 7,250 | FTE RNs short, 2038 |
| Oklahoma | 5,900 | FTE RNs short, 2038 |
| Louisiana | 5,680 | FTE RNs short, 2038 |
The takeaway
- Money and nurses are not the same shortage. Hospitals crossed $1 trillion in workforce spending in 2025, and RN pay is outrunning inflation, but the federal government's own supply-and-demand model still shows the country short of registered nurses through 2038.
- The national number is a blend of a real improvement and a real problem. 's model shows the national shortfall narrowing from 8% in 2028 to 3% in 2038 — even as the LPN shortfall worsens and nonmetro areas stay locked at a shortage roughly five times the metro rate.
- The gap concentrates. California alone accounts for a projected 84,750-nurse shortfall in 2038 — more than triple the next-largest state's — meaning national averages understate how acute the shortage will be in the places already carrying the most patients.
Spending figures are calendar/fiscal-year 2025 estimates from AHA's analysis of third-party benchmark data; shortage figures are 's own model projections under a "status quo" scenario assuming current attrition, graduation, and labor-force-participation patterns hold, not a guarantee of future outcomes.
Sources
- American Hospital Association, Costs of Caring: Challenges Facing America's Hospitals as They Care for Patients in 2026 (March 2026) — 2025 hospital workforce spending ($1 trillion+), workforce cost growth (5.6%), registered-nurse advertised salary growth (5.5%/year), and total/drug/supply expense growth for 2025. aha.org
- , National Center for Health Workforce Analysis, Nurse Workforce Projections, 2023–2038 (December 2025) — national and state-level registered-nurse and LPN supply/demand projections, the 2028/2033/2038 national RN shortage figures, the metro/nonmetro breakdown, and the state-by-state RN shortfall ranking (Exhibit 2). bhw.hrsa.gov
- , Bureau of Health Workforce, Workforce Projections dashboard — underlying interactive data source for the NCHWA nursing brief, cited for context on model methodology. data.hrsa.gov
Comments
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Two federal-adjacent bodies, working from separate datasets, describe the same market from opposite ends. The American Hospital Association's Costs of Caring 2026 report says hospitals paid more than $1 trillion to their workers in 2025, with workforce costs up 5.6% for the year. The Health Resources and Services Administration's National Center for Health Workforce Analysis (NCHWA), using its own supply-and-demand simulation model, still projects the country will be short 8% of the registered nurses it needs in 2028. Spending is not the bottleneck. Producing and distributing nurses is.