As I was reviewing healthcare attorney Alex Krause’s blog post about nurse practitioner compensation last week, a lightbulb went off in my head. He asserted that NP scope of practice laws affect how much nurse practitioners are paid. The theory? NPs practicing in states with more restrictive scope of practice laws have less bargaining power when it comes to their salaries. They can’t do as much so they aren’t paid as much. Interesting…
It makes sense that nurse practitioners practicing in areas where their ability to work is contingent upon physician involvement would be paid less. In these states an employer has to pay a salary not only to the NP, but also compensate the physician to oversee the NP’s practice. Regardless what restrictive practice laws outline, whether it’s that a nurse practitioner’s charts be signed by an MD or that a physician be on site with the NP, physicians will expect to earn from these added job responsibilities.
Restrictive regulations when it comes to nurse practitioner practice also increase administrative responsibilities. Someone needs to track that required oversight metrics are met and be responsible for implementing processes that comply with state’s legal requirements. More red tape means higher administrative overhead. Ultimately, physician involvement in practice and administrative overhead cut into the nurse practitioner’s bottom-line.
I decided to investigate my lightbulb moment in greater detail. The theory that NPs practicing in states that allow independent practice earn more and those working in restrictive states earn less makes sense. But, is it supported by data?
To test this theory I looked at average nurse practitioner salaries by state as calculated by the U.S. Department of Labor Bureau of Labor Statistics. I compared this salary data to the AANP’s state nurse practitioner regulatory map.
The AANP categorizes state practice laws in 3 ways:
- Full Practice- Nurse practitioners may order, diagnose, treat, and prescribe under the authority of the state’s board of nursing. This is commonly referred to as “independent practice” in the NP community.
- Reduced Practice- State law reduces nurse practitioner’s ability to engage in at least one element of practice. The state also requires the NP to work under a collaborative agreement with an outside healthcare provider
- Restricted Practice- State law reduces nurse practitioner’s ability to engage in at least one element of practice. The state also requires supervision, delegation, or team-management by an outside health discipline in order for the nurse practitioner to practice.
Overall, the theory holds up. The average salary for nurse practitioners practicing in states allowing “full practice” or independence practice is $95,728. The average salary for nurse practitioners working in states that do not allow full or independent practice is $91,860. Nurse practitioners earn more in states allowing for full scope of practice.
The theory breaks down a little bit when comparing states identified as having “reduced practice” and “restricted practice”. The average salary for NPs practicing in reduced practice states is $90,660. The average salary for NPs in states with restricted practice is $93,060. I suspect this is because, even within these categories, state laws vary significantly as to their level of restriction. They are a mishmash of regulatory stipulations. Grouping them into broad categories is difficult and may be too generalized to adequately capture their level of restriction.
So, what does this mean for NPs? If you’re a nurse practitioner and deciding where you want to practice, look to states that allow NPs to practice to their full ability. Even if you don’t plan to take advantage of the practice considerations this allows for, for example opening your own practice, state laws still affect you personally. Working in a state that grants nurse practitioners independence in their practice increases your earning potential.
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