The U.S. healthcare system is facing a workforce crisis. While the nursing shortage has been a pressing issue for years, an increasingly visible physician shortage is now compounding the problem. Both trends have major implications for how care is delivered, who can access it, and how providers operate in an already stretched environment.

The Ongoing Strain on the Nursing Workforce

The shortage of nurses is not new, but recent conditions have made it more urgent. As the population ages, demand for healthcare services is rising. Hospitals, long-term care facilities, and outpatient centers are competing for a limited pool of registered nurses. The U.S. is projected to face a deficit of over 500,000 nurses this year. Many experienced nurses are retiring, while others are leaving due to burnout. The pandemic worsened an already troubling trend. Nurses are being asked to do more with fewer resources, leading to high turnover rates and greater reliance on contract or travel nurses. This has increased labor costs and operational challenges, but it’s also sparking new conversations about how to build a more sustainable and supportive workforce model.

Nursing schools can’t admit enough students to meet demand, due to faculty shortages and limited clinical placement sites. Many programs are turning away qualified applicants each year because they don’t have enough instructors or available clinical training slots. Some funding relief is coming from philanthropy, including this donation from Carlyle Group co-founder Bill Conway to expand scholarships, hire faculty, and improve infrastructure at nursing schools. Without expanding the educational pipeline and resolving these bottlenecks, the system will continue to fall short.

Several initiatives have aimed to strengthen the talent pipeline, but progress has been uneven. Collaboration between hospitals and academic institutions, more flexible degree programs, and dedicated funding streams could all help accelerate capacity.

A Growing Concern: Physician Shortages

Attention is also turning to a growing physician shortage. A shortfall of up to 86,000 physicians is projected by 2036. This will affect both primary care and specialties, particularly in rural and underserved areas. Many physicians are nearing retirement, and the pipeline isn’t strong enough to replace them. Medical school enrollment has increased, but residency slots haven’t kept pace, in part due to federal funding caps. This creates a bottleneck that delays fully trained doctors from entering practice.

New doctors are also favoring specialty fields over primary care, which often results in fewer providers for general and family medicine. Patients in many communities struggle to access basic care or build long-term provider relationships. Over 13,000 primary care clinicians are currently needed, especially in rural areas.

These gaps add pressure to urgent care and emergency departments, which aren’t equipped for chronic or preventive care. Burnout and intent to leave among physicians are also rising, tied to staff shortages and administrative burdens. Some health systems are experimenting with new care delivery models to alleviate strain, such as team-based care approaches and expanding the role of advanced practice providers. These efforts are early signs of progress, and with the right support and scaling, they could help reshape how care is delivered in the years ahead.

Systemwide Impact and Strategic Solutions

The effects of these shortages are being felt throughout healthcare. Providers are facing longer wait times, more administrative tasks, and greater challenges recruiting and retaining staff. Patients may see reduced access to care, especially where disparities already exist. Health systems are being forced to rethink staffing models, team structures, and resource allocation. Addressing the crisis will take multiple strategies. Increasing medical and nursing school capacity must go hand in hand with supporting faculty and clinical training.

Financial incentives like loan repayment or tax relief could attract more professionals to high-need areas. Telehealth and virtual care can also help extend existing resources by improving access without overwhelming facilities. In tandem, technology platforms that reduce paperwork and automate administrative tasks could allow clinicians to focus more time on patient care.

Looking Ahead

These labor dynamics are influencing healthcare real estate strategy. From the reconfiguration of clinical space to the rising demand for outpatient facilities and telehealth infrastructure, providers are rethinking their real estate footprints to align with evolving care models and workforce constraints.