America's Hospitals: In Danger or Bouncing Back?

Slide Presentation by James Bentley, Ph.D.

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On November 19, 2002, James Bentley, Ph.D., made a presentation in a Web-assisted teleconference at Event 1, which was entitled "The Big Picture: Hospitals in a Volatile Healthcare Environment."

This is the text version of Dr. Bentley's slide presentation. Select to access the PowerPoint® slides (176 KB).

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The Big Picture: Hospitals in a Volatile Healthcare Environment

James Bentley, Ph.D.
Senior Vice President for Strategic Policy Planning
American Hospital Association

Slide 1

Today's Major Issues:

• Financial Stability.
• Workforce.
• Regulatory mandates.
• Professional liability.

Slide 2

Hospital Financial Overview:

• 1/3 operating at a loss on total bottom line.
• 1/3 operating at a loss on patient care but achieving minor margin on non-operating income.
• 1/3 achieving a margin on patient care and total bottom line.
• Financial market results are a big unknown for 2002.

Slide 3

Hospitals Face Severe Workforce Shortages

This bar graph provides nationwide vacancy rates for selected types of hospital personnel in the year 2001. The vacancy rates are as follows: Imaging Technicians, 15.3%; Registered Nurses, 13.0%; LPNs, 12.9%; Pharmacists, 12.7%; Nursing Assistants, 12.0%; Laboratory Technicians, 9.5%; Billing/Coders, 8.5%; IT Technologists, 5.7%; and Housekeeping/Maintenance personnel, 5.3%.

Source: The Healthcare Workforce Shortage and Its Implications for America's Hospitals, First Consulting Group, Fall 2001.

Slide 4

The Labor Shortage Will Reach Crisis Proportions Unless Action is Taken

This line graph is a forecast of the actual number of full time Registered Nurses available vs. the required number of nurses that will be needed at any given time for the time period 2001-2020. The graph shows that the demand for full-time RNs will continue to increase while the supply of these nurses continues to decline. If this supply and demand imbalance continues, a shortage of 800,000 full time RNs is expected in the year 2020.

Source: Bureau of Health Professions, National Center for Health Workforce Analysis, Projected Supply, Demand, and Shortages of Registered Nurses: 2000-2020, released July 2002.

Slide 5

Skyrocketing Professional Liability Premiums

This slide provides information on the percentage of American hospitals that have had a 10% or greater increase in professional liability premiums in the period 2000-2002. In 2002, 32% of all hospitals had an increase of 10%-49%, 5% had increases of 50%-99% and 3% saw increases greater than 100%. In 2001, 54% had increases of 10%-49%; 12% had increases between 50% and 99%; and 16% had increases greater than 100%. In 2002, 41% had a 10%-49% increase; 11% had a 50%-99% increase; and 33% reported increases of liability premiums of over 100%.

Source: AHA/ASHRM Survey of Hospital Experience with Professional Liability Insurance.

Slide 6

Change Drivers

• New Science: new knowledge base.
• Coverage/Financing: employer role.
• Demography: aging, diversity of society.
• Consumerism: service expectations.
• Workforce supply: long-term shortage.
• Community organization: virtual.
• Societal decisionmaking: market-based.
• "Niche" providers: Loss of profitable cases.

Slide 7

Greatest Risk

• Small volume hospitals.
  • Can't make the utilization underlying current payment approaches.
• High uncompensated care hospitals.
  • Mandate for care not matched by mandate for payment.
• High debt load hospitals.
  • Financial inflexibility.

Slide 8

Strategies for Hospitals

• Retain hands-on care as a core purpose.
• Continue 24 x 7 x 365 care.
• Reflect distinctive local characteristics.
• View institution as programs, not facilities.
• Focus on consumers.
• Develop information service strategy.
• Create workforce.
• "Partner" for capital.
• Encourage innovative leadership.

Slide 9

Changing Hospital Roles

• Backstopping the system: 24 x 7.
• Increasing intensive care.
• Increasing emergency care.
• Terrorism preparedness.
• Rural hospitals: providing the continuum of care.

Current as of June 2003

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Internet Citation:

The Big Picture: Hospitals in a Volatile Healthcare Environment. Slide Presentation by James Bentley, at Web-Assisted Teleconference, "America's Hospitals: In Danger or Bouncing Back?" Agency for Healthcare Research and Quality, Rockville, MD. https://www.ahrq.gov/news/ulp/hospital/bentleytxt.htm

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