Posts Tagged ‘recession’

Non-Profit Hospital Fundraising Soars in 2011

Monday, October 29th, 2012

More than $8.9 billion was donated to non-profit hospitals and healthcare systems in 2011 — an all-time high.   According to a report from the Association for Healthcare Philanthropy (AHP), that is an 8.2 percent increase over the previous year.  The recent numbers continue a trend that started in 2010 when non-profit hospitals saw an eight percent rise in donations compared with 2009 to more than $8 billion.  Individual donations totaled nearly 60 percent of that amount, according to the AHP.  That was a significant increase over 2009, when donations fell 11 percent or $944 million.

During 2011, the cost of fundraising rose to 31 cents per dollar collected, a two percent rise over the previous year.  Healthcare systems raised $3.24 for every dollar they spent.  University-connected hospitals were the most prolific, with $7.58 raised for each dollar spent.   Approximately 19 percent of donated funds supported community benefits and charity care; an additional 8.6 percent funded training and research.

Annual giving was the primary fundraising source, followed by capital campaigns and special events.  Approximately 70 percent of money raised was in the form of cash contributions, while the remainder was pledges primarily in the form of bequests and planned gifts.

Susan J. Doliner, chair of the AHP board of directors, notes that “It’s interesting to see that the funds raised continue to be predominantly in support of construction and renovations, equipment and program operations.  Stay tuned, as this finding shines a light on the future gap in resources healthcare organizations will face as we begin the implementation of new healthcare financing models.”  The uptick in donations is good news for hospitals and healthcare systems working to accommodate millions of new patients when the Patient Protection and Affordable Care Act (ACA) becomes fully effective in 2014.  At present, healthcare systems are relying on capital campaigns to finance new construction rather than bank loans or other debt.   Only 17 percent are using debt, a decline from the 20 percent reported in 2010.  Another 42 percent are financing new facilities with cash reserves.  The use of tax-free bonds is at its lowest level in six years, comprising just 21 percent of new construction financing.

Healthcare Employment on a Strong Growth Trajectory

Monday, April 16th, 2012

Healthcare employment will continue to grow much faster than employment in general, with the number of jobs in home care and other ambulatory settings expected to grow by more than 40 percent by 2020, according to a new study from the Center for Health Workforce Studies (CHWS) at the State University of New York at Albany.

Recent statistics from the Department of Labor focus on an expected hiring shift away from hospitals, as the system emphasizes preventive care and fewer admissions, said Jean Moore, CHWS director.  “For a long time, acute-care services tended to trump everything else, and that seems to be changing,” Moore said.  “There’s a growing awareness that it’s penny-wise and pound-foolish not to pay attention to preventive and primary care.”

Hospitals also are expected to keep hiring — nearly one million between now and 2020 — for a growth rate of 17 percent – as baby boomers age and need more inpatient care.

Physicians’ offices and other healthcare professionals are projected to hire 1.4 million people by 2020, a 36 percent increase.  The number of home health care jobs will soar by 872,000 – that’s an 81 percent growth rate.  The total number of ambulatory-care jobs will grow by 2.7 million by 2020, or 44 percent.

According to Kaiser Health News, healthcare is projected to be a growth industry, even if the Supreme Court strikes down the Patient Protection and Affordable Care Act (ACA).  “One of the things I wasn’t expecting was how much growth there was even during the recession,” Moore said.  “I would have expected some tempering of the growth.”

Although total U.S. employment declined by two percent between 2000 and 2010, healthcare employment rose 25 percent — demonstrating the sector’s expanding share of the economy.  By 2020, nearly one of every nine American jobs will be in healthcare.  When you consider that four million new health jobs will be created and people retiring from existing ones, more than seven million new workers will be needed.  That includes more than one million nurses.

According to the report, administrative healthcare jobs were cut during the economic slump from 2008 to 2010, a time when providers added nursing and other clinical positions.  Recent reports suggest that hospitals are hiring additional administrative staff to keep up with the increased regulation required by the ACA.  “They may be rehiring the people they had to let go when times were tight,” Moore said.

Healthcare employment totaled 14.19 million in October of 2011, an increase from the 13.88 million a year earlier, according to the Bureau of Labor Statistics.  Hospital jobs increased by 84,000 during the same time period.  Ambulatory services — physician offices, outpatient clinics and home health agencies added more than 173,000 positions.

Demand is strongest for general practitioners, nurse practitioners and physician assistants at private practices, community clinics, hospitals and long-term care facilities.  Demand also is high for physical therapists.  Some analysts predict that the shortage of physical therapists will increase as healthcare reform goes into effect.  Fewer uninsured Americans translates to a greater demand for physical therapy.  In response, medical schools are expanding and developing physical therapy training programs.

If anything, the physical therapist shortage will worsen, because in 2000, 15.6 percent were between the ages 50 and 64; 10 years later, 32 percent were in that age bracket, according to a report from the American Physical Therapy Association (APTA).  Unemployment among physical therapists remains remarkably low: In 2010, only 0.4 percent — one in 250 — of physical therapists were jobless.  “Nobody knows how accountable-care organizations and medical homes will shake out, but healthcare reform in general will decrease the number of uninsured, which will increase demand for physical therapists,” said Marc Goldstein, senior director of research for the APTA.  “Physical therapy programs are being developed or expanded, so the current level of 6,000 graduates annually should creep up.”

A survey by Sullivan, Cotter and Associates, Inc., a nationally-recognized compensation and human resource management consulting firm, over the last year, nearly 75 percent of respondents reported they increased their physician staffing levels; adding an average of 12 specialists and nine primary-care physicians to their staffs.  Another 75 percent said they plan to increase their physician staffs and mid-level providers over the next year.  “These data are consistent with the labor market shift in physician employment that has been occurring over the past few years,” said Kim Mobley, practice leader for physician compensation.  “We expect this trend to continue for some time.  This shift in the labor market has resulted in what has become a highly competitive market for physicians as organizations and physicians align to provide services in a high quality, more efficient manner.”

Medicare, Medicaid Costs Rising More Slowly

Tuesday, January 24th, 2012

Healthcare spending nationally grew slowly for the second successive year in 2010, bringing it in line with growth in the U.S. economy as a whole, according to the Department of Health and Human Services (HHS).  Spending rose by 3.9 percent in 2010, to $2.6 trillion, while the GDP rose 4.2 percent, according to HHS, which published its findings in the journal Health Affairs.  In 2009, spending increased nearly the same by 3.8 percent, but in contrast it’s growth rate was twice that by 7.6 percent in 2007.  Spending increases frequently hit double digits in the 1980s and 1990s.  While spending growth in general remained slow, premiums for people in private insurance plans grew faster for the first time in seven years than what was spent on their care, according to the Centers for Medicare and Medicaid Services (CMS).  Premiums in 2010 rose 2.4 percent, slightly less than the 2.6 percent increase in 2009, although private health insurers’ spending on actual benefits rose only 1.6 percent in 2010, down from 3.7 percent in 2009.

Healthcare represents 17.9 percent of the U.S. economy, the same proportion as in 2009, according to a government report. “Persistently high unemployment, continued loss of private health insurance coverage and increased cost sharing led some people to forgo care or seek less costly alternatives than they would have otherwise used,” the report said.

The report showed that the federal government paid 29 percent of the nation’s healthcare bill in 2010, up from 23 percent in 2007. Some of that increase reflects a transitory increase in federal aid to states to enroll more uninsured people in Medicaid. The percentage of spending by private businesses and state and local governments fell.

The recession played a large role in impacting spending, CMS officials said.  Because fewer people were insured, and private insurers generally picked up less of the cost, patients went to the doctor and hospital less frequently.  The answer may go beyond the recession.  “The utilization slowdown is at least in part structural, and not just cyclically driven by the economy, and the adoption of higher cost sharing plan designs will result in some level of permanent slowdown in trend,” said Ana Gupte, a senior analyst at Sanford Bernstein, which conducts research for investors.

“Premiums grew faster than benefits for the first time in seven years, and benefits grew at their slowest rate in the history of the accounts, according to Anne Martin, a CMS economist.  Martin said this was because private health insurance companies lost enrollees as people were laid off, moved to cheaper health insurance plans as a result, cost-sharing increased.

Karen Ignagni, president of America’s Health Insurance Plans, said that the portion of premiums “allocated to health plans administrative costs was among the lowest in recent years, despite the fact that health plans have been in compliance with the healthcare reform law.”

Additionally, spending on prescription drugs declined in 2010.  Not only did individuals buy fewer drugs, but there were also more switches from brand to lower-cost generic medications. According to CMS, fewer new drugs came onto the market.

Paul Ginsburg, president of the Center for Studying Health System Change, a Washington research group, said the report didn’t address the biggest question: “When the economy gets strong again, do we just return to the old business as usual?  Probably,” he said. “But there’s a chance that the experience of people economizing may have longer-lasting effects.”

The Obama administration was pleased with the report and called it good news for the healthcare law, although some researchers found the law had a less than 0.1 percent impact on national health spending in 2010.  “These numbers do not take into account all of the cost-saving provisions in the Affordable Care Act that are still being implemented.  But they do show why the Affordable Care Act is so important,” senior White House adviser Nancy-Ann DeParle said. According to DeParle, the insurance regulations in the law will keep insurance companies “in check.”

The phasing in of the patient Protection and Affordable Care Act (ACT) which will expand insurance coverage to as many as 32 million people, will incur larger cost increases later in this decade. National health spending is expected to increase by 8.3 percent in 2014, when the most ambitious coverage expansions take effect, according to CMS projections.  “The law will control the growth of healthcare spending through fraud prevention, better coordination of care, disease prevention and overhauling insurance markets,” DeParle said.

According to DeParle, “Starting in 2011, insurance companies were required to publicly disclose and justify any premium increases larger than 10 percent. Many states have the authority to reject unreasonable premium increases and the Affordable Care Act gives states $250 million to strengthen their rate review programs. Additionally, insurers are required to spend at least 80 percent of your premium dollars on healthcare expenses instead of overhead and profits.”

Time to Resolve the “Doc Fix”

Wednesday, December 21st, 2011

Congress’ end of year to-do list inevitably includes the “doc fix” – billions of dollars to avoid deep rate cuts for physicians who treat Medicare’s 48 million patients.  Congressmen and Senators always defer the cuts demanded by a 1997 reimbursement formula — known as the sustainable growth rate (SGR) and which most believe needs to be entirely rewritten.  The deferrals are temporary, and the doc fix has become increasingly difficult to pass through a divided and deficit-wary Congress.  In 2010, Congress put off scheduled cuts five times, with the longest delay lasting one year.

The story is the same heading into 2012.  If lawmakers are unable to agree before returning home for the holidays, 500,000 physicians will face a stiff 27 percent cut beginning January 1.  Although Congressional leaders have vowed to prevent that, they disagree over how to pay for the fix.  There is little doubt some agreement will be reached, but that deal could be delayed until early next year.

The cost of congressional intervention, not surprisingly, has grown: Delaying the cuts — the solution Congress has chosen since 2003 — will cost $21 billion for a one-year delay and $38.6 billion for two years.  Repealing the formula would add approximately $300 billion to the deficit, according to the Congressional Budget Office.

No one imagined that the SGR would cause so much trouble when it was passed as a minor element of the Balanced Budget Act of 1997.  Nearly 15 years ago, Medicare physician spending, which accounts for a small share of the program’s overall outlay, was growing slowly.  The law included other restraints that have since been repealed.  Analysts predicted that, at most, the SGR formula would curb physician payments minimally.  “It wasn’t viewed as a big deal at the time,” said Paul Van de Water, an economist specializing in Medicare with the research group Center on Budget and Policy Priorities.  “They needed a few more billion dollars in savings (for the Balanced Budget Act), so they just tacked on the SGR arrangement.”

Kaiser Health News wonders why Congress doesn’t just scrap the SGR formula.  “Money is the biggest problem.  It would cost about $300 billion to stop the doc fix cuts over the next decade and Congress can’t agree on where to find that kind of cash.  Some lawmakers, including Senator Jon Kyl (R-AZ), have proposed using money saved from winding down the wars in Iraq and Afghanistan to finance a permanent fix.  While the idea has found favor among some Democrats, other Republicans oppose it.  For physicians, the prospect of facing big payment cuts is a source of mounting frustration.  Some say the uncertainty led them to quit the program, while others are threatening to do so.  Still, defections have not been significant to date, according to MedPAC.  Physician groups continue to lobby Congress to enact a permanent payment fix.”

Dr. Florence C. Barnett recently decided to quit seeing Medicare patients.  She said the plan covered approximately 33 percent of what it cost her to see patients — and found herself facing a growing Medicare patient population after other local neurosurgeons left the program in 2010.  “This is the way the government will ration healthcare,” Barnett said.  “The people who can afford it will have healthcare, and the people who are only on government support — they will not be able to find a doctor or they will have a very long wait.  It’s happening now.”

A survey conducted by the Medicare Payment Advisory Commission found that among patients looking for a new primary-care physician in 2010, 79 percent experienced no problems finding one.  According to the American Medical Association (AMA), which generally resists limits in reimbursements, nearly 33 percent of primary-care physicians already restrict how many Medicare patients they accept in their practices.

Physicians are once again relying on Congress to put off the impending cut.  It’s a scenario that Glen Stream, M.D. and president of the American Academy of Family Physicians, calls a “Lucy and Charlie Brown and the football thing.”  In other words, physicians have become numb to the whole situation.  This year, that numbness could be risky.  “Doctors are sort of numb from this,” Stream said.  “It’s concerning because I think there’s a very serious chance that this cut could go into place and yet many practicing physicians have heard this years and years in a row and it always seems to get averted at the last minute.  I think that they may not understand the gravity of the situation this time.”

Writing on the MDNews.com website, Maggie Behringer says that “Last year the battle to fund the Medicare deficit — $19 billion for the fiscal year — ended in a one-year measure.  The summer saw a hands-off stance from the Center for Medicare and Medicaid Services when the administration instructed providers to temporarily cease filing claims until Congress resolved a standstill over stimulus spending and unemployment benefits.  The cut projected for January, 2012, should Congress fail to enact the customary doc-fix, totals to 27.4 percent.  The core conflict for legislators — 19 of whom are physicians, themselves — emerges in the inability of the SGR to adapt in today’s economic environment.  The formula was originally developed to bind spending to the economy’s growth.  Despite initial success, the exponential climb in healthcare costs quickly surpassed the overall market.  The subsequent deficits to fund Medicare were further compounded by the recent depression and ongoing recession.  Even if Congress is able to act in time with a temporary doc-fix over the holidays, the fundamental dilemma will remain a question of funding just as the patient population eligible for Medicare benefits enters a major boom.”

Healthcare Construction Up 50 Percent

Thursday, May 12th, 2011

Healthcare construction rose nearly 50 percent to $12.6 billion in 2010, an increase from the $8.5 billion reported in 2009.  Many medical development experts are now saying that the industry has come back almost as strongly as prior to the recession.  Healthcare assets remain strong because of the fundamentals of its existence; essentially, the growing and aging population.  Additionally, consolidations have hit the industry hard, with successful mergers typically resulting in redevelopment or expansion plans.

Healthcare construction spending grew more than 10 percent for seven years, and then stalled.  The halt still represents an enhanced growth than almost any other construction market during the recession, which deepened as a result of the credit freeze that began in the fall of 2008.  Throughout the slowdown, hospital construction spending increased nine percent when compared with the period before the credit freeze; spending for specialized medical office buildings fell 17 percent.  The slowdown in medical office spending corresponds to trends in other developed financed sectors, although the slowdown began later and has been less severe.  Reduced income and unhealthy balance sheets caused some developers to lose access to credit.  Others lost credit because lenders had concerns about cash flow coming from new capacity in a depressed economy.

Healthcare construction spending should return to a 10 percent annual growth rate in 2011, a reflection of the usual cyclical surge that follows a recession.  The rebound for hospital construction spending is a result of delayed stimulus plan funding and the resumption of work that was put on hold while healthcare reform was debated in Washington, D.C.

The Urban Land Institute (ULI) has recognized that the growing demand for medical services – needed to treat aging baby boomers, combined with shifts in approaches to treatments to curb rising costs — will significantly increase the need for new and redeveloped medical office buildings.  According to a new report, The Outlook for Health Care, published by the ULI and Seavest Inc., the increase in investment and development to fill that demand will strengthen the healthcare industry’s role as an economic development engine throughout the United States.

The Outlook for Health Care, written by economist Gary Shilling, discusses long-term trends and drivers contributing to the demand for more medical facilities and all-new healthcare facility products such as wellness centers.  The reason is that baby boomers are living longer and need a greater range of services; technology changes have required retrofits or new development; growth in the number of insured Americans under the healthcare reform legislation; ongoing growth in healthcare-related jobs; the shift toward outpatient treatment facilities; and growth in the number of physicians employed by hospitals.

Shilling discussed the report at a forum, “Anchor Institutions as Catalysts for Urban Investments,” hosted by ULI in Washington, D.C.  “Both demand and supply factors point to rapid growth in spending on medical services and medical office buildings for many years.  Medical care will continue to grow rapidly and steadily for two basic reasons – it is an essential human service, and it is heavily supported by the government,” Shilling said.

I Just Graduated in Nursing. Where’s My Job?

Monday, May 9th, 2011

This spring’s class of nursing school graduates are running into an unexpected roadblock.  The dream jobs that they thought would be waiting for them are hard to find.  According to Rhys Gibson, “I mean I thought I was the cat’s meow and everything, because I’m an African-American guy coming out of here – I was waiting for the red carpet, I had the grades, had the experience, to an extent but not the practical experience as a nurse working on the floor.  There isn’t a whole lot of money, even on my unit, I was lucky enough to make it in when I did because there hasn’t been another RN1 since and that was December ’09 when I got that job offer.”  Gibson has applied for hundreds of jobs and finally founded a job as a nurse on a geriatric psychiatry ward at Rush University Medical Center.  He is just one of thousands of people who entered nursing schools in Illinois in recent years, many in response to a drumbeat of news about a looming nurse shortage.

According to Cathy Grossi of the Illinois Hospital Association, “There’s been a concerted effort led by the Illinois Center for Nursing to expand the capacity of the educational programming across Illinois to accommodate student interest for nursing education. So we’ve increased capacity around the state about 25 percent.  That’s since 2006. But then the recession hit in 2007.  And while it’s officially been over since 2009, the effects have been deep and long-lasting, even in healthcare – one of the brighter growth areas of the economy.  We are now experiencing an increase in the number of graduates coupled with the time temporarily where there’s probably not as much opportunity as there was in the past.”  According to Grossi, nurse vacancies at Illinois hospitals fell by more than half from 2008 to 2010.

Although the nursing shortage has eased slightly for the time being, it is not going away. The recession brought a temporary reprieve because nurses who were close to retirement have seen their 401(k) portfolios decline.  As a result, they are postponing retirement a few more years until the economy — and their portfolios — recover.  Other nurses have seen their spouses or partners laid off and so have increased their hours to make ends.  Some who left the profession to care for children or for other reasons have started working again to pay the bills.  Additionally, many hospitals are not hiring.  The recession brought hiring freezes to healthcare facilities, and many are still in effect.  Help wanted ads for healthcare professionals dropped by 18,400 listings in July of 2010, even as the overall economy saw a modest increase of 139,200 in online job listings.

Even so, healthcare remains one of the economy’s healthiest industries. On April 1, 2011, the Bureau of Labor Statistics (BLS) reported that the healthcare sector is growing, despite significant job losses in recent months in nearly all major industries.  Hospitals, long-term care facilities, and other ambulatory care settings added 37,000 new jobs in March 2011, the largest monthly increase recorded by any sector.  As the largest segment of the healthcare workforce, registered nurses will be recruited to fill many of these new positions.  The BLS confirms that 283,000 jobs have been added in the healthcare sector in the last 12 months.

The nursing shortage will regain momentum because of the impending baby boom retirement crisis.  When you consider that the majority of registered nurses are over the age of 55, and that they will soon be retiring as well, the terms ‘crisis’ and ‘nursing shortage’ will become even more significant in coming few years.  The nursing shortage is expected to also be influenced by the fact that nursing jobs will grow by 22 percent from 2008 to 2018, according to the BLS.  Add in the fact that the nursing work force is aging and nursing schools aren’t graduating nearly enough nurses to fill the healthcare industry’s requirements, and the growing nursing shortage can be described as a “perfect storm”.

“Moving into the future, we see a very large shortage of nurses, about 300,000,” said Peter Buerhaus, a nurse and health-care economist and a professor at Vanderbilt University.  “That number does not account for the demand created by reform. That’s a knockout number. It knocks the system down.  It stops it.  I think the big story is…the future of nursing is dominated by aging baby-boomer nurses who are going to retire, and we are looking at massive shortages,” Buerhaus said.

Nine Million Americans Lost Healthcare Coverage During the Recession

Monday, April 4th, 2011

The financial crisis not only robbed nine million Americans of their jobs – but also their healthcare insurance. According to a new study by The Commonwealth Fund, only 25 percent of Americans who lost employer-sponsored healthcare coverage succeeded at finding another source.  As a result, an estimated 52 million Americans did not have healthcare coverage in 2010.  Even though the federal government provides a subsidy, just 14 percent of people who lost their jobs continued their coverage through COBRA.

According to The Commonwealth Fund Biennial Health Insurance Survey of 2010, “Using data from The Commonwealth Biennial Health Insurance Survey of 2010 and prior years, this report examines the effect of the recession on the health insurance coverage of adults between the ages of 19 and 64 and the implications for both their finances and their access to healthcare.  The survey of 3,033 adults, conducted by Princeton Survey Research Associates International from July 2010 to November 2010, finds that in the last two years a majority of men and women who lost a job that had health benefits became uninsured.  Adults who sought coverage on the individual insurance market over the past three years struggled to find plans they could afford and many were charged higher premiums, had a health condition excluded from their coverage, or were denied coverage altogether because of a pre-existing condition.  Meanwhile, Americans with health insurance had higher deductibles and consequently greater exposure to medical costs.  And millions were struggling to pay medical bills, facing cost-related barriers to getting the care they need, or skipping or delaying needed care, including prescription medications, because of the cost.”

Just 50 percent of adults aged 64 or less are current with preventive care.  Fully 49 million employed Americans spent 10 percent or more of their yearly income on out-of-pocket costs and insurance premiums, a sharp increase from the 31 million reported in 2001.  Once the Patient Protection and Affordable Care Act (ACA) goes into full effect in 2014, the situation is likely to improve dramatically.  “These reforms have enormous potential to begin solving the problems identified in this report,” said Sara Collins, vice president of The Commonwealth Fund, a private foundation that promotes a high performing healthcare system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable, including low-income people, the uninsured, minority Americans, children, and the elderly.

“The report tells the story of the continuing deterioration of healthcare accessibility, efficiency, safety and affordability over the past decade,” said The Commonwealth Fund president Karen Davis. “All this despite the fact that the United States spends more than any other country on healthcare.  Most recently it has failed the millions of Americans who lost their jobs during the recession and lost health benefits as well, leaving them with no place to turn for affordable healthcare coverage.  The silver lining is that the Patient Protection and Affordable Care Act has already begun to bring relief to families,” Davis said.  “Once the new law is fully implemented, we can be confident that no future recession will have the power to strip so many Americans of their health security.”

Of those people who attempted to buy an individual plan during the study’s timeframe — 19 million individuals – or 71 percent found it difficult or impossible to locate a plan they could afford and met their needs, were denied coverage or charged extra because of a pre-existing medical condition.  Adults with family incomes of less than $22,050 for a family of four were hardest hit with 54 percent having no healthcare insurance.  An additional 41 percent of families with incomes of between $22,050 and $44,100 had no coverage.  Of higher-income families, just 13 percent lacked healthcare coverage in 2010.

Conservative groups such as the Heritage Foundation are critical of the healthcare reform law.  The Washington, D.C.-based think tank wants changes made to the healthcare system to make it less reliant on government and to have individuals “own and control their own healthcare policies.”  Additionally, Heritage believes that the healthcare law will increase government spending.  “Of course there’s some people who will benefit from the law, but just focusing on individuals with benefits is misleading,” said Brian Blase, a policy analyst in health studies.  “You have to look at the law in its totality.”

Healthcare Spending Slowed in 2009

Tuesday, January 25th, 2011

Americans’ healthcare spending grew by just four percent in 2009 (the last year for which statistics are available), the smallest annual increase in 50 years. This suggests that Americans did not seek healthcare because of lost jobs and a lack of healthcare insurance due to the recession.  At the same time, healthcare insurance premiums increased at a faster pace than in 2008.  Additionally ,the number of Americans with coverage fell by 6.3 million.  Out-of-pocket spending on healthcare showed a slight increase.  Medicaid spending rose sharply by nine percent, compared with less than five percent in 2008.  This is a result of more people qualifying for Medicaid, again because of the recession.

The statistics, released by the Department of Health and Human Services (HHS), are a sign that the recession left a deep imprint on healthcare in America – far worse than other recent recessions.  “Job losses caused many people to lose employer-sponsored health insurance and, in some cases, to forgo health-care services they could not afford,” according to economists and statisticians at HHS’s Centers for Medicare and Medicaid Services.  The report, which has been compiled by the government annually since 1960, is the most recent snapshot of spending across the healthcare system.

Healthcare spending in the United States totaled $2.5 trillion in 2009, adding up to an average of $8,068 per person.  The four percent rise recorded in 2009 compares with more than six percent in 2007, eight percent in 2005 and double-digit increases in 1990 and 1980.  Even with the slowdown in spending, healthcare spending still comprised 17.6 percent of the GDP in 2009.

Recession Hits Healthcare Hiring

Monday, October 18th, 2010

Although healthcare has long been perceived as a recession-proof industry, the pace of employment growth has slowed,  with just 17,000 jobs added monthly during January, February and March for a net gain of 51,000 new positions. That’s less than half the 2008 numbers, although hiring is likely to improve later this year because of pent-up demand.  More than 16 million Americans – one in eight – work in healthcare.  Employment in the industry has grown by 500,000 since December of 2007, a time when 5.1 million jobs vanished from the overall economy.

Even the world-renowned Mayo Clinic, which employs 35,000 people, is feeling the pinch.  The destination hospital has frozen salaries for physicians and senior administrators, reduced travel and overtime expenses and cut 2009 capital spending by $150 million.  Standard & Poor’s downgraded Mayo’s debt in March, citing the institution’s large, unfunded pension liability and break-even operating margins.

In the words of Robert Fogel, a Nobel laureate and professor at the University of Chicago’s Booth School of Business, “It’s a long-term shift reflecting changes in technology and what consumers want.  Healthcare is the growth industry of the 21st century.”

As 78 million baby boomers march towards retirement and old age, the need for healthcare professionals will only grow.  The current slowdown in job growth is a temporary blip on the healthcare radar.

2008 Healthcare Spending Experiences Slowest Growth Rate in 48 Years

Tuesday, February 2nd, 2010

Americans spent an average of $7,681 per person on healthcare during 2008, just a 3.5 percent rise over the previous year – the slowest growth rate in 48 years.  According to a report issued by the Department of Health and Human Services, healthcare spending totaled $2.3 trillion in 2008 and accounted for 16.2 percent of the GDP.Healthcare spending rose just 3.5 percent in 2008.

The culprit is the recession, which achieved what a generation of public officials attempted without success.  Federal officials said the slowdown in health spending resulted from the soft economy, people delaying elective procedures, for example, and did not cite any factors that will alter the long-term outlook for continued increases as baby boomers age and physicians rely more on new technologies to treat patients.

According to Micah Hartman, a government statistician who contributed to the report, federal spending for health services and supplies grew 10.4 percent in 2008 and equaled 36 percent of federal receipts, up from 28 percent in 2007.  “In 2008, federal Medicaid spending increased 8.4 percent – the highest rate of growth since 2003 – while state spending declined by 0.1 percent, the first decline in these expenditures in program history,” Hartman said.  “Spending for healthcare by private businesses grew just 1.2 percent in 2008, in part because of a drop in the proportion of employer-sponsored insurance paid by employers.  Private business’ health spending remained relatively flat as a share of compensation at 7.9 percent.”

In other findings, the report noted that “private health insurance premiums and benefits grew in 2008 at their slowest rate since 1967, 3.1 percent and 3.9 percent respectively.”  The slowdown reflects a drop in the number of Americans with private health insurance.  That fell to 195.4 million in 2008, compared with 196.4 percent in 2007.