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6 The Health Care Employer's Perspective MANY OF THE THEMES THAT RUN SEPARATELY through this report come together when we begin to view allied health workers from the perspective of health care employers. When the supply of practitioners in an allied health field declines because fewer students choose that career or because schools close, health care administrators who employ allied health personnel are among the first to experience the change. If licensure laws change or a new technology is introduced, employers are among the first to respond to the change. When a glut of workers in an allied health field exists in a locality, employers notice it in the number of responses they net to vacancies they advertise. 1 ~ ~ ~ _ Employers are not merely users of a given supply of allied health per- sonnel, however they are also active participants in the forces that de- termine the supply of workers. In other words, the quantity of workers demanded and the quantity supplied are not independent. Wage and salary rates and working conditions affect the supply of workers. The supply of workers in turn affects the wages, salaries, and working conditions that they are offered. Yet employers setting wage and salary levels have to balance many considerations other than the amount of money needed to attract the required number of workers. They must consider the payment they can get for services and the bottom-line impact of personnel expenses, the regulatory requirements that constrain work force deployment, and the skills and knowledge demanded by the technologies in use. In the past, cost-based reimbursement, the absence of competition, and a generally adequate supply of allied health personnel allowed adminis- trators to make the salary adjustments that were needed to maintain their 206

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE . 207 desired staffing levels. They were able to accomplish this without appre- ciably changing staffing or service levels or the deployment of staff. Yet changes in the health care system and in allied health labor markets may force administrators to rethink their staffing practices. There will be in- creasing competition for technically oriented workers, who have more em- ployment options than nontechnical workers. In addition, administrators will have strong economic incentives to control personnel costs to compete in terms of price, yet remain financially viable. These changes have created a new environment with which administra- tors have little experience. Although sortie administrators have had to face periodic shortages of nurses, only recently have they faced personnel short- ages and price competition simultaneously. There is no historical pattern to indicate how employers will adapt to difficulties in hiring and staffing. The committee identified some allied health professions in which short- ages are likely to occur if changes in the labor market fail to take place. This chapter focuses on forestalling shortages; it emphasizes the impor- tance of planning for the future. Market mechanisms will force adjustments that will eventually decrease stresses in the allied health labor market. Yet markets adjust slowly. For example, there is a considerable lag between educational institutions recognizing and responding to increased student interest in an allied health field and an increased number of graduates in that field. Employers have many reasons to act early to forestall possible personnel shortages. For instance, acute shortages of workers in an allied health field may cause salaries to rise sharply, some services to close, or the initiation of new needed services to be postponed. More subtly, the quality of health care may be eroded if, over extended periods of time, too few existing employees must struggle to maintain services. These and other serious service dislocations could be reduced if administrators were to respond appropriately to early market signals. In this chapter the committee focuses mainly on what personnel admin- istrators, corporate human resource administrators, and department heads in all types of health care facilities hospitals, nursing homes, freestanding facilities might consider doing to help relieve or prevent personnel short- ages. It discusses two types of activities that can produce gains in personnel supply: (1) making employment more attractive, and (2) using the available work force more effectively. None of the activities discussed is new; they have been tried in fields other than allied health. There is a need for further investigation, however, to ascertain which activities are best suited to resolve problems with the allied health labor force, taking into account the different characteristics of the work force in each field. There are other ways in which health care providers can lessen their personnel problems. For instance, hospitals in Texas have responded to shortages by using the state hospital association to mount an elaborate

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208 ALLIED HEALTH SERVICES campaign to recruit high school graduates into health careers (Texas Health Careers, 1987~. Other mechanisms, such as offering vacationing high school students jobs in health care facilities, are also used to inform and encourage students to select health care careers. Throughout this chapter, terms such as "human resource administrators and "facility administrators" are used. These terms are purposefully vague. Health care organizations often have a personnel function to facilitate the details of personnel management, departmental administrators who make decisions about the deployment of staff, and upper level human resource administrators who deal with facility-wide labor force issues. This frag- mentation makes it difficult to develop and implement creative staffing arrangements that would likely be part of the solution to allied health staffing problems. STRATEGIES FOR EMPLOYERS TO ENHANCE THE SUPPLY OF ALLIED HEALTH PRACTITIONERS . Several factors play roles in creating imbalances between the supply of and demand for allied health workers: the diminishing size of the college- age population; students' propensities to choose careers outside of health care; and the decreasing availability of allied health programs on the one hand and the aging of the population, disease patterns, and technological advances in health care on the other. These imbalances will likely remain unless something changes on one or both sides of the equation. However, generalizations of this sort do not apply to all allied health fields or to all parts of the country. Demand and supply vary from place to place, and with varying characteristic circumstances. Individual facilities and areas will in some cases experience an adequate or even excess supply of personnel in fields in which a national shortage is predicted, and the balance between supply and demand will differ among the fields. This is readily apparent today as facility administrators in some parts of the country struggle to hire physical therapists when, for example, respiratory therapists are plentiful. The expectation is that in many parts of the nation and for many em- ployers of allied health practitioners the labor market will be tight. To increase the supply of workers, employers can intervene to make education more accessible and employment more attractive. Students may then be more likely to select allied health careers. People who have left the work force to pursue other interests raising families, new careers, or leisure may return. In addition, workers may choose to remain in the work force longer or to remain in a particular career longer. Increasing the supply of workers by encouraging greater numbers of students to enter the allied health fields is a strategy that depends both on employers making

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 209 employment in allied health careers more attractive and on educational institutions expanding programs in response to increased student demand. The second strategy for coping with shortages, using workers more productively or effectively, in essence reduces the demand for allied health personnel at a given level of output. Yet there are limits to the productivity improvements that can be achieved. These limits can result from regulatory restrictions, the skills of individuals, technological constraints, or the nature of the work. The challenge for administrators in today's competitive health care environment is to try to ensure that productivity improvements are pushed to their limits. Undertaking one or both of these strategies would require a serious reconsideration of the role of human resource management. For many facility administrators, it would mean giving human resource management a higher priority than in the past. Yet such investments or efforts would be repaid if the service dislocations that could result from tight labor mar- kets were avoided. Moreover, private sector employers must take the ini- tiative in enhancing the supply of allied health personnel. The public policy options, such as programs of grants or scholarships, cannot on their own solve manpower problems. Making education inexpensive and readily avail- able might attract some people into allied health fields, but unless good jobs offering competitive wages are available, too few people will be at- tracted, and those who choose an allied health occupation will not stay in it long. Salaries In a perfectly competitive market, an imbalance between demand and supply would cause prices to change until demand and supply were once again in equilibrium. Thus, if a shortfall of allied health personnel were to occur, wage rates would be expected to rise, demand would fall, and the supply of personnel would increase to match demand. This series of reactions is likely to occur in the allied health personnel market. Yet market forces do not always work freely, and there can be delays before equilibrium is reestablished. If demand increases at a greater rate than supply, wages may rise, but there will be a lag before supply catches up with demand. In addition, wage rates may be slow to respond to supply shortages if em- ployers are unwilling or unable to raise wages. An explanation offered for the slow adjustment of nurses' compensation is that large health care pro- viders, such as hospitals, have often been one of just a few employers of allied health practitioners in a locality. Realizing that these practitioners have few alternative places at which to work, employers have been able to keep wages down (Aiken, 19821. In many local markets, however, the competition for allied health practitioners has been increasing with a pro-

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. 210 ALLIED HEALTH SERVICES liferation of work sites freestanding units of numerous types, sometimes independent practice options, and so on. Slow wage adjustments can be expected if employers do not recognize that wage competition is taking place. There are also many reasons why employers may be reluctant to adjust wages. Sometimes employers recognize that competition for workers is occur- ring but are unable to compete with the salaries being offered by other organizations. Some types of employers for whom this is likely to be true are discussed at the end of this chapter. During the course of the study the committee often heard of allied health practitioners who left traditional employment settings to establish independent practices or to work for employers paying substantially higher salaries for example, health spas, food manufacturers, and biotechnology firms. The committee also heard that the traditional service ethic that in the past attracted individuals to relatively low-paying health care jobs is being eroded. Opportunities in alternative places of work or higher paying careers are felt to overwhelm the traditional service satisfaction. Employers' reluctance to respond to indications of a personnel shortage by raising salaries is due not only to the expense of paying higher wages but also to the fact that the compensation levels of the many types of workers in a hospital are interrelated. An increase in one group's pay is likely to be quickly followed by increases for other workers. Such failures of the market are not unique to health care providers. The Wall Street journal (Mitchell, 1987), noting a serious shortage of skilled blue-collar craftsmen, remarked: Surprisingly, the labor market has sparked only modest wage gains so far. Although desperate for certain key skills, some employers would rather limp along without a full workforce than raise wages high enough to attract needed workers . . . many companies have chosen to ignore issues of supply and demand for fear that higher labor costs will make it more difficult to compete. A similar attitude prevails in health care. The New York Times (Uchitelle, 1987) cited Jerome Grossman, chairman of the New England Medical Center, where 200 of 2,800 jobs were vacant. as saving "The amounts we ~~ _ ~~ ~ ~~ ~ - A; Arc the ~ ' - rid ~~ - rl ~ Y1~ C:1~ ' J An) Call Ulldl8~ ~aLl~llLo ala ~~ ~~ ~~ . . . we are forced to make trade- offs." Moreover, there are sometimes alternatives to pay increases. For example, when laboratory technicians are in short supply, chemists and individuals trained in other relevant disciplines can be substituted. When there are alternative sources of workers, such as lower level practitioners or individuals with other training, substitution may be a preferable alter- native to raising pay. For example, in one locality in which there is an oversupply of dentists and a shortage of hygienists, an HMO uses dentists to perform the hygienists' tasks. In some allied health fields, however, the freedom to substitute personnel is constrained by regulation.

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 211 Alternatively, other ways of dealing with personnel shortages include marginally curtailing services, asking allied health employees to work over- time, or taking measures to increase output. Other ways of attracting personnel through economic incentives without increasing wages or salaries include paying bonuses for joining and staying on staff, and offering continuing education and day-care subsidies. These methods avoid an upward shift in pay scales; consequently, if utilization or occupancy rates decline the employers are not left with an excessively highly paid staff when the supply of workers is plentiful. Evidently, health care administrators, who are necessarily concerned with their organization's bottom line, have an array of strategies available that can be implemented before wage rates are increased. Thus, a lag in the response of wages to a perceived shortage of personnel is not unexpected. Although raising salaries has been shown to increase the size of the nursing work force, other economic factors also influence the decision to work. Family income is important. As spouses' incomes rise, nurses tend to reduce their working hours or to stop working altogether. In addition, when nurses' salaries become high enough, some nurses reduce the number of hours they work. Conversely, in times of high unemployment, inactive nurses often return to the work force (Aiken, 1982~. These phenomena are likely to occur in some of the allied health fields in particular, those that are mainly composed of women and that are similar to nursing in education and pay levels. An analysis of nurses' compensation in relation to changes in the balance of demand and supply notes that sometimes wage increases have lagged behind shortages. The same analysis also notes that wage increases have repeatedly succeeded in reducing shortages (Aiken and Mullinex, 1987~. Pay differentials between various educational levels in the same occu- pation also have the potential of increasing or decreasing the supply of personnel of a given level. For example, when there was no difference between the earnings of baccalaureate nurses and associate degree nurses, students realized that the economic return to the 2-year education was higher than the return to the 4-year program, and the number of associate degree graduates eventually exceeded the number of baccalaureate grad- uates (Buerhaus, 1987~. Pay levels affect the supply of allied health practitioners at each point at which an individual makes a career decision. Although economic consid- erations often are not the sole or primary considerations, earnings potential is one of many factors considered by students who are selecting an edu- cational program. Once started on a career, satisfaction with current earn- ing levels and expected increases in earnings will figure in decisions to continue working; to leave the work force; to pursue child care, leisure, or other unpaid activities; or to change to another occupation with better compensation. Similarly, the return to an occupation will be in part de-

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212 ALLIED HEALTH SERVICES pendent on pay levels especially when the cost of work includes major expenditures such as child care. How does allied health compensation conspire with that in other oc- cupations? First, compensation for allied health practitioners should be understood in the context of women's earnings, because women dominate many allied health fields. In 1986 women earned on average 69.2 cents for every dollar earned by men (Mellor, 1987~. Moreover, occupations in which women represent the majority of workers tend to rank lower in terms of earnings than male-dominated occupations (Rytina, 1982~. The American Physical Therapy Association is one group that is trying to ad- dress these problems. It recently examined factors contributing to the dis- parity in professional and economic status between men and women members as indicated by self-employment, administrative responsibility, graduate degrees, and earnings. Full-time salaried female physical therapists had annual salaries that were only 85 percent of those of full-time salaried men. Self-employed physical therapists are more likely to be men (62 percent) and they earn more than self-employed women physical therapists. The annual gross earnings of these women were 71 percent of those of self- employed men. The study concluded that the association should explore approaches for creating career ladders, encourage women to commit them- selves to their careers and to the maintenance of their skills, and consider societal barriers that limit women's aspirations and opportunities (Reagan, 19861. Table 6-1 arrays compensation data for several allied health fields and other selected occupations. These data for allied health occupations were obtained through a national survey of 33 hospitals, 16 medical schools, and 28 medical centers. These institutions were chosen for their similarity in size to the University of Texas Medical Branch at Galveston, which has 1,100 beds and 7,500 employees. Thirteen of the institutions are in Texas, Arkansas, and Louisiana, which represents an oversampling of that region. Thus, these data pertain to large institutions and have a regional bias. The occupational categories are carefully defined and clear, and although the Texas-Arkansas-Louisiana region is oversampled there are no other rea- sons to believe that the manpower markets of the institutions have any special characteristics. In Table 6-1 the starting rate refers to the rate normally paid to fill a vacancy in the occupation. The maximum rate is the highest rate actually paid to employees in the occupation (University of Texas Medical Branch, 1986~. Data for the other occupations are from a nationwide salary survey of firms with at least 50 employees. Each occupation was divided into levels with detailed job content descriptions for each level. For the non-allied health fields the starting salary in Table 6-1 is for the lowest level, and the maximum is for the highest level (Bureau of Labor Statistics, 1986~. Some

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE TABLE 6-1 Monthly Salary Ranges of Selected Allied Health Occupations and Other Occupations, 1986 213 Mean Mean Starting Maximum Percentage Occupation Rate Rate Difference Audiologist $ 1,872 $2,334 25 Dietitian 1,676 2,196 31 Electrocardiograph technician 1,073 1,332 24 Medical lab technician 1,222 1,622 33 Medical record administrator 2,076 2,637 27 Medical record technician 1,272 1,595 25 Medical technologist 1,630 2,174 33 Nuclear magnetic resonance technologist 1,596 2,033 27 Occupational therapist 1,777 2,219 25 Physical therapist 1,845 2,338 27 Radiologic technologist 1,435 1,900 32 Radiation therapy technologist 1,651 2,094 27 Respiratory therapist 1,481 1,855 25 Speech-language pathologist 1,857 2,318 25 Accountant 1,752 5,129 93 Accounting clerk 1,043 1,823 75 Attorney 2,584 8,431 226 Auditor 1,795 3,309 84 Buyer 1,770 3,442 94 Computer operator 1,144 2,416 111 Computer programmer 1,736 3,578 106 Drafter 1,088 2,584 137 Engineering technician 1,407 2,726 94 Engineer 2,322 6,585 183 File clerk 861 1,302 51 Secretary 1,361 2,338 72 Stenographer 1,531 1,812 18 Systems analyst 2,428 5,981 173 Typist 1,049 1,404 34 SOURCES: University of Texas Medical Branch (1986); Bureau of Labor Statistics (1986). Of the occupations selected for inclusion in Table 6-1 were chosen because they require investments in education comparable to those required in the allied health fields. Others were chosen to show how compensation for a lesser educational investment compares with compensation in allied health occupations. The table indicates that starting salaries for allied health fields in some cases do not compare unfavorably with other occupations requiring similar educational investments or that students might consider as alter- native careers. For example, auditors and accountants must have bachelor's

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214 ALLIED HEALTH SERVICES degrees and receive mean monthly starting salaries of $1,797 and $1,752, respectively; these are similar to or a little below the mean starting salaries for physical and occupational therapists and medical record administrators, occupations that also require bachelor's degrees. In computer fields the starting salaries of systems analysts exceed the starting salaries for speech- language pathologists and audiologists for whom a master's degree is the entry level requirement. Engineering technicians, who are described as "semiprofessional," and computer operators are included in technical sup- port operations and can be considered equivalent to medical laboratory and medical record technicians with associate degrees. Engineering tech- nicians start at salaries roughly $150 per month higher than the equivalent allied health fields; computer operators start at roughly $100 per month lower. It will come as no surprise that attorneys and engineers start at salaries closer to the mean maximum rate than to the starting salary for speech-language pathologists and audiologists. Increases in earnings over the length of a career are substantially lower in allied health fields than in the other listed occupations. The salary spread for each of the non-allied health fields listed, except typists, is larger than that in any allied health field. In sum, these data indicate that although allied health practitioners' starting pay is not always competitive with the earnings of workers in alternative fields, the differences are not large. However, the relative lack of a pay ladder puts individuals who stay in allied health fields at a signif- icant economic disadvantage. Although there is no empirical evidence that prospective students turn away from allied health careers because of wage compression, it seems likely that students know of it and react by seeking careers with~brighter economic futures. An important factor for employers who are considering raising pay to alleviate personnel shortages is the value of the job to the institution. This factor is brought out starkly when administrators consider the costs and benefits of expanding the pay ladderin other words, paying more for experience. In some facilities, and for some allied health fields, experience may be of little value from the employer's perspective. Indeed, recent graduates may be preferable if they bring more up-to-date skills or the enthusiasm of a novice to the job. Why then should an organization reward experience? One answer is the high cost of recruiting and orienting new personnel. In addition, some would say that treating employees like dis- posable objects by not recognizing loyalty or tenure is simply inhumane management. Furthermore, by combining further education with pay and career progression, the quality of services may be upgraded and advances In ~now~ec~ge can be incorporated into the facility's practice. This latter point becomes more important when the stream of newly trained practi- / 1 ~ ~ 1 ~ - 1- -O . . . .

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 215 tioners slows. Employers who must substantially increase pay to attract needed personnel may consider examining job content and restricting tasks to ensure that the now more expensive personnel are used effectively. If higher compensation succeeds in increasing by even a small amount the time that individuals remain in the allied health work force (either by continuing to work or by returning to work), the impact on supply can be . . ~ s~gn~hcant. Although supply problems may be alleviated by increasing compensation, employers may be reluctant to act. The most fundamental and obvious reason for this reluctance has to do with the facility's bottom line. Higher salaries may not appear justified by the revenue generated for a service. Another possible deterrent for some managers is that pay raises in one occupation may produce similar salary expectations in other hospital oc- cupations. In the face of price competition and prospective payment, hospital f~- nancial administrators feel they have reason to be reluctant to increase salary expenses. At a recent Senate Finance Subcommittee hearing, a spokesman for the American Hospital Association said that the level of Medicare payments constrained hospitals' revenues so that nurses' salaries could not be increased (Health Professions Report, 19871. Yet data indicate that the early 1980s were relatively profitable for hospitals. Hospital op- erating margins key indicators of their fiscal health peaked in 1984 (Table 6-21. By September 1987 total operating margins and patient rev- enue operating margins in community hospitals were close to the levels of the early 1980s, and there were no signs that the deterioration in financial status had ceased. However, operating margins in the 1960s and 1970s were consistently lower than in the 1980s. Thus, although some hospitals are running in the red and the situation for the average hospital has deteriorated in the past few years, hospital administrators with longer mem- ories may not be feeling so pressured that they will not consider salary increases. Furthermore, a hospital's financial viability rests to a great extent on its ability to admit and care for patients. If a lack of staff in any allied health field interferes with this ability or slows down discharge rates, then a wage increase is likely to be more than offset by revenue increases or decreases in other costs that result from the return to normal services. Indeed, employers who need scarce allied health employees may have no choice but to raise wages. As one observer put it, Gone are the days when doctors and hospitals could look upon America's bright and motivated women as a source of cheap labor denied economic opportunities elsewhere. To attract this pool of talented workers into health care, we must get used to the notion of paying competitive wages. (Reinhardt, 1987)

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216 ALLIED HEALTH SERVICES TABLE 6-2 Operating Margins (percentage) for U.S. Community Hospitals, 1963-1987 Operating Margin Total Revenue Patient Revenue Year 1963 2.5 - 6.0 1965 2.3 -5.1 1967 2.6 - 4.6 1969 2.4 - 3.9 1971 2.3 - 3.2 1973 1.2 -4.4 1975 2.3 - 3.0 1977 3.5 - 0.6 1979 3.9 - 0.6 1981 4.7 0.2 1983 5.1 1.0 1985 5.2 1.5 1987a 4.8 0.3 January through November. SOURCE: American Hospital Association, Hospital Data Center (1988). Other Strategies to Increase job and Occupational Tenure A review of the recent periodical literature of hospital administration reveals scant coverage of human resource management. Most of that attention is focused on short-term issues in spite of radical and long-term changes in the hospital's envi- ronment as the nation redefines how health care is perceived, delivered and paid for. (Mansfield, 1987) So opens the report of a literature review of the nine major hospital administration and personnel journals for the years 1983 through 1985, forcing the conclusion that human resource management is not a high priority for health services researchers or for their audience of health care corporate executives and hospital administrators. This is a surprising find- ing when we consider that payroll represents about half of hospital ex- penses. The review also noted that, of 157 articles related to human resources, 71 percent were published in Nursing Management. The committee's own search of the Cumulative Index of Nursing and Allied Health Literature (which covers nursing and allied health personnel) and of selected psy- chological, management, and popular publications was similarly revealing. Searching literature published since 1983 on such descriptors as the oc- cupational titles of each of the 10 allied health fields covered in this report, as well as "manpower," "turnover," "retention," and "personnel," 36 articles were found. Thirty related to nursing.

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224 ALLIED HEALTH SER VICES s~llectomies, chest x rays, prescription drugs, preoperative screening tests, and thyroid function tests. Shroeder adds: A recent study from our institution estimated the proportion of redundancy among a wide variety of diagnostic and nursing services for patients on a general medical ward. Of the more than 8,000 services ordered for 173 patients during the obser- vation period, 21 To were judged to be unnecessary by faculty auditors who reviewed the medical records. The most overused services were partial thromboplastin time (deemed unnecessary in 63% of uses), stat/emergency orders (43%), nuclear med- icine studies (26%) and platelet counts (25%~. Another way of assessing overutilization is by determining whether clinical services contribute to patient management. Reports from several teaching institutions and one community hospital show that as few as 3% to 5~c of diagnostic tests are actually used in the management of the patients for whom they are ordered. (Shroeder, 1987) Probably the allied health service most studied for overutilization is the clinical laboratory. Barr (1987) suggests that ensuring effectiveness is in part the responsibility of laboratory scientists, who should ask a number of questions such as "Are the ordered tests appropriate for the patient's clinical condition?" "What level of accuracy and precision is needed for clinical judgment?" Other investigators are working to develop methods for detecting overutilization (see, for example, Eisenberg, 1982; Garg et al., 1985~. Many questions about effectiveness remain unanswered. If cost-contain- ment pressures continue to mount, some employing organizations may initiate their own research. HMOs may shift their focus from a concentra- tion on reducing hospitalization to reducing ineffective care in other areas. Other prospectively paid providers also have reason to try to eliminate excess services. Finally, some allied health practitioners may want to undertake effec- tiveness research to justify their place in patient care. Until such research is done, they may be vulnerable to cuts by institutions seeking to reduce personnel expenses. EMPLOYERS WITH SPECIAL PROBLEMS Some health care providers are particularly disadvantaged in the com- petition for allied health practitioners. These employers will find that, for one reason or another, they cannot implement many of the strategies discussed previously in this chapter. In this section the committee discusses the predicaments of two of these employers rural health care facilities and nursing homes and other long-term care sites. The committee also suggests some strategies they might find useful in trying to cope with their needs for allied health manpower.

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE Rural Health Care Facilities 225 According to the Census Bureau, more than a quarter of the population of the United States lives in rural areas. These areas differ from other parts of the nation in many aspects, and often these differences have implications for the delivery of health care. Rural areas are more sparsely populated than urban localities, and there- fore fewer people live in the catchment area of a rural health care provider. In addition, rural populations are more often poor (14 percent below the poverty level, compared with 11 percent in metropolitan areas in 1981) and elderly (13 percent over 65 compared with 10.7 percent in 1980~; therefore, they have different health statuses and health care needs. Ex- amples of rural health status differences include higher infant mortality rates; a higher incidence of hypertension, coronary heart disease, emphy- sema, and some other chronic conditions; but a lower incidence of acute conditions on the whole (Cordes and Wright, 1985~. Some of these differences may be related to differences in the health care services available to rural populations. The hospital-bed-to-population ratio is approximately the same for rural and nonrural areas, thanks to the hospital construction program mandated by the Hill Burton Act of 1946. Yet the number of health professionals in relation to total population is less in rural areas, and the range of services offered by hospitals is narrower (Cordes and Wright, 19851. That rural hospitals have special problems is well documented. Of the 5,732 community hospitals in the United States in 1986, 47 percent were rural and 17 percent had fewer than 50 beds. Eighty percent of the small hospitals in the United States are rural. Small hospitals anywhere are more likely to close than larger hospitals: of the 214 community hospitals that closed between 1980 and 1985, 75 percent had fewer than 50 beds, 86 were rural, and 128 were urban (Health Resources and Services Admin- istration, Office of the Administrator, 19871. The reasons for the vulnerability of rural hospitals may relate not only to their rural characteristics but also to their small size. Analyses of Amer- ican Hospital Association data (Table 6-3) show that, between 1980 and 1986, the smaller the hospital, the greater the deterioration in several key indicators of strength. Operating margins, admissions, and occupancy rates have fallen more and are lower in smaller hospitals. These data show why raising salaries to attract allied health practitioners is not feasible for many small rural hospitals. It is more difficult to attract practitioners to rural employment than to other settings. Table 6-4 contrasts the ratio of practitioners to population in metropolitan and nonmetropolitan settings for some allied health profes- sions. It is evident that metropolitan areas in 1980 had a more plentiful

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226 TABLE 6-3 Selected Indicators of Hospital Strength ALLIED HEALTH SERVICES Indicator Percentage Change, 1980- 1986 Actual Percentage, 1986 Operating margin All hospitals 1.0 5.4 Hospitals with 25-49 beds -4.8 1.5 Hospitals with less than 25 beds -4.5 -6.3 Admissions All hospitals - 8.0 Hospitals with 25-49 beds - 39.8 Hospitals with less than 25 beds -44.8 Occupancy All hospitals - 16.1 63.2 Hospitals with 25-49 beds - 36.7 33.2 Hospitals with less than 25 beds -31.7 27.4 SOURCE: Health Resources and Service Administration, Office of the Administrator (1987). supply of practitioners in all the listed fields. The lower rural concentration may be due in part to the lower concentration in rural areas of some of the individuals and organizations that usually employ allied health prac- titioners dentists, physicians, and so on. But with the hospital-bed-to- population ratio quite similar in rural and nonrural areas, the usual em- ployers of the majority of allied health practitioners would seem to be present. For rural hospitals, allied health employment problems can be viewed TABLE 6-4 Geographic Distribution of Selected Allied Health Professions, 1980 Number per 100,000 Population Nonmetro Ratio as Percentage of Allied Health Profession Nonmetro Metro Metro Ratio Dietitian 26.0 30.9 84 Speech therapist 14.4 19.5 74 Health aide (except nursing) 99.9 138.5 72 Inhalation therapist 16.6 23.1 72 Dental assistant 53.2 75.2 71 Health record technician 5.0 7.2 69 Radiologic technician 31.0 46.3 67 Physical therapist 12.7 21.1 60 Clinical laboratory technician 68.9 120.5 57 Dental hygienist 12.3 23.1 53 Occupational therapist 3.5 9.3 38 SOURCE: Hamburg (1985).

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 227 in three ways: (1) the difficulty of attracting practitioners to rural employ- ment, (2 i being able to afford the practitioners, and (3) finding practitioners with the type of education and training that suits them for rural employ- ment. The geographic maldistribution of personnel in some health care fields has been well studied. Less work has focused on the maldistribution of allied health practitioners. Some lessons can be drawn from what is known about other types of health care practitioners. Allied health education, like most health care education, takes place primarily in metropolitan areas. Most often, clinical experience is provided in acute care settings with suf- f~cient patient volumes to support state-of-the-art, high-technology services. Graduates are subsequently drawn to employment in similar settings for several reasons. They perceive these settings as offering high-quality care, personal challenges, full use of their education, and the stimulation of contact with peers and supervisors. By contrast, to city-reared workers, rural facilities are an unknown setting, often perceived as isolated, tech- nologically backward, and with little room for advancement in their field. One lesson from studies of health personnel education and employment decisions is that graduates who grew up in rural areas or whose education included experience in these areas are more likely to choose rural em- ployment. Individuals whose roots are in rural areas can find the monetary and psychological costs of attending educational programs in metropolitan areas prohibitive. Taking education to rural areas would help bring these indi- viduals into the allied health work force. Such techniques include the use of telecommunications technologies and "circuit riding" faculty. Employers could assist such efforts by encouraging qualified allied health staff to participate in teaching. They could also provide classroom space and clinical experience in their facilities. The employer's role in increasing the supply of graduates who are fa- miliar with rural settings is thus twofold: first, to work with local high schools and career counsellors to encourage students to pursue allied health careers and second, to work with allied health educators to provide clinical experience in their facilities. In Alabama a group of junior colleges and the University of Alabama formed a consortium in 1969 to enhance the supply of allied health practitioners in underserved areas. As described by Keith Blayney (1981), dean of the School of Community and Allied Health at the University of Alabama: In 1969, the state's junior college presidents and representatives of the University of Alabama in Birmingham (UAB) met and endorsed the concept of a consortium to link the two-year schools with UAB. The benefits were readily apparent by sharing students with the Regional Technical Institute (RTI) at UAB, the dupli- cation of specific allied health programs and their high costs could be avoided. Also, students could attend school near their homes for the first year of the program.

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228 ALLIED HEALTH SERVICES After the second year at RTI, graduates were likely to return to their homes, located in the medically underserved areas of the state, and provide ancillary support for medical services there. As the program developed, efforts were made to establish clinical training sites for the students in or near their homes, thus providing an additional impetus to return home. Before their year of technical training at the RTI ends, the students spend six to eight weeks in on-site clinical training. Although the RTI is located in the heart of UAB's Medical Center, where there is a large volume and variety of clinical ma- terials, it soon became clear that the Medical Center alone would not be sufficient to provide adequate experience for all the allied health students. As a result, linkage students can now complete the last weeks of their clinical training at smaller health care facilities throughout the state. These facilities range from doctors' offices to nursing homes, clinics, and hospitals. This arrangement has other advantages. The students can work close to their homes, in facilities similar in size and scope to those in which they will probably work. Also, upon graduation, the students are often offered positions at the facilities where they did their training. Since the number of clinical facilities has been expanded, a higher percentage of RTI graudates have returned to rural areas to work. In 1977, 59% of graduates of programs that have clinical training sites outside of Birmingham tookjobs outside of the city, while only 34~0 of the graduates who had no clinical affiliation outside Birmingham left the city. An evaluation of the linkage program after 11 years found that 66 percent of the graduates who remained in allied health fields returned to their home counties to work (Cooper, 1982~. Clearly, this model requires serious commitments by employers and leaders in educational institutions who are concerned with and willing to help resolve some of the problems of rural care. Another type of linkage would be for rural employers to arrange regular, periodic secondment to an urban facility for their allied health employees. Arrangements with educational programs and leaders in allied health fields to provide lectures or seminars to practitioners in rural areas might also help dispel fears of isolation and ensure that practitioners are kept up to date in their field generous allowances for continuing education would also help to achieve this goal. Rural employers who operate low-volume facilities that cannot afford or fully use a full-time staff member can also try to develop linkages. In Wisconsin, 22 small rural hospitals have formed a cooperative that shares services, mobile technologies, and professional staff who travel among the hospitals (Health Resources and Services Administration, Office of the Administrator, 1987~. Employer-initiated sharing (as opposed to employees who on their own find several part-time jobs) may also appeal to practi- tioners because they get full-time employment and benefits that are often not offered to part-time employees.

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE . 229 A further model of cooperation among employers is the regional or- ganization of services with each hospital specializing in certain services. The Robert Wood Johnson Foundation is offering grants for this and other models to help rural health providers with financial problems. The notion of multicompetent personnel is frequently suggested as a solution for low-volume rural providers. There are currently a small num- ber of programs training multicompetent practitioners. A program pro- viding dual certification at Southern Illinois University at Carbondale, which was started in the 1970s, is popular with rural communities. Recently, however, students have sought certification in only one field, a trend that is thought to be the result of better pay for single-field jobs (Cordes and Wright, 1985~. As the committee has noted, the ability to pay competitive salaries is likely to be limited in rural locations and is dependent on reim- bursement decisions. Still, without attractive compensation, efforts to ease rural manpower problems will fail in the long run. Employers who want to hire multicompetent practitioners can help by ensuring that educators know that a demand for them exists and also by making known the mix of competencies they need. If an individual's ed- ucation is tailored to an employer's requirements, the employer can use the practitioner efficiently, and thus maximize the results from his or her salary. The third type of problem of rural health providers finding allied health personnel with the special skills needed for employment in small rural settings can also be alleviated by linkages with educational programs. Again, providing clinical sites for students ensures that they learn about rural practice. Models for these programs already exist. We have already mentioned the University of Alabama's Linkage Program. Another is the University of Wisconsin Medical Technology Program, which places stu- dents in a generalist capacity in small hospital laboratories. This program is said to have contributed significantly to students' interest in clinical lab- oratories in community and rural hospitals, as the majority of students have been employed in such laboratories after graduation (Bamberg, 19811. Still another model offers students experience on health care teams in rural Kentucky. Students at Kentucky Southern Community College are exposed to rural practice and learn how to function with other members of the health profession team (Bamberg, 19811. One type of linkage already in place for some rural providers is mem- bership in a multiprovider organization. Regardless of whether this or- ganization is horizontally or vertically integrated, if it includes both rural and urban sites, then an opportunity for innovative solutions to staffing problems exists. Rural members of the organization might negotiate ar- rangements whereby service at or rotation through a rural location becomes a necessary step for upward mobility in the organization's career ladder.

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230 ALLIED HEALTH SERVICES Long-Term Care Facilities Long-term care providers (e.g., nursing homes and chronic mental care facilities), like rural health care providers, have special needs and charac- teristics that make some of the strategies suggested in the earlier part of this chapter inapplicable. For example, it is difficult to increase salaries to attract allied health practitioners when reimbursement is extremely tight. It is also often impossible to provide advancement paths in small facilities, a category into which many nursing homes fall. Chapter ~ explores some of the reasons long-term care facilities are not seen as attractive work sites. A number of these reasons are subjective and perceptual. Caring for elderly patients and patients with chronic or mental diseases is seen as unsatisfactory in contrast to working with patients in whom real and lasting improvements can be realized. Mental disturbances in patients make practitioners' tasks more difficult and are a condition for which their education often fails to prepare them. In the course of this study the committee uncovered a concern among the providers of long- term care that educators and practitioners in many allied health fields are both unwilling and unprepared for work with elderly patients and patients with chronic conditions. Remarks like the following were often heard: "Physical therapists would rather work in sports medicine and with the acute phase of trauma rehabilitation than with frail, confused, nursing home patients." Long-term care facilities in some regions are not perceived as giving high-quality or sometimes even adequate care. Clearly, a long- term, major effort is needed to change perceptions of work in the chronic care sector. The figures in Table 6-5 suggest that, for dietitians working part-time and for full- and part-time occupational and physical therapists, TABLE 6-5 Average Hourly Earnings in Hospitals and Nursing and Personal Care Facilities, 1985 . Occupation Hospital Nursing and Personal Care Facilities Percentage Difference Full-time Dietitian Occupational therapist Physical therapist Head nurse Part-time Dietitian Occupational therapist Physical therapist Head nurse $11.52 11.41 11.98 14.37 11.66 11.78 12.71 14.84 $10.69 11.11 13.25 12.40 11.60 11.32 15.63 11.58 -0.5 -3.9 23.0 - 22.0 SOURCE: Bureau of Labor Statistics (1987a,b).

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 231 compensation is not likely to be a decisive factor in choosing between employment in a nursing or personal care facility and employment in a hospital. fob satisfaction, however, may be greater in acute care settings. Lower level personnel nursing aides and orderlies have fewer op- portunities in the acute care sector. Yet for these individuals the average hourly salary of $5.15 for nursing aides in nursing and personal care facilities might not be competitive with alternative employment in such places as fast-food restaurants, which pay more, require no formal post- secondary education, and in which working conditions are less stressful (Kerschner, 1987~. Long-term care employers can try to use some of the options suggested in the earlier section for rural health employers. Establishing links with allied health education programs to increase curriculum content relating to long-term care could help to deflect some of students' anxieties about serving these special populations. Similarly, providing clinical sites for stu- dents can dispel misconceptions about the work, enhance the skills needed to serve in long-term care, and establish ties with an employer. An Institute of Medicine committee in 1983 recommended that edu- cational programs for nursing should provide more formal instruction and clinical experience in geriatrics. It was believed that this would augment the supply of new nurses interested in caring for the elderly (Institute of Medicine, 1983~. This could also be an effective strategy for allied health practitioners, and it is discussed further in Chapter 8. 1 / I ~ ~~ CONCLUSIONS AND RECOMMENDATIONS Human resources planning has not been a high priority or an integral ~ ~ .1 1 1.1 0 1 / part ot strategic planning In the neaten care organization. As a result, there has been little emphasis on or investment in research and experimentation in structuring staffing policies and working environments. Moreover, when there is a plentiful manpower supply, there is little incentive to undertake such an onerous task. The committee foresees, however, that the availability of alternative employment and stable or falling enrollments in allied health education programs will find some employers particularly hospitals- unprepared to solve staffing difficulties and fulfill service demands. Relying on the government to create incentives, such as educational subsidies for entry into professions that turn out to be poor careers, and complaining about licensing barriers are not likely to be as effective solutions as an investment in improved management capability. Except in the face of ap- preciably lower operating margins, it will be difficult for administrators to make a convincing case for increased reimbursement (e.g., through the prospective payment system) to help support salary increases without hav- ing demonstrated to payers that management solutions have been pursued

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232 ALLIED HEALTH SERVICES to their practical limits. To date, employers have relied on new graduates and short-term incentives to offset turnover and prolong tenure in the work force. The committee recommends that employers strive to increase the sup- ply of allied health practitioners by attracting people into allied health occupations and prolonging their attachment to their fields. Some ways to do this include increasing compensation, developing mechanisms for retention, and establishing flexible schedules and educational opportun- ities. Employers should also look to new labor pools that include men, minorities, career changers, and individuals with handicapping condi- tions. Yet attracting and keeping individuals in allied health fields is only one part of a strategy to relieve pressures. The committee also recommends that chief executive officers, human resource directors, and other health care administrators develop methods for the effective utilization of the existing supply of allied health personnel. Such methods must grow out of experimentation with new ways of organizing work efficiently and distributing labor among skill levels while ensuring that the quality of care is not compromised. As the health industry looks more aggressively beyond cost savings through reduced hospital utilization and toward technology assessment, quality as- surance, and nonhospital utilization controls, it is appropriate that allied health services should come under scrutiny. This scrutiny should be viewed by management as an opportunity to work with allied health professionals to use a scarce labor resource effectively. It is also an opportunity for the allied health field to help provide the research underpinning that will be the foundation for decision making. The committee recommends that health care providers and adminis- trators seek innovative ways to channel limited allied health resources toward activities of proven benefit to consumers. Agencies such as the National Center for Health Services Research and the Health Care Fi- nancing Administration should sponsor research and technology assess- ment to ensure that allied health services are effective and that they are organized efficiently. Associations of employers, unions, accrediting agencies, and professional associations should assist in disseminating research findings and providing technical assistance in their implemen- tation. If employers are to use limited human resources effectively, personnel must be appropriately educated. In addition, the goals and aspirations of new graduates should accord with the realities of life in the workplace; otherwise, their job satisfaction is likely to be undermined. The committee therefore strongly recommends that health care administrators and ac- ademic administrators engage in constructive exchanges to improve the

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THE HEALTH CARE EMPLOYER'S PERSPECTIVE 233 congruence of employment and education. These exchanges, which should take place at the state and local levels, will be enhanced by the partici- pation of educators who are also leaders of the professional associations. Although the analyses in this study are most often based on national data, the committee emphasizes that conditions differ among states and even among localities. State legislators have a legitimate interest in ensuring an adequate supply of health care personnel, educational opportunities for the states' citizens, and employment opportunities for graduates of state- supported educational programs. The committee recommends that state legislatures establish special bodies whose primary purpose would be to address state and local issues in the education and employment of allied health personnel. REFERENCES Aiken, L. H.1982. The nurse labor market. Health Affairs 1(4):30-40. [Cited in Buerhaus, 1987.] Aiken, L. H., and C. F. Mullinex. 1987. The nurse shortage. Myth or reality? New England Journal of Medicine 317(10):641-645. American Hospital Association, Department of Human Resources. 1986. Report on Union Activity in the Health Care Industry. Chicago: American Hospital Association. Sep- tember. American Hospital Association, Hospital Data Center. 1988. National Hospital Panel Sur- vey. Chicago: American Hospital Association. Araujo, M. 1980. Creative nursing administration sets climate for retention. Hospitals. Bamberg, R. 1981. Educating clinical laboratory scientists in the 1980s: Some suggestions. American Journal of Medical Technology 47(4):259-261. Barr, I. T. 1987. The new age laboratory: There is more to clinical laboratory science than doing the test. College of Pharmacy and Allied Health Professions, Northeastern University. Blayney, K.D. 1981. The Alabama linkage story. In Sharing Resources in Allied Health Education, S. N. Collier, ed. Atlanta, Gal: Southern Regional Education Board. Blayney, K. D. 1982. The multiple competency allied health technician. Editorial. Alabama Journal of Medical Sciences 1 9( 1 ): 1 3- 1 4. Buerhaus, P. I. 1987. Not just another nursing shortage. Nursing Economics 5(6):267- 279. Bureau of Labor Statistics. 1986. National Survey of Professional, Administrative, Tech- nical, and Clerical Pay. Bulletin 2271. Washington, D.C.: Government Printing Office. March and October. , , . Cooper, F. R. 1982. A survey of graduates of the University of Alabama in Birmingham School of Community and Allied Health junior college/Regional Technical Institute linkage. School of Public Health, University of Alabama, Birmingham. Cordes, S. M., and I. S. Wright. 1985. Rural health care: Concerns for present and future. In Review of Allied Health Education, 2nd ea., J. Hamburg, ed. Lexington: University Press of Kentucky. Eisenberg, I. M. 1982. The use of ancillary services: A role for utilization review. Medical Care 20(8):849-860. Garg, M. L., et al. 1985. A new methodology for ancillary services review. Medical Care 23(6):809-815.

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