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Allied Health Services: Avoiding Crises (1989)

Chapter: 3 Forces and Trends in Personnel Demand and Supply

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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Suggested Citation:"3 Forces and Trends in Personnel Demand and Supply ." Institute of Medicine. 1989. Allied Health Services: Avoiding Crises. Washington, DC: The National Academies Press. doi: 10.17226/769.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 63 3 Forces and Trends in Personnel Demand and Supply CHAPTER 1 DESCRIBED 10 ALLIED HEALTH FIELDS. People working in these fields have seen their roles evolve in response to such forces as demographic change, disease patterns, financing trends, structural changes in the delivery system, and technological development. This chapter examines these and other forces to establish a context for Chapter 4, which discusses demand and supply in individual allied health fields. Before considering each of the environmental pressures that projections of employment must take into account, the interaction of several forces in one allied health field—respiratory therapy—is illustrated. RESPIRATORY THERAPY'S MOVE INTO THE HOME: THE ROLE OF INTERACTIVE FORCES Respiratory therapy's move into the home is an example of how several environmental forces acting together may affect the evolution of a health care service. These forces may bring about a shift in the work site and can affect the independence, earnings, and educational requirements of practitioners. As with other allied health services, some respiratory therapy services have shifted from hospital-based to home-based delivery. Although respiratory therapists have long provided oxygen to patients at home, only recently have technologically advanced life-support systems (e.g., mechanical ventilators) been widely used there. Several forces operating together may have accelerated the trend toward home delivery of respiratory therapy services. These forces include the following:

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 64 1. Demographic Change As of 1984 approximately 28 million Americans, or 11.9 percent of the population, were aged 65 or older; the over-75 group is now the fastest growing age segment of the population (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). The aging of the U.S. population can be viewed in terms of its relationship to disease prevalence: as the population ages, chronic diseases grow more prevalent. It is estimated that over 3 million Medicare patients suffer from chronic obstructive pulmonary diseases such as emphysema, chronic bronchitis, and asthma. Almost a quarter of a million others experience breathing difficulties for reasons other than pulmonary disease (e.g., spinal cord injuries). As many of these conditions progress, respiratory therapy becomes necessary. 2. Technological Change Several innovations in technology have made home-based respiratory care feasible and more acceptable to patients. For instance, equipment has become smaller. Some microprocessor- controlled ventilators and suction machines are compact enough to be mounted on wheelchairs or specially designed carts, giving people who need the machines a measure of mobility. 3. Health Care Financing Policies Environmental forces are not always expansionary. Health care financing policies, including pressures to cut health care costs, may fuel the move to home care. On the other hand, financing policies may also be used to curtail an expansion of home care that is made possible by new technologies. Medicare's prospective payment system is stimulating the need for respiratory therapists outside the hospital. PPS gives hospitals a strong incentive to discharge all patients as quickly as possible, thereby reducing hospital costs. Pulmonary patients, although well enough to be discharged, are often in need of care at home. Yet Medicare does not reimburse the home care services of respiratory therapists on a per-visit basis. Rather, the cost of their services may be included as an administrative expense by agencies providing home care services. Only 6 percent of home health agencies retain a respiratory therapist. The rest occasionally consult with therapists, contract with durable medical equipment services, or arrange short-term training courses for their nurses assigned to pulmonary patients. Respiratory therapists employed by suppliers of oxygen and other equipment are reimbursed under Medicare's durable equipment benefit. In a 21-state survey, Gilmartin and Make (1986) found that Medicare and Medicaid were paying more than $270,000 per year for each ventilator-assisted hospital patient. The association estimated that the cost for equivalent care in the home would be $21,000 per year. Furthermore, it was estimated that over 2,000 chronic ventilator-dependent hospital patients were well enough to be cared for at home (Gilmartin and Make, 1986). The Health

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 65 Care Financing Administration argues, however, that expanding Medicare coverage to include home-based respiratory care is likely to increase Medicare costs because it would be difficult to limit specialized care to those who truly need it (Health Care Financing Administration, 1986). In sum, financing policy has provided an impetus for respiratory home care as well as impeded its growth. Improved technology (spurred by the availability of financing) has made respiratory home care feasible, and the increasing number of elderly people in the population has heightened the demand for such a service. The social value placed on independent living has increased the marketability of delivering respiratory therapy services in the home and has placed pressure on policymakers to expand insurance benefits to include home- delivered care. The remainder of this chapter examines a number of separate forces to determine how each impinges on the demand for and supply of allied health personnel and to emphasize how an understanding of these forces can help local decision makers interpret change in their own environment. FORCES THAT DRIVE THE DEMAND FOR ALLIED HEALTH PRACTITIONERS Population Growth and Demographic Trends Demographic trends provide clues about tomorrow's health care consumers and their health care needs. An analysis of the changes in the composition and growth of the U.S. population shows how these trends translate into changes in health care needs. Population growth in the United States is slowing. The population increased by 1 percent annually between 1972 and 1986, but the Bureau of the Census projects growth of only 0.8 percent annually to the year 2000. The rate of growth will not be uniform among age, race, or ethnic groups, as shown in Table 3-1, which is based on the moderate projections of the Bureau of the Census (Fullerton, 1987). Minority populations will grow faster than the white population; the number of children and youths (with the exception of high school youths) will decline; the working-age population will grow twice as fast as the total population; and the number of people of retirement age will increase with the greatest rate of growth occurring among people aged 85 or older. The Elderly Between 1940 and 1984 the number of people aged 65 and older more than tripled, growing from 9 to 28 million; this group is anticipated to grow to 35 million, or 13 percent of the population, by the year 2000.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 66 TABLE 3-1 U.S. Population (in millions) by Race and Age, 1986 and Projected for the Year 2000 Percentage Distribution Population 1986 2000 Percentage 1986 2000 Change, 1986-2000 Total 241.6 268.3 11.1 100.0 100.0 White 204.7 221.5 8.2 84.7 82.6 Black 29.4 35.1 19.4 12.2 13.1 Asian and other 7.5 11.6 54.7 3.1 4.3 Hispanic 18.5 30.3 63.8 7.7 11.3 Age group 0-4 18.1 16.9 -6.6 7.5 6.3 5-13 34.2 33.5 -2.0 14.2 12.5 14-17 14.8 15.3 3.4 6.1 5.7 18-24 28.0 25.2 -10.0 11.6 9.4 25-64 116.3 142.5 22.5 48.1 53.1 65-84 26.4 30.3 14.8 10.9 11.3 85-and older 2.8 4.6 64.3 1.2 1.7 SOURCE: Fullerton (1987). While increases in the number and proportion of individuals over 65 have been considerable, a faster rate of growth is evident in the very old segment of the population. In 1950 there were just 600,000 people aged 85 or older; by the year 2000 it is expected that number will have increased nearly eightfold. As the number of elderly people increases, the demand for allied health practitioners in a variety of fields will rise accordingly. About 17 percent of occupational therapists' total practice in 1982 was service to the elderly in nursing homes and acute care hospitals. Audiologists now spend one-third of their time with older persons (National Institute on Aging, 1987). Using straight- line projections and assuming that the mix and ratio of personnel to patients will be the same in the year 2020 as they are today, the National Institute on Aging estimates that twice as many occupational and physical therapists will be needed in 2020 as are available today. It also estimates that 40 percent more audiologists will be required to maintain service at the current level (National Institute on Aging, 1987). Children Between 1980 and 1984 the number of school-age children fell by 2.5 million. During that same period, however, the under-5 population rose 9 percent to 17.8 million, the largest under-5 population since 1968, when it was 17.9 million. The Census Bureau expects that there will be fewer children under 5 (16.9 million) by the year 2000, and the number of

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 67 children as a whole (under 17 years old) will fall from 67.1 million in 1986 to 65.7 million in 2000 (Fullerton, 1987). Children and adults use health care services differently. Children have less need of acute care services and have fewer hospital days (National Center for Health Statistics, 1986). A reduction in the number of children in the population does not affect the demand for all allied health practitioners. For those practitioners employed by schools (speech-language pathologists, for example), the number of children in the population has a noticeable impact on demand. For practitioners focused on acute care, the impact, if any, is slight. Children are also major users of disease prevention services, some of which employ allied health practitioners—for example, dental hygienists in dental caries prevention. For practitioners in many allied health fields, children represent only a small portion of their practice. The implications for allied health practitioners of the predicted drop in the number of children in the population must be balanced against the effect of disease prevention efforts and the vigor with which such efforts are being made. The demand for those allied health personnel who are most central to child health services (e.g., dental hygienists, speech-language pathologists and audiologists) will depend to a great extent on public investment decisions that are often made at the local level. Local funds are the sole source of support for health education programs in 75 percent of all school districts. About 20 percent of school health education programs receive state funding; only 3 percent receive federal, private, or special funds for such programs (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). Minorities One out of five persons in the United States in 1986 was a member of a minority group. Blacks, the largest group at 29.4 million, constituted 12.2 percent of the total population in 1986. By the year 2000, 35.1 million blacks will constitute 13.1 percent of the population. The number of Hispanics is rising even more sharply. Hispanics totaled 9.1 million in 1970 and 18.5 million in 1986; they are expected to total 30.3 million people—more than 11 percent of the population—in the year 2000. The number of Asians and Pacific Islanders in the United States is also growing rapidly. Between 1970 and 1980 this population group grew 120 percent to 3.7 million. By the year 2000 it will total 11.6 million (Fullerton, 1987). The prevalence of some diseases is higher among minorities than among whites. Diabetes. for example, is far more prevalent among blacks than among whites, and the incidence rate for cancer in 1983 was highest among black males. Among native Americans, cirrhosis, pneumonia, and diabetes

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 68 are more common than among whites, and the prevalence of diabetes among Mexican Americans is nearly twice that among whites (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). The changing proportion of the total minority population and the higher prevalence of some diseases among the various groups in that population may affect the demand for services as health care needs change. Factors such as financial and geographic access barriers also influence the demand for health care services, however, and health care needs do not always translate into a demand for services. Minorities are more likely than whites to lack health care insurance, and they consistently report greater difficulty than whites in gaining access to medical care. Twenty-six percent of Hispanics have no medical coverage compared with 9 percent of whites and 18 percent of blacks (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). These differences between whites and minorities in access to health care are reflected in health care utilization rates. Twenty percent of blacks and 19 percent of Hispanics indicate they have no usual source of medical care, compared with 13 percent of whites. Between 1978 and 1980 the percentage of people 4 to 16 years old who had never received dental care was higher among Mexican Americans (30.7) than among blacks (22.3) or whites (9.7). Similarly, the percentage of individuals with no physician contact was higher among Mexican Americans (33.1) than among other Hispanics (23.9), blacks (23.8), or whites (20.4) (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). The expected increase in minority population groups by the year 2000 could have an effect on the need for allied health practitioner services. For these needs to translate into effective demand, however, the current barriers to care must be eliminated. Disease Patterns There are two changes in disease patterns within the United States that deserve special attention because of their potential impact on allied health personnel. First, there is the growing acquired immune deficiency syndrome (AIDS) epidemic. Second, whereas infectious diseases such as influenza, smallpox, and tuberculosis were the leading causes of death at the turn of the century, today chronic diseases predominate in this area. Acquired Immune Deficiency Syndrome (Aids) AIDS is a notable and unexpected exception to the trend of declining death rates from infectious disease. As of 1987 an estimated 1.5 million Americans were infected with the human immunodeficiency virus, now

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 69 known to be the cause of AIDS. AIDS cases in the United States rose from 183 in 1981 to nearly 40,000 by the middle of 1987. Over 75 percent of persons diagnosed with AIDS die within 2 years of the diagnosis. As the disease spreads and the number of cases grows, and particularly if the life expectancy of infected individuals lengthens with the discovery of new, treatments, the health care system will be increasingly taxed. In 1985, AIDS was the cause of 23,000 hospitalizations, an increase from the estimated 10,000 of the year before. The average length of stay for an AIDS patient was more than double the overall average of 6.5 days (Trafford, 1987). The federal government estimates that it will spend $1 billion on AIDS in fiscal year 1988, 40 percent of which will go to patient care. The Health Resources and Services Administration (1988) estimated that AIDS will account for $8 billion to $16 billion in direct medical care expenditures in 1991. Estimating the impact of AIDS on the demand for allied health personnel is fraught with uncertainties. Greater precision in estimating needs and workloads will come from a better understanding of some key determinants of the disease. Epidemiologists can estimate only roughly the number of individuals who are currently infected, as well as those who will develop the full-blown symptoms of the disease. The disease manifests itself in many forms, and treatment patterns vary. The progression of the disease often resembles the chronic illnesses of old age (e.g., dementia and wasting). AIDS patients therefore need some of the same services as the elderly and may compete for scarce resources (e.g., skilled nursing care and home health services) (Health Resources and Services Administration, 1988). The volume of acute care facility use for AIDS care and treatment relative to that provided in community settings now varies among localities. The introduction of new preventive, diagnostic, and treatment modalities may alter the mix of personnel and settings of care in ways that are now difficult to predict. Methods of financing care may also play a role in determining the type and focus of AIDS care. Some allied health fields already play a major role in addressing AIDS; the role of others is still emerging. Clinical laboratory personnel are not only conducting the tests used to detect the virus that causes the disease, but they are also facing a heavier workload generated by the secondary infections that AIDS patients often acquire. Occupational therapists are helping AIDS patients learn how to conserve their energy, and respiratory therapists are providing care to patients who develop lung infections. A host of counselors is emerging to assist patients during the various stages of the disease. The committee noted growing concern about the effect of AIDS on the supply of as well as the demand for allied health practitioners. Some educators fear that potential allied health students may be dissuaded by their

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 70 perceived increased risk of exposure to the disease. To date, however, there has been nothing beyond anecdotal evidence to indicate that this perception is a serious factor in allied health career choices. Chronic Diseases Chronic conditions are the most prevalent health problem for the elderly, and the proportion of elderly people in the U.S. population is increasing. More than four out of five persons who are aged 65 and older have at least one chronic condition, and multiple conditions are commonplace among older persons (U.S. Senate, Special Committee on Aging, 1987). The demand for allied health practitioners may be influenced both by efforts to curtail the incidence of chronic disease and by medical successes in treating chronic conditions. For example, some allied health fields are directly affected by widespread efforts to reduce the risk factors for cardiovascular disease. Clinical laboratory personnel are conducting more blood tests and dieticians are providing more counseling in an effort to determine and control cholesterol levels. Increased rates of survival in cases of stroke and heart attacks may mean increased demand for health care because the majority of patients do not make a full recovery (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). Of the nearly 2 million stroke patients in the United States, 40 percent require special services and 10 percent require total care. The results from a large, longitudinal study also indicated the need for care: when stroke survivors were examined an average of 7 years after their stroke, 31 percent needed assistance in self-care and 2.7 percent required help in ambulation (Public Health Service, Office of Disease Prevention and Health Promotion, 1987). Economic Growth The growth of the economy as a whole dictates how much income will be generated and how this level of income will affect government spending and the income that will be available for families to spend on health care (and other kinds of consumption) and to save. There are many uncertainties involved in projecting economic changes. They range from the policies that will be adopted regarding taxes, government expenditures, foreign trade, and events such as wars and revolutions, to scientific discoveries that affect technology, and even to the weather, which may kill crops or create disasters. Making a projection entails making assumptions as to how each of these uncertainties will affect economic change. BLS, whose employment projections the committee used, details a long list of such assumptions; from these, it calculates high, low, and moderate projections to illustrate that there is a range of error around

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 71 any projection and to describe the sensitivity of the projections to these variables.* Personal income affects all kinds of expenditures, including health care spending, in many ways. For instance, it influences what consumers are willing to spend on health insurance. Consumers are also responsible for about a quarter of total national health care expenditures through direct, out-of-pocket payment for services (Health Care Financing Administration, 1987). Under BLS's moderate scenario, real disposable income (i.e., income after taxes and before inflation) is expected to grow by 2.4 percent annually (low projection, 0.7 percent; high projection, 1.9 percent), less than the 2.7 percent average annual growth for the previous 14 years. From this projection are derived the BLS projections of personal consumption expenditures on services (of which health care services are a part). The expenditures on services are expected to grow faster than total personal consumption expenditures, as they have in the past: 3 percent (low projection, 2.2 percent; high projection, 3.3 percent), compared with the 3.2 percent average for 1972-1986. Government spending is influenced by economic conditions. BLS projects higher levels of federal government spending in their high-growth projection than in their low-growth projection. This factor is important for health care employment because the federal government accounts for nearly 29 percent of national health care expenditures. BLS projects the Medicare portion of federal health care expenditures in constant dollars. The increase from the low projection in 1986 to that of the year 2000 is 30 percent; the increase from the 1986 high projection to that of the year 2000 is 62 percent. Between the 1986 and year 2000 moderate projections, BLS predicts a 43 percent increase in expenditures. These differences could have an effect on those allied health practitioners whose employment is significantly dependent on Medicare spending. Private health insurance, which pays for more than 30 percent of national health care expenditures, is affected by economic conditions in several ways. For instance, the size of corporate profits can affect the richness of the benefit packages and health insurance that employers offer employees. Furthermore, the number of people covered by private insurance depends in part on the unemployment rate, which in turn depends on economic conditions. Because unemployed people often lack health insurance, in times of high unemployment the demand for nonessential (and some essential) care is reduced. In that case, health care employment will also be reduced. * Data for the discussion of the BLS economic projections that follows are drawn from Saunders (1987).

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 72 Structure of The Health Care Industry The structure and organization of health care services are constantly evolving in response to such forces as the availability of money and human resources, regulation, consumer demand, financial incentives, and technology. Major changes in recent decades include the growth of multi-hospital systems and investor-owned health care providers, the growth of managed care, and the movement of care from inpatient settings into outpatient departments, physicians' offices, and specialized freestanding centers. Figure 3-1 illustrates the decline in the hospital as the prime employment site for the health care industry. This decline reflects a structural change: the hospital's fall from its position of primacy in health care provision. Structural changes may or may not affect the delivery of health care services and the demand for health care workers. Changes in the location of a service may represent only a change in work site for allied health personnel without altering the number of persons who are actually employed. For example, hospital admission testing today is often done on an outpatient basis, and unless there is a change in the volume of tests performed, there is no numerical employment significance to the change in the testing site. Although structural changes may not affect demand, they could have an effect on educational requirements and regulation. Practi Figure 3-1 Hospital employment as a percentage of health care industry employment: calendar years 1965-1986.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 73 tioners may need new levels or arrays of skills in the new settings, and new quality concerns may emerge that could result in changes in regulation. Other changes in the structure of the health care industry have considerable implications for allied health practitioner demand. For example, as patient lengths of stay in a hospital become shorter, the need for home care increases and more practitioners may be needed. To determine whether a change in the location of care has implications for demand, one must ask whether each allied health field used in the traditional location is likely to be used in the new setting, and whether the volume of service and productivity will change. The growth of HMOs has had no real impact on allied health employment to date. A 1987 survey of allied health employment in 56 HMOs that included staff, group, and independent practice association models across the country found that employment for most allied health fields was not substantial. For example, 22 HMOs employed a total of 110 medical technologists, 26 HMOs employed 42 nutritionists, and 13 HMOs employed 34 physical therapists. Respondents stated that they did not expect to employ larger numbers of practitioners in the near future (Rudman et al., 1987). The formation of multi-hospital systems is important to allied health employment if these systems staff their facilities differently than independent hospitals. Studies that compare staffing in different, types of hospitals have often focused on ownership characteristics such as public, private, for-profit, and not-for-profit status (see, for example, Watt et al., 1986; Mullner and Andes, 1985). Little is known about the differences in staffing between independent and multi-institutional facilities. BLS has projected employment in the health care industry to the year 2000 (Personick, 1987). (See Appendix E for a detailed discussion of these projections.) The projections take into account some of the structural changes discussed in this section. Notably, BLS foresees that hospitals will increase employment despite the shift to outpatient care. This trend is largely due to the expected increase in the proportion of elderly people in the population and to advances in technology. Table 3-2 shows actual employment in 1986 in five health care settings and the BLS projections to the year 2000. Outpatient facilities with an annual growth rate of 4.6 percent are expected to show the highest growth rate and rank as the second fastest growing industry in the economy in terms of employment. But because the private hospital sector is so much larger, its 1 percent annual increase will add almost as many jobs as the 4.6 percent growth of the outpatient setting. The second fastest growing sector— offices of health practitioners—reflects the growth of such activities as physicians' office labs, office surgery, and independent allied health practices. Nursing homes will also experience rapid growth as the aged population grows and early discharge from hos

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 74 pitals increases the demand for nursing home care. Thus, an additional 800,000 jobs will be generated by nursing and personal care homes by the year 2000. TABLE 3-2 Wage and Salary Employment (in thousands) in Health Care Services by Setting, 1986 Actual and Projected for the Year 2000 Setting Annual 1986 Projected, 2000 Annual Increase (percentage) Health care services 7,599 10,844 2.6 excluding federal hospitals Total private health 6,551 9,774 2.9 care services Offices of physicians, 1,672 3,061 4.4 dentists, and other health care practitioners Nursing and personal 1,250 2.097 3.8 care facilities Private hospitals 3,038 3,513 1.0 State and local 1,048 1.070 0.2 hospitals Outpatient facilities 591 1,103 4.6 and health care services not cited elsewhere SOURCE: Personik (1987). HEALTH CARE FINANCING Health care expenditures in the United States are rising. In 1986 Americans spent an average of $1,837 per person on health care for a total of $458 billion. This total constitutes 10.9 percent of the GNP, an increase from 10.3 percent in 1984 and 5.9 percent in 1965. The Health Care Financing Administration projects health care expenditures of $1.5 trillion in the year 2000 —the major payers being the federal government, which will pay one-third; private insurance, which will pay 30 percent; and patients, who will pay one- quarter (Health Care Financing Administration, 1987). As health care payers look to the future, the picture is one of increasing costs as the population ages and scientific advances make care ever more complex. It is difficult to overstate the effect that financing policy has on the demand for allied health personnel. Two types of impact on employment should be highlighted. First, financing incentives can change the way a health care provider views allied health services. Whereas some services, such as laboratory services, were considered to be revenue producing prior to the recent financing change to prospective pricing, they are now perceived as a cost

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 75 element in the health care product and thus ripe for management economizing efforts. Alternatively, the way health care services are reimbursed can create incentives for the expansion of a service to which allied health workers contribute. For example, the ability of a hospital to enter the sports medicine market will depend on its ability to attract physical therapists. Second, financing policy also affects the ability of individual allied health practitioners to prosper in the health care market. At issue in this case are fee- for-service reimbursement and direct access to patients without physician referral. Tied to these issues are a set of regulatory concerns embodied in licensure laws, such as scope of practice and supervision of practitioners by other health professions. Respiratory therapists, for example, are seeking to gain direct Medicare reimbursement for home services so they can move from a consideration of their services as part of home health agency overhead to marketing their own skills in a manner not unlike that of occupational and physical therapists. Likewise, dental hygienists are seeking to gain independence from dentists in their ability to bill for services, a move requiring both licensure and reimbursement accommodation. Perhaps the most dramatic example of the importance of financing in generating demand for services and personnel is the spread of third-party reimbursement in the 1960s, a trend that generated increased demand for services, an era of hospital building and technology, adoption, and rising employment for health care personnel. More recently, the federal government has established a cost containment measure, the prospective payment system (PPS), that shifts the risk of the cost to the provider. Under PPS, hospitals are reimbursed on the basis of a preset per case payment, and the level of payment depends on the diagnosis. A number of observers have examined PPS's initial impact on hospital operations. Following initiation of the system, length of hospital stay decreased at a faster rate than had been occurring previously (although there was a slight upturn in 1986), and occupancy has averaged only 66.6 percent since 1983, when the phase-in of the program first started. However, the proportion of patients with complex problems has increased (Prospective Payment Assessment Commission, 1987), and staffing has been altered as hospitals adapt to these changes. Hospital employment, which had been increasing at a rate of 4.9 percent per year in the 6 years before prospective payment, decreased in 1984 and 1985 (2.1 percent and 1.8 percent, respectively) and increased only slightly (0.4 percent) in 1986 (Prospective Payment Assessment Commission, 1987). Further analysis of hospital staffing shows that the use of part-time employees has increased and for many allied health fields there was a shift to employees with higher levels of training. It is not clear whether the move to higher skill levels reflects the needs of sicker patients or a perception that a more highly educated em

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 76 ployee is a more cost-effective employee. The shift to part-time staffing could be a cost containment effort as well as a way to make flexible staffing easier. For some allied health fields, it may simply reflect the difficulty of hiring full- time staff. Alternatively, it may signal a move to policies that are designed to minimize the cost of employee benefits. The Bureau of Health Professions (Health Resources and Services Administration, U.S. Department of Health and Human Services) asked the American Hospital Association to report staffing changes since the introduction of PPS. The following general trends were found: • increased emphasis on productivity; • heightened demand for employees who can work in more than one functional area and thus decreased interest in professional credentialing that restricts the practitioner's scope of practice; • increased use of part-time employees, contract services, and float pools; • increased competition among professionals; • replacement of personnel by capital; • fewer management positions; and • increased retraining and cross-training of personnel (American Hospital Association, 1985). A small study of 13 Philadelphia hospitals in 1985 provides some insight into the personnel strategies of institutions that are adjusting to PPS. Most of the hospitals surveyed had cut their labor force through attrition, primarily in the ranks of less skilled patient care employees (Appelbaum and Granrose, 1986). More recent studies of PPS's impact on hospitals suggest that the downward trend in staffing has been reversed. A 1987 national survey of laboratories found that after sharp post-PPS staff and budget cuts, testing volume is up, budgets are bigger, and staff reductions are abating. In 1986 only 16 percent of labs reported staff increases; a year later, 31 percent were reporting staff increases (Gore, 1987). Another aspect of health care financing—mandated benefits—may also influence the utilization of health care services. States mandate insurance coverage to improve access to services. In the past two decades, 645 mandated coverage bills have been passed by the states (Scandlen, 1987). Currently, coverage is mandated for physical therapists in two states and for speech and hearing therapists in four states (Scandlen and Larsen, 1987). Some states mandate the coverage of all licensed health care practitioners. Technological Change The direction of technological change and its effect on allied health employment are difficult to predict. Some of the changes in health care financing and the structure of the delivery system suggest likely future

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 77 directions: health care managers appear to be interested in technologies that will improve productivity and lower costs; technologies that enable providers to establish organizations that fill a special market niche are also likely to be purchased. Technological change is not only reactive (to such factors as financial incentives) but prospective as well; that is, it drives the type of care provided by delivery systems. For instance, the technology of renal dialysis gave rise to the creation of dialysis centers and to practitioners who specialize in treating patients with end-stage renal disease. Technologies also drive the organization of delivery systems. Electronic telemetry equipment, for example, enables patients to be treated in nontraditional settings such as satellite facilities, homes, and vehicles. How technologies that are as yet underdeveloped will influence allied health employment is, of course, not known. Seymour Perry, professor of medicine at Georgetown University and former director of the National Center for Health Care Technology, described the following advances at the workshop held by the committee in April 1987: • Automation in clinical laboratories will progress, decreasing the complexity of tasks and increasing productivity. It is anticipated that the only category of lab personnel that may be replaced by computers is that comprising the least skilled. More highly trained individuals may actually be in greater demand as computers are added to the laboratory. • Computer-based technologies will be used increasingly, especially for clinical decision making, administration, medical recordkeeping, and patient monitoring. • Genetic and monoclonal antibody technologies will generate new diagnostic tests. Many monoclonal antibody-based diagnostic tests will be self-administered in the future, and new test reagents will replace more labor intensive tests such as culturing. The early diagnosis and monitoring of tumors permitted by these technologies will change treatment modes and prognoses for numerous cancers. • Advances in technology will permit more health care to be delivered in outpatient settings. The development of less invasive surgical technologies will spur outpatient surgery. As new generations of laboratory and diagnostic imaging equipment become smaller, more diagnostic procedures will be performed in physicians' offices and other nonhospital sites. Other technologies, such as programmable infusion pumps for pain medication or chemotherapy, will shorten hospitalization and allow for home care of patients. New technologies that emerge from basic science and that represent real advances in diagnosis and treatment are likely to be adopted. Yet initially, the effectiveness of such technologies is not always clear; hence, there is

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 78 growing interest in technology assessment. In addition, it is not always clear how technological change will affect human resources, especially in the long run. The development and adoption of new technologies follow various paths and have differing effects on the demand for allied health personnel. Along one path, for example, a new technology initially requires highly skilled personnel and is of low productivity until it becomes a routine procedure that can be performed in high volumes by lower level staff. In the path typically taken by laboratory tests, the test becomes automated. Other technologies may use personnel differently. The relationship between human resources needs and technological change fluctuates constantly but is seldom explored, making it difficult to assess the future with much certainty. Although we have some understanding of the forces that drive technological change, the effects of such change on allied health practitioners have not been adequately researched. The Supply of Other Health Practitioners The supply of other health practitioners—doctors, nurses, dentists— influences the demand for allied health services in several ways. As the supply of physicians continues to grow at a rapid pace (over 50 percent growth is expected between 1980 and the year 2000), allied health practitioners must ask whether physicians whose practices fail to bring the income they desire will seek to take back functions they had delegated to allied health practitioners in earlier periods. Physicians also wonder about this. One surgeon wrote: To abrogate one's responsibility for postoperative care is retrogressive and tends to return to the period of 200 years ago, when the surgeon was simply a technician. I do not believe that only the respiratory therapists can understand the controls of the MA2 or Bear respirators. I do not believe that the surgeon who operates upon the intestinal tract should need an enterostomal therapist to take care of the problems in a patient with an ileostomy. I do not believe that the surgeon who performs a mastectomy should require a physical therapist to assure that the patient has normal arm motion following this operation. (Jordan, 1985) Since the Graduate Medical Education National Advisory Committee (GMENAC) made its prediction in the 1970s of a surplus of 70,000 physicians by 1990, there has been considerable debate in the literature about whether these numbers are in excess of an ''optimal'' level and, if there were, indeed, an excess of physicians by 1990, what that could mean for the health care system. GMENAC concluded that nonphysician providers (that is, physician assistants, nurse practitioners, and nurse-midwives) may substitute for physician services and thus aggravate the physician surplus (GMENAC, 1980). Some allied health leaders have been concerned that this conclusion has been generalized inappropriately to all allied fields.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 79 For physicians to assume what are now considered to be allied health functions, at least three conditions must be satisfied: 1. Physicians must be willing once again to take on tasks that the medical profession had delegated to less highly skilled providers because these tasks were considered repetitive or unchallenging. 2. Physicians must be competent to perform the tasks. While in theory the medical doctor license permits the physician to perform most of the tasks of allied health practitioners, in many cases their training has not prepared them to function effectively or productively in the full range of services of many of the allied health fields. 3. Payers and managers must be willing to recompense the cost of the substitution. The decision to substitute physician time for the time of the allied health practitioner must make economic sense to the physician or the organization that employs the physician. In a physician's office this substitution implies that physician time is so underutilized that it is preferable to use a physician to do the tasks rather than pay an allied health practitioner to do them. In an organization that employs physicians, for example, an HMO, such substitutions mean that physician and allied health personnel salaries are so nearly equal that allied health practitioners are not worth employing because of their more limited scope of practice and sometimes more limited patient appeal. Competition between physicians and allied health practitioners is most likely to occur when allied health practitioners are increasing their autonomy. For example, although physical therapists, physicians, and chiropractors offer the same service, in some senses they can be viewed as competing for the first contact with patients having musculoskeletal pain symptoms. The American Physical Therapy Association views competition in the following light: Members of the American Physical Therapy Association are actively seeking legislative removal of the requirement for referral, that is, legislative provision for direct access to their services, and have succeeded to date in 14 states (evaluation with referral is permitted in another 22 states). This is an effort toward independence in practice that does not put the physical therapist in direct competition with the physician, and may, in fact, increase referrals to physicians in appropriate circumstances. This is not to say that competition is lacking between physical therapists and physicians. Such competition as does exist between these two practitioners is competition between their businesses, not between the services that each personally provides to patients. In recent years, physicians have increasingly employed physical therapists in their businesses and compete directly with the businesses of self-employed physical therapists and, in some instances, with the businesses of hospitals which have a variety of out-patient and "outreach" physical therapy units. (American Physical Therapy Association, 1987) Medical technologists who are attempting to move more forcefully into roles as directors of full-service laboratories are raising issues involving

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 80 "arbitrary barriers" that are being imposed by facility accreditation standards. Competition may come from physicians who are reportedly seeking a greater involvement in the laboratory business, and, to the extent that physicians' office laboratories substitute for other testing sites, the use of medical assistants and on-the-job trained personnel to run office laboratory equipment may be seen as a form of physician substitution and competition. Anecdotally, there appears to be growing evidence of competition and "turf" disputes between nurses and allied health personnel. At the committee's public hearing (Washington, D.C., July 1, 1987), the Association of Surgical Technologists spoke about their controversy over the operating room sphere and whether they or nurses will perform certain functions. Future nurse-allied health practitioner confrontations will in part be determined by the supply of nurses and by whether managers will begin to limit the breadth of nursing duties. On the other hand, nursing appears to be moving up the ranks of faculty leadership into higher levels of decision making about whether nurses or others will perform certain roles. Counterbalancing the possible direct competition to allied health practitioners from growing numbers of physicians is the positive effect of the volume of work that may well be generated by their increased supply. Utilization management techniques are geared to controlling the unnecessary use of services, but it is unclear how effective these tools will be in reducing the volume of ancillary services and how this in turn will affect allied health employment. Moreover, the continuing specter of malpractice militates against vigorous efforts to control testing. A far-reaching response to physicians who protect themselves against liability by practicing defensive medicine does not appear to be imminent. The net effect of the growing physician supply weighs more heavily on the side of increasing rather than decreasing the services delivered by allied health personnel. That is not to say that turf issues between allied health practitioners and others will lessen, but it appears that demand for allied health personnel will not be unfavorably affected. FORCES THAT DRIVE THE SUPPLY OF ALLIED HEALTH PRACTITIONERS The discussion thus far has focused on the factors that drive the demand for allied health practitioners. In this section, we turn to forces that shape the supply of allied health personnel. The U.S. Labor Force The future availability of allied health workers cannot be divorced from larger trends in the U.S. labor force. The labor force is growing more slowly than in the past, and the participation rates of various groups within

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 81 it is changing. The labor force is becoming older; it also includes more women and more racial and ethnic minorities than in the past (Table 3-3).* TABLE 3-3 Projected Changes in the U.S. Labor Force Between 1986 and the Year 2000 by Age, Sex, and Race Percentage Change Percentage Distribution 1986-2000 Worker Group 1986 2000 Total workers aged 16 17.8 100.0 100.0 and older Men 16 and older 11.8 55.5 52.7 16-24 -6.1 10.4 8.3 25-54 19.4 37.7 38.2 55 and older -1.8 7.4 6.2 Women 16 and older 25.2 44.5 47.3 16-24 0.1 9.4 8.0 25-54 35.8 29.8 34.4 55 and older 10.1 5.2 4.9 Race Whites aged 16 and older 14.6 86.4 84.1 Blacks aged 16 and older 28.8 10.8 11.8 Asians and other groups 71.2 2.8 4.1 aged 16 and older Ethnicity Hispanics aged 16 and 74.4 6.9 10.2 older SOURCE: Fullerton (1987). The number of women in the labor force is projected to increase more than twice as fast as the number of men, and in the year 2000 women will constitute nearly half the labor force. They will also account for 63 percent of the additional workers filling new jobs. Men and women of prime working age— that is, between the ages of 25 and 54—will be the most rapidly increasing group, while the number of younger workers will decline. The proportion of workers of prime working age will increase from 67.5 percent in 1986 to 72.6 percent in the year 2000. The number of black workers will increase twice as fast, Asian workers will increase five times as fast, and Hispanic workers more than five times as fast as the number of white workers. Hispanic workers will make up 29 percent of the workers entering the labor market between 1986 and the year 2000; other minority groups combined will constitute another 29 percent. Thus, by the year 2000 the economy will be more dependent on women workers (who have always been prominent in the allied health professions) and on minority workers. * The discussion of the labor force that follows is based on data in Saunders (1987).

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 82 Trends in College Enrollment In the majority of the allied health occupations, graduation from 4-year or 2-year college programs is the way workers qualify for employment. We must therefore examine trends in higher education enrollments and graduations as a first step in estimating the potential labor supply of allied health personnel.* The college-age population—those people aged 18 to 24—is declining as a result of a decrease in births two decades ago. After peaking in the 1980-1982 period, this population had dropped 8 percent by 1986; it is expected to continue declining through 1996 when it will be 23 percent below the 1980-1982 peak. The number of college-age people will then begin to rise again, and by the year 2000 it is projected to be 6 percent above the 1996 low point but still 19 percent lower than the 1980 peak and about 12 percent lower than in 1986 (Figure 3-2). The resulting constriction in the flow of new workers into the labor force will affect all occupations. Whether it will affect the professions and other occupations that require college education as much as it affects those occupations that do not require college education depends on whether college attendance declines as much as the size of the population. College enrollments and graduations will maintain their current levels, or increase, only if a higher proportion of youths go on to college. Workers in the allied health fields are primarily women. There are a few fields—emergency medical services, for example—in which women constitute a small minority; in a few others, such as respiratory therapy, the share of men and women in the work force is roughly equal. For the most part, however, women predominate in the allied health fields. For this reason, we focus on women's college participation rates and on the trends in women's choices of fields of study. The number of women receiving bachelor's degrees increased steadily between 1970 and 1986, reaching 502,000 in the latter year (47 percent more than in 1970), as a rising proportion of college-age women completed college. The Center for Education Statistics projects a further increase in the number of women earning bachelor's degrees that will peak at 512,000 by 1989, followed by a slow decline through the year 2000 to 470,000 graduates—about 6 percent below the 1986 level. Because the size of the college-age population is expected to be 12 percent smaller than the 1986 * The following assessment uses data from the Census Bureau's Current Population Surveys and data developed by the U.S. Department of Education's Center for Education Statistics (National Center for Education Statistics, 1985; Center for Education Statistics, 1970-1987, 1987; D. E. Gerald, U.S. Department of Education, personal communication, 1988).

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 83 population by the year 2000, this projection of female graduates assumes that the proportion of women completing college will continue to increase. Figure 3-2 College-age population (18 to 24 years): Actual, 1980-1982, and projected, 1983-2000. Since these projections were made, the Center for Education Statistics has released preliminary data for 1987 (based on a sample of colleges). These data indicate an increase in the number of graduates between 1986 and 1987 instead of the decrease that had been projected. The preliminary estimate of female baccalaureate degree graduates for 1987 was 512,000-2 percent above the 1986 figure instead of 1 percent below it, as had been projected. This increase may mean that the rising trend in the proportion of women completing college is continuing even more strongly than earlier estimates had assumed. Graduations from programs that required fewer than 4 years of study increased more rapidly than all other awards granted by institutions of higher education from 1975 to 1985. Associate degrees awarded increased by 26 percent. Whereas the increase in men earning associate degrees was only 6 percent, almost 50 percent more women earned associate degrees in 1985 than had earned them a decade earlier. Other degrees awarded for programs of less than 4 years increased by 45 percent between 1975 and 1985. There was a decline in the number of associate degrees awarded between 1985 and 1986 that is projected to continue through 1996, when the number of graduates will be about 11 percent fewer than in 1985. The Center

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 84 for Education Statistics does not make sex-specific projections for associate degrees, but if current trends continue in the relative shares of degrees awarded to men and women, we may expect that the decrease in female associate degree graduates will be less than 11 percent. The number of associate degree graduates is expected to resume its upward climb in 1997, but in the year 2000 it will still be 8 percent below the 1985 level. The Center for Education Statistics' 1972, 1977, 1982, and preliminary 1986 data show no trend toward increased college enrollment among people aged 25 to 44. Trends In Women's Choices of Fields of Study The proportion of female baccalaureate graduates who enter health fields (i.e., allied health, health sciences, and nursing) has increased over the past decade and a half. In 1970 slightly less than 5 percent of female baccalaureate graduates chose these fields. This proportion increased to about 11.5 percent in 1980; in 1986 it was just below 11 percent. Thus, at a time when the number of women bachelor degree graduates was increasing, the health fields nearly doubled their share of that rising total. Together, the fields of business and management, communications and communication technologies, computer sciences, and engineering did even better. Their share of female graduates increased approximately 11-fold—from less than 3 percent in 1970 to more than 32 percent in 1986. Yet the gains in the fields of health, business, and communications were at the expense of education. Education's share of female graduates declined from about 36 percent in 1970 to 13 percent in 1986, indicating a major change in women's career goals. The fields of psychology and the social sciences attracted gradually declining shares of graduates over the 16-year period, falling from 21 to 14 percent (Figure 3-3). Among women earning associate degrees between 1983 and 1985, business and management was also the top-ranking field, followed by the health sciences. For men, the health sciences were not among the three top-ranking fields during these years. Trends in the choice of study area within the health fields provide additional information to estimate the potential labor supply of allied health personnel. Nursing still accounts for almost 60 percent of the bachelor's degrees in the health fields that are awarded to women, although this figure has fallen slightly since 1970 (Figure 3-4). Hospital and health care administration, once the domain of men, has become increasingly attractive to women. For physical therapy, occupational therapy, and speech-language pathology and audiology, fields that require at least a bachelor's degree for entry, the number of graduates has grown over the years, but their relative shares of health degree awards have remained constant. Nurs

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 85 ing also dominates the degree awards for programs that require fewer than 4 years of study, accounting for about 52 percent of these degrees in recent years. Figure 3-3 Women earning bachelor's degrees: Relative shares of selected major fields of study, 1970-1986. For some fields, colleges are not the primary sponsors of CAHEA- accredited educational programs. Programs in radiography, for example, are based primarily in hospitals rather than in educational institutions. Consequently the Center for Education Statistics data just cited include only degrees and awards granted by institutions of higher education; they do not encompass all allied health program graduates. Nevertheless, the impact of non- college education programs on the validity of the trends portrayed by the data is marginal. Although noncollege sponsors accounted for 40 percent of all CAHEA-accredited programs in 1986, they accounted for only 33 percent of the graduates during the 1985-1986 academic year. One of the factors influencing career choice is student perception of employment opportunities. The BLS expects the number of jobs in some of the fields that are currently popular with women (teaching, psychology, social work, and, surprisingly, most of the business executive occupations) to grow more slowly than the allied health fields in the coming years.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 86 Figure 3-4 Relative shares of selected health fields, Women baccalaureates in allied health and health sciences: 1970-1986. Accounting and nursing are expected to grow at roughly the same rate as the allied health fields. Employment in a few fields, including computer sciences, is projected to grow at a faster rate than employment in the allied health fields. To the extent that these expectations affect students' choices of careers, the allied health fields may be able to hold their own or even gain a larger share of female college graduates. Because the number of female college graduates is projected to remain at close to current levels or to decline only slightly over the next 12 years, the supply of graduates in the allied health fields may remain at close to current levels through the year 2000, despite the decline in the college-age population. Education Financing A commonly cited maxim among allied health leaders relates to the position of allied health in the pecking order of health professions education programs: "Allied health fields are the last to be funded in good times, the first to be cut when resources are reduced." This statement reflects the importance of the economic climate in which higher education resource allocation takes place and how decisions about allied health education resources are related to broader financing trends. Education fi

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 87 nancing, the efficiency of education programs, and higher education's perceived contribution to society all have an impact on the longevity of allied health education programs and future supply of allied health personnel. Overall, national higher education expenditures in the past 10 years have grown. Between 1973-1974 and 1983-1984 current funds expenditures, adjusted for inflation, increased 23 percent for public institutions and 31 percent for private institutions. Much of that growth came in the mid-1970s. Public college spending in the latter half of the 10-year period grew by only 5 percent; private college spending grew by 13 percent (Center for Education Statistics, 1986). There were shifts in revenue sources between 1973 and 1983. For public institutions the federal share of total revenue decreased from 12.8 percent to 10.5 percent; the state share remained relatively stable. For private colleges the percentage of total revenue attributable to federal sources rose slightly to 19.4 percent by the middle of the period but dipped to 15.7 percent by 1983-1984. State and local appropriations were relatively low and declined slightly over the 10 years—from 3.2 percent to 2.5 percent. Both public and private institutions that own hospitals have seen revenues from their hospitals increase from 5.1 percent to 7.4 percent for public colleges and from 8.7 percent to 10.1 percent for private schools. Private institutions rely more heavily on tuition than do public schools (39 percent compared with 15 percent), but the contribution of tuition is increasing in both types of schools (Center for Education Statistics, 1987). Although they fare better than most arts and sciences programs in garnering external funding, allied health programs are nonetheless relative newcomers to academia. As federal support has diminished, allied health program administrators have become pessimistic about their place in higher education institutions relative to traditional departments (e.g., history and mathematics) and professional programs (e.g., engineering, medicine, and business administration). Federal funds to stimulate allied health education program development peaked in 1974 at nearly $30 million and diminished substantially thereafter. No data are available on aggregate allied health education expenditures, but much of the cost is borne by state and local government expenditures and by tuition support in private institutions. The key driving forces behind allied health education financing are state and local appropriations, student demand, and the availability of clinical facilities and teaching staff. Allied health education programs are vulnerable in each of these areas (see Chapter 5). Although there is variability among the states in the generosity of their educational funding, cutbacks often mean that allied health programs, because they are perceived to be expensive, are especially vulnerable. For

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 88 some allied health fields, this vulnerability is compounded by falling student enrollments. Unlike other types of curricula, allied health education is dependent on clinical facilities for teaching resources and is therefore affected by health care financing policy as well as higher education budgets. State legislators and higher education officials faced with difficult resource allocation decisions are seeking ways to ensure greater accountability from collegiate institutions. For example, a Michigan commission on the future of higher education in that state recommended various measures to attain a ''stronger, leaner, more efficient system'' and save on capital and operating costs. These measures focused on the review of "non-core" and "low-degree producing" undergraduate programs, health care profession programs, high-cost programs, and programs with excess capacity because of their geographic location (McKinney, 1986). State officials are also paying close attention to the products of the higher education system and its impact on local economic development. Respondents to a 50-state survey revealed that formal assessment of student and institutional performance is a growing trend and is likely to intensify in the years ahead. Among the broad array of activities evaluated by outcome assessment are graduates' employment experiences, their evaluations of the education they received, employer hiring patterns, and former students' job performance. Counterbalancing this orientation toward jobs is a growing concern that technically trained individuals be creative, have the capacity for civic responsibility, and receive a liberal education. Specialized accrediting bodies for the professions are the continual targets of exhortations to foster curricula that include general education in the humanities, the arts, and the social sciences (Boyer et al., 1987). Although most allied health programs report good initial job opportunities for their graduates, this advantage in terms of outcome assessment is balanced against the liabilities of untilled student spaces, the need for expensive equipment and high faculty/student ratios, and an image in some academic circles as lacking in scholarly attributes. Other Forces Influencing Supply Unions We noted earlier that the ability of the allied health fields to attract students depends in part on the attractiveness of allied health occupations relative to other occupations open to women. The ease with which a graduate can find work and the earnings that can be expected for that work are both facets of the perceived attractiveness of an occupation. One factor that affects both an occupation's earnings and the kind of work life it offers is the extent to which unions are present and active. In many fields, unions help to determine demand and supply. Demand is affected by collective bargaining agreements concerning such issues as

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 89 the length of the working day, the tasks that may be performed, and compensation. Supply is affected by altered pay, benefits, working hours, job security, and other factors that make an occupation more or less attractive to workers. In recent years, unions have viewed health care, with its many unorganized workers, as a major opportunity for expansion. In the past the union movement has not had much success with health care workers. Its limited success has been in the public sector and then only in some areas of the nation. This situation has changed recently. Although union activity in the private sector as a whole declined from 23 percent to 18 percent between 1980 and 1985, union membership among health care workers increased by 6 percent to about 20 percent of the health care work force (American Hospital Association, 1986). In general, allied health occupations appear to be covered less frequently by labor- management contracts than are nurses, for example. In private hospitals in 23 metropolitan areas, 26 percent of nurses were covered, compared with 5 to 12 percent of occupational, speech, and physical therapists, medical record administrators, and dieticians. Approximately 20 percent of medical laboratory technicians were covered, as were 16 percent of radiographers (American Hospital Association, 1986). Unions have not yet become a major factor in many allied health fields, but service workers have become, with some success, the focus of much union activity. The recent swing away from an emphasis on direct economic considerations that nursing unions are exhibiting may provide some clues about the concerns of other health care workers and suggest what may be done to make employment in these fields more attractive. Malpractice Litigation The supply of allied health practitioners in some fields is also vulnerable to the impact of malpractice litigation. Since the late 1960s the number of medical malpractice claims and the size of jury awards have soared. By the mid-1970s physicians in several states were having difficulty purchasing malpractice insurance as insurers withdrew from the market; some physicians could not buy insurance at any price. For all physicians the average cost of insurance increased by 81 percent between 1982 and 1985 (Health Care Financing Administration, 1987). Malpractice litigation raises questions about quality, liability, and other issues. The experience of physicians in this regard suggests how the supply of some allied health practitioners potentially could be affected by malpractice litigation and insurance. Twenty-one percent of respondents to a 1984 survey by the American Academy of Family Physicians reported that they had restricted their obstetrics practice because of high premium costs. Thirty- five percent of respondents to a survey by the American College of Obstetricians and Gynecologists said

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 90 that they had responded to professional liability risks by altering their practice— reducing or eliminating the obstetrical component or eliminating care for high- risk pregnancies (U.S. Department of Health and Human Services, 1987). The supply of allied health practitioners whose autonomy of practice is limited is unlikely to be affected by malpractice considerations. But for some allied health fields, these considerations could, in the future, become an important issue. The extent of physician supervision of an allied health practitioner's work can determine the practitioner's legal responsibilities. For example, if a physical therapist is the primary manager of a patient, the therapist is responsible for assuming that appropriate informed consent procedures are followed (Banja and Wolf, 1987). A 1982 case brought against an audiologist in the California Supreme Court (Turpin v. Sortini et al., 643 P. 2d 954) reveals the vulnerability of practitioners to malpractice litigation even when the possibility of harm seems remote. In this case an audiologist's failure to diagnose deafness in a child was claimed to have damaged a child born subsequently to the parents who, because it had not been diagnosed, were not informed of the inheritability of the defect. How the physician supply has been affected by malpractice issues can be studied to good effect by those concerned with the future supply of allied health practitioners. If practitioners successfully push toward modes of practice in which supervision diminishes and autonomy increases, malpractice litigation and the cost of insurance could eventually limit the supply of practitioners to those who are willing to endure the stress of litigation threats and who have the resources to pay high premiums. ALTERNATIVE PATTERNS FOR DEVELOPMENT OF HEALTH CARE SERVICES: THREE SCENARIOS It is obvious from the discussion thus far that there are many forces that affect health care services delivery and the demand for and supply of allied health personnel. It is virtually impossible to consider all of the elements of these forces in attempts to evaluate the future for any single allied health field. Instead, the committee developed alternative assumptions about the major factors that influence employment in the health industry. It believes that looking at a limited number of broad scenarios is a useful tool for decision makers trying to evaluate the future of specific allied health professions. BLS's employment projections are based on macroeconomic factors—the trade balance, employment rates, productivity, and overall demand (see Appendix E). Although demand for health care services and allied health practitioners is related to macroeconomic growth, there are other forces at work that may operate independently of these factors and in some cases

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 91 overwhelm them. Thus, the committee offers three simple scenarios that are driven by the single force most likely to determine the size and direction of change in health care services—health care financing. Unfolding events can be considered in the context of these scenarios; decision makers concerned with balancing demand and supply can apply the scenarios to estimate the demand side of the equation. The three scenarios are based on health care financing for two reasons. First, financing is the major force shaping technology. development and adoption, the structure of the industry, and other determinants of allied health personnel demand. Second, health care financing responds, through public and private policy decisions, to other important influences such as the economy, demographics, disease patterns, and social values. Thus, financing responds to some important determinants of demand and drives others. Scenario 1: The Mixed Model The mixed model assumes a continuation of the existing mixture of methods of payment. Selected services, both inpatient and outpatient, would be paid on a prospective basis (using capitation, diagnosis, or some other unit of payment); other services would be charged on a retrospective, fee-for-service basis. Within the fee-for-service sector, some payers would negotiate rates with providers, whereas other payers would pay on the basis of customary and reasonable charges. First-dollar coverage would be less usual than the use of copayments and deductibles as utilization controls. Other assumptions of the model include an increase in the proportion of the population in managed care systems, which is projected to grow steadily from today's approximately 10 percent. The model also assumes that hospital utilization by younger patients would continue to drop, but upward pressure from the aging population would overwhelm any downward trends and cause overall hospital admissions to rise slowly. The intensity of care would continue to increase, as would selectivity in hospitalizing young people and the number of admissions of older patients with complex problems. Hospitals would continue their vertical integration as they sought to retain their share of the market. Under this scenario, non-inpatient services would increase, especially in freestanding centers, the home, hospices, hospital outpatient departments, and the like. Some long-term care would take place at home, but modest expansion in the supply of nursing home beds would allow nursing homes to continue as the chief long-term care institutional site. However, efforts would be made to moderate the growth of nursing home beds to contain costs. Technologies that appeared to be cost-effective would be adopted relatively quickly and diffused throughout the health care system. Technol

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 92 ogies that promised to improve patient care outcomes would also be sought, as would advances that allowed procedures to be performed on an outpatient basis. Scenario 2: Prospective Payment This scenario assumes that prospective payment would become the dominant payment mechanism, with not only hospital care but also most other sorts of care paid on that basis. Generally, payment would be established at a preset, negotiated level that was determined on a capitated or diagnosis basis. Under this scenario, HMOs and preferred provider organizations (PPOs), owned and run by insurance companies, would gain a substantial share of the market. Indemnity insurance would be expensive and infrequently used. Large organizations of employers would become sophisticated bargainers to successfully control health benefit costs through negotiations with insurance companies and HMOs. Those organizations in turn would bear the risks and thus would be impelled to exercise strict utilization control and case management and become skillful at payment negotiation to ensure their profits. The number of salaried physicians would increase substantially. Hospital utilization would be affected by the growth of HMOs and other managed care systems that were successful in controlling admissions. Although the upward pressures of the aging population would be felt, under this scenario, those pressures would not be sufficient to prevent a small drop in overall hospital utilization. Because hospitalized patients would be more seriously ill, care would be more complex. Within the hospital, there would be great emphasis on employee productivity and ensuring that unnecessary or ineffective services were eliminated. Outpatient and other cost-restraining delivery styles would increase rapidly with this scenario. Physicians who were not employed by managed care systems would broaden the scope of their practices, supplying an increasing range of services. All existing outpatient services would burgeon, and new ones would be added as technology and entrepreneurial providers took advantage of opportunities. Technologies that were seen to be cost effective would be eagerly sought; other technologies would be viewed more skeptically. However, the increased emphasis on ensuring effective care would encourage increased technology assessment. The results of such research would be rapidly adopted. Scenario 3: Access Under this scenario, policy decisions would be made that attempt to ensure access to care for all in need, a goal that could be achieved by a number of mechanisms used singly or together. It could be accomplished

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 93 by a scheme of national health insurance that might incorporate mechanisms of cost control. It could also be achieved by expanding public programs, expanding mandated insurance benefits, ensuring payment to providers who care for unsponsored patients, requiring all employers to provide adequate health insurance benefits, and instituting catastrophic insurance for those with incomplete coverage. Developing an adequate "safety net" would halt the cost shift to other payers, one way in which uncompensated care is supported today. This scenario is not necessarily an alternative to the first two scenarios but could occur in tandem with either. It is assumed with this scenario that whatever funding arrangements were made, they would encourage individuals who might have postponed elective procedures in the absence of third-party payment to seek care in a timely fashion rather than delay seeking it until they became seriously ill. Thus, the intensity and complexity of inpatient care would decrease marginally. It is also assumed that funding would be made available for health promotion and disease prevention services that are thought to decrease total health care costs. In Chapter 4 we show how these scenarios would affect the demand for practitioners in each of the 10 allied health fields named in Chapter 1. CONCLUSION This chapter described a number of factors—including aspects of population and economic growth and changes in financing and the structure of the health industry—that drive the demand for personnel in the health care fields. It also considered forces that may affect the supply of health care workers —for example, the growth of the U.S. labor force and the college-age population and trends in female students' choices of study field. Finally, the chapter presented three health care financing-driven scenarios that decision makers may find useful in trying to evaluate the future of specific allied health professions. Educators, employers, and others are faced with difficult investment decisions in planning for future human resource needs. They must make their best guesses about the forces that drive the demand for and supply of workers— guesses about their magnitude, the directions they may take, and their interactions. The answers are not always obvious. There is no certainty, for example, as to how many AIDS patients will require and receive physical therapy services or whether sonograms will be routinely used to screen for cancer. Despite uncertainty, however, it is possible to learn more about how these forces influence allied health employment and the supply of workers in allied health fields. Methods may include tracking disease and treatment patterns and how allied health practitioners are used,

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 94 or identifying new technologies and determining their likely impact on allied health services. Whatever the methods used, monitoring and investigating the key forces in the demand for and supply of allied health personnel provides useful insights into the future and better information for determining policy actions. REFERENCES American Hospital, Association. 1985. Effects of the Medicare Prospective Pricing System on Hospital Staffing. Final Report. Chicago, Ill.: American Hospital Association. December 31. American Hospital Association. 1986. Report on union activity in the health care industry. (Unpublished paper) Department of Human Resources, American Hospital Association, Chicago, Ill. September. American Physical Therapy Association. 1987. Independent practice? Comments on draft background papers prepared for the American Society of Allied Health Professions' Invitational Conference, June 15-16, Washington, D.C. Appelbaum, E., and C. S. Granrose. 1986. Hospital employment trader revised medicare payment schedules. Monthly Labor Review August: 37-45. Banja, J. D., and Wolf, S. L. 1987. Malpractice litigation for uninformed consent: Implications for physical therapists. Journal of the American Physical Therapy Association 67(8): 1226-1229. Boyer, C. M., P T. Ewell, J E. Finney, and J. R. Mingle. 1987 Assessment and Outcomes Measurement—A View from the States. Highlights of a New ECS Survey. Denver: Education Commission of the States. March. Center for Education Statistics. 1970-1987. Digest of Education Statistics. Annual Reports. Washington, D.C.: U.S. Government Printing Office. Center for Education Statistics. 1986. Higher Education Finance Trends, 1970-71 to 1983-84. Department of Education Bulletin OERI, CS 87-303B. Washington, D.C.: Government Printing Office Center for Education Statistics. 1987. Less-Than-4-Year Awards in Institutions of Higher Education: 1983-85. Washington, D.C.: Government Printing Office. Fullerton, H. N., Jr. 1987. Projections 2000. Labor force projections: 1986-2000. Monthly Labor Review 110(9): 19-29. Gilmartin, M. E., and B. J. Make. 1986. Mechanical ventilation in the home: A new mandate. Respiratory Care 31 (5):406-411. GMENAC (Graduate Medical Education National Advisory Committee). 1980. Report of the Graduate Medical Education National Advisory Committee to the Secretary, Department of Health and Human Services. GMENAC Summary Report, vol. 1, no. 3. Washington, D.C.: U.S. Department of Health and Human Services. Gore, M. T. 1987. The impact of DRGs after year 4: A swing to better times. Medical Laboratory Observer December: 27-30. Health Care Financing Administration. 1986. Report to Congress. Study of Home Respiratory Therapy. Washington, D.C.: U.S. Department of Health and Human Services. Health Care Financing Administration. 1987. National health expenditures, 1986-2000. Health Care Financing Review 8(4): 1-36. Health Resources and Services Administration. 1988. Report of the Intragovernmental Task Force on AIDS Health Care Delivery. Public Health Service, Department of Health and Human Services. January.

FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY 95 Jordan, G. L., Jr. 1985. Presidential address: The impact of specialization on health care. Annals of' Surgery 201(5):537-544 McKinney, H. T. 1986. State control of higher education in Michigan: A new scenario. In Michigan Higher Education: Meeting the Challenges of the Future. Report from the Michigan Senate Select Committee on Higher Education. Lansing, Mich. Mullner, R., and S. Andes. 1985. Differences in composition of personnel among government, voluntary, and investor-owned U.S. community hospitals. Executive summary paper. Hospitals and Health Services Administration January/February: 72-88. National Center for Education Statistics. 1985. Projections of Education Statistics to 1992-93: Methodological Report with Detailed Projection Tables. Washington, D.C.: Government Printing Office. National Center for Health Statistics. 1986. Health United States 1986 and Prevention Profile. Public Health Service Publ. No. 87-1232 Washington, D.C.: Government Printing Office. National Institute on Aging. 1987. Personnel for health needs of the elderly through year 2020. Unpublished draft. Washington, D.C. Personik, V. A. 1987. Projections 2000: Industry output and employment through the end of the century. Monthly Labor Review 110(9):45. Prospective Payment Assessment Commission. 1987. Technical Appendixes to the Report and Recommendations to the Secretary, U.S. Department of Health and Human Services. Washington, D.C.: Prospective Payment Assessment Commission. April 1. Public Health Service, Office of Disease Prevention and Health Promotion. 1987. Prevention Fact Book. Washington, D.C.: Government Printing Office. April. Rudman, S. V., J. R. Snyder, and S. L. Wilson. 1987. Allied health professionals and HMOs: A national survey. Paper presented at the annual meeting of the American Society of Allied Health Professions, Las Vegas. Saunders, N. C. 1987. Projections 2000. Economic projections to the year 2000. Monthly Labor Review 110(9):11-18. Scandlen, G. 1987. The changing environment for mandated benefits. Blue Cross and Blue Shield Association, Washington, D.C. April. Scandlen, G., and B. Larson. 1987. Mandated coverage laws enacted through December 1986. Blue Cross and Blue Shield Association, Office of Government Relations, Washington, D.C. February 10. Trafford, A. 1987. AIDS: The New Phase of Denial. Washington Post Health. July 28.8. U.S. Department of Health and Human Services. 1987. Report of the Task Force on Medical Liability and Malpractice. Washington, D.C.: U.S. Department of Health and Human Services. August. U.S. Senate, Special Committee on Aging. 1987. Aging America. Trends and Projections. U.S. Department of Health and Human Services, Washington, D.C.: Government Printing Office. Watt, J. M., R. A. Derzon, S.C. Renn, and C.J. Schramm. 1986. The comparative economic performance of investor-owned chain and not-for-profit hospitals. New England Journal of Medicine 314(2):89-96.

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With estimates of their numbers ranging from one million to almost four million people, allied health care personnel make up a large part of the health care work force. Yet, they are among the least studied elements of our health care system. This book describes the forces that drive the demand for and the supply of allied health practitioners—forces that include demographic change, health care financing policies, and career choices available to women. Exploring such areas as credentialing systems and the employment market, the study offers a broad range of recommendations for action in both the public and private sectors, so that enough trained people will be in the right place at the right time.

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