Health Services Employment, 1998 and 2001
From 1998 to 2001, the number of health service employees increased by 35%, from 11.2 million to 15.1 million. The number of health professionals (hereafter "medical professionals") increased by 53%: 7.2 million to 11.0 million. The number of non-health professionals (hereafter "non-medical staff") increased by only 2.5%: from 4.0 million to 4.1 million. In 1998, non-medical staff made up 36% of the health services workforce. In 2001, 27.2%.
Health Services Employment by Location, 1998
The smaller chart shows the number of medical professionals and the number of non-medical staff by employment location. The chart also shows their ratio. Physicians' offices have the highest percentage of non- medical staff: 46%. Home health care providers have the lowest percentage: 16%. The percentage of non-medical staff in hospitals equaled the average for all health care venues.
What about administrative expenditures? The table below lists the top 11 hospital expenditures (by percentage) for 1990 and 1994 (the latest data available). The list is in 1990 ranking order. The numbers in parentheses represent the rank in 1994. The parentheses will only appear if the ranking is different than in 1990. In both cases, the largest single expenditure was for administrative and general costs. These expenditures increased and general routine care expenditures decreased. Total administrative costs accounted for 26% of hospital costs in 1994, up from 24.6% in 1990 ($78 billion and $54 billion, respectively).45
Top 11 Hospital Expenditures Percentage of Total Hospital Costs, 1990 and 1994
| 1990 (%) | 1994 (%) | |
| Administrative and general | 14.22 | 15.20 |
| Adult and pediatric general routine care | 14.05 | 12.57 |
| Employee benefits | 6.80 | 7.79 |
| Capital related costs-buildings and fixtures | 5.93 | 5.19 |
| Laboratory | 5.31 | 5.05 |
| Radiology-diagnostic | 3.89 | 3.88 |
| Operation of plant | 3.58 | (9) 3.22 |
| Operating room | 3.47 | (7) 3.57 |
| Dietary | 3.38 | (11) 2.81 |
| Capital related costs-movable equipment | 3.20 | (8) 3.45 |
| Drugs charged to patients | 2.91 | (10) 3.04 |
According to the American Medical Student Association (AMSA) web site, the United States spends about $1,000 per capita on administrative costs. Canada spends only $250. Many who advocate universal health care cite this disparity as a positive money-saving feature of a single-payer system of health care. With the money saved (a projected $100 billion according to the Government Accounting Office), the government can insure the currently uninsured and underinsured.
Before September 11, 2001, health care reform, including the issue of universal health care, was on the minds of lawmakers. Since then, other issues have crowded out reform. But with increasing administrative costs taking money away from clinical services, will lawmakers consider legislative measures to reverse this situation in the future?
Sources: Bureau of Health Professions. National Center for Health Workforce Information and Analysis. U.S. Department of Health and Human Services. HRSA State Health Workforce Profiles -- Alabama, December 2000. Bureau of Health Professions. "More than 1 in 10 Americans works in health care or is a health professional." Original source: Bureau of Labor Statistics. Retrieved September 20, 2002 from http://bhpr.hrsa.gov. Steffie Woolhandler, et. al. "Administrative Costs in U.S. Hospitals" and "Costs of Care and Administration At For-Profit and Other Hospitals in the United States." The New England Journal of Medicine, various dates. Retrieved September 20, 2002 from http://www.nejm.org. National Center for Health Statistics. Health, United States, 2001 With Urban and Rural Health Chartbook, 2001. Retrieved September 20, 2002 from http://www.cdc.gov/nchs/data/hus/hus01.pdf. American Medical Student Organization. "AMSA's Universal Health Care Initiative." Retrieved September 20, 2002 from http://www.amsa.org/hp/uhcinitiative.cfm.
1 Source: "The History of Hospice." Retrieved September 11, 2002 from http://www.cp-tel.net/pamnorth/history.htm.
2 In 2000, the total number of hospitals dropped 20.4% to 5,810 from 7,298 in 1987.
3 The term "substance abuse hospitals" was included with psychiatric hospitals for the first time in the 1997 Economic Census. The term seems to have been an added qualifier only. No additional hospitals were included in the statistics. In fact, the number of hospitals in this category fell by 14 from 1992-1997.
4 Source: Reproductive Rights Freedom Network. American Civil Liberties Union. "Hospital Mergers: The Threat to Reproductive Health Services," 1997. Retrieved September 4, 2002 from http://www.aclu.org/library/hospital.html.
5 The number of clinics performing abortions increased 10% from 1982-1996. In 1996, 70% of abortions were being performed in specialized clinics. Only 7% were being performed in hospitals. 1996 is the most recent data available.
6 The court decision legalizing abortion, Roe v. Wade, was decided on January 22, 1973. In 1978, 1.41 million abortions were performed. In 1996, 1.37 million abortions were performed.
7 Source: B.A. Robinson. "Abortion and Roman Catholic Hospital Mergers," January 29, 2001. Retrieved September 4, 2002 from http://www.religoustolerance.org/abo_rcc.htm.
8 According to the American Hospital Association, "community hospitals are defined as all nonfederal, short-term general, and other special hospitals. Other special hospitals include obstetrics and gynecology; eye, ear, nose, and throat; rehabilitation; orthopedic; and other individually described specialty services. Community hospitals include academic medical centers or other teaching hospitals if they are nonfederal short-term hospitals. Excluded are hospitals not accessible by the general public, such as prison hospitals or college infirmaries." There are 4,915 community hospitals in the United States. Source: American Hospital Association. "Fast Facts on U.S. Hospitals from Hospital Statistics®," November 15, 2001. Retrieved September 4, 2002 from http://www.hospitalconnect.com/aha/resource_center/fastfacts/fast_facts_US_hospitals.html.
9 For all states in 2000, Maine and Utah also ranked the same in both categories.
10 If this facility closes, it would affect more than 1,200 employees and 200 doctors. "The health system would also lose 163 inpatient beds (including 43 psychiatric beds), more than 6,200 annual inpatient visits, and more than 20,000 yearly emergency visits." Source: Massachusetts Medical Society Online. "MMS Trustees Create Task Force on Hospital Closings-Vital Signs." Retrieved September 10, 2002 from http://www.massmed.org.
11 Ohio ranked 28th in number of beds and 23rd in hospital admissions.
12 CGE&Y stands for Cap Gemini Ernst & Young U.S. LLC. The survey was conducted by Gartner Consulting. Gartner conducted "in-depth telephone interviews" with "nearly four-dozen top executives of healthcare facilities across the nation." (Lisi)
13 The National Cancer Institute (NCI) funded the Connecticut Hospice from 1974 to 1977 "to develop a national demonstration center for home care for the terminally ill and their families." From 1978 to 1980 they funded 26 other hospices. Source: "The History of Hospice." Retrieved September 11, 2002 from http://www.cp-tel.net/pamnorth/history.htm.
14 As of 2001, the name was changed to Centers for Medicare and Medicaid Services.
15 In 2000, 2,912 hospices were Medicare certified. This represented 91% of all hospices.
16 Medicare funding for hospice care prior to the Balanced Budget Act of 1997 was based on two 90-day benefit periods followed by a 30-day period and an unlimited fourth benefit period. After each period, physicians must certify that the patient has six months or less to live. Currently there are two initial 90-day periods followed by unlimited 60-day periods. The average length of hospice care in 1992 was 64 days. In
17 In 2001, the name was changed to Centers for Medicare and Medicaid Services.
18 Medicare funding for hospice care prior to the Balanced Budget Act of 1997 was based on two 90-day benefit periods followed by a 30-day period and an unlimited fourth benefit period. After each period, physicians must certify that the patient has six months or less to live. Currently there are two initial 90-day periods followed by unlimited 60-day periods. Sources: "The History of Hospice." Retrieved September 11, 2002 from http://www.cp-tel.net/pamnorth/history.htm. National Hospice and Palliative Care Organization. "NHPCO Facts and Figures." Retrieved September 11, 2002 from http://www.nhpco.org.
19 Source: Lagnado, Lucette. "Rules are Rules: Hospice's Patients Beat the Odds, so Medicare Decides to Crack Down-Terminally Ill Who Don't Die Within a 6-Month Period Risk Losing Coverage-Al Ouimet's 9-Year Survival." The Wall Street Journal, June 5, 2000. Retrieved September 11, 2002 from http://www.nhpco.org/public/articles/c025.doc.
20 In this hospice, 4.8% lived between 7 months and a year and 3.6% lived more than a year. A study of nearly 200,000 hospice patients nationwide by Dr. Nicholas Christakis, an associate professor of medicine and sociology at the University of Chicago, found that 7.2% of hospice patients lived longer than a year.
21 Source: Medicare Rights Center. "The History of Medicare and the Current Debate." Retrieved September 13, 2002 from http://www.medicarerights.org/maincontenthistory.html. Those over 65 are eligible for Medicare if they or their spouse worked for at least 10 years in Medicare-covered employment and are a citizen or permanent resident of the United States. Source: Centers for Medicare and Medicaid Services.>U.S. Department of Health and Human Services. "Who is Eligible for Medicare?" Retrieved September 16, 2002 from http://www.medicare.gov/Basics/Eli-gibility.asp.
22 Numbers do not sum due to rounding.
23 In November 2000, 34.9 million people were 65 years old and older.
24 This is what is commonly known as Part A and Part B Medicare benefits, respectively.
25 Source: Centers for Medicare and Medicaid Services. 2002 Annual Report of the Boards of Trustees of the Federal Hospital Insurance Trust and Federal Supplementary Medical Insurance Trust Funds. Retrieved September 12, 2002 from http://cms.hhs.gov/publications/trusteesreport/default.asp.
26 Almost all doctors and hospitals accept the Original Medicare Plan.
27 Source: Aetna U.S. Healthcare. "Current Medicare Issues," August 2001. Retrieved September 13, 2002 from http://www.aetna.com/public_policy_issues/medicare.htm.
28 Source: The Office of Congressman Neil Abercrombie. "Balanced Budget Refinement Act of 1999: Highlights." Retrieved September 13, 2002 from http://datahub-3.datahub.com/.
29 Nearly all persons over the age of 65 are covered under Medicare.
30 In 1998, 57% of the uninsured lived in households with children.
31 The Balanced Budget Act of 1997 provided new managed care options for Medicaid. But managed care Medicaid plans have existed before this. In 1996, 40.1% of Medicaid recipients were in managed care plans. In 2001, 56.8% were.
32 In 1988, there were 33.6 million Americans without health insurance coverage. The number of uninsured grew by 30.6% from 1988-1998.
33 In a survey cited in Uninsured in America (see source), 64% of the uninsured said that the high cost of health insurance is preventing them from having coverage. In the 1990s, employees were expected to pay more and more of their health care premiums. As a result, employees paid three times as much for health care benefits in 1998 as they did in 1977.
34 31 states reporting. North Dakota had the smallest Medicaid budget deficit: $1.1 million. Texas had the largest: $716.7 million. Source: National Association of State Budget Offices. National Governors Association. Medicaid and Other State Healthcare Issues: The Current Situation, May 2002. Retrieved September 18, 2002 from http://www.nasbo.org/Publications/PDFs/fsmedicaidmay2002.pdf.
35 Medicaid funds comprised 43.6% of all federal funds provided to states in 1999.
36 Previously, the income limit for a family of three was $15,000. This was lowered to $11,600.
37 As of July 1, 2000.
38 According to the FDA, a drug is considered medically necessary "if it is used to treat or prevent a serious disease or medical condition, and there is no other available source of that product or alternative product that is judged by medical staff to be an adequate substitute. Patient 'inconvenience' alone is an insufficient basis to classify a product as a medical necessity." Source: Center for Drug Evaluation and Research. Food and Drug Administration. "Definition of a Medically Necessary Product," July 6, 2001. Retrieved September 18, 2002 from http://www.fda.gov/cder/drug/shortages/presentation/sld005.htm.
39 Early in 2002, 1.1 million doses each of varicella (chicken pox) and MMR (measles, mumps, rubella) vaccine were on backorder nationwide.
40 Roche Pharmaceuticals, which manufactures this drug, wrote doctors a letter stating that this drug would be available later that spring. But as of August 2, 2002, the drug was still listed on the DIS drug shortage list.
41 Source for all quotes in this paragraph: Young, Donna. American Society of Health-System Pharmacists. "Drug Shortages Frustrate Health Care Providers," April 4, 2002. Retrieved September 18, 2002 from http://www.ashp.org.
42 A smallpox vaccine.
43 Source: U.S. Department of Health and Human Services. "HHS, Bayer Agree to Cipro Purchase." HHS News, October 24, 2001. Retrieved September 19, 2002 from http://www.hhs.gov.
44 As of September 19, 2002, there were 288 million people in the U.S. Source: U.S. Census Bureau.
45 Figures were based on total non-federal hospital expenditures for 1990 and 1995. Source: National Center for Health Statistics. Health, United States, 2001 With Urban and Rural Health Chartbook, 2001. Retrieved September 20, 2002 from http://www.cdc.gov/nchs/. The "Administrative and general" category includes financial management and planning, accounts payable, patient billing, payroll, etc.
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