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OCR for page 63
3
Forces and Trends in Personnel
Demancl and Supply
CHAPTER 1 DESCRIBED 1O 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 ex-
amines these and other forces to establish a context for Chapter 4, which
discusses demand and supply in individual allied health fields. Before con-
sidering each of the environmental pressures that projections of employ-
ment 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 prac-
. .
tltloners.
As with other allied health services, some respiratory therapy services
have shifted from hospital-based to home-based delivery. Although respi-
ratory therapists have long provided oxygen to patients at home, only
recently have technologically advanced life-support systems (e.g., mechan-
ical ventilators) been widely used there. Several forces operating together
may have accelerated the trend toward home delivery of respiratory ther-
apy services. These forces include the following:
63
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64
ALLIED HEALTH SERVICES
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 bron-
chitis, and asthma. Almost a quarter of a million others experience breath-
ing difficulties for reasons other than pulmonary disease (e.g., spinal cord
injuries). As many of these conditions progress, respiratory therapy be-
comes 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 ma-
chines a measure of mobility.
3. Health care financing policies Environmental forces are not always ex-
pansionary. 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 re-
spiratory therapists outside the hospital. PPS gives hospitals a strong in-
centive 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 equip-
ment are reimbursed under Medicare's durable equipment benefit. In a
21-state survey, Gilmartin and Make (1986) found that Medicare and Med-
icaid 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, 19861. The Health
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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 Med-
icare 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 con-
sumers 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 in-
creased 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 popu-
lation 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.
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66
ALLIED HEALTH SERVICES
TABLE 3-1 U.s. Population (in millions) by Race and Age, 1986 and
Projected for the Year 2000
Percentage
Percentage Distribution
Change,
Population 1986 2000 1986-2000 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 ~3.1
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, 19871.
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
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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, 19871.
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, 19861. A reduction in the number of children
in the population does not affect the demand for all allied health practi-
tioners. For those practitioners employed by schools (speech-language pa-
thologists, 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 de-
cisions 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 dis-
tricts. 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 His-
panics 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, 19871.
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
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68
ALLIED HEALTH SERVICES
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, 19871.
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 His-
panics 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 per-
centage 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, Of-
fice 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 bar-
riers 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 syn-
drome (AIDS) epidemic. Second, whereas infectious diseases such as in-
fluenza, 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
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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 (Traf-
ford, 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 ex-
penditures 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 Ser-
vices Administration, 19881. 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 ed-
ucators fear that potential allied health students may be dissuaded by their
. . .. .
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70
ALLIED HEALTH SERVICES
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, 19871.
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 car-
diovascular 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, 19871. 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, lon-
gitudinal 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~.
. , in. . ~ . .
Economic Growth
The growth of the economy as a whole dictates how much incense 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, gov-
ernment expenditures, foreign trade, and events such as wars and revo-
lutions, 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 eco-
nomic 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
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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 Finanacing Administra-
tion, 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 rleriver1 the Pelvis nroiections of nersonn1 con-
sumption 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 pro-
jects 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 pre-
dicts a 43 percent increase in expenditures. These differences could have
an effect on those allied health practitioners whose employment is signif-
icantly 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 es-
sential) care is reduced. In that case, health care employment will also be
reduced.
r--~-------- -- r-
Data for the discussion of the BLS economic projections that follows are drawn from
Saunders (1987).
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72
ALLIED HEALTH SERVICES
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 tech-
nology. 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 em-
ployment site for the health care industry. This decline reflects a structural
change: the hospital's fall from its position of primacy in health care pro-
. .
vlslon.
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 em-
ployed. For example, hospital admission testing today is often done on an
outpatient basis, and unless there is a change in the volume of tests per-
formed, 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-
~4
62
LL
(D 58
LL
a:
IL
56
54
52
an
48
46
1965 1968 1971 1974 1977 1980 1983 1986
CALENDAR YEAR
FIGURE 3-1 Hospital employment as a percentage of health care industry employment:
calendar years 1965-1986.
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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 consid-
erable 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 employ-
ment 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 1 10 medical tech-
nologists, 26 HMOs employed 42 nutritionists, and 13 HMOs employed
34 physical therapists. Respondents stated that they did not expect to em-
ploy larger numbers of practitioners in the near future (Rudman et al.,
1987).
The formation of multihospital systems is important to allied health
employment if these systems staff their facilities differently than indepen-
dent 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 pop-
ulation 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-
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FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY
40
20
100 _
80 _
60 _
-
-
o
K
lo,
,~
.1
. ~ .
..............
, , /
oc
a....
....
1
77
if,
~ .
/,
_
A<
-
l
I.. a..
i
,,,
QQQ
a.
1970 71 72 73 74 75
C Business and Management/
Communication and
Communication Technologies
Education
76 77 78 79
YEAR
_ Computer Sciences,
Engineering
ram ~
t~:! Allied Health/ Y///'l Other
85
/ ~
Social Sciences/
Psychology
Health Sciences
FIGURE 3-3 Women earning bachelor's degrees: Relative shares of selected major fields
of study, 1970-1986.
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.
For some fields, colleges are not the primary sponsors of CAHEA-ac-
credited educational programs. Programs in radiography, for example, are
based primarily in hospitals rather than in educational institutions. Con-
sequently 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 im-
pact of non-college education programs on the validity of the trends por-
trayed 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.
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86
ALLIED HEALTH SERVICES
100
80
60
20
o
1970 1972 1974 1976 1978
YEAR
:.:.:.:.::1 Nursing _ Occupational _ Physical
Therapy Therapy
1980 1982 1984 1986
-I Medical Laboratory
Technologies
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 edu-
cation 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 ed-
ucation resources are related to broader financing trends. Education fi-
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FORCES AND TRENDS IN PERSONNEL DE1WAND 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 per-
sonnel.
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, 19861.
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 S.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, 19871.
Although they fare better than most arts and sciences programs in gar-
nering 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.~.. engineering medicine. and
business administration).
Federal funds to stimulate allied health education program development
peaked in 1974 at nearly $30 million and diminished substantially there-
after. No data are available on aggregate allied health education expen-
ditures, 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 appro-
priations, student demand, and the availability of clinical facilities and teach-
ing staff. Allied health education programs are vulnerable in each of these
areas (see Chapter 51.
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
~ O O A,
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88
ALLIED HEALTH SERVICES
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 af-
fected by health care financing policy as well as higher education budgets.
State legislators and higher education officials faced with difficult re-
source 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, 19861.
State officials are also paying close attention to the products of the higher
education system and its impact on local economic development. Respon-
dents 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 grow-
ing concern that technically trained individuals be creative, have the ca-
pacity for civic responsibility, and receive a liberal education. Specialized
accrediting bodies for the professions are the continual targets of exhor-
tations 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 opportun-
ities for their graduates, this advantage in terms of outcome assessment is
balanced against the liabilities of unfilled 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 grad-
uate 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
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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 at-
tractive to workers.
In recent years, unions have viewed health care, with its many unor-
ganized 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, 19861. 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 occu-
pational, 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 phy-
sicians 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 ques-
tions 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 prac-
tice because of high premium costs. Thirty-f~ve percent of respondents to
a survey by the American College of Obstetricians and Gynecologists said
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ALLIED HEALTH SERVICES
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, 19871.
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, 19871. 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, mal-
practice 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 profes-
sions.
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
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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 con-
cerned with balancing demand and supply can apply the scenarios to es-
timate 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, f~-
nancing 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 ne-
gotiate 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 down-
ward trends and cause overall hospital admissions to rise slowly. The in-
tensity 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 rel-
atively quickly and diffused throughout the health care system. Technol-
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92
ALLIED HEALTH SERVICES
ogles that promised to improve patient care outcomes would also be sought,
as would advances that allowed procedures to be performed on an out-
patient basis.
Scenario 2: Prospective Payment
This scenario assumes that prospective payment would become the dom-
inant 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 infre-
quently used. Large organizations of employers would become sophisti-
cated 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. A1-
though 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 un-
necessary or ineffective services were eliminated.
Outpatient and other cost-restraining delivery styles would increase rap-
idly 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 ea~erlv sought:
_ . . ~ ~ _ ~ ~ . . . ~ C, , ~ ~ C, .
. . . . . . . . . · .. . .
Other technologies would be viewed more skeptically. However, the ~n-
creased 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
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FORCES AND TRENDS IN PERSONNEL DEMAND AND SUPPLY
93
by a scheme of national health insurance that might incorporate mecha-
nisms of cost control. It could also be achieved by expanding public pro-
grams, 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 de-
crease 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 pop-
ulation 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,
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ALLIED HEALTH SERVICES
or identifying new technologies and determining their likely impact on
allied health services. Whatever the methods used, monitoring and inves-
tigating the key forces in the demand for and supply of allied health
personel provides useful insights into the future and better information
for determining policy actions.
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Representative terms from entire chapter:
health fields
