Academic journal article Monthly Labor Review

Changes in Hospital Staffing Patterns: After Declining in the Early 1980's, Hospital Employment Is Increasing, Especially at Those Jobs That Require the Use of Complex Technology

Academic journal article Monthly Labor Review

Changes in Hospital Staffing Patterns: After Declining in the Early 1980's, Hospital Employment Is Increasing, Especially at Those Jobs That Require the Use of Complex Technology

Article excerpt

After declining in the early 1980's, hospital employment is increasing, especially those jobs that require the use of complex technology.

Kay Anderson and Barbara Wootton

Kay Anderson is an economist in the Office of Employment and Unemployment Statistics, Bureau of Labor Statistics. Barbara Wootton is an economist formerly with that office.

The hospital industry underwent a transitional period during the 1980's. Escalating health care costs led to changes in govemment-financed health care coverage, new forms of private health care financing, and growth in the number and diversity of alternate health care providers. Faced with an increasingly competitive economic environment, hospital managers focused on profitability and cost containment. Their strategies included decreasing the length of costly inpatient stays; eliminating or contracting out previously-offered services; diversifying into emerging health care markets; integrating into multihospital chains; and aggressively marketing their programs and services. During the 1980's, there also were significant technological developments in the hospital industry. Although frequently eliminating the need for lengthy hospital stays, new technology also contributed to rising health care costs.

Recent changes in the hospital industry have influenced the structure of occupational employment within the industry. With labor costs accounting for the largest item in hospital budgets-about one-half of their operating expenses in many cases-reducing employment and altering staffing patterns were often used as cost containment measures.[1] This article examines hospital staffing patterns and their changes, reflecting both the structure transition and technological advances that have characterized the hospital industry in recent years.

Data are derived from the Occupational Employment Statistics surveys of hospitals conducted in 1983, 1986, and 1989. The Occupational Employment Statistics program is a Federal-State cooperative survey of nonfarm establishments designed to develop current occupational employment data of wage and salary workers by industry. The survey follows a 3-year cycle: during the first year, it covers manufacturing industries and hospitals; during the second year, mining, construction, finance, and service industries; and during the third year, trade, transportation, communications, public utilities, education, and government services industries. The survey is based on a probability sample, stratified by industry, geographic area, and employment size of firm.[2]

Industry structure

The hospital industry comprises establishments primarily engaged in providing diagnostic and extensive medical treatment services, including surgical and other hospital services, as well as continuous nursing care. These establishments have organized medical staffs, inpatient beds, and equipment and facilities to provide complete health care. They include general medical and surgical hospitals, psychiatric hospitals, and specialty hospitals such as children's and orthopedic hospitals.[3] The Occupational Employment Statistics survey's employment estimates cover private and State and local government hospitals.

The structure of the hospital industry began to change rapidly in the early 1980's as a result of new payment systems, deregulation, and new competitors. The Federal Government concerned about skyrocketing health care costs, sought to limit health care expenditures by enacting the Social Security Amendments of 1983. This legislation mandated medicare's prospective payment system, linking payment for particular hospital services to a fixed-fee schedule for diagnosis-related groups. Under the previous cost-based system, hospitals essentially were reimbursed for their actual expenditures. The new system provides an incentive for hospitals receiving medicare reimbursements to reduce their costs. If costs are below the predetermined payment, the hospital keeps the savings, but if costs exceed the payment, it must absorb the difference. …

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