prepared to care: the 24/7 role of america’s full- service hospitals

Prepared to Care:The 24/7 Role of America’s Full-

service Hospitals

The standby role of full-service is both unique and critical in the health care system.

Standby Role:

• Provide access to care 24 hours a day 7 days a week (24/7)

• Care for all patients regardless of ability to pay

• Be ready to respond to disasters

24/7 Role of Full-service Hospitals

Americans rely heavily on the 24/7 access to care provided by hospital EDs…

• One third of hospital care begins in the emergency department.

• The majority of ED patients require immediate care.

• More than half of ED care occurs outside of normal business hours.

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

Emergency Department Visits, 1997 – 2004, In Millions

Source: AHA Annual Survey, data for community hospitals.

…and that need is growing.

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

92.8 94.899.5 103.1 106.0 110.0 111.0 112.6

0

20

40

60

80

100

120

1997 1998 1999 2000 2001 2002 2003 2004

Em

erg

ency

D

epar

tmen

t V

isit

s

Meeting common emergency needs requires a wide array of resources be maintained 24/7.Example: Resource Needs for a Common Condition

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

Safety Net Role

Hospitals provide a medical safety net for the growing number of uninsured…

Number of Uninsured, 2000 – 2004, In Millions

39.8

45.0 45.843.6

41.2

2000 2001 2002 2003 2004

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

…serving proportionally more Medicaid and uninsured patients than physician offices…

Percent of Total Visits by Expected Source of Payment, Emergency Departments vs. Physician Offices, 2003

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

21%

14%16%

36%

5%

23%

56%

10%

Medicaid Uninsured Medicare Private Insurance

Emergency Department Physician Offices

…and taking an increasing role in the care of the behaviorally ill.

1,5071,349

467

662

1995 2004

Units of Hospitals Freestanding Facilities

Behavioral Health-Related Emergency Department Visits, 1994/95 – 2001/02

In Millions

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

Inpatient Psychiatric Facilities, 1995 – 2004

4.4

2.8

1994-95 2000-01

Disaster Readiness

A wide range of disasters hit communities annually…

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

Percent of Hospitals with Response Plans by Type of Incident, 2003

...and hospitals stand ready to respond.

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

97.3%

84.8%

77.2% 76.9%

85.5%

NaturalDisasters

Chemical Biological Nuclear orRadiologic

Explosive

Challenges in Maintaining the Standby Role

Hospitals face three major challenges in maintaining the standby role.

• Capacity constraints

• Financial challenges

• Competition for patients from facilities that don’t serve or contribute to the standby role

Capacity Constraints

Emergency Department Visits and Emergency Departments(1) in Community Hospitals, 1991 - 2004

(1)Defined as hospitals reporting ED visits.

As the number of patients seeking ED care has risen, the number of EDs has declined.

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

80

90

100

110

120

91 92 93 94 95 96 97 98 99 00 01 02 03 04

4,500

5,000

5,500

EmergencyDepartment Visits

EmergencyDepartments

Em

erg

ency

D

epar

tmen

ts

Em

erg

ency

D

epar

tmen

t V

isit

s (M

illi

on

s)

Capacity constraints have led to ED diversion in a majority of urban hospitals.

Percent of Hospitals Reporting Time on Diversionin Last 12 Months

42%

36%

67%

17%

64%

0% 10% 20% 30% 40% 50% 60% 70% 80%

All Hospitals

Non-teaching

Teaching

Rural

Urban

Source: AHA 2006 Survey of Hospital Leaders

Hospitals face a severe workforce shortage…

Vacancy Rates for Selected Hospital Personnel, December 2005

7.6%7.3%

6.3%5.9%

4.4%

8.5%

RegisteredNurses

NursingAssistants

LPNs LaboratoryTechnicians

ImagingTechnicians

Pharmacists

Source: 2006 AHA Survey of Hospital Leaders*118,000 vacancies is a national estimate created by extrapolating the vacancy rate to all 4,919 community hospitals in 2004.

118,000 RN Vacancies*

Registered Nurse FTEs: Supply and Demand, in Thousands, 2000 - 2020

Source: National Center For Health Workforce Analysis, Bureau of Health Professions, Health Resources and Services Administration, 2004.

…that is expected to worsen significantly over the coming decades.

FT

Es

in T

ho

usa

nd

s

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

1,600

1,800

2,000

2,200

2,400

2,600

2,800

3,000

2000 2005 2010 2015 2020

RN FTE Supply

RN FTE Demand

In 2020,

there will be a shortage of

1 million nurses

Financial Challenges

PrivatePayers

ElectiveCases

LessComplex

SurgicalCases

Well-funded

IndigentCare

24/7 CapacityUnfunded

Revenue from Service to Paying Patients

Medicareand

Medicaid

EmergentCases

MoreComplex

MedicalCases

Under-funded

DisasterReadiness

Hospitals support the standby role through revenues from patient care…

Hospital Payment Shortfall Relative to CostsFor Medicare and Medicaid Patients in Billions, 1997-2004

1997 1998 1999 2000 2001 2002 2003

Medicare

Medicaid

Bil

lio

ns

of

Do

lla

rs

2004

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

-1.9-2.6 -2.1

-2.3

-5.0

-15

-8.1

-3.4-2.4-1.4

4.32.3

-7.1

-1.6 -1.4

-$30

-$20

-$10

$0

$10

Total Shortfallin 2004: $22 Billion

…but hospitals face a growing shortfall from Medicare and Medicaid…

$18.5

$20.7$21.6 $21.5

$22.3

$24.9

$26.9

$19.0

1997 1998 1999 2000 2001 2002 2003 2004

Total Uncompensated Care Costs In Billions,1998 - 2004

Source: AHA Annual Survey

…and rising levels of uncompensated care.

Competition from Providers Not Serving the Standby

Role

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005

2,500

3,000

3,500

4,000

4,500

5,000

Physician-owned Limited-service Hospitals Ambulatory Surgery Centers

Physician-owned Limited-service Hospitals and Ambulatory Surgery Centers, 2000 - 2005

Source: The Centers for Medicare & Medicaid Services

Ph

ys

icia

n-o

wn

ed

Lim

ite

d-

se

rvic

e H

os

pit

als

Am

bu

lato

ry s

urg

ery

Ce

nte

rs

Hospitals are losing patients to a growing number of limited-service providers…

Percent of Hospitals with an Emergency Department*, Physician-owned Limited-service Hospitals versus All Community Hospitals, 2003

*Hospitals treating more than 5% of cases in emergency department.

…that do not provide the 24/7 standby role…

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

91%

21%

Physician-owned Limited-serviceHospitals*

All Community Hospitals

…nor support the safety net role.

Medicaid as a Percent of All Patient Discharges, 2002

Physician-owned

Source: The Chartis Group, Prepared to Care: The 24/7 Role of America’s Full-service Hospitals, 2006

15%

1%

4%

Heart Hospitals Orthopedic Hospitals Community Hospitals

Physician-owned

Est of

Well-funded services

Physician-ownedlimited-service

hospitals

Instead these facilities cherry-pick the well-funded services.

…relying on the economically motivated referral decisions of physician-owners...

• Behaviors associated with self-referral have been well documented, including:• Patient steering (physician-owners direct their patients to

their own facilities)

• Cherry-picking: • Offering well-reimbursed services

• Selecting healthier patients

• Avoiding low-income patients

…and leaving full-service hospitals without the means to subsidize the standby role.

Left forfull-servicehospitals

Unfunded and under-funded

services

• To maintain the standby role hospitals need:• Adequate payment from Medicare and Medicaid

• Support for uninsured populations

• Help in addressing the workforce shortage

• Fair competition• Ban self-referral to new limited-service hospitals• Payment systems that recognize standby costs

• Broad system support for the standby role

Without action, these services may not be there when we need them.