"Medical bills will become the number one cause of bankruptcy in America..."

[hbscott]

Nursing shortage critical part of rising health costs

Cherie Skinner

A recent article by the Physicians for a National Health Program said, "Medical bills will become the number one cause of bankruptcy in America if administrative costs are not curbed and insurance coverage is not made more available."

Health care costs are now 15 percent of the GDP and are growing 10 percent annually. With costs this high, businesses across the nation are being forced to shift costs to employees or drop coverage altogether.

The cost of health care is increasing the cost of doing business in both the public and private sectors. As baby boomers near 65, there's a real possibility Medicare may go bankrupt in 15 years. The health care cost crisis has the attention of everyone from presidential candidates to union heads.

There are several reasons for the continually escalating health care costs:

The increased development and use of clinical and operational technology.

Higher employment costs due to the shortage of personnel, including nurses.

Our aging population, which requires a higher level of care.

The cost of prescription drugs.

The heavy burden of federal regulations.

The nursing shortage is the most critical problem on this list, as it increases the cost and may compromise quality of care and availability of care. Providers, faced with a growing shortage of nurses and the possibility of closing beds and cutting services, increase salaries and turn to nursing agencies that charge two to three times the going nursing rate.

The shortage is of concern in the Denver area as four new hospitals are scheduled to open in the next two years. Where they'll find their nursing staff is unknown, as other facilities in both urban and rural areas of Colorado struggle to recruit and retain enough nurses.

In 2000, the U.S. Department of Health and Human Services identified Colorado as one of 30 states with a nursing shortage. The 2000 supply-versus-demand shortage was 11 percent and is projected to be 31 percent in 2020, higher than the rest of the nation.

In today's mobile society, shortages affect health care organizations nationally. The U.S. Bureau of Labor Statistics reports that the number of employed nurses will rise from 2.3 million to 2.9 million by 2012, but there'll be 1.1 million open positions.

Most reports list the causes of the nursing shortage as:

Increased demand due to population growth.

A larger proportion of elderly with more complex medical needs.

The aging of the nursing work force (the average age is 47).

Medical advances that demand more nursing time.

The shortage of nursing faculty and nursing schools.

More appealing career options for women.

Job dissatisfaction.

The Colorado Department of Labor Job Vacancy Survey in spring 2003 reported 951 open registered nursing positions in Denver. Just the year before, 500 to 1,000 qualified applicants were denied access to nursing school because there wasn't enough capacity.

Being employed even full time no longer guarantees access to health insurance. The average cost of health insurance for companies across the nation escalated from 0.6 percent in 1996 to 13.9 percent in 2003.

Many employers are cutting their contributions, resulting in employees having to pay larger portions of the premium or dropping coverage entirely.

As health care costs rise, so does the number of uninsured. Today, 45 million Americans are uninsured, and that number is growing at 1 percent a year. The Employee Benefit Research Institute said, "Over one-half (56 percent) of all uninsured working adults are employed full time throughout the year." CFO.com reported a survey of 292 large corporations, conducted by Watson Wyatt and the Washington Business Group on Health, that found 70 percent of employers had made major changes to their health care strategy in the past year. Only 34 percent stated they were willing and able to absorb the whole cost.

According to Paula Stearns, executive director of the Colorado Nursing Association, the Denver community is taking many creative steps to increase the number of graduate nurses. These include partnerships between universities and health care systems, expansion of nursing programs and development of new ones.

Unfortunately, it will be awhile before nurses are graduated from these new and expanded programs. Meanwhile, 55 percent of working nurses in Colorado will be retired in five years. The number of nursing faculty retiring during that same time is even higher as their average age is beyond the average nurse age.

A strong health care system is critical to a community's success. What can businesses do?

Partner with health care organizations and educational institutions that offer nursing programs and work together to increase the number of nurses in the work force. Lobby for legislation at the state and federal levels that reduces health care costs and improves health. Investigate alternative insurance options, such as the Medical Savings Account.

To reduce costs, negotiate and make certain your health care plan covers health prevention and promotion as well as alternative health care.

Cherie Skinner is a faculty member in the M.B.A. in health care and master's in nursing programs at the University of Phoenix. Reach her at 303-600-1123 or [email protected].

http://www.bizjournals.com/industries/health_care/industry_regulation/2004/05/31/denver_focus4.html

-HBS

[fergus51]

I think it's an interesting fact.... A lot of Americans I know think "socialized" or universal healthcare is more expensive than the system that is currently in place, but they often don't consider the fact that we pay in other ways like when people declare bankruptcy.

[gwenith, BSN, RN]

Absolutely not to mention increase in loss of valued workers to workplace, the bankrupt person then also becomes less of a consumer of other products also a drain on the economy.

Interestingly the one aspect driving insurance costs through the roof is never mentioned which is the inordinate amount of litigation.