Trends and Indicators in the Changing Health Care Marketplace Section 5: Trends in the Structure of the Health Care Marketplace
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Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.1: Health Care Employment and Share of Total Non-Farm Employment, 1990-2005p
Health care employment as a proportion of all non-farm employment has increased fairly steadily since the early 1990s. In 2005p, 9.2% of all workers, or 12.3 million people, held health care jobs, up from 7.5% (8.2 million) in 1990.
Health Care Employment
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Notes: Not seasonally adjusted. Health Care Employment includes those who work in ambulatory health care services (NAICS code 621), hospitals (NAICS code 622), and nursing and residential care facilities (NAICS code 623).
Source: Kaiser Family Foundation calculations using data from Bureau of Labor Statistics, Current Employment Statistics survey using the 2002 North American Industry Classification System (NAICS), at http://www.bls.gov/ces/home.htm#data.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 02/08/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.2: Community Hospital Beds per 100,000 Population, 1975-2003
Community hospital capacity has declined as lengths of stay decrease and use of outpatient procedures grows, although the decline appears to have leveled off since 2000. In 2003, the nation’s community hospitals housed 280 beds for every 100,000 residents, almost two-thirds the capacity that existed in 1975.
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Notes: Data are for community hospitals, which represent 85% of all hospitals. Federal hospitals, long term care hospitals, psychiatric hospitals, institutions for the mentally retarded, and alcoholism and other chemical dependency hospitals are not included.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.3: Community Hospital Beds per 100,000 Population, by State, 2003
Community hospital capacity is not evenly distributed throughout the nation. In 2003, South Dakota had 578 beds per 100,000 residents, while Washington, with 183 beds per 100,000, had about a third of this capacity. A combination of factors including population density, reimbursement levels, and managed care penetration contribute to these differences. Further, there is clear regional variation: Western and Southwestern states have lower levels and Midwestern states have higher levels of hospital capacity.
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Notes: District of Columbia included. Data are for community hospitals, which represent 85% of all hospitals. Federal hospitals, long term care hospitals, psychiatric hospitals, institutions for the mentally retarded, and alcoholism and other chemical dependency hospitals are not included.
Source: Kaiser Family Foundation calculations using bed data from 2003 American Hospital Association Annual Survey, Copyright 2004 by Health Forum LLC, an affiliate of the American Hospital Association, special data request, 2005; and July 1, 2003 population data from U.S. Census Bureau at http://www.census.gov/popest/states/NST-ann-est.html.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 04/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.4: Number and Distribution of Community Hospital Beds, by Ownership Status, 1980-2003
The ownership status of community hospitals changed little over the last two decades, with the proportion of hospital beds in not-for-profit hospitals remaining constant at about 70%. Meanwhile, the share of public hospital beds declined somewhat as the proportion of investor-owned beds increased modestly.
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Notes: Data are for community hospitals, which represent 85% of all hospitals. Federal hospitals, long term care hospitals, psychiatric hospitals, institutions for the mentally retarded, and alcoholism and other chemical dependency hospitals are not included.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.4, p. 51, at http://www.kff.org/insurance/3161-index.cfm, updated with KFF calculations using 2002 and 2003 American Hospital Association Annual Survey data, Copyright by Health Forum LLC, an affiliate of the American Hospital Association, special data request, 2004 and 2005.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 4/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.5: Proportion of Hospital Beds in 10 Largest Hospital Systems, 1989-2003
While HMO enrollment is concentrated in a few large firms (see Exhibit 5.11), the hospital market is still largely local and dispersed. Fewer than 20% of all hospital beds were in the 10 largest hospital systems in 2003. However, these figures mask an important market transition over the last decade as independent not-for-profit community hospitals have merged together to form large local hospital systems, often dominating certain urban health care markets.
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Notes: The numerator, hospital beds in 10 largest systems, is licensed beds. The denominator, total community hospital beds, is staffed beds. This discrepancy will result in a modest overstatement of the proportion of beds in hospital systems. Excludes the U.S. Department of Veterans Affairs hospital system.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.5, p. 52, at http://www.kff.org/insurance/3161-index.cfm, updated with KFF calculations using hospital systems data from Modern Healthcare’s Health Systems Survey (2000 data from personal communication; 2001-2003 data at http://www.modernhealthcare.com/survey.cms), and community hospital beds from the American Hospital Association’s Annual Hospital Survey (2000-2003, Copyright by Health Forum LLC).
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 4/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.6: Full-Time-Equivalent Employees Working in Community Hospitals, per 100 Adjusted Admissions, 1980-2003
After increasing through the 1980s and early 1990s, community hospital staffing levels began declining in the mid-1990s, a period marked by rapid increases in managed care. In 2003, hospitals had 7.1 full-time-equivalent employees per 100 adjusted admissions, about 14% fewer than in 1990.
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Notes: Adjusted admissions reflects the number of inpatient admissions, plus an estimate of the volume of outpatient services expressed in units equivalent to an inpatient admission in terms of level of effort.
Source: The Lewin Group analysis of American Hospital Association Annual Survey Data, in American Hospital Association/The Lewin Group, TrendWatch Chartbook 2005, Trends Affecting Hospitals and Health Systems, May 2005, Table 5.3, p.A-40, at http://www.hospitalconnect.com/ahapolicyforum/trendwatch/chartbook2005.html.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 02/08/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.7: Non-Federal Physicians per 100,000 Civilian Population, 1970-2003
The supply of physicians rose steadily during the 1970s, 1980s, and 1990s, fell in the early 2000s, but has been rising since then. There were 281 non-federal physicians for every 100,000 persons in 2003, fewer than the 288 in 2000, but almost twice the capacity as in 1970.
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Note: Non-federal physicians are not employed by the federal government and include medical doctors and osteopaths. They represent 98% of total physicians.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.7, p. 54, at http://www.kff.org/insurance/3161-index.cfm, updated for 2001, 2002 and 2003 with KFF calculations using data from State Health Facts, at www.statehealthfacts.kff.org, based on American Medical Association, Physicians Professional Data, and U.S. Census Bureau data at http://www.census.gov/popest/national/NA-EST2004-01.html.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 02/02/05
Trends and Indicators in the Changing Health Care Marketplace
Non-Federal Physicians per 100,000 Civilian Population, by State, 2003
While the 2004 U.S. average number of non-federal physicians per 100,000 population was 281 (see Exhibit 5.7), there was considerable geographic variation in physician capacity across the states. The number of physicians per 100,000 population ranged from a high of 752 in the District of Columbia to a low of 175 in Idaho. Sparsely populated and rural states typically have less physician capacity per capita than denser and more urban states.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 02/08/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.9: Distribution of Physicians by Type of Practice, 1983, 1994, 1999, 2001
The physician marketplace has changed dramatically since 1983, when 41% of physicians were self-employed in solo practice. In 2001, only 23% of all physicians worked on their own, while 39% of physicians were employees and 37% worked in group practices. An important driver for this trend away from solo practice is physicians’ pursuit of market leverage in negotiating payments from managed care plans.
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Note: Totals for each year may not sum to 100% because of rounding. 2001 employee figure includes independent contractors.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.9, p. 56, at http://www.kff.org/insurance/3161-index.cfm, updated with 2001 data from the American Medical Association, 2001 Patient Care Physician Survey.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 4/01/04
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.10: Distribution of HMO Enrollment by Ownership Status, 1981-2004
During the 1980s and the 1990s, the proportion of HMO enrollment in for-profit plans increased dramatically, from 12% in 1981 to 63% in 1997, and has changed little since then as conversions of plans from non-profit to for-profit status became less common.
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Notes: Some plans failed to report profit status and are excluded from the analysis. HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employee Health Benefits Program, direct pay plans, and unidentified HMO products. Using data as of July 1 of each year.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.10, p. 57, at www.kff.org/insurance/3161-index.cfm, updated with July 1, 2003 data from InterStudy Publications, The InterStudy Competitive Edge Spring 2004, Part II: HMO Industry Report, Table 14, p. 40, and July 1, 2004 data from HealthLeaders-InterStudy, The Competitive Edge, Spring 2005, Part II: Managed Care Industry Report, June 2005, Table 7, p.30.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 03/15/06
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.11: Proportion of Total HMO Enrollment in 10 Largest National Managed Care Firms, 1988-2003
The proportion of HMO enrollees in the nation’s 10 largest managed care firms rose from 46% in 1988 to 65% in 1997 and then remained at that level through the early 2000s. The proportion for 2002 (48%) is not a decline, but a change in methodology, described in the Notes below. The five largest national managed care firms in 2003 were Kaiser Foundation Health Plans, Inc.; UnitedHealth Group, Inc.; WellPoint Health Networks, Inc; Aetna Inc.; and Health Net, Inc.
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Notes: InterStudy Publications revised their method of classifying HMOs according to group affiliations starting with their July 1, 2002 HMO data. Formerly, HMOs were grouped as National Managed Care Firms (NMCFs, or companies with licensed HMOs in 2 or more states with combined total HMO enrollment of 10,000 or more; plans affiliated with The Blue Cross and Blue Shield Association were included as a single group under NMCF). In 2002, InterStudy began grouping plans into National Managed Care Firms (in 2003, 25 Blues and non-Blues plans met the NMCF definition), plus 2 new groups: Intrastate Groups (12 plans in 2003 owned by a given parent or holding company but operating within only 1 state, both Blues and non-Blues) and Independent Blues Plan (23 plans in 2003 bearing the Blues brand but not part of a NMCF or Intrastate grouping). The apparent decline in the NMCF percentage for 2002 and 2003 is a result of this methodological change. HMO enrollment includes enrollees in both traditional HMOs and point-of-service (POS) plans through: group/commercial plans, Medicare, Medicaid, the Federal Employees Health Benefits Program, direct pay plans, and unidentified HMO products.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 5.11, p. 58, at http://www.kff.org/insurance/3161-index.cfm, updated with July 1 data from InterStudy Publications, The InterStudy Competitive Edge, Part II: HMO Industry Reports, 12.1 (Tables 7 and 19), 13.1 (Tables 6 and 8), and Spring 2004 (Tables 14 and 25).
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 4/11/05
Trends and Indicators in the Changing Health Care Marketplace
Exhibit 5.12: Health Care Mergers and Acquisitions, 1994-2003
The number of mergers and acquisitions of health care services companies rose rapidly from 1994 to 1997, more than doubling from 536 to 1,284. But as stock prices took a downward turn and merged entities confronted management difficulties, the number of health care company mergers fell, dropping to their lowest level (392) in 2003, then increasing in 2004 (425) and 2005 (525). Home health care and long term care activity, in particular, increased in 2005. Mergers and acquisitions of health care technology companies increased from 2000-2002 for all but E-health and have fluctuated since 2002.
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
SERVICES
Behavioral Health
27
47
35
61
53
46
33
17
13
11
20
24
Home Health Care
58
76
136
137
83
63
32
28
37
25
29
72
Hospitals
92
128
163
197
137
109
84
83
56
38
59
53
Laboratories: MRI, Dialysis
56
60
91
113
94
55
61
66
50
36
38
39
Long Term Care
26
73
130
114
149
80
47
53
71
98
86
128
Managed Care
39
27
59
57
62
66
46
30
33
28
37
30
Physician Medical Groups
90
135
265
311
264
139
70
39
36
24
36
34
Rehabilitation
50
66
62
80
46
28
11
16
16
18
10
9
Other
98
62
150
214
256
148
101
109
156
114
110
136
TECHNOLOGY
Biotechnology
N/A
52
85
96
127
96
113
E-Health
71
86
59
53
49
60
Medical Devices
76
120
175
164
133
141
Pharmaceuticals
41
87
147
170
171
128
Notes: Includes publicly announced merger and acquisition transactions. N/A = data not collected prior to 2000. Managed Care includes, for example, HMOs, PPOs, and dental and vision plans. Other includes such companies as institutional pharmacies, dental care practices, outpatient surgery centers, etc. E-Health includes companies providing internet-related services, such as online medical record storage systems.
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number:7031 Information Updated: 03/15/06
Trends and Indicators in the Changing Health Care Marketplace Information provided by the Health Care Marketplace Project. Publication Number: 7031
