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Changing Demographics and the Implications for Physicians, Nurses, and Other Health Workers

Modeling the Impact of Changing Demographics on the Future Demand for Health Professionals

  1. Physician Aggregate Requirements Model
    1. Modeling Physician Requirements
    2. Modeling Requirements for Physical Therapists, Optometrists, and Podiatrists
  2. Nursing Demand Model

Efforts to model the impact of changing demographics on the demand for and supply of health professionals incorporate many of the demographics trends discussed above as well as trends in economics, technology, the education system, regulation and legislative activities, the health care operating environment, and the ability to substitute between health professionals. Recent modeling efforts differ in level of sophistication, factors used to forecast future supply and demand, and assumptions made by analysts.

A consensus exists that the supply of physicians and nurses can be predicted with an adequate degree of accuracy even 10 or 20 years into the future (see, for example, Tarlov [1995] and Prescott [2000]). Previous efforts to model the requirements for health workers, on the other hand, have met with mixed success and often with controversy. As discussed above, efforts over the past two decades to model requirements show there is little consensus on how best to define requirements, the relationship between requirements and its determinants, the future values of many of these determinants, and forecasters' assumptions.

There is often disagreement regarding how requirements should be defined. For example, should requirements be defined by an assessment of the population's needs? Should requirements be based on demand and, if so, are current levels of employment accurate measures of demand? Should requirements be defined by benchmarking? For example, one could compare physician staffing levels to a level determined to be "efficient" (e.g., HMO staffing patterns). Alternatively, one could compare physician-per-population levels in the U.S. to levels in other countries. Or, should requirements be defined as some combination of demand, needs, and benchmarking? Despite these concerns and disagreements, supply and demand models are important tools to help analysts and policy makers understand the implications of trends and policies.

This section contains a brief description of two requirements forecasting models recently updated by BHPr-the Physician Aggregate Requirements Model (PARM) and the Nursing Demand Model (NDM)-and presents preliminary forecasts of the impact of changing demographics and other user-defined scenarios on requirements for the health professions in these two models. Both models define requirements as the number of health workers that the U.S. is likely to demand based on population needs and economic considerations.

Demographics, especially the growth in size of the elderly population, are the driving force behind most projections of future workforce requirements. Future demographics can be extrapolated with some degree of accuracy based on historical patterns of fertility rates, mortality rates and migration. The Census Bureau publishes its middle series projections that extrapolates future population levels based on expected fertility, mortality, and migration patterns. The Census Bureau last updated the series in 1996, and the middle series under-predicted the size of the 2000 population by approximately 6.8 million individuals (or 2.4 percent of the total population). The population projections used in the PARM and NDM are based on the Census Bureau's middle series projections, but incorporate adjustments based on recently released 2000 census data.

5.1 Physician Aggregate Requirements Model

The PARM combines projections of the future demand for health care services, by medical specialty and setting, with estimates of physician productivity to forecast future requirements. Exhibit 5.1 provides an overview of this process. For a more thorough description of the model and its capabilities see PARM User Guide and Technical Report (Dall, 2002). To calculate future demand for health care services, the PARM first combines population projections (Exhibit 5.2) by six age groups, three race/ethnicity groups, and sex (Box 1 of Exhibit 5.1) with estimates of the proportion of the population in each of three insurance categories (Box 2) to divide the population into 108 categories (Box 3). The six age categories are 0-17, 18-34, 35-54, 55-64, 65-74, and 75 years and older. The three race categories are non-Hispanic white, African American (Hispanic and non-Hispanic), and other (including white Hispanic). The three insurance categories are (1) the insured who receive services in a fee-for-service arrangement, (2) people enrolled in a health maintenance organization (HMO), and (3) the uninsured.

The PARM contains 22 categories of health professionals providing patient care. These categories consist of 19 physician specialties and three non-physician specialties (i.e., physical therapy, podiatry, and optometry). The process to forecast requirements is similar for both physicians and these three non-physician specialties, although the data sources differ.

The workload measures used in the PARM are physician-patient encounters in each of five settings: (1) doctors' offices, (2) hospital outpatient clinics and emergency departments, (3) hospital inpatient (hospital rounds), (4) hospital inpatient (surgery), and (5) other settings (e.g., nursing homes and home health). The PARM multiplies the number of people in each population category by its corresponding estimate of per capita physician-patient encounters (Box 4) to estimate total demand for physician services as measured by physician-patient encounters (Box 5). Estimates of total encounters in each setting (Box 5), multiplied by the average minutes physicians spend per encounter (Box 6), creates an estimate of total physician minutes required to provide patient care (Box 7). Note that the minutes per encounter include an adjustment for indirect patient care to capture time spent on tasks such as completing paperwork and reviewing patient histories.

Total required minutes (Box 7), divided by estimates of total annual patient care minutes per physician in each specialty (Box 8), creates forecasts of total physician requirements for patient care activities (Box 9). The data on physician-patient encounters and physician productivity come from the AMA annual survey and thus only include MDs. Consequently, an adjustment is made to the physician requirement counts to include DOs (Box 10). Data on the number of DOs in 1999, by specialty, come from the American Osteopathic Association. These numbers are inflated, using recent growth rates by DO specialty, to update the numbers to the base year of 2000. In addition, requirements for physicians in non-patient care activities (e.g., administration, teaching, and research) are calculated as a fixed percentage of physicians in patient care. Calibration adjustments are made to equate base year forecasts of actual physician supply with base year estimates of total requirements (Box 11), and this produces the refined forecasts of requirements for the 22 original specialties plus a category for physicians in nonpatient care activities. The base year for total MD counts is 2000.[10] The base year counts of MDs come from the AMA's Physician Characteristics and Distribution in the US: 2002-2003 Edition. Active MDs whose specialty is unknown are distributed across the other specialties based on those specialties' proportion of total active physicians.The shaded boxes (i.e., boxes 2, 4, and 6) indicate areas of the PARM where the user can easily change the forecasting assumptions.

Exhibit 5.1 PARM Structure


Exhibit 5.2 U.S. Population Forecasts (in thousands)

Race Sex Age Year
1999 2000 2005 2010 2015 2020
Non-Hispanic White Men 0-17 22,737 22,628 22,042 21,315 21,067 21,143
18-34 21,373 21,223 21,069 21,375 21,641 21,174
35-54 29,670 29,974 29,654 27,994 25,887 24,596
55-64 9,027 9,231 11,341 13,104 14,371 14,675
65-74 6,871 6,846 6,894 7,854 9,817 11,599
75+ 5,141 5,255 5,686 6,019 6,367 7,341
Men Total 94,818 95,158 96,685 97,661 99,150 100,528
Women 0-17 21,501 21,399 20,851 20,152 19,902 19,965
18-34 21,003 20,842 20,597 20,842 21,116 20,672
35-54 29,896 30,214 29,996 28,385 26,258 24,909
55-64 9,594 9,796 11,931 13,730 14,967 15,241
65-74 8,233 8,132 7,919 8,789 10,750 12,485
75+ 8,887 9,011 9,352 9,318 9,395 10,184
Women Total 99,113 99,395 100,646 101,216 102,389 103,456
Non-Hispanic White Total 193,931 194,553 197,332 198,877 201,539 203,984
African American Men 0-17 5,483 5,532 5,799 5,987 6,282 6,619
18-34 4,305 4,319 4,474 4,765 5,052 5,276
35-54 4,374 4,483 4,768 4,747 4,697 4,722
55-64 1,029 1,057 1,317 1,637 1,969 2,149
65-74 660 666 707 864 1,096 1,404
75+ 400 408 450 473 517 594
Men Total 16,252 16,465 17,515 18,472 19,613 20,763
Women 0-17 5,310 5,354 5,593 5,754 6,017 6,322
18-34 4,643 4,653 4,800 5,053 5,338 5,566
35-54 4,999 5,125 5,477 5,626 5,582 5,602
55-64 1,277 1,313 1,634 2,102 2,512 2,735
65-74 937 947 1,009 1,136 1,423 1,802
75+ 791 802 864 876 949 1,071
Women Total 17,957 18,193 19,376 20,547 21,821 23,096
African American Total 34,209 34,658 36,892 39,020 41,434 43,859
Other (including Hispanic White) Men 0-17 8,676 8,899 10,050 11,092 12,317 13,752
18-34 8,340 8,453 9,160 9,063 10,324 11,398
35-54 6,221 6,488 7,627 10,078 10,741 11,450
55-64 1,298 1,357 1,786 2,408 3,051 3,710
65-74 761 791 945 1,224 1,608 2,111
75+ 418 443 585 764 963 1,226
Men Total 25,713 26,431 30,153 34,630 39,004 43,647
Women 0-17 8,269 8,482 9,577 10,570 11,739 13,100
18-34 7,390 7,546 8,439 9,077 10,303 11,348
35-54 6,288 6,543 7,618 9,524 10,354 11,259
55-64 1,452 1,520 2,015 2,709 3,339 3,943
65-74 976 1,009 1,176 1,486 1,941 2,495
75+ 642 681 901 1,182 1,455 1,810
Women Total 25,017 25,780 29,725 34,549 39,130 43,955
Other Total 50,730 52,211 59,877 69,179 78,134 87,602
Total U.S. Population 278,870 281,422 294,100 307,075 321,107 335,444

Source: Modified version of Census Bureau middle series projections.

The base year for the PARM is 2000; however, data from 1996 to 2000 are pooled from some health care use databases to increase sample size. Data from the 1999 National Health Interview Survey (NHIS) are used to estimate the proportion of people in each demographic category among three possible insurance status groups.

5.1.1 Modeling Physician Requirements

To estimate per capita demand for physician services from each of the 108 population groups in the PARM, we first estimated the total amount of care that physicians in each specialty provide in each setting. We estimated these totals using AMA estimates for 1999 of the total number of MDs in each medical specialty primarily engaged in patient care, and data from the 1998 and 1999 AMA physician surveys that asked respondents the average number of weeks worked per year and average encounters (i.e., visits or surgical procedures) per week with patients. These data come from the 1999-2000 and 2000-2002 editions of the Physician Socioeconomic Statistics. Published statistics from the 1998 and 1999 surveys were averaged because sample sizes for some specialties are relatively small.

We used the following databases to determine the distribution of total patient-physician encounters across the 108 population subgroups:

  • The 1997, 1998, and 1999 National Ambulatory Medical Care Survey (NAMCS) databases were pooled to analyze patient-physician encounters in physicians' offices.
  • The 1997, 1998 and 1999 National Hospital Ambulatory Care Survey (NHAMCS) databases were pooled to analyze patient-physician encounters in hospital outpatient and emergency department settings.
  • The 1997 and 1998 Health Care Cost and Utilization Project (HCUP) databases were pooled to analyze patient-physician encounters in hospital inpatient settings.
  • The 1996 and 1998 National Home and Hospice Care Survey (NHHCS) databases were pooled to analyze patient-physician encounters in patients' homes.

As illustrated in Exhibit 5.1, we combine information on per capita demand for physician services obtained from an analysis of these databases with population forecasts and estimates of annual physician time spent in patient care to forecast future requirements for physicians.

Below we present forecasts of physical requirements under five scenarios. We selected these scenarios based on policies being advocated in the political arena and scenarios looked at in previous modeling efforts. In all of these scenarios, changing demographics-and in particular the aging of the population-are a major determinant of the projected increase in physician requirements between 2000 and 2020. Comparing the forecasts from a particular scenario to the forecasts from scenario 1 (which represents the status quo) indicates the impact upon physician requirements attributed to changing demographics and/or changes in forecasting assumptions.

  • Scenario 1, the status quo, assumes that patterns of health care use, insurance distribution, physician staffing, and physician productivity remain constant over time similar to the patterns that existed in the late 1990s.[11] As discussed above, the PARM assumes that an adequate supply of physicians existed in the base year (i.e., 2000). An over (or under) supply of physicians in the base year will result in an over (or under) estimate of requirements in future years. Patterns of health care use cover the period 1996 to 1999.Under this scenario, the number of physicians would increase from approximately 781,300 in 2000 to 1,038,200 in 2020, a 33 percent increase (Exhibits 5.3 and 5.4). At the same time, the U.S. population would increase by 19 percent, so that the ratio of physician per population would rise from 2.8 per thousand population in 2000 to 3.1 per thousand population in 2020. Medical specialties experiencing the largest percentage increases in demand between 2000 and 2020 are cardiovascular diseases (52 percent), radiology (51 percent), pathology (44 percent) and various surgical specialties (44 percent). Medical specialties experiencing the smallest percentage increases in demand are pediatrics (11 percent), obstetrics/gynecology (14 percent) and psychiatry (22 percent).
Exhibit 5.3 Impact of Changing Demographics on Requirements for Physicians: Status Quo Scenario
Medical Specialty 2000 2005 2010 2015 2020 % Change 2000 to 2020
Total Physicians (MDs and DOs)
781,282
831,447
891,687
959,996
1,038,234
33
Total Patient Care Physicians
733,342
780,266
836,594
900,574
973,840
33
General Primary Care
268,710
283,632
300,651
320,992
344,907
28
GP & FP
109,571
115,583
122,512
130,358
139,252
27
General Internal Med.
106,411
114,197
123,645
134,406
146,885
38
Pediatrics
52,728
53,852
54,494
56,228
58,770
11
Medical Specialties
96,926
104,145
113,200
123,560
135,331
40
IM Subspecialties
40,205
43,336
47,301
51,841
56,955
42
Cardiovascular Diseases
20,828
22,675
25,143
28,172
31,690
52
Other Medical Specialties
35,893
38,133
40,756
43,548
46,687
30
Surgery
161,160
171,133
183,519
197,706
213,196
32
General Surgery
37,604
40,605
44,473
48,805
53,641
43
Obstetrics/Gynecology
43,068
44,547
46,168
47,802
48,962
14
Otolaryngology
9,839
10,326
10,877
11,520
12,248
24
Orthopedic Surgery
23,225
24,804
26,736
28,965
31,596
36
Urology
10,690
11,455
12,448
13,696
15,122
41
Ophthalmology
18,876
20,099
21,650
23,643
25,972
38
Other Surgical Specialties
17,858
19,296
21,167
23,276
25,655
44
Other Patient Care
206,545
221,355
239,224
258,315
280,405
36
Psychiatry
44,495
46,877
49,340
51,537
54,116
22
Anesthesiology
36,762
39,547
43,188
47,499
52,493
43
Emergency Medicine
23,494
24,813
26,206
27,802
29,505
26
Radiology
30,354
33,218
36,919
41,005
45,855
51
Pathology
16,757
18,229
20,174
22,019
24,167
44
Other Specialties
54,683
58,672
63,398
68,453
74,270
36
Non Patient Care
47,940
51,182
55,093
59,422
64,394
34
Total U.S. Population (Thousands)
281,422
294,100
307,075
321,107
335,444
19

Exhibit 5.4 Forecasts of Physician Requirements Under the Status Quo Scenario

Exhibit
5.4 Forecasts of Physician Requirements Under the Status Quo Scenario

Exhibit 5.4 Forecasts of Physician Requirements Under the Status Quo Scenario (Text Only)

  2000 2005 2010 2015 2020
General Primary Care 268,710 283,632 300,651 320,992 344,907
Medical Specialties 96,926 104,145 113,200 123,560 135,331
Surgery 161,160 171,133 183,519 197,706 213,196
Other Patient Care 206,545 221,355 239,224 258,315 280,405
Non Patient Care 52,327 55,807 59,981 64,626 69,979
  • Scenario 2, baseline, produces the requirements forecasts that are most likely to occur based on projected trends in managed care growth and the shifting of care from higher cost to lower cost settings. This scenario is comparable to the baseline scenario in the NDM, described later in Section 5.2, which assumes that HMO enrollment rates will increase by half a percentage point per year between 2000 and 2020 (with the gains in HMO enrollment coming from the population insured under a fee-for-service arrangement). In addition, this scenario assumes that each year, 2 of inpatient-based surgeries will shift to an outpatient setting. Regression analyses conducted to update the NDM find that for each 1 increase in the proportion of hospital-based surgeries performed on an outpatient basis, demand for inpatient days at acute care hospitals will decline by 0.47, outpatient visits will increase by 0.66, and home health visits will increase by 0.86. Using this information, the baseline scenario assumes a gradual decrease in per capita demand for inpatient days and surgery performed on an inpatient basis, and a gradual increase in outpatient visits and "other" visits. Exhibit 5.5 presents the forecasts for this scenario. Under this scenario, total requirements for physicians would increase by 28 percent between 2000 and 2020 to 996,400. Compared to the status quo scenario, there would be the same level of growth in general primary care specialties (28 percent), but slower growth in medical specialties (33 percent versus 40 percent), surgical specialties (17 percent versus 32 percent), and "other" patient care specialties (32 percent versus 36 percent).

Exhibit 5.5 Impact of Changing Demographics on Requirements for Physicians: Baseline Scenario

Specialty 2000 2005 2010 2015 2020 % Change
2000 to 2020
Total Physicians (MDs and DOs)
781,282
823,465
874,019
931,208
996,387
28
Total Patient Care Physicians
733,342
772,936
820,389
874,069
935,248
28
General Primary Care
268,710
284,113
301,283
321,556
345,039
28
GP & FP
109,571
115,576
122,428
130,168
138,846
27
General Internal Med.
106,411
114,438
123,929
134,583
146,730
38
Pediatrics
52,728
54,099
54,926
56,806
59,463
13
Medical Specialties
96,926
102,850
110,381
119,005
128,730
33
IM Subspecialties
40,205
42,759
46,041
49,799
53,993
34
Cardiovascular Diseases
20,828
22,235
24,192
26,629
29,440
41
Other Medical Specialties
35,893
37,856
40,149
42,577
45,297
26
Surgery
161,160
165,957
172,525
180,173
188,291
17
General Surgery
37,604
38,974
40,943
43,086
45,378
21
Obstetrics/Gynecology
43,068
43,721
44,495
45,260
45,567
6
Otolaryngology
9,839
10,003
10,214
10,498
10,847
10
Orthopedic Surgery
23,225
23,995
25,001
26,169
27,547
19
Urology
10,690
11,115
11,737
12,567
13,511
26
Ophthalmology
18,876
19,746
20,915
22,491
24,378
29
Other Surgical Specialties
17,858
18,402
19,219
20,102
21,064
18
Other Patient Care
206,545
220,016
236,199
253,334
273,187
32
Psychiatry
44,495
46,925
49,329
51,398
53,782
21
Anesthesiology
36,762
39,547
43,188
47,499
52,493
43
Emergency Medicine
23,494
24,285
25,103
26,079
27,122
15
Radiology
30,354
33,218
36,919
41,005
45,855
51
Pathology
16,757
18,229
20,174
22,019
24,167
44
Other Specialties
54,683
57,812
61,487
65,333
69,768
28
Non Patient Care
47,940
50,528
53,630
57,140
61,139
28
Total Population (Thousands)
281,422
294,100
307,075
321,107
335,444
19
  • Scenario 3, universal health care coverage, assumes that the entire U.S. population has medical insurance. Under this scenario, the PARM moves a portion of the uninsured population into the insured fee-for-service and HMO settings based on the current proportion of the insured population in each of those two settings. The primary motivation for this scenario is that some advocates for the uninsured would like to see the Government sponsor more initiatives to cover the uninsured. Under this scenario, total demand for physicians would have been an estimated 817,615 in 2000, and would increase to an estimated 1,092,400 in 2020-a 40 percent increase from current (2000) baseline and/or status quo levels (Exhibits 5.6, 5.7, and 5.8). (It should be noted that under the status quo scenario, although substantially short of universal coverage, the percentage of population with medical insurance will rise over time as the population ages and a larger proportion of the population becomes Medicare-eligible.)
  • Scenario 4 is universal health care coverage with 100 of the population enrolled in a health maintenance organization. The motivation for this scenario is work performed by Weiner (1994) and others on requirements for physicians under a managed care environment. Under this scenario, total physician requirements would have been an estimated 781,900 in 2000 and would increase to 1,059,900 in 2020-a 36 percent increase from current levels (Exhibits 5.6, 5.7, and 5.8).
  • Scenario 5, non-minority rates, assumes that minorities have similar rates of medical insurance coverage as non-Hispanic whites within each demographic group defined by age and sex. Under this scenario the percentage of the population uninsured, insured under a fee-for-service arrangement, and in an HMO applicable to non-Hispanic whites is applied to the other two race/ethnicity groups. The motivation for this scenario is equality across racial and ethnic groups in access to medical coverage. Under this scenario, demand for physicians would have been an estimated 802,400 in 2000, increasing to 1,072,000 in 2020-a 37 percent increase from current levels (Exhibits 5.6, 5.7, and 5.8).

Exhibit 5.6 Forecasted Physician Requirements Under Five Scenarios

Exhibit 5.7 Forecasts of Physician Requirements in 2000 Under Alternative Scenarios  

Exhibit 5.7 Forecasts of Physician Requirements in 2000 Under Alternative Scenarios (Text Only)

  Total Physicians
Status Quo 781,282
Baseline 781,282
Universal Coverage 817,615
Universal HMO Coverage 781,889
Non-minority Rates 802,356

Exhibit 5.8 Forecasts of Total Physician Requirements in 2020 Under Alternative Scenarios

 

Exhibit 5.8 Forecasts of Total Physician Requirements in 2020 Under Alternative Scenarios (Text Only)

  Total Physicians
Status Quo 1,038,234
Baseline 996,387
Universal Coverage 1,092,381
Universal HMO Coverage 1,059,907
Non-minority Rates 1,072,048

5.1.2 Modeling Requirements for Physical Therapists, Optometrists, and Podiatrists

The PARM also models requirements for physical therapists, optometrists, and podiatrists. These three specialties are modeled using the same approach as physicians, but rely on different data sources. The following data sources are used to model demand for physical therapists:

  • Data from the 2000 Occupational Employment Statistics (OES), which are published by the Bureau of Labor Statistics (BLS), provide information on the total number of physical therapists in 2000. In addition, the BLS reports the total hours per week worked, and weeks per year worked, on average, for physical therapists:
  • The American Physical Therapy Association estimates that physical therapists spend approximately 13.9 percent of their time in inpatient settings (Vector Research Inc., 1997). Multiplying this percentage by the estimate of the total number of physical therapists as published by the BLS produced an estimate of the number of FTE physician therapists working in inpatient settings.
  • An analysis of the 1996 Medical Expenditure Panel Survey (MEPS) provided additional information on the distribution of visits with physical therapists by delivery setting, but the sample sizes were insufficient to estimate the distribution of visits across the 108 population groups in the PARM. Consequently, we pooled data from the 1998, 1999, and 2000 NHIS on people who reported a visit with a physical therapist to distribute our estimate of total physical therapist visits across the 108 population groups. [12]

The following data sources and steps describe the approach used to forecast requirements for optometrists:

  • A major source of data on optometrists is a paper by White, Doksum and White (2000) entitled "Workforce Projections for Optometry." These authors analyzed survey data and report information on the current size of the optometrist workforce, patient encounters and associated time requirements, and demographic characteristics of patients. In addition, these analysts provide estimates of the total hours per week worked in patient and non-patient care.
  • One important data item not included in the White et al. paper was a breakdown of the hours spent by optometrists in different patient care settings. An examination of the 1998 BMAD (Part-B Medicare Annual Data) beneficiary file, which provides information on Medicare Part-B carriers, provided some information on the distribution of patients by practice setting. Although Medicare patients make up only a small percentage of total visits to optometrists, we used the distribution of practice setting from optometrists who saw Medicare patients to approximate the overall distribution of optometrists' time by delivery setting. This was a less than perfect remedy, but it does not alter the accuracy of the forecasts except with regard to practice setting. This is because the data on the actual productivity of the optometrists, which is based on minutes per visit and total patient care hours worked, comes directly from the White et al. survey. Productivity is assumed equal among all practice settings.
  • Although the White et al. paper provides information on patient demographics, the information is insufficient to distribute total visits across the 108 population groups in the PARM. Like the analysis for physical therapists, we pooled data from the 1998, 1999, and 2000 NHIS on people who reported a visit to an eye doctor (including optometrists and ophthalmologists) to distribute our estimate of total optometrist visits across the 108 population groups. We used a similar approach to estimate base year visits to podiatrists and then extrapolate future requirements for podiatrists.
  • The American Podiatric Medical Association (APMA) provides data on total visits to podiatrists per year, as well as the total number of FTE podiatrists in the current workforce. [13] APMA also publishes data indicating the hours per week, weeks per year, and visits per week of the typical podiatrist.
  • To distribute total visits across the 108 population groups in the PARM, we pooled data from the 1998, 1999, and 2000 NHIS on people who reported a visit to a foot doctor.
  • Finally, to create a distribution of visits over practice settings, BMAD Medicare data were analyzed in a similar fashion to that used for optometrists. The totality of these data sources proved sufficient to create baseline estimates for podiatrist visits by demographic group, and the order of the procedures undertaken was analogous to that used for optometrists.

Exhibit 5.9 shows the requirements projected for these three professions. In 2000, there were an estimated 120,410 physical therapists, 30,468 optometrists, and 13,320 podiatrists. Under the status quo scenario, the number of physical therapists, optometrists, and podiatrists will increase by 18 percent, 20 percent, and 28 percent, respectively, between 2000 and 2020. Exhibit 5.10 shows the projected requirements under the five scenarios described previously.

Exhibit 5.9 Impact of Changing Demographics on Requirements for Physical Therapists, Optometrists, and Podiatrists

Profession 2000 2005 2010 2015 2020 % Change 2000 to 2020
Physical Therapy 120,410 125,476 130,636 136,235 142,065 18
Optometry 30,468 31,825 33,270 34,900 36,576 20
Podiatry 13,320 14,066 14,916 15,910 17,030 28
Total U.S. Population (Thousands) 281,422 294,100 307,075 321,107 335,444 19

Exhibit 5.10 Forecasted Requirements for Physical Therapists, Optometrists, and Podiatrists Under Alternative Scenarios

Scenario Physical Therapy Optometry Podiatry
2000 2020 2000 2020 2000 2020
1: Status Quo 120,410 142,065 30,468 36,576 13,320 17,030
2: Baseline 120,410 165,360 30,468 39,326 13,320 18,410
3: Universal Coverage 126,163 149,291 32,233 38,735 14,034 17,935
4: 100HMO 137,111 171,790 36,793 46,781 17,258 23,297
5: Non-minority Rates 122,301 145,128 30,925 37,286 13,536 17,391

5.2 Nursing Demand Model

The Nursing Demand Model forecasts demand for RNs, LPNs and nurse aides by delivery setting and State through 2020 based on projected changes in demographics and other factors that affect patterns of health care use and nurse staffing. Below is a brief description of the recently revised NDM and preliminary forecasts that show the impact of changing demographics and other determinants on nurse demand. For a more detailed description of the NDM, the data used in the NDM, the assumptions that go into the model and the forecasts, see The Nursing Demand Model: Development and Baseline Forecasts (Dall and Hogan, 2002).

The NDM uses an eclectic approach to forecast demand that combines empirical analysis with input from health care experts regarding how the health care system operates and the role of nurses in the delivery of care. The purpose of the model is to forecast future demand for health care services in different delivery settings, and then to forecast the number of FTE RNs, LPNs, and nurse aides in each setting to meet the projected demand for nursing services. The NDM forecasts demand for nurses at the State level and then aggregates these numbers to obtain a national estimate. The NDM seeks to answer four questions:

  1. What will be the future health care demands of the population?
  2. Where will patients receive health care services?
  3. What level of nursing services will patients require?
  4. Who will provide these nursing services?
Exhibit 5.11 visually depicts how the NDM combines input databases and forecasting equations to answer these four questions. The NDM contains two major components: (1) the data and equations to forecast future demand for health care services, and (2) the data and equations to forecast future nurse staffing patterns.

Modeling Demand for Health Care

The following steps produce forecasts for inpatient days in short-term (ST) and long-term (LT) hospitals, outpatient and emergency department visits in ST hospitals, nursing facility residents, and home health visits:

  • Step 1, combine State-level population forecasts with national estimates of per capita health care utilization to extrapolate expected demand for health care services. For each of the six health care delivery settings modeled, there are 32 per capita utilization rates applied to 32 population strata divided into eight age categories, by sex, and by urban or rural location. The eight age categories are ages 0-4, 5-17, 18-24, 25-44, 45-64, 65-74, 75-84, and 85 and older. Then, apply per capita utilization rates from the base year (1996) to extrapolate demand for health care services. Demand is measured in terms of inpatient days, outpatient visits, and emergency department visits in hospitals; home health visits; and nursing facility residents. This first step controls for variation across States and over time in demographics.
  • Step 2, adjust up or down these initial extrapolations of health care demand in each State and year based on projected changes in the health care operating environment, economic conditions, and the overall health of the population. This step creates a more refined forecast of future demand for health care services. The relationship between demand for health care and its determinants (e.g., HMO enrollment rates, changes in technology), after controlling for demographics, was estimated using multiple regression analysis.
  • Step 3, calibrate the model by calculating multiplicative adjustment factors that equate base-year forecasts of health care demand with the base-year estimates of actual demand, and then apply these State-level adjustment factors to the forecasts.

Modeling Nurse Staffing Intensity

The following steps produce forecasts of staffing intensity measured in terms of FTE nurses per inpatient day, per visit, per nursing facility resident, or per population depending on the nurse type and setting modeled.

  • Step 1, apply the projections of future health care market conditions and other determinants of staffing intensity (e.g., relative wages of RNs, LPNs, and nurse aides, patient acuity levels, and reimbursement rates for health care services) to the 22 forecasting equations-one for each nurse-type-by-setting combination-to create preliminary estimates of staffing intensity. These forecasting equations were estimated by regressing nurse staffing intensity on various determinants.
  • Step 2, calibrate the model by calculating multiplicative adjustment factors that equate base-year forecasts of staffing intensity with the base-year estimates of actual staffing intensity, and then apply these State-level adjustment factors to the forecasts.

Combining estimates of future demand for health care services (e.g., demand for inpatient care in ST hospitals as measured in total inpatient days) with forecasts of future staffing intensity (e.g., FTE nurses per 1,000 inpatient days) creates the demand forecasts.

The majority of the forecasting equations were estimated using multiple regression analysis with State-level data from 1996 through 2000 (although most regression equations were estimated using a subset of these years based on data availability). Both theory and empirical analysis helped determine which exogenous variables to use in the forecasting equations. Three criteria considered in selecting variables are (1) a logical relationship between the exogenous variable and the dependent variable, (2) the impact of the exogenous variable on the dependent variable is statistically significant, and (3) forecasts of the exogenous variables are readily available or can be reliably extrapolated into the future.

The revised NDM runs as a stand-alone program to be run on a personal computer in a Windows environment. The model, like the PARM, allows the user to change assumptions regarding the future determinants of nurse demand.

Exhibit 5.11 Overview of the Nursing Demand Model

Data on nurse staffing levels during the base year come from multiple sources. The estimates of FTE RNs come from the 1996 Sample Survey of RNs. Estimates of LPNs and nurse aides come from the Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES), the American Hospital Association (AHA) annual survey, and the American Health Care Association (AHCA). Data that describe the current and future trends in the health care operating environment, patient acuity levels, economic conditions, etc., and that are used to forecast future health care utilization patterns and nurse staffing patterns come from publications from various government agencies and private organizations. The NDM assumes that the labor market for nurses was in equilibrium in 1996 (the base year) with the exception of hospitals. The NDM uses employment levels in 1996 as a demand-based measure of nurse requirements, but increases requirements for RNs in hospitals by 7 percent above employment levels. The reason for this adjustment is based on analyses of the 1992, 1996, and 2000 Sample Surveys of RNs that show a significant decrease in the proportion of RNs in hospitals between 1992 and 1996-possibly as a result of extensive cost-cutting measures and hospital mergers that occurred during the early 1990s (Dall and Hogan, 2002). Hospitals in many parts of the U.S. have been unable to fill vacant RN positions reopened after these turbulent times for RNs in hospitals.

The forecasts presented below show the increase in projected demand for nurses under a status quo scenario where there is no change in per capita health care utilization rates (within the 32 demographic groups) and no change in nurse staffing ratios (Exhibit 5.12). This scenario is comparable to the status quo scenario used to forecast physician requirements using the PARM. These projections simply show the impact of changing demographics on the demand for health care services.[14] Under this scenario, changing demographics will result in a projected 28 percent increase in demand for RNs between 2000 and 2020, a 32 percent increase in demand for LPNs, and a 37 percent increase for nurse aides. The areas with the largest percentage growth are those that predominantly serve the elderly: home health and nursing facilities (Exhibit 5.13).

Note that these forecasts of total nurse requirements under the status quo scenario are lower than The NDM baseline scenario forecasts which incorporate trends in factors other than changing demographics that affect future demand for nurses (Exhibits 5.14 and 5.15). The NDM's baseline forecast predicts an increase in total FTE RN requirements from 2 million in 2000 to 2.8 million in 2020 (a 41 percent increase), an increase in total FTE LPN requirements from 618,000 in 2000 to 905,000 in 2020 (a 46 percent increase), and an increase in FTE nurse aide and home health aide requirements from 1.5 million in 2000 to 2.3 million in 2020 (a 50 percent increase). Demand for nurses and nurse aides will continue to grow in hospitals during the next two decades, but at a slower rate than for the nursing professions as a whole. The exception is the strong growth in demand for RNs in hospital outpatient settings as technological innovations and managed care trends shift patients from inpatient to outpatient care.

Under the baseline scenario, the aging of the population and resulting increase in demand for geriatric care suggests large increases in demand for nurses and nurse aides in home health and nursing facilities. Demand for RNs, LPNs and NAs in home health is projected to increase by 109 percent, 137 percent, and 67 percent, respectively, between 2000 and 2020. Demand for RNs, LPNs and NAs in nursing facilities is projected to increase by 66 percent, 66 percent, and 61 percent, respectively, between 2000 and 2020.

Exhibit 5.12. Forecasts of FTE Nurse Demand: Status Quo Scenario

 

Exhibit 5.12. Forecasts of FTE Nurse Demand: Status Quo Scenario (Text Only)

  1996 2000 2005 2010 2015 2020
Registered Nurses 1,889,326 1,964,920 2,075,690 2,198,904 2,342,782 2,505,747
Licensed Practical Nurses 578,444 604,151 644,026 687,281 734,242 787,329
Nurse Aides & Home Health Aides 1,487,915 1,487,792 1,593,810 1,708,561 1,835,164 1,983,582

Exhibit 5.13. Forecasts of FTE Nurse Demand: Status Quo Scenario

Exhibit 5.14. Forecasts of FTE Nurse Demand: Baseline Scenario

 

Exhibit 5.14. Forecasts of FTE Nurse Demand: Baseline Scenario (Text Only)

  1996 2000 2005 2010 2015 2020
Registered Nurses 1,889,326 2,001,198 2,160,980 2,346,388 2,568,253 2,822,388
Licensed Practical Nurses 578,444 617,946 675,190 740,928 816,291 905,159
Nurse Aides & Home Health Aides 1,487,915 1,545,722 1,702,803 1,880,368 2,083,860 2,323,518

Exhibit 5.15 Forecasts of FTE Nurse Demand: Baseline Scenario

Executive Summary | Introduction | Aging of the Population | Changing Racial and Ethnic Composition of the Population | Geographic Location of the Population | Modeling the Impact of Changing Demographics on the Future Demand for Health Professionals | Summary and Conclusions | References

 

 


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