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

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

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Summary and Conclusions

Current and future demographics play an important role in determining the demand for and supply of health workers. This report discusses three major demographic trends and discusses their implications for the future demand for and supply of health professionals. Both a literature review and forecasts from two recently updated requirements forecasting models provide insight on the impact of changing demographics on the future health workforce. The major findings are as follows:

Aging of the Population

The aging of the population and the subsequent increase in the size of the elderly population is perhaps the most important demographic trend that will affect the future health workforce. The aging of the population will increase the total amount of health care services demanded, will change the mix of services demanded, and will have profound economic implications that could affect future coverage policies and the provider reimbursement system. Key findings and implications from this literature review and analysis of the PARM and NDM include the following:

If health care consumption patterns and physician productivity remained constant over time, the aging population would increase the demand for physicians per thousand population from 2.8 in 2000 to 3.1 in 2020. Demand for full-time-equivalent RNs per thousand population would increase from 7 to 7.5 during this same period.
In 2000, physicians spent an estimated 32 percent of patient care hours providing services to the age 65 and older population. If current consumption patterns continue, this percentage could increase to 39 percent by 2020.
The aging of the health workforce raises concerns that many health professionals will retire about the same time that demand for their services is increasing. Furthermore, the declining proportion of the population age 18 to 30 raises concerns regarding the ability to attract a sufficient number of new health workers.
The rise in health care expenditures associated with the rapid increase in the elderly population will likely place additional pressures on the Medicaid and Medicare programs, as well as private insurers, to control health care costs. Such measures would likely decrease the demand for and supply of health professionals.
The aging population could result in rising average patient acuity, which could in turn require higher nurse and physician staffing levels. One countervailing trend is that tomorrow's elderly might have lower disability rates than today's elderly, controlling for age, because of improvements in economic resources, education levels, lifestyle, public health, and medical technology.

Changing Racial and Ethnic Composition of the Population

The changing racial and ethnic distribution of the population has important demand and supply implications for the future health workforce. Key findings and implications from this literature review and analysis of the PARM include the following:

The literature suggests that Hispanics and non-whites have different patterns of health care use compared to non-Hispanic whites. Disparities in access to care account for part of the difference in utilization.
Demand for health care services by minorities is increasing as minorities grow as a percentage of the population. Between 2000 and 2020, the percentage of total patient care hours physicians spend with minority patients will rise from approximately 31 percent to 40 percent.
Minorities are underrepresented in the physician and nurse workforce relative to their proportion of the total population. As minorities constitute a larger portion of the population entering the workforce, their representation in the physician and nurse professions will increase. The U.S. will increasingly rely on minority caregivers.
Minority physicians have a greater propensity than do non-minority physicians to practice in urban communities designated as physician shortage areas. An increase in minority representation in the physician workforce could improve access to care for the population in some underserved areas.

Geographic Location of the Population

The geographic location of the population determines where the health care needs of the population lie. Key demographic trends and their implications for the health workforce include the following:

Geographic variation in population growth rates and in determinants of health worker demand and supply highlight the importance of developing forecasting models that can make State-level and sub-State level forecasts.
Although an increasing proportion of the U.S. population resides in urban areas, a substantial proportion of the population will continue to reside in rural areas. Many of these rural areas are currently designated as physician shortage areas.
Pockets of urban areas will continue to have a high concentration of minorities. Many of these areas are currently designated as physician shortage areas.
Pockets of urban areas will continue to have a high concentration of minorities. Many of these areas are currently designated as physician shortage areas. Efforts to increase the supply of health professionals in these areas must deal with economic, cultural and language considerations.

Modeling

One way to better understand the potential implications of demographic and other trends on the demand for health professionals is through modeling of specific scenarios. Using forecasting models such as the PARM and NDM, one can determine the relationship between demographics and demand for health care services and, based on projections of future demographics, extrapolate future demand for health professionals. While there is general agreement that demographics can be extrapolated with sufficient accuracy for policy purposes, there is often disagreement on the future characteristics of other determinants of demand for health professionals. Even modest changes in assumptions regarding the characteristics of the future health care operating system can result in large changes in projected demand for health professionals such as doctors and nurses.

The literature review identified the following items to consider when modeling the impact of changing demographics on the demand for and supply of health professionals:

Current utilization patterns among the elderly might not be sustainable in the future given the expected explosion in Medicare and Medicaid spending. Ginzberg (1999) anticipates that within the next couple of decades Medicare will provide beneficiaries access to "essential" health care services, but not to high-cost hospitals and expensive procedures. Consequently, modeling efforts should consider scenarios where the Medicare and Medicaid programs place greater restrictions on access to expensive medical procedures and delivery settings, or where these programs reduce reimbursement rates to providers.
Numerous authors have found declining disability rates among the elderly over time which could lead to declining utilization rates for nursing home and other health care services (see, for example, Manton et al., 1997; Bonifazi, 1998; Bishop, 1999; and Freedman and Martin, 1998 & 2000).
Freiman (1998) argues that the relationship between race or ethnicity and demand for health care services is a complex function of cultural, socioeconomic, and other considerations. Consequently, Freiman concludes that separate demand equations should be estimated for people in different racial or ethnic groups.
Several studies suggest that physicians locate in areas with other physicians in order to benefit from the professional synergism that develops when there is already an established population of physicians (e.g., Connor, Hillson and Krawelski, 1995; Brasure et al., 1998). Efforts to model the supply of physicians in underserved areas might identify "forerunner" specialties and analyze patterns of physician location.
Efforts to model physician supply might consider adding an urban/suburban/rural dimension to the model for the following reasons. One, there could be a systematic difference in the age distribution of physicians in these geographic locations. Two, the relationship between supply and its determinants could be different in these geographic locations. Three, there is substantial policy interest in forecasting supply in underserved urban and rural areas.
Modeling the primary impact of changing demographics on the future health workforce is straightforward. What are less obvious are the secondary and tertiary impacts. For example, as the population ages and places greater demands on the health care system, how might the system react in terms of changing utilization or provider staffing patterns? Additional research in this area could improve supply and requirements forecasting models.

Information on how demographic trends will affect the future demand for health care services, and consequently the derived demand for health workers, is important to the public debate. Forecasting models provide a tool for analysts to understand the likely impact of changing demographics and other factors on the future demand for health professionals, and on the adequacy of the supply of professionals to meet this demand.