Kimberly Johnson, RHIA, CPC, CHC - Health Care Compliance ...

July 2010
38
Managing employee
turnover in a
shrinking workforce
Editor’s Note: Joyce Freville is the Vice President
and Chief Compliance Officer for Trilogy Health
Services, LLC in Louisville, Kentucky. Joyce may
be contacted by telephone at (502) 213-1725 or
by e-email at jfreville@trilogyhs.com.
The present long-term care landscape is
full of opportunities to both succeed
and to fail. One of the best methods
to increase the chances of success, both in
quality and financial terms, is to monitor and
manage employee retention. Over the next
half century, the number of individuals who
use long-term care facilities (e.g., nursing
facilities, alternative residential care, or home
care services) will increase, while the number
of qualified staff will decrease.
Let’s look at the landscape we presently face.
Although the future demand for long-term
care (LTC) cannot be precisely predicted, in
2002, the U.S. Government Accountability
Office estimated that spending on LTC will
increase two-and-a-half to four times over the
next 40 to 50 years, reaching $379 million
per year. Furthermore, according to the US
Bureau of Census, the number of Americans
over age 65 will increase by approximately
36.4 million by the year 2030. That equates to
approximately 71.4 million people age 65 and
older, an increase of 104.2%, and they will be
approximately 20% of the US population. 1
The Baby Boomer generation is the fastest
growing segment of the population in the
United States, and encompasses individuals
born between 1946 and 1964. During
this period, the U.S. saw an explosion in
By Joyce Freville, PhD, CHC
birthrates never seen before and not seen
since. The increased longevity of the Baby
Boomer generation will cause a substantial
increase in the size of the elderly population
in the coming decades, and will increase the
demand for long-term care services.
In fact, about 44% of the current population
over 65 will use a nursing home at some
point. By 2050, the nursing home population
is expected to increase to 5.4 million, about
260% greater than in 2000, and the number
of those using home health care to 2.3 million,
about 156% greater than in 2000. 2 Furthermore,
with the increase in Americans over
age 65, there will be a greater need for clinical
workers; however, a nation-wide shortage of
nurses is predicted. The combination of the
personnel shortage, increase in senior citizens,
and the current turnover trend poses a significant
problem to the US health care system.
As Baby Boomers retire, more health care
workers will leave the workforce. Because
Baby Boomers make up such a large part
of the current nursing workforce, this will
create a severe shortage. Furthermore, because
Baby Boomers will make up 20% of the US
population, they will require more health care
as a part of the aging process. 1 Essentially,
the providers will become the recipients of
health care services. With advancement in
medical technology, people are living longer.
With seniors occupying such a large segment
of the population, it is predicted that there
will be a major financial strain on the health
care industry as a whole when they retire; not
only because they will require health care, but
Health Care Compliance Association • 888-580-8373 • www.hcca-info.org
also because they will no longer contribute as
much to the tax base that funds the Medicare
and Medicaid Programs.
Health care cost
The U.S. spent $2.3 trillion on health care in
2008, or $7,681 per person. This amounted
to 16.2% of the nation’s gross domestic product
(GDP). Health care is predicted to rise
to 25% of GDP in 2025 and 49% in 2082. 3
More than a fifth of health care spending
is on Medicare. Moreover, this represents
about 16.2% of the federal budget and 3.5%
of the GDP. Medicare is funded through a
combination of payroll taxes (41%), general
tax revenues (39%), premiums paid by the
elderly (12%), and other sources, such as
interest earned on a trust fund established for
the program. 4 Conversely, Medicaid makes
up approximately 2.6% of the GDP and
represents about one fourth of state expenditures
and approximately 50% of incremental
spending. Over the past five years, Medicaid
enrollment has increased by 40% and will
continue to grow as Baby Boomers age. 4
Long-term care
Based on a study by the Department of Health
and Human Services in 2005, it is estimated
that by 2050, the total number of individuals
who will need LTC services will increase to
approximately 27 million. The aging of the
Baby Boomer generation is the most significant
factor contributing to the demand. The number
of elderly people is expected to more than
double over the next 50 years, increasing from
approximately 8 million to 19 million. The
trends in the size of demand for LTC will follow
trends of the aging Baby Boomer generation.
When Baby Boomers start to reach age 75 in
2021, the use of institutional and home care will
increase significantly. The demand will increase
even more sharply around 2040, when the
majority of Baby Boomers are in their eighties.