According to data from the American Hospital Association (1), in 1985, the United States had 5732 operational community hospitals; by 2002, the latest year for which figures are available, the number had decreased to 4927, a loss of approximately 14% (1). In that same timeframe, these hospitals lost approximately 18% of their beds, dropping from just over 1 million to 820,653 beds. This reduction in bed capacity has been accompanied by hospital cost-cutting efforts, staff downsizing, and elimination of services. Many explanations for these trends have been suggested, including changes in Medicare reimbursement and the growth of managed care organizations (MCOs).
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However, as the current baby boom generation ages, rising inpatient demands are presenting hospitals with significant challenges. According to a 2001 report from Solucient (2), who maintains the nation’s largest health care database, the senior population—individuals age 65 and older—are projected to experience an 85% growth rate over the next two decades. Since this age group utilizes inpatient services 4.5 times more than younger populations, the number of admissions and beds to accommodate those cases will soar. By the year 2027, hospitals can anticipate a 46% rise in demand for acute inpatient beds as admissions escalate by approximately 13 million cases. Currently, the nation’s healthcare facilities admit 31 million cases; this number will jump to more than 44 million, representing a 41% growth from present admissions figures. For hospitals that maintain an 80% census rate, an additional 238,000 beds will be needed to meet demands (1).
Adding to this increase in demand and pressure on bed capacity, hospitals must address the requirements of the Emergency Medical Treatment and Active Labor Act (EMTALA) passed by the US Congress in 1986 as part of the Consolidated Omnibus Reconciliation Act (COBRA). The law’s initial intent was to ensure patient access to emergency medical care and to prevent the practice of patient dumping, in which uninsured patients were transferred, solely for financial reasons, from private to public hospitals without consideration of their medical condition or stability for the transfer (3). EMTALA mandates that hospitals rank the severity of patients. Thus, tertiary referral centers are required to admit the sickest patients first. This directive presents a significant challenge to many healthcare facilities. High census rates prohibit the admission of elective surgical cases, which, although profitable, are considered second tier. Routine medical cases or complicated emergency surgical cases have the potential to adversely affect the institution’s financial performance.