Just as our country has endured an unprecedented economic crisis in the past 24 months, the United States will soon be in an unprecedented healthcare HUMAN CAPITAL crisis that will catch many off guard, just as the economic crisis of 2008 did for so many. There are several factors for this with Healthcare reform setting the stage for the “perfect storm” as the first of the “baby boomers” turns 65 in 2011. Just as government run Fannie and Freddie Mac helped fuel the economic crisis of 2008 – the current environment is ripe for a healthcare human capital crisis. It is no question that reform in healthcare is needed. What type of reform is the ultimate question. In their book, Redefining Health Care, the authors point out the following; “Health care is on a collision course with patient needs and economic reality. In today’s dysfunctional health care competition, players strive not to create value for patients but to capture more revenue, shift costs, and restrict services. To reform health care, we must reform the nature of competition itself.”
The Institute of Medicine in their 2008 report Retooling for an Aging America clearly leads the way when it comes to understanding the significant impact of the aging population which has not been seen before in our history. Here are the facts from the IOM report 2008.
1. Between now and 2030 the number of adults aged 65 or over will double. This dramatic shift will place unseen and accelerating demands on the US healthcare system. The sheer number of older patients will overwhelm the number of physicians and other healthcare professionals unless something is done.
2. Beginning in 2011 – the 1st wave of the baby boom generation will begin to turn 65 – the 78 million baby boomers will tip the population scale growing from 12 to 20% by 2030.
3. Older Americans will consume much more healthcare and this is not built into the $900 billion Healthcare reform estimate. The current 12% of older Americans currently accounts for 26% of all physician visits – by growing to 20% – older Americans will account for more than 50% of healthcare utilization just as these reforms start to take affect.
The recommendations laid out by the IOM report are essential in healthcare reform – but have not been addressed in the current healthcare model. Other demographic factors are at play, such as, the aging healthcare workforce. Leaders in healthcare human capital retention understand that we are in the “eye of the storm” with a false sense of security with the impending wave of baby boomers, the backlog of new grads, and the eventual retirement of veteran nurses. This is especially true in the competition for quality licensed healthcare professionals who drive the revenue and deliver the highest quality in patient care. The reality is that the demand for healthcare is going up and the supply of available licensed professionals is going down. This demand cycle will be good for professionals who will see significant growth in salaries and perks, but it will be a challenge for healthcare organizations wanting to attract and retain their people with the aging population and workforce – added with the new demands of Healthcare reform.