As much as they might want to, the 2.5 million baby boomers working in health care today aren’t going to stick around forever.
After pushing the field to the threshold of transformation — from one that was local and set in its ways to one that is increasingly national, with higher stakes than ever — many of these veteran professionals will bow out before the revolution is complete.
The generation’s departure from the workforce will be gradual, posing both problems and opportunities for the industry. The intellectual capital they take with them will be sorely missed and difficult to replace. However, their exodus may quicken the pace at which hospitals make much-needed changes to their staffing models to meet the demands of the new and still emerging health care landscape.
Framing the Issue:
• The health care workforce is dominated by baby boomers, and many are reticent to leave.
• Once the boomer exodus begins, shortages may hit all segments of the health care workforce.
• Centering health care within teams may avert a disaster. If care teams work more efficiently, fewer staffers will be needed.
• Similarly, making better use of caregivers’ working with physicians should help.
It’s already clear that predictions of workforce shortages were overblown, as economic and other factors prompted older managers and nurses to remain on the job. “One of the trends we’re seeing is that many baby boomers are not retiring as early as we all had feared,” says Carolyn Jacobson, chief human resources officer for Fairview Health Services in Minneapolis.
In many ways that’s good, Jacobson says, because it gives the health system more time to prepare.
For managers, changes in attitude
Health care managers in the boomer generation have a different attitude from their predecessors about how long their careers should last — and so do many employers.
Some boomers have settled in at the director or vice president level and don’t want to move, says Mark Madden, senior vice president of executive search firm B.E. Smith. “We know the baby boomers have defined themselves by their work, and they’re not leaving as early as the previous generation did,” he explains. “The topic is very hot in our industry, because it is something we haven’t experienced before.”
At search firm Witt/Kieffer, placements of health care executives 60 and older have nearly doubled over a 10-year period, according to managing partner Andrew Chastain. That age group comprised 13 percent of executive placements in 2013, up from 7 percent in 2003.
“The candidate pool is bigger in that area because: (1) there are more of them; and (2) they expect to work longer, because they feel healthier,” Chastain says. And because they expect to live longer, they want to accumulate more financial resources, he says.
An estimated 300,000 people worked as medical and health service managers in health care in 2013, and about 114,000 of those worked for hospitals, according to the U.S. Bureau of Labor Statistics.
Chastain says the retirement slowdown raises some concerns about the next generation’s ability to lead. Will Gen Xers and millennials have the skills and experience needed to take over when boomers finally leave? “What makes us nervous is, as they do start to retire, [will there be problems] with the supply side?” he says.
On the other hand, the types of management skills needed in the near future also could change. The advent of payments based on quality and, eventually, for whole populations may disperse the leadership role within hospitals, with clinicians taking on more responsibilities.
“This whole notion of clinical productivity perhaps requires that we change our notions about what leadership looks like,” says Deborah Bowen, president and CEO of the American College of Healthcare Executives. “It may not be the traditional notion of the CEO title, it may be more about impact and influence on patient care.”
That shift toward the clinical side of the equation is reflected in ACHE’s membership. The roughly 36,000 members and fellows include about 2,000 doctors and close to 5,600 nurses, who together represent more than 20 percent of the organization.
“Proportionately, that population has probably doubled in the last five to 10 years,” Bowen says. “We didn’t always track clinicians because there weren’t enough to track.”
Nurses also sticking around
Given the sheer numbers involved, boomer retirements could pose more of a risk for the nursing profession. So far, that has not happened and, in fact, some new nursing graduates are having trouble finding jobs, according to a study published online by Health Affairs in August.
In 2000, the researchers predicted the United States would have 2.2 million RNs by 2012. In fact, there were 500,000 more than that. The likely causes: a surge in the number of graduates of nursing schools; the recession, which prompted nurses to work longer; and a fundamental shift in the profession’s retirement rate.
“About half of the extra half million nurses whom we didn’t think we would have [resulted] from the ramp-up in education,” says David Auerbach, lead author of the study and senior policy researcher for Rand Corp. And about a quarter of the extra nurses were there because fewer nurses retired than had been expected, Auerbach says.
Those trends could have a long-term effect. “The educational ramp-up is a permanent thing, and that is going to make any shortage resulting from the retiring boomers not as much of a problem,” Auerbach says. “And it’s really even hard to say if there will be a shortage at all if the schools keep doing what they’re doing.”
Others say RN demand is, in fact, picking up. Jeremy Enck, vice president of sales for staffing firm Fortus Healthcare Resources, says demand has not been this strong since 2006, and could continue for at least 10 years.
Research that Auerbach has worked on shows that, overall, 37.3 percent of the U.S. nurse workforce is 50 years or older as of 2013, up from 19.6 percent in 1980. Bureau of Labor statistics show that 2.67 million RNs were working in health care in 2013, 1.55 million of them employed by hospitals. Therefore, the new nursing school grads need to replace roughly 573,000 hospital RNs who will retire over the next 15–20 years.
Is there a doctor in the house?
When it comes to physicians, the numbers may be more worrisome. Christiane Mitchell, director of federal affairs for the Association of American Medical Colleges, says many industry groups have come to the conclusion that a physician shortage is already here and getting bigger. “And,” she adds, “most of the groups are in agreement that the primary driver of the shortage is the aging of the baby boomers.”
That phenomenon has a twofold impact: Boomers will get sicker and need more care as they age, even as doctors leave the workforce in droves, according to the AAMC. It predicts there will be a shortage of 91,000 physicians by 2020 and 130,000 by 2025.
Mitchell notes that medical schools are working to increase their graduation totals and are on track to boost enrollment by 30 percent between 2007 and 2016.
A big sticking point is placing all those new med school grads into residency slots. Residencies largely are funded through Medicare, and the AAMC and others would like to see funding for more such slots. That seems unlikely given that it would require federal legislation and billions of dollars. Adding 3,000 residency slots over five years would cost $9 billion to $11 billion, Mitchell says, and even then would not compensate for the looming shortage.
One of the unknowns is whether or not the demand for physicians will decrease as health care moves toward team-based care and other types of clinicians take on more responsibilities.
Most efforts to solve the physician shortage center on increasing the supply, notes a policy analysis published in 2011 by the National Institute for Health Care Reform. That’s a cumbersome process that may take decades to produce results. Instead, the authors suggested, “policymakers may want to consider ways to increase the productivity of primary care providers and accelerate primary care workforce expansion by, for example, examining how changes in state scope-of-practice policies might increase the supply of nonphysician practitioners.”
However, that option is complicated by the fact that states set their own regulations for doctors and other practitioners. “When you talk about physician shortages, it just depends on where you live,” says Kavita Patel, M.D., a practicing physician and a fellow at the Brookings Institution.
Even getting consensus about how many physicians are currently in practice is impossible. Relying on state data, the Kaiser Family Foundation estimates the number at 834,000, while Census Bureau data put the total at 623,000. Moreover, definitions of physician productivity don’t represent true patient care needs.
“We don’t really have in the United States reliable estimates for the workforce of supply or demand,” Patel says. “All of these numbers are flawed because we don’t really even know what the demand is supposed to be, or should be,” she says.
“Like all things in health care,” Patel says, “we’ve made it onerously difficult.”
Hospital and health system officials are taking a variety of steps to keep ahead of any workforce shortages that might result from the retirement of the large baby boom generation. Carolyn Jacobson, chief human resources officer for Fairview Health Services in Minneapolis, shared some of Fairview’s strategies. “We are watching this fairly closely,” Jacobson says.
Fairview has formed partnerships with the University of Minnesota, St. Catherine University and Augsburg College to meet quarterly to assess what the organizations should be doing to address shifting supply and demand.
Fairview recently has been dipping into the ranks of the for-profit sector to meet its changing management needs. “The work that health care leaders are doing now mirrors much more closely what’s happening on the for-profit side,” Jacobson says. “So, having folks who have been through a lot of change, paying attention to the bottom line, all of those kinds of qualities, are becoming much more important to us in our leadership roles.”
“Physicians are hard to find,” Jacobson says. Part of Fairview’s effort to limit the effects of a physician shortage involves trying to get nurses who are working at the top of their licenses within its developing team-based care programs. As part of that, Fairview sponsors nurses to become trained as nurse practitioners.
Jacobson says one of the things Fairview has done is to create grant and loan incentive programs for nurses with two-year degrees to earn four-year degrees. Fairview has Magnet status and needs to keep a certain number of four-year degreed nurses to maintain it, she says.
More Attention Needed
sometimes overlooked segment of the health care workforce is made up of those with specialized health care training, but without bachelor’s degrees.
These caregivers and support staff — such as home health aides, community care workers, psychiatric aides and licensed practical nurses — are going to take on a bigger role as health care moves out of the hospital and into the home. They also may be able to absorb some of the extra work brought on by the aging boomer generation.
“The health care system would not function without pre-baccalaureate workers,” according to a paper from the Metropolitan Policy Program at the Brookings Institution. The authors of the paper, titled “Part of the Solution: Pre-Baccalaureate Healthcare Workers in a Time of Health System Change,” called for more research to figure out how to take better advantage of their skills.
Joanne Spetz, director of the UCSF Health Workforce Research Center and a professor at the University of California, San Francisco, says these front-line staffers also will be important as more of both short-term and long-term care are administered at home.
Health care employed 3.9 million support staffers in 2013, according to the U.S. Census Bureau. “It’s a huge workforce,” Spetz says.
This is the fifth installment in Hospitals & Health Networks’ yearlong series examining the many ways the nation’s roughly 75 million baby boomers will affect the U.S. health care system as they grow into old age. The boomers are quickly leaving the workforce, creating a threatened shortage in all types of workers. Health care reform and other changes may avert a crisis. The series will include articles in the magazine and in our e-newsletter, H&HN Daily. Here’s the complete lineup: