Executive Summary

The size and characteristics of the future health workforce are determined by the complex interaction of the health care operating environment, economic factors, technology, regulatory and legislative actions, epidemiological factors, the health care education system and demographics. Efforts over the past several decades to model the supply of and demand for health workers show there is a lack of consensus on the relationship between the health workforce and its determinants, the future values of many of these determinants, and forecasters' assumptions.

The Workforce Analysis Branch of the Bureau of Health Professions (BHPr), Health Resources and Services Administration (HRSA), commissioned a report synthesizing the literature on one set of factors that will have a profound impact on the future health workforce-changing demographics-and discussing its implications for the health workforce. In addition, BHPr commissioned the update of two requirements forecasting models: the Physician Aggregate Requirements Model (PARM) and the Nursing Demand Model (NDM). The major findings of the literature and these two demand models are the following.

Population Aging

• 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 (FTE) registered nurses 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.

Increasing Racial and Ethnic Diversity

• 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

• 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. Efforts to increase the supply of health professionals in these areas must deal with economic, cultural and language considerations.

Forecasting the Impact of Changing Demographics and Other Factors on Physician Requirements
The PARM forecasts requirements for allopathic (MD) and osteopathic (DO) physicians providing patient care in 19 specialties as well as physicians in non-patient-care activities. Requirements are demand-based and rely on current and forecasted patterns of health care use, physician staffing patterns, and medical insurance prevalence rates. We consider forecasts under five scenarios (Exhibit ES.1).

• Scenario 1, Status Quo, forecasts physician requirements under the assumption that patterns of health care use, medical insurance coverage, and physician productivity remain constant over time. Under this sceScenarionario, total requirements for physicians would increase from approximately 781,300 in 2000 to 1,038,200 in 2020 (a 33 percent increase).
• Scenario 2, Baseline, is our best estimate of demand for physicians based on changing demographics and projected trends in the other factors (e.g., insurance coverage and economic considerations). Under this scenario, physician requirements would increase to 996,400 in 2020 (a 28 percent increase).
• Scenario 3, Universal Coverage, assumes that the entire U.S. population has medical insurance. Under this scenario, the uninsured population is placed into the insured fee-for-service and health maintenance organization (HMO) settings based on the current proportion of the insured population in each of those two settings. Under this scenario, total demand for physicians would have been an estimated 817,600 in 2000, increasing to an estimated 1,092,400 (a 40 percent increase over the 2000 baseline level).
• Scenario 4 is universal health care coverage with 100 percent of the population enrolled in a health maintenance organization. Under this scenario, total requirements would have been an estimated 781,900 in 2000, increasing to an estimated 1,059,900 in 2020 (a 36 percent increase over the 2000 baseline level).
• Scenario 5, Non-minority Rates, assumes that minorities have rates of medical insurance coverage similar to non-Hispanic whites within each demographic group defined by age and sex. Under this scenario, demand for physicians would have been an estimated 802,400 in 2000, increasing to an estimated 1,072,000 in 2020 (a 37 percent increase over the 2000 baseline level).

Exhibit ES.1 Forecasted Physician Requirements

The PARM also forecasts requirements for three non-physician specialties: physical therapy, podiatry, and optometry. Based on available data and studies, the requirements for all three professions are projected to increase, between 2000 and 2020, at rates equal to or slightly greater than the growth in population.

Forecasting the Impact of Changing Demographics and Other Factors on Nurse Requirements
The NDM forecasts demand-based requirements for FTE registered nurses (RNs), licensed practical nurses (LPNs), nurse aides and home health aides (NAs). Although the NDM forecasts requirements at the State level, in this report we present only national-level forecasts (Exhibit ES.2). Under a baseline scenario, which represents the forecasts most likely to occur based on changing demographic and projected trends in other determinants of nurse demand, total requirements for FTE RNs would increase from approximately 2 million in 2000 to 2.8 million in 2020 (a 41 percent increase). Requirements for FTE LPNs would increase from 618,000 in 2000 to 905,000 in 2020 (a 46 percent increase). There would also be an increase in FTE nurse aide and home health aide requirements from 1.5 million in 2000 to 2.3 million in 2020 (a 50 percent increase).

Demand for nurses and nurse aides will continue to grow in hospitals during the next two decades, but at a slower rate than for the nursing professions as a whole. The exception results from strong growth in demand for RNs in hospital outpatient settings as technological innovations and managed care trends shift patients from inpatient to outpatient care. The fastest growth in demand will occur in nursing facilities and home health. Under a status quo scenario where patterns of per capita health care use and nurse staffing remain constant over time, the requirement for nurses and nurse aids increases at a slower rate than under the baseline scenario.

Exhibit ES.2 Forecasted FTE Nurse Requirements

Findings from the PARM and NDM, as well as the literature review, provide important insights on the impact of changing demographics on the health workforce. This report also identifies areas for additional research such as (a) factors changing the per capita use of health care services, (b) the paucity of information on the relationship between race/ethnicity and the supply of health workers, and (c) the need for models that can forecast demand for and supply of health workers at smaller geographic units of aggregation (e.g., at the sub-State level).