To Follow the Money, Follow the Workforce

Dramatic headlines now highlight profiteering in hospice services.This should not be a surprise to those who track workforce. Hospice has consumed steadily more nurses in recent HRSA nursing reports. When the nation sends more spending to a service, more workforce follows because workforce is required to be able to deliver the services.

Nurses have moved steadily toward higher pay and toward the most lines of revenue with the highest revenue in each line just like physicians, physician assistants, and nurse practitioners. All also move toward higher pay for less hours as well. About 85% of nurses are forced though hospital entry positions after nursing school - by designs that send the most spending to hospitals. Witness the current nursing problems as hospitals have already ratcheted back.

With 30% more spending compared to the costs of delivering care, health services expand rapidly - as in just about any other health care business. More profits draw more investors and result in more services - including those that might not be as needed. This is the case for health services other than primary care or public health.

Primary care physicians, nurse practitioners, physician assistants, and registered nurses get paid less - unless they convert away from primary care. Conversion is easy for these flexible sources of workforce. Conversion away from primary care is not simple for family physicians. Not surprisingly 70 - 85% of NP, PA, and IM primary care sources are found outside of primary care.

Only school nurses get paid less that primary care nurses for a variety of reasons including schools having to cut all types of personnel including teachers, teaching assistants, and nurses. Education and health systems are personnel intensive and therefore health care cost intensive and with increasing health care costs, the cuts must involve those most important to the delivery of education in the United States. School district budget officers have been telling this to us for years. Why don't we listen?

Why do we allow profiteering that results in such rapid health care cost increases? This is guaranteed to defeat our businesses, our economy, our schools, our health care delivery, and government budgets at all levels.Why did we forget the lessons of the 1980s when health care drove us to our knees and reining in health care costs for a few years allowed the economy to kick off the longest recent run of economic progress in the nation's history? We thought it crazy to pay thousands more for a car due to health care costs. Now we pay thousands more for education, for health care, for government, and more.

One way to cut back on health care costs is just to say no - that is to more workforce in certain areas. The US has doubled non-primary care workforce each 15 years by design changes resulting in ever more non-primary care workforce (See Three Dimensions of Non-Primary Care Increase) A design that rewards higher pay for non-primary care results in more growth and also more workforce moving to non-primary care, even those trained in primary care that are now 70% moving to non-primary care careers.

Cutting back on non-primary care is a very good idea as no one has found a good way to rein in non-primary care spending. Primary care is already cut back. The cut back is due to too little primary care spending that has limited the primary care personnel and the services that can be provided. Primary care is personnel intensive and has relatively few codes that have not had major improvements in reimbursement.

Non-primary care profits can be preserved by more services, by fewer personnel, by more technology, by billing code creep, and by new services not yet facing cost controls. Also people desperate for very specific non-primary care services have thousands of advocacy groups clamoring for more when we have ever less available for health spending - if we hope to have a nation at all.

Even the highest income only give 14% for taxes and we passed 14% years ago. We are at 17.5% of our Gross Domestic Product spend on health care and will not stop until we reach at least 20% according to government sources. By that time we will have doubled non-primary care once again and incredible pressures will push health spending higher.

Primary care and basic health access and public health lose out in the competition - as in the past 50 years except for 1965 - 1980. But even then when we doubled primary care, we increased non-primary care slightly higher. And since 1980 we have had stagnant primary care because we have diverted more and more resources to non-primary care - which has doubled each 15 years as we have gone along with those haphazardly shaping the design over the past 100 years.


  1. Answer: We are nuts. Or, more accurately, those who are amoral, whether in business or in politics, accumulate the most money and power and write the rules to benefit themselves.
    BTW, I think you meant "nursing school" in the following sentence: "About 85% of nurses are forced though hospital entry positions after medical school."

  2. Thanks Josh, HRSA reports have nursing workforce entry as involve a substantial hospital component for the first few years. Nurses steadily move away from hospital and direct patient care services after this time period. Gains are steady across administrative and advanced degree nursing. Doctoral nurses are the least involved in direct patient care and have higher salaries.

    Lower salaries are found in more direct patient careers, in school nursing, primary care nursing, and community health nursing. Workforce follows spending and spending follows workforce.


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