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The following is an excerpt from the grant proposal to the U.S. Department of Labor. It clearly defines the problem in Maryland, as well as other health care facilities across the nation.
Fueled by new technology and managed care, the health care industry is changing. Across the country, community hospital beds decreased in the period from 1990-1996. Adult occupancy rates declined from 64% to slightly more than 58%. Hospital admissions, along with the length of stay, also declined. According to research, the last six months of 1997 saw a $55.9 million fall of Maryland hospital profits — a full 37% fall — compared to the comparable period in 1996.
Declining profitability has resulted in major reorganization and reductions in staff.
Mergers and acquisitions, affiliations, and closures are reshaping the health care delivery system. Many hospital workers, particularly those at the lowest skill level, have already become dislocated or are at risk. In Baltimore, Liberty Hospital, recently acquired by Bon Secours Medical Center, is about to become a long-term care facility. Children’s Hospital is slated for closure this spring. Furthermore, lawmakers in Maryland are considering establishing a blue-ribbon commission to examine the region’s bed capacity with a view toward cutting underutilized inpatient services. A reduction of hospital reimbursement rates is imminent.
These past and planned changes in the health care system are having a profound impact on the local economy. Health care is the largest employer in the state of Maryland, accounting for one out of 10 private sector jobs. In Baltimore City, one out of five private sector jobs is in health care, and two of the three largest employers are health care institutions. Cutbacks and layoffs in this sector will leave many incumbent workers facing layoff, unemployment, and wage reduction.
The outlook, however, is not all bleak. While inpatient services declined, outpatient visits increased by approximately 50% nationwide in the period from 1990 to 1996. In Maryland, from 1990 to 1997, total health services grew by 9%, with the nonhospital sector growing faster than the hospital sector. In 1990, just under half of the employment in the health care industry was in hospitals. By 1997, that percentage had dropped to 42%. Jobs in health care exist, but they are shifting to ambulatory care settings. Furthermore, reorganization within hospitals has created new, more skilled jobs that remain unfilled for lack of trained, qualified workers. Incumbent workers are experienced and understand just what it takes to work in a hospital. Training them is also cost-effective in the long run due to greater turnover among new workers. The average cost of locating, hiring, and training new employees is many times the cost of retraining incumbent ones.
Ironically, while the industry’s training requirements are increasing, decreased profitability is shrinking funds previously available in each hospital for training. Without public support, many incumbent workers will have to go through the experience of dislocation before they can avail themselves of the training they need to stay employed.
There are other obstacles preventing health care workers’ successful transition to new positions or transfer between institutions. They include: 1) lack of mutually recognized skill standards; 2) lack of coordinated and mutually recognized training; 3) differences in job responsibilities within similar job classifications at each hospital that heretofore have made multiemployer training difficult; 4) inability of a substantial number of workers to pass academic gatekeeper exams; 5) workers’ lack of a high school diploma, which has disqualified them from training and upgrading; and 6) insufficient career and educational counseling.