Growth in healthcare spending rose 7.4% (it’s lowest level in three years) yet still, about twice as fast as the overall economy and faster than wage growth in 2003. These data come from the Center for Studying Healthcare System Change. The study details how much is spent to provide healthcare to U.S. residents with private insurance, which is often provided by employers. Spending is important, because insurance premiums fluctuate based on such underlying costs.

Spending growth slowed last year for several reasons: patients used doctors, hospitals and drugs less, possibly reflecting a rise in the amount insured workers pay in deductibles and co-payments. The study also found a slow down in prescription drug spending. The following points resulted from the study:

• The total amount spent on healthcare rose 7.4% in 2003, a slower rate than the increase of 9.5% in 2002.
  
  
• Average costs to provide healthcare benefits increased 12% for employers in 2004, coming down from a 15% increase in 2003, marking the first slowing of premium increases since 1996.
  
  
• Hospital prices last year increased 8%, the biggest one year jump in a decade.
  
  
• Spending for patients in hospitals rose less than the year before, but outpatient care grew 11%,making it the fastest growing spending category. Hospital care overall accounted for 53% of the increase in the hospital spending.

• NURSING FACULTY SHORTAGE - According to the American Association Colleges of Nursing (AACN) nursing schools turned away almost 16,000 qualified applicants from entry-level baccalaureate nursing programs in 2003, with nearly two-thirds of schools citing faculty shortages as the main reason. Some 614 teaching vacancies have been reported at 300 nursing schools across the country. The average salary for a nurse professor with a masters degree was $60,357 in 2003. A nurse practitioner clinician with the equivalent education earned $80,697, or 34% more. With the median age for full-time nurse faculty at 52 in 2003 and the average age of retirement at 62, nursing schools should anticipate a surge in retirements in the next decade.
  
  
• DISRUPTIVE PHYSICIANS - Almost one-third of physician executives say serious problems with disruptive behavior by doctors erupt in their organizations on either a monthly or a weekly basis, a pattern that is underscoring a growing concern within the profession, according to a new national survey. That survey was conducted by the American College of Physician Executives and shows that about 70% of respondents reported that problems with physician behavior nearly always involves the same doctors over and over again. 1,627 physician executives responded to the survey.
  
  
• POPULARITY OF AMBULATORY SURGICAL CENTERS - Nearly one-fifth (19%) of Pennsylvania patients are cared for at free standing surgery and diagnostic centers rather than hospitals, according to a new study by the Pennsylvania Healthcare Cost Containment Council, an independent state agency. Between July 2003 and May 2004 new ambulatory surgical centers opened in Pennsylvania, bringing the total to 161.
  
  
• THE INCIDENCE OF HEART FAILURE - The incidence of patients experiencing heart failure is continuing to increase. Each year 550,000 new cases are diagnosed, adding to the five million people currently living with heart failure. Annually, about 266,000 of these people will die of heart failure.
  
  
• PHYSICIAN SHORTAGE PREDICTED - More than 50% of physicians between the ages of 50 and 60 are planning to retire, seek non-clinical jobs, or significantly reduce the number of patients they see in the next one to three years, according to a survey of 436 physicians nationwide performed by Meritt, Hawkins and Associates.
  
  
• IMAGE CONSCIOUS - Imaging is a significant part of many medical practices. Over the past five years there has been a steady increase in the utilization of imaging services in the hospital setting, outpatient setting and in the physician’s office. Though the number of outpatient stand alone diagnostic imaging centers opened each year is not available, numbers certainly show that there has been an increase in the number of these centers. The American College of Radiology estimates that between 1998 and 2001, procedures involving MRIs grew about 16% while use of CT scans, cineangiography, nuclear medicine and interventional radiology grew between 7% and 15%. The American Society of Nuclear Cardiology estimates about five million cardiac nuclear imaging procedures are now performed annually, up from about three million five years ago, with cardiologists performing the largest volume. The capital required to start a diagnostic imaging center is substantial. A small operation costs approximately $500,000 to $1,000,000 to build and equip while a large one with more complex equipment could cost $5,000,000 to $8,000,000. In addition to the high capital cost of the equipment itself, the shields that must be built into the facility to protect the equipment, and the needs for upgrades and new equipment purchases as technology advances, contribute to the expense of running such a center.
  
  
• THE NEXT GREAT SPECIALTY...HOSPITALISTS – Hospital-based physicians have long practiced in Europe and Canada, but there are now estimated to be 8,000 hospitalists in the United States. The Society of Hospital Medicine (SHM) projects the ranks will reach 30,000 by the end of the decade. Predictable hours, the ability to work with ill patients and growing utilization by numerous other specialties has led to greater recognition for this specialization. According to the SHM’s 2004 Compensation and Production Survey of 300 hospital medicine group leaders and administrators representing 2,134 hospitalists, there are several compensation models being used by hospital medicine programs. A mix of straight salary, productivity bonus and incentives is the most popular method, at 47% of those surveyed. Compensation based on salary alone is used by 41%, and 12% use a model of straight productivity and incentives. The survey, which was released in April 2004, showed a median total compensation for a hospitalist of $155,000. Those working for multi-state hospitalists-only groups have a median compensation of $169,000, while academic hospitalists earn a median income of $135,000.

With over twenty-five years of clinical and business experience, we have worked with physician practices, hospitals, health systems, academic medical centers and healthcare businesses in 48 states with focus on strategy, new business development and performance improvement. We specialize in integrating the business and clinical aspects of healthcare. Some of our current projects include:

1. Development of Heart Centers/Heart Hospitals, Enhancement of Cardiac Service Lines and Vascular Centers, Development of Strategic Alliances and new marketing plans for Heart & Vascular Programs
   
   
2. Strategy and market development for hospitals, health systems, clinical groups, and other healthcare businesses. CON support for new programs
   
   
3. Group practice management enhancements and clinical practice assessments, compensation modeling Leadership programs/educational forums for healthcare industry executives, trustees, directors and clinicians
   
   
4. Business enhancement strategies for emerging healthcare companies and healthcare related businesses
   
   
5. Executive and career mentoring/coaching for physicians and healthcare executives
   
   
6. Temporary management of Heart and Vascular Centers and Cardiovascular Projects