Research and analysis by Avalere Health

Teaching Hospitals: Current and Future Challenges

Final ChartsSeptember 21, 2009

Research and analysis by Avalere Health

Highly specialized services are concentrated in teaching hospitals.

Chart 1: Percent of Hospitals Offering Specialized Services, Teaching vs. Non-teaching, 2007

Source: Association of American Medical Colleges. (February 2009). Key Facts About Teaching Hospitals.

Research and analysis by Avalere Health

Teaching hospitals offer important “non-hospital” services to benefit their communities.

Chart 2: Percentage of Teaching Hospitals Offering “Non-hospital” Services, 2007

Source: Avalere Health analysis of American Hospital Association Annual Survey data, 2007.

89.1% 88.8% 85.3% 84.4% 79.0% 77.1% 72.5%

Health Screenings

Community Outreach

Health Fairs Support Groups

Health Information

Center

Patient Education

Center

Enrollment Assistance

Research and analysis by Avalere Health

Source: Avalere Health analysis of American Hospital Association 2000 - 2007 Annual Survey Data.Uncompensated care costs include charity care and bad debt.

Teaching hospitals provide a significant and growing amount of uncompensated care.

Chart 3: Uncompensated Care Costs (in Billions), Teaching Hospitals, 2000 - 2007

Research and analysis by Avalere Health

Medicare payments for graduate medical education totaled an estimated $8.4 billion in FY2008.

Chart 4: Medicare Special Payments to Teaching Hospitals, 2008

Source: Centers for Medicare & Medicaid Services, Office of the Actuary, July 2008.FY = fiscal year

Direct GraduateMedical Education$2.70 B

IndirectMedical Education

$5.74 B

Research and analysis by Avalere Health

23

1

24

3

0

6

12

18

24

Fee-for-Service Program Only

Managed Care Channel Only

Both State Does Not Contribute

Num

ber

of S

tate

s

State Medicaid programs also contribute to graduate medical education.

Chart 5: Number of State Medicaid Programs that Contribute to Graduate Medical Education, by Type of Contribution, FY 2005

Source: Henderson, T.M. (August 2006). Medicaid Direct and Indirect Graduate Medical Education Payments: A 50-State Survey. Completed for the Association of American Medical Colleges.(1) Includes payments directly to teaching programs and recognized in managed care rates.FY = fiscal year

(1)

(1)

Research and analysis by Avalere Health

Physician demand will outpace supply - even without expanded coverage - and residency caps limit ability to fill gap.

Chart 6: Projected Physician Shortage, 2009 - 2025

Source: Association of American Medical Colleges. (February 2009). The Complexities of Physician Supply and Demand: Projections Through 2025.

124,400

Research and analysis by Avalere Health

1.5%0.2% 0.4%

-2.8%

-8.4%-9.0%

-10.1%-11.4%

2000 2001 2002 2003 2004 2005 2006 2007

Med

icar

e M

arg

ins

Teaching hospital overall Medicare margins have steadily declined since 2000.

Chart 7: Average Teaching Hospital Medicare Margins, 2000-2007

Source: Health Forum, American Hospital Association, 2007 Annual Survey.Includes all hospitals with intern-to-bed ratios greater than zero.

Research and analysis by Avalere Health

Teaching hospitals are making cutbacks to address economic challenges.

Chart 8: Percent of Teaching Hospitals Making Changes in Response to Economic Concerns Since September 2008

Source: American Hospital Association. (April 2009). The Economic Crisis: The Toll on the Patients and Communities Hospitals Serve.

34%

10%

15%

29%

52%

84%

Other

Considering Merger

Divested Assets

Reduced Services

Reduced Staff

Cut Administrative Expenses

Research and analysis by Avalere Health

Cuts to teaching hospital resources could have ripple effects for other sectors of the economy.

Chart 9: Direct and Total Effects of Teaching Hospitals on the U.S. Economy, 2007

Source: Avalere Health analysis of American Hospital Association 2007 Annual Survey data for teaching hospitals.

Impact of Teaching Hospitals on Payroll and Benefits

Impact of Teaching Hospitals on Economy

Direct EffectTotal Effect