Moderator: Welcome to the Federal Reserve Bank of Atlanta's Economic Development podcast series. I'm Paige Dennard with the Federal Reserve Bank of Atlanta. Today, we're talking with Dr. Stephen Newman, chief operating officer at Tenet Healthcare Corporation.
Hospitals, and the enterprises that support them, are often a significant source of jobs in local and regional labor markets. Some communities have actively pursued hospital development as a core economic development strategy. However, hospitals and their satellite operations face constant change. The public demands that hospitals provide the latest treatments in the most upgraded facilities, and there is always a need for trained nurses and technicians.
Dr. Newman joined Tenet Healthcare in February 1999 as vice president of operations for Tenet's former Gulf States region, where he managed hospitals in Alabama, Louisiana, and Mississippi. In June 2000, he was promoted to senior vice president of operations, and in 2007, to chief operating officer.
Dr. Newman, thank you for joining us today.
Dr. Stephen Newman: Thanks for the opportunity, Paige.
Moderator: The hospital industry has been in flux for many years. The emergence of large hospital groups and remote community-based clinics are just a couple of the trends we've seen. What industry factors are impacting hospitals today, and what do they mean for employment trends?
Newman: Well, Paige, the most recent significant impact has come from the new health care reform legislation. This legislation, passed earlier this year, will affect the delivery system and payment mechanisms for hospitals, physicians, and related ancillary services for decades to come. There will be a major shift over the next 10 years from a system that has traditionally been focused on what we call "sick care" to what we call "well care." By that I mean there will be a significant premium paid to providers in the health care system that keep patients healthy rather than intervene after disease occurs. This has dramatic impact on the way hospitals and physicians, specifically, work together to diminish utilization of inpatient and outpatient services and improve clinical outcomes and drive efficiency, thereby cutting the cost of health care delivery.
Moderator: Medical and technical colleges, which supply the nation's doctors, nurses, and lab and medical technicians, are facing significant budgetary pressures. Are there medical professional categories where medical education is not likely to meet demand?
Newman: Well, Paige, I think we're headed toward a labor crisis in the health care delivery system. What do I mean by that? Today, we have limited access for those who have access to the system, and barely enough professionals—whether they be physicians or nurses or ancillary providers—to provide care to the covered population today. As we then extend care to those 32 million Americans who haven't had routine care, we dramatically increase the demand for service. A lot of this service will be preventive health care services, but we don't have the professionals to serve that. Specifically, we will need a significantly greater number of graduates from nursing schools each year. And, secondly, because of the emphasis on primary and preventive care, we have an insufficient number of physician extenders—those being physician assistants and nurse practitioners—to provide routine care and care of less urgent patients who are seen in the outpatient or ambulatory setting.
Moderator: Modern economic development approaches focus on providing a range of occupations that allow employees to increase their earning opportunities over time by enhancing their job skills. How does this progression work in hospital-based jobs, and do the appropriate training or educational opportunities exist?
Newman: I do believe those educational opportunities exist, and I'll give you two key examples. One would be in clerical positions. There is an upward mobility in terms of education and career enhancement in the management of the revenue cycle processes—the billing, coding, and collections process. The second, most obvious, would be the one in which licensed, practical, or vocational nurses can obtain on-the-job training with certified courses that allow them to sit for their registered nurse [RN] examinations. So we have LVN [licensed vocational nurse] to RN programs to provide career advancement and skill enhancement for these individuals. We also take new graduate nurses and we have in-service education programs that allow them to take positions over a relatively short period of time in our critical care areas, such as the operating room, emergency department, or intensive care units with in-hospital education programs.
Moderator: How might economic development and workforce development practitioners work better with hospital executives to ensure that current and future workforce needs are met?
Newman: My sense is there needs to be work at the local, state, and federal level to expand the pipeline of professionals that can be trained and then oriented to work in the expanded health care delivery footprint that will be necessary to care for the population which is being placed within our system. I think discussions, for example, between local and regional hospital executives with community colleges in the area, which are sources of educating nurses as well as ancillary professionals and physician extenders—this sort of conversation…could lead to underwriting with tuition assistance [for] those students. Or in some instances…we have underwritten faculty positions simply to expand the number of classes and class size…in each of these disciplines. [All this] could certainly help expand workforce and meet the needs that hospitals and health care delivery systems have over the coming decade.
Moderator: Dr. Newman, thank you so much for joining us today.
Newman: Well, Paige, thanks for giving me the opportunity to talk with you and your listeners.
Moderator: This concludes our podcast. We've been speaking with Dr. Stephen Newman, chief operating officer at Tenet Healthcare Corporation.For more podcasts on this topic and others, please visit the Atlanta Fed's website at www.frbatlanta.org. If you have comments or questions, please e-mail email@example.com.
Thanks for listening.