Fast Facts on Texas Hospitals 2012-2013 T e x a s H o s p i ta l A s s o c i at i o n Caring for Texans: An In-Depth Look at Texas Hospitals and the People They Serve Texas hospitals are as diverse as the state's geography. The sheer size of the state, its mix of urban and rural areas, types of hospital ownership and patient populations all impact the delivery of health care services. This brochure includes the latest statistics on Texas hospitals as well as demographic data on Texas residents and their health status. Over the last decade, the number of government-owned hospitals has been shrinking, while the number of investor-owned hospitals has increased. In 2010, government-owned hospitals accounted for 21 percent of the hospitals in Texas, with nonprofit hospitals accounting for 28 percent and investor-owned facilities comprising 51 percent of all hospitals in Texas. Texas Hospitals at a Glance Economic Impact Texas hospitals are a mix of facilities providing general acute-care, pediatric, long-term acute-care, psychiatric, rehabilitation and other specialized services. In 2012, Texas had 630 hospitals with 83,000 licensed beds. About 27 percent of Texas hospitals are located in rural areas, and more than 73 percent are in urban areas. According to a 2012 Texas Department of State Health Services report, Harris County (Houston) had the highest number of hospitals with 80, followed by Dallas County with 42, Tarrant County (Fort Worth) with 39 and Bexar County (San Antonio) with 32. Ownership of Texas hospitals varies among government-owned, nonprofit and investor-owned facilities. In addition to providing valuable health care services, Texas hospitals and the dedicated professionals who work in them make significant contributions to the state's economy, to local communities, and to the patients and families they serve. Hospitals regularly rank among the top 20 employers in large urban areas and, in rural areas, hospitals often are either the largest or second largest employer. The health care sector is an economic mainstay, providing stability and even growth during times of recession. The goods and services hospitals purchase from other businesses create additional economic value for the community. With these "ripple effects" included, each hospital job supports about two more jobs and every dollar spent by a hospital supports roughly $2.30 of additional business activity. In 2010, hospitals in Texas employed nearly 369,000 people with a payroll (salaries and benefits) of more than $23 billion. These hospital jobs result in a total impact of approximately $177 billion in economic activity benefiting the state. Texas' investor-owned hospitals pay an estimated $530 million in state taxes each year. These taxes include property taxes, sales/use taxes and business/franchise taxes. The state sales tax rate - 6.25 percent - is above the national medium with localities adding more to this percentage. Rural vs. Urban Rural vs. Urban 27% of Texas hospitals are located in rural areas (non-Core Based Statistical Areas) 73% of Texas hospitals are located in urban areas, 73% of Texas hospitals are located with Harris County (Houston) having in urban areas, the most facilities with Harris County at 80 (Houston) having the most facilities at 80 27% of Texas hospitals are located in rural areas (non-Core Based Statistical Areas) Hospital Ownership Of Texas' 630 hospitals: Hospital Ownership Of Texas' 630 hospitals: 51% are investor-owned 28% are nonprofit 28% are nonprofit Rising health care costs are the result of a number of complex factors: 51% are investor-owned 21% are government-owned 1 2 0 1 2 -1 3 T E X A S H O S P I TA L S 21% are government-owned Health Care Spending Cost Shifting. Medicaid and Medicare payment rates fall well short of hospitals' costs. Texas Medicaid pays hospitals about 50 percent of audited allowed costs for inpatient care, T e x a s h o s p it a l a ss o ci a ti o n and about 75 percent for outpatient services. Medicare pays slightly better, but Texas hospitals still lose $500 million per year on treating Medicare patients. A portion of the shortfall on government health programs is shifted to insured and private-pay patients. Population Growth/Demographics. The Texas population is growing twice as fast as the national average. In addition, the population is aging, and people have more health problems and consume more health care services as they age. Nearly half of Medicare beneficiaries have three or more chronic conditions, and a sicker population requires a higher intensity of care. Did You Know? In 2010 alone, Texas' hospitals... n Provided care for 2.7 million inpatients n Treated more than 38 million patients on an outpatient basis Treated 9.8 million people in the emergency room n n n n n Employed more than 120,000 nurses (RNs and LVNs) - this does not include additional outside contract nurses who work in the hospital Were the site of 808,000 inpatient surgeries Delivered 384,000 babies Were ready to serve 24 hours a day, seven days a week, 365 days a year Uninsured/Unaffordable Insurance. Texas has the highest rate of uninsured in the nation. Texas has a large volume of small businesses, particularly in its service industries. Due to the cost of health coverage, many small employers cannot afford to offer health insurance coverage to their employees. As the number of uninsured and underinsured grows, hospitals give more financial assistance and accrue more bad debt. A portion of this uncompensated care is shifted to paying patients and those with insurance. Utilization. Medical advances and technology enable Americans to live longer, but have contributed to the increased demand for and use of health care services. Lifestyle. Texas has an obesity epidemic, with a 50 percent increase since 1990. Being overweight increase the risk of acquiring other illnesses, like diabetes or heart disease. These chronic illnesses increase the cost of health care. Expenditures in the U.S. on health care were almost $2.6 trillion in 2010 - more than three times the $724 billion spent in 1990, and more than ten times the $255 billion spent in 1980. In 2010, U.S. health care spending was $8,402 per resident and accounted for 17.9 percent of the nation's Gross Domestic Product. The combination of hospital care (31 percent) and physician/clinical services (20 percent) accounts for more than half of the nation's health expenditures. Other major categories include prescription drugs (10 percent) and nursing homes (5 percent). In 2020, national health expenditures are projected to reach 19.8 percent of the nation's GDP. Financial Challenges Regardless of their health status or whether they have insurance, Texans are feeling the pinch of the current economic crisis. Texas hospitals, too, are facing tough financial times. In 2010, Texas hospitals provided more than $5 billion in uncompensated care (bad debt and charity), at cost, to uninsured and underinsured patients. In addition, many hospitals provide substantial discounts to uninsured/underinsured patients. These discounts are not included in the $5 billion of uncompensated care costs. 2 2 0 12 -1 3 T E X A S H O S P I TA L S Although costs to deliver care are rising, reimbursement rates for Medicaid, Medicare and other government programs have not kept pace with expenses. As governments seek to reduce their spending, cuts are being made in health care program funding. In fiscal year 2013, Texas Medicaid will reimburse most hospitals about 50 percent of their costs to deliver inpatient health care. This below-cost reimbursement is driving more physicians and hospitals to drop their participation in Medicaid, limiting access to providers for low-income pregnant women and children. Even with supplemental federal funds that help compensate for high volumes of Medicaid and charity care patients, hospitals' unpaid costs for covering the shortfall and caring for the uninsured rose from $1.7 billion in 2003 to nearly $2.2 billion in 2009. Explosive Growth and an Aging Population What Texas looked like 10 years ago is far different than today, and the next decade is expected to see further changes. The age and characteristics of a state's population have a direct impact on the health care system. The state's population is growing at an explosive pace - twice as fast as the national average. During this 10 year period, Texas had the fourth highest percentage growth and ranked first in the number of residents added during this period. And, like the rest of the country, the Texas population is aging and in need of more health care services, which puts added demands on the system. Population Growth and Uninsured Status With 25.6 million residents in 2011, Texas ranks second behind California in population. Between 2000 and 2030, the total population of Texas is projected to increase by almost 12.5 million - an increase of more than 59 percent. This percentage change is twice the 29.2 percent change projected for the nation, and ranks Texas fourth highest in the percentage of population growth between 2000 and 2030. In 2000, Texas ranked 47th based on the percentage (9.9 percent) of the Texas population 65 and older. Since then, the percentage of seniors has increased to 10.3 percent in 2010 and is projected to reach 15.6 percent in 2030. Despite this dramatic increase, the percentage of those 65 years and older in Texas in 2030 still will be less than the national average of 19.7 percent. Even with more than 5 million seniors in 2030, Texas is projected to be ranked 48th based on the percentage of seniors. According to recent U.S. Census Bureau data, the major race categories of U.S. residents include white (72.4 percent), black (12.6 percent) and Asian (4.8 percent). For census purposes, Hispanic origin is considered an ethnicity and not a race; Hispanics may be of any race. In Texas, 37.6 percent of the 2010 population considered themselves to be of Hispanic origin. Several projections have the Texas Hispanic population exceeding 50 percent by the year 2040. A corresponding decrease is projected for the white population. f a st Nationally, the percentage of people without health insurance increased to 16.3 percent in 2010 from 14.7 percent in 2008. The number of uninsured people increased to 49.9 million in 2010 from 44.7 million in 2008. The number of people with health insurance decreased to 256.2 million in 2010 from 256.7 million in 2008. The number of people covered by private health insurance increased to 195.8 million in 2010 and the number of people covered by government health insurance increased to 95 million in 2010. The percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010, from 58.5 percent in 2008. The percentage of people covered by employment- based insurance is the lowest since 1987, the first year that comparable health insurance data were collected. Between 2008 and 2010, the uninsured rate and the number of uninsured for non-Hispanic whites increased from 10.8 percent and 21.3 million to 11.7 percent and 23.1 million. The percentage and number of uninsured Hispanics increased to 30.7 percent and 15.3 million in 2010, up from 29.8 percent and 14.1 million in 2008. In Texas, more than 6 million residents are uninsured. Although Texas is second in the number of uninsured (California has 6.9 million uninsured), Texas leads the nation in the percentage of the uninsured. The percent of uninsured in Texas (25 percent) is significantly higher than the national average (15.8 percent). More than 8 percent of the nation's population resides in Texas and almost 13 percent of the nation's uninsured population resides in Texas. Hospital Utilization by Age As people age, they tend to have more chronic health problems and use more hospital services. National hospitalization rates in 2009 (309 days per 1,000 population) are relatively low for people 15-44 years, but then the rates begin to rise dramatically as the patient's age increases. People older than 65 years experience three times as many hospital days per thousand (1,993 days per 1,000 population) as the overall population (574 f a cts o n days per 1,000 population). This ratio goes up to nearly four times as many hospital days per thousand for people over the age of 75. Despite comprising only 13 percent of the population, those 65 years and older account for 39 percent of hospital discharges and 45 percent of hospital days. Care near the end of life consumes a disproportionate share of costs. About two-thirds of people die in institutions such as hospitals and nursing homes. Increased access to palliative and hospice care is important in reducing health care costs. Reforming end-of-life care could mean substantial savings. Hospice use reduces Medicare program spending during the last year of life by an average of $2,309 per beneficiary. Lengthening hospice stays by just three days would boost savings by nearly 10 percent. Total national health expenditures on Medicare beneficiaries tend to increase dramatically in the last year of life. This is driven by a more intensive use of hospital inpatient services in the last three months of a beneficiary's life. Spending on Medicare beneficiaries in their last year of life is almost five times greater than for other Medicare patients. About one-quarter of all Medicare expenditures are for the last year of life. In the last month of life, Medicare expenditures are 20 times as high as average monthly expenditures for beneficiaries who are not in their last year of life. Poverty Status/Income Texas saw its poverty rate go up some 12.1 percent between 2008 and 2010. According to the latest census data, 4.6 million Texans lived below the poverty line in 2010, making Texas' poverty rate the sixth highest in the country. Poverty status is determined by comparing annual income to thresholds that vary by family size. In 2012, the national poverty threshold for a single individual is $11,170 and $23,050 for a family of four. Texas' poverty rate (18.4 percent) is significantly higher than the national percentage of 15.1 percent. Almost 10 percent of those in poverty reside in Texas. Between 2008 and 2010, real per capita income declined by 2.1 percent for the total population. The per capita income for the overall Texas population was $23,863; for whites it was $26,036; for blacks, $17,902; and for Hispanics, $13,910. te x a s h o s p it a l s By the Numbers 630 Number of hospitals in Texas 264 Number of designated trauma facilities 369,000 Number of full- and part-time employees in Texas hospitals 122,000 Number of nurses (RN and LVN) employed in Texas hospitals (more than one-third of a hospital's employees are nurses) Top 3 Rank of Texas hospitals as a source of private sector jobs in rural areas of the state; in major metropolitan areas (e.g., Houston, Dallas, San Antonio) hospitals generally are among the top 20 employers $177 Billion Annual amount of economic activity generated by Texas hospital jobs $5 Billion Amount of uncompensated care, at cost, provided by Texas hospitals in 2010 1 in 9 Number of U.S. jobs supported by hospitals, either directly or indirectly 3 2 0 1 2 -1 3 T E X A S H O S P I TA L S T e x a s h o s p it a l Sources of data used in this brochure: Directory of Hospitals, Texas Department of State Health Services AHA Hospital Statistics - 2012 edition, American Hospital Association Texas Hospital Association Membership System - October 2011 2010 AHA/DSHS/THA Annual Survey of Hospitals, Texas Department of State Health Services Texas Department of State Health Services Impact of Community Hospitals, June 2011, American Hospital Association Texas Comptroller's Office Texas Hospital Association Internal Revenue Service - December 2011 Growth in U.S. Health Spending Remained Slow in 2010, Health Affairs, January 2012 National Health Expenditures, U.S. Department of Commerce, Bureau of Economic Analysis Texas Ahead, Texas Comptroller's Office U.S. Bureau of Economic Analysis U.S. Bureau of Census National Hospital Discharge Survey, Centers for Disease Control & Prevention Last Year of Life Expenditures, Centers for Medicare & Medicaid Services, Office of Research Income, Poverty and Health Insurance - 2010, U.S. Bureau of Census America's Health Rankings, United Health Foundation a ss o ci a ti o n In 2010, the national median household income was $49,445. Real median income declined for black and non-Hispanic white households between 2009 and 2010. The changes for Hispanic-origin households were not statistically significant. Between 2009 and 2010, all households experienced decreases in median income. Households inside principal cities experienced a 0.8 percent decrease in incomes, while households outside major metropolitan areas experienced a 2 percent decline. In 2010, Texas ranked 31st highest based on a median household income of $47,601. Chronic Disease According to the 2011 America's Health Rankings, Texas ranks 44th in the nation based on the health status of the population as well as several core measures and health outcomes. The challenges for Texas include a high rate of residents without health insurance (25 percent), a high percentage of children living in poverty (26.5 percent), low public health funding ($56 per person), a high incidence of infectious disease (18.4 cases per 100,000 population) and limited availability of primary care physicians (95 primary care physicians per 100,000 population). Texas ranks lower for health determinants than for health outcomes, indicating that overall healthiness may decline over time. Obesity In 2010, nearly 66 percent of the Texas adult population was overweight or obese, an increase of nearly 50 percent since 1990. The overweight/obesity rate in Texas for adults is higher among Hispanics at 74.3 percent and blacks at 74.2 percent than whites at 62.8 percent. Some 31 percent of Texas high school students are overweight or obese. If the present trend continues, Texas could see costs related to obesity reach $39 billion a year by 2040. Being overweight or obese increases the risk of acquiring costly, chronic illnesses such as coronary heart disease, hypertension, stroke, congestive heart failure, high cholesterol, diabetes, osteoarthritis, gallbladder disease, asthma, sleep apnea and certain cancers. Diabetes The number of adult Texans with diabetes is expected to quadruple over the next three decades - a massive spike that demographers and health care experts attribute to the state's aging population and out-of-control obesity epidemic. Currently, one in 8 adult Texans (almost 2.2 million people) has been diagnosed with diabetes. That number is likely to grow to nearly 8 million by 2040. Another 425,000 are believed to be undiagnosed along with more than 1 million who are estimated to have pre-diabetes. Altogether approximately one in four Texas adults is affected by diabetes or pre-diabetes. The fastest growing populations in Texas - older people and Hispanics - are those most likely to be obese and have diabetes. Diabetes, the sixth-leading cause of death in Texas, currently costs the state more than $12.5 billion. One in 10 health care dollars is attributable to the disease. In Texas, the death rate (per 100,000 people) attributable to diabetes is greater for blacks at 43.3, than for non-Hispanic whites at 22.9 and others at 14.1. Beyond Health Care In addition to providing services within their facilities, hospitals go out into their communities to help meet broader health and social needs. Texas hospitals aid in disease prevention, promote good health habits and raise awareness about lifestyle choices, contribute to advances in medicine and help address other societal needs. Examples of these other community benefits include: Health education programs, such as screenings at health fairs and sponsorship of support groups for individuals coping with a disease; n Subsidized health services, such as free clinics, vaccinations and athletics physicals; n Partnerships with schools and seniors groups to address special health needs; n Health professions training programs and continuing education for physicians, nurses and technical staff; and n Clinical research. n Hospitals not only contribute significantly to the state's economic viability through local spending, job creation and research, but also enhance the quality of life for the communities they serve. Kaiser State Health Facts - Texas Responding to The Epidemic, Texas Health Institute This brochure was developed by the Texas Hospital Association. Founded in 1930, THA is the leadership organization and principal advocate for the state's hospitals and health care systems. Based in Austin, THA enhances its members' abilities to improve the accessibility, quality and cost-effectiveness of health care for all Texans. One of the largest hospital associations in the nation, THA represents more than 85 percent of the state's acute-care hospitals and health care systems, which employ some 369,000 health care professionals statewide. Learn more about THA at www.tha.org or follow THA on Twitter at http://twitter.com/texashospitals. Questions may be directed to the following THA staff: For media inquiries, contact Lance Lunsford at 512/465-1052. For legislative inquiries, contact THA's government relations staff at 512/465-1044. According to Texas Government Code 305.027, portions of this material may be considered "legislative advertising." Authorization for its publication is made by John Hawkins, Texas Hospital Association, P.O. Box 679010, Austin, TX 78767-9010. 4 2 0 12 -1 3 T E X A S H O S P I TA L S