Hospital Capacity Constraints Continue to Stress Orange County, Calif.

New Nurse-to-Patient Staffing Requirements Aggravate Capacity Constraints

News Release
Aug. 18, 2005

FURTHER INFORMATION, CONTACT:
Alwyn Cassil (202) 264-3484 or acassil@hschange.org

WASHINGTON, DC—A number of factors have come together to make hospital capacity constraints more severe in Orange County, Calif., according to a new Community Report released today by the Center for Studying Health System Change (HSC).

Hospitals have struggled for several years with staffing shortages and inadequate bed capacity to keep up with the needs of increasing demand from a growing population and less stringent managed care restrictions on the use of services. The new state law mandating a nurse-to-patient ratio of 1:5 has aggravated these problems in a market where competition for nurses was already fierce and salaries far exceed the national average.

"The new mandate has intensified pressures on Orange County hospitals by driving up personnel costs and making it difficult to keep some hospital units staffed and open," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.

Other key findings of the report, Dynamic Orange County Health Care Market Responds to Opportunities, Threats, which is available online at http://www.hschange.org/CONTENT/773/, include:

• Concern that the growth of preferred provider organization (PPO) and high-deductible insurance products could threaten the dominance of health maintenance organizations (HMOs).
• Potential shifts in where patients receive hospital care as former Tenet Healthcare Corp. hospitals adjust to new ownership and Kaiser Permanente prepares to build a new hospital.
• The financial weakening of CalOPTIMA, the quasi-governmental agency that administers Medi-Cal managed care in the county.

Orange County is one of 12 communities across the country tracked intensively by HSC researchers through site visits. The new report is based on a March 2005 site visit and interviews with more than 90 Orange County health care leaders, representing health plans, employers, hospitals, physicians and policy makers.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded principally by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.