In 2003, healthcare spending in the United States topped $1.7 trillion and accounted for over 15 percent of gross domestic product, the largest proportion found in a major industrialized country. As costs have skyrocketed, the U.S. hospital industry has come under considerable pressure (from insurance companies and the government, among others) to reduce costs and streamline services while continuing to provide high-quality medical care to an increasingly demanding—and aging— public. Healthcare costs are a critical factor in contract negotiations, labor stoppages, discussions of outsourcing, and debates about U.S. economic competitiveness.Compounding these issues is the ongoing problem of bad debt in the industry. In 2000, U.S. hospitals wrote off $20 billion in bad debt. In that year, eighteen percent of the American population (43.3 million people) had no health insurance; without insurance, patients are billed directly and many simply fail to pay. The industry’s bad debt is also due to the high deductibles and steep co-payments that many insurers demand. As a result of these pressures, there has been considerable change in the healthcare sector as managers struggle to redesign work and systems. Managers are experimenting with new technologies, models of care delivery, and forms of work organization; employers and unions are jointly interested in improving employee skill levels, reducing employee burnout, adopting emerging best practices, and heading off looming labor shortages. In spite of recent increases in the number of students entering healthcare careers, the United States still faces an unprecedented worker shortage—600,000 in nursing alone within the next ten years.
