• TABLE OF CONTENTS
HIDE
 Title Page
 Acknowledgement
 Table of Contents
 Introduction
 Selected economic and social...
 Capacity and utilization of short-term...
 Personnel, expenses and assets...
 Demand for hospital care
 Hospital cost functions
 Summary of findings and implications...
 Appendix
 Bibliography
 Biographical sketch














Group Title: investigation of some aspects of the prices and costs of hospital care
Title: An investigation of some aspects of the prices and costs of hospital care
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 Material Information
Title: An investigation of some aspects of the prices and costs of hospital care
Physical Description: v, 387 leaves : illus. ; 28 cm.
Language: English
Creator: Phillips, Harold Roger, 1928-
Publication Date: 1966
Copyright Date: 1966
 Subjects
Subject: Hospitals -- Rates   ( lcsh )
Hospitals -- Cost of operation   ( lcsh )
Economics thesis Ph. D
Dissertations, Academic -- Economics -- UF
Genre: bibliography   ( marcgt )
non-fiction   ( marcgt )
 Notes
Thesis: Thesis--University of Florida, 1966.
Bibliography: Bibliography: leaves 380-386.
General Note: Manuscript copy.
General Note: Vita.
 Record Information
Bibliographic ID: UF00098217
Volume ID: VID00001
Source Institution: University of Florida
Holding Location: University of Florida
Rights Management: All rights reserved by the source institution and holding location.
Resource Identifier: alephbibnum - 000574425
oclc - 13867619
notis - ADA1791

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Table of Contents
    Title Page
        Page i
        Page i-a
    Acknowledgement
        Page ii
    Table of Contents
        Page iii
        Page iv
        Page v
    Introduction
        Page 1
        Page 2
        Page 3
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        Page 11
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        Page 14
        Page 15
        Page 16
    Selected economic and social changes
        Page 17
        Page 18
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    Capacity and utilization of short-term general and other special hospitals: 1946-1960
        Page 48
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    Personnel, expenses and assets in short-term general and other special hospitals in the United States: 1946-1960
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    Demand for hospital care
        Page 241
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    Hospital cost functions
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    Summary of findings and implications for management
        Page 291
        Page 292
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    Appendix
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    Bibliography
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    Biographical sketch
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Full Text















AN INVESTIGATION OF SOME

ASPECTS OF THE PRICES AND COSTS

OF HOSPITAL CARE











By

HAROLD ROGER PHILLIPS


A DISSERTATION PRESENTED TO THE GRADUATE COUNCIL OF
THE UNIVERSITY OF FLORIDA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE
DEGREE OF DOCTOR OF PHILOSOPHY










UNIVERSITY OF FLORIDA
August, 1966


*















ACKNOWLEDGMENTS

Although an author receives help from many sources, it is not always

possible to assign specific credit for the assistance. I gratefully

acknowledge a general debt to other scholars, teachers, colleagues and

students whose assistance I am unable to identify except in a general

manner.

Specifically, I am indebted to the University of Florida and its

College of Business Administration for providing financial aid during the

years of my graduate study.

Also, I express appreciation to Professor William V. Wilmot, chairman

of my supervisory committee, as well as to the other members of the

committee -- Professors D. J. Hart, L. J. Benninger, Max Langham,

R. L. Lassiter and W. B. Riggan -- for their assistance.

I am grateful to the American Hospital Association for permission to

make liberal use of material published by them in the American Hospital

Directory and their annual Guide Issue of Hospitals.

Finally, I express my appreciation to my family for their patience and

assistance. Especially to my wife, Betty, I express my gratitude for

typing and retyping the manuscript.


Harold Roger Phillips















CONTENTS

ACKNOWLEDGMENTS .....................


Chapter
I. INTRODUCTION ...............


The Problem, Its Nature and Importance
Purpose ... ... ..... ... ..
Statement of Hypothesis . . . .
Methodology ..............
Data . . . . . . . . .


II. SELECTED ECONOMIC AND SOCIAL CHANGES


Population ..............
Age . . . . . . . .
Race . . . . . . . .
Sex . . . . . . . .
Age, sex, race . . . . .
Marital status . . . . .
Urbanization . . . . . .
Births, deaths, marriages, divorces
Physicians .............
Population density . . . . .
Employment .......... .
Employment status . . . .
Wage and salary income . . .
Personal income . . . . .
Average income of spending units .
Productivity . . . . . .
Price Level .............
Consumers' prices . . . . .
Wholesale prices . . . . .
Capital Accumulation . . . .
Health Insurance . . . . . .
Summary . . . . . . . .


. . 17


18
19
S 19
20
20
S 21
22
23
24
25
27
27
33
34
35
36
40
. 40
42
42
46
47


Page
11



1
1
11
11
12
14


. . *











III. CAPACITY AND UTILIZATION OF SHORT-TERM GENERAL
AND OTHER SPECIAL HOSPITALS: 1946-1960 . . 48

Capacity and Utilization . . . .. . .. 48
Hospitals . . . . . . . . . . 49
Beds . . . . . . . . . . ... .64
Admissions . . . . . . . . . .70
Average daily census . . . . . ... .93
Occupancy percent eje . . . . . ... ..05
Average length of stay . . . . . . .. 11
Summary ...................... 112

IV. PERSONNEL, EXPENSES [ND ASSETS IN SHORT-TERM
GENERAL AND OTHER SPECIAL HOSPITALS IN THE
UNITED STATES: 1946-1960 . . . . .... .122

Personnel . . . . . . . . . . . 122
Full-time personnel .............. .124
Full-time personnel per 100 patients . . .. 137
Expenses . . . . . . . .... ... .. .S50
Total expense . . . . . . . . . 150
Total expense per patient-day . . . ... .162
Payroll expense ................. 79
Payroll expense per patient-day . . . .. 183
Revenue . . . . . . . .... ... .. .203
Assets . . . . . . . . ... ... . .204
Plant assets . . . . . . . . . .204
Total assets . . . . . . . . . . 223
Summary . . . . . . . . . . . 239

V. DEMAND FOR HOSPITAL CARE . . . . .... .241

Simple Linear Demand ............... 241
Hospital Care Consumotion Function . . . . 253
Hospital Care Consumption Function Adjusted
for Price Level Changes . . . . . . 259
Summary . . . . . . . . ... . . 265

VI. HOSPITAL COST FUNCTIO:-3 . . . . .... .266

Review of Pertinent Economic Theory ...... .. 266
Assumptions and Data Adjustments . . . . 269
Short-run Costs ............... .. 280
Summary ...................... 290









VII. SUMMARY OF FINDINGS AND IMPLICATIONS FOR
MANAGEMENT ................... 291

Findings Which Support Hypothesis . . ... .291
Findings Unfavorable to Hypothesis . . . . 294
Topics Requiring Additional Research ...... .296
Implications for Management . . . . .. 298

APPENDIX I .. .. .. ... ..... .. .. ... .303

APPENDIX II .. .. . . . . .. . .. .. .. 327

APPENDIX III ......................... 333

APPENDIXIV ................. ....... 339

APPENDIX V ......................... .374

APPENDIX VI .. ... .. ... ........ ..... 376

SELECTED BIBLIOGRAPHY .................. 379

BIOGRAPHICAL SKETCH ................... 387













CHAPTER I

Introduction

The Problem, Its Nature and Importance

Aggregate expensesI of all short-term non-federal hospitals in the

United States increased from approximately $1.2 billion in 1946 to $5.6

billion in 1960. During the same period, total expenses per patient-day

of these hospitals increased from $9.39 to $32.23.

Inasmuch as the post World War II period witnessed substantial

economic expansion, one would expect that there would be sizeable in-

creases in the aggregate expenditures incurred by hospitals in providing

care. If this expenditure increase were the result solely of a shift in the

demand schedule facing the hospital industry, the change could be shown

as in Figure I-1.

Costs
$ P





Patient-days
Figure I-1. Hypothetical shift on total cost curve for hospital
industry between 1946 and 1960.



IThe words "expenses" and "costs" are used synonymously in this
study. Although these terms have different meanings to accountants and

1






2

The resulting change in amount of output (patient-days) and costs (total

expenditures) is described by the movement of a point along the TC curve

from P to P'.

It is possible that the increase in total expenditures could have re-

sulted solely from a shift in the cost curve as shown in Figure 1-2.

Costs




TC
$4






Patient-days

Figure 1-2. Hypothetical shift of total cost curve for
hospital industry between 1946 and 1960.

It is possible that there could have been shifts both in demand and

in costs which caused the increase in total expenditures. It seems

reasonable to assume that this is what occurred inasmuch as increases

in population and income could be expected to shift demand, while an

examination of the change in patient-day expense suggests that the cost

curve also shifted.

Patient-day expenses, rising from $9.39 to $32.23, increased nearly

250 per cent. The consumers' price index during the same years increased



economists, the accounting "expenses" reported in the annual hospital
survey appear to be similar to the economist's concept of cost. In some
places, reference will be made to theoretical economic costs, for example,
a total cost curve. The context of the discussion will make clear whether
reference is to reported "expenses" or theoretical economic "costs.







about 50 per cent. Thus, it appears that there was a shift in the total

cost curve caused not only by price increases but by other forces as well.

If the forces causing shifts in both demand and costs could be identi-

fied and the magnitude of their effects ascertained, such information

would be useful for varied purposes by different groups.

Knowledge of the causative forces would enable hospital management

to achieve its objectives more effectively and economically than would

otherwise be possible.

Employees of the hospital might benefit from better administration

through an improved wage structure as well as increased personal satis-

faction from being more effective in their work.

The patients might benefit from better care at a possible reduction in

cost. Also, to the extent that the patient helps support hospitals through

taxes or voluntary contributions that he makes, he along with the rest of

the general public will be interested in any legitimate means of reducing

the "burden."

Finally, the public will be interested in another respect which is

commonly identified as the community's obligation to protect the health

of its citizens.1 The obligation implies that the community has both the

duty and the power to regulate the conduct of hospitals. While the regu-

lation may take different forms, it includes such aspects as location,



1Max Shain and Milton I. Roemer, Hospitals and the Public Interest
(Ithaca, New York: Graduate School of Business and Public Administration,
Cornell University) reprinted from Public Health Reports, Vol. 76, No. 5
(May, 1961), pp.401f..








size of hospitals and rates to be charged for various services. Obviously,

one may badly err when making such decisions unless he knows something

about the forces that influence the costs of providing service.

Public attention, both individually and collectively, has been

focused upon hospital expenses.

In 1958 the insurance commissioner of Pennsylvania issued a
now-famous adjudication on the application of the Philadelphia
Blue Cross plan for a premium increase. In explaining his refusal
to grant the increase, the commissioner offered a bill of particulars
on the operation of both Blue Cross plans and hospitals, suggesting
widespread neglect in the control of hospital utilization and costs.
In the following months, official investigations were launched in
several States on the whole question of hospital management and
economics.1

Another quotation from the same source is even more pointed.

Finally, there is the question of hospital operating costs, which
have obvious importance for the general public. In recent years,
public concern about this has become an overriding issue. Not only
has there been widespread popular reaction to the sharp rises in
hospital costs, but the channel of expression of this action has been
widened through a separate but closely related social movement:
hospital insurance. ..2

The reason for such concern about hospital expenses is to be found

in the demand for hospital care. Dr. Robertson points out that throughout

a wide range of prices, demand is highly "inelastic .. 3 Thus, price

changes cause little variation in the quantity of care which buyers are



lIbid., p. 401.

2Ibid., p. 403.

3Robert L. Robertson, The Market for Hospital Care (Reprint Series No.
29; Madison: The IndustrialRelations Research Center of the University
of Wisconsin) reprinted from Hospital Administration, Vol. 7, No. 1
(Winter, 1962), pp.45f.







willing and able to purchase. Any individual hospital as well as all

hospitals in the aggregate face this demand situation although the

coefficients of elasticity would not necessarily be identical.

There are at least two explanations for the inelasticity. First,

medical care is so important to the purchaser that price tends to be of

lesser importance to the decision to purchase the service than it is for

many other goods or services. Second, the public, through a govern-

mental agency or organized charity, will pay for the care if the patient

is unable to do so. The public's willingness to assume such expense

is based not only upon humanitarian motives, but also upon self-interest

in protecting itself from communicable diseases.

Because of the public concern about the costs of medical care gener-

ally and hospital care in particular, suggestions have been made as to

how existing patterns of care and payment therefore ought to be modified.

For example, ". . we are suggesting that any effective public control

over expenditures for hospital service by the population as a whole re-

quires a conscious and deliberate control over the supply of beds in a

state. "

Mr. Roemer, in another article concerning what he identifies as the

inadequate total number of physicians and their maldistribution throughout

the nation, suggests, "greater investment in the training of physicians

would cost the nation money, but it might yield great savings in the



1Max Shain and Milton I. Roemer, p. 408.





6

national expenditures for hospital care, not to mention improvements in

the health services generally."l

Controversy over payment for hospital and medical care has been

focused in recent years upon the costs of health care insurance and the

various health care plans submitted to the United States Congress.2 This

controversy has been concerned not only with individual rates which have

risen sharply in post World War II years, 3 but in addition with the magni-

tude of the total cost to the nation.

In view of the widespread interest in hospital costs and the implica-

tions of these costs, it would seem that study would be given to such

cost data as are available. However, few studies appear to have been

made.



1Milton I. Roemer, Hospital Utilization and the Supply of Physicians
(Ithaca, New York: Graduate School of Business and Public Administration,
Cornell University) reprinted from The Journal of the American Medical
Association, Vol. 178 (Dec. 9, 1961), p. 993.

2"Health Care for the Aged: Here Are The Two Plans," U. S. News
and World Report (Feb. 24, 1964), p. 46.

"Problem of Medical Costs What Can Be Done About It," U. S.
News and World Report (May 25, 1964), p. 72.

"Why It Costs More to Insure Against Illness," U. S. News and
World Report (Jan. 31, 1958), p. 83.

E. J. Faulkner, Appendices in connection with "Statement on Pro-
posed Social Security Amendments on Behalf of the Health Insurance
Association of America Before the Ways and Means Committee, U. S.
House of Representatives, June 24, 1958" (New York: Health Insurance
Association of America). (Mimeographed.)

3Elizabeth A. Langford, "Medical Care in the Consumer Price Index,
1936-56, (Washington: Government Printing Office) reprinted from the
Monthly Labor Review (September, 1957).





7

Such studies as have been made generally treat some limited group

of hospitals. One dealt with hospitals having 500 or more beds. The

data of this study appear to be those for one year. By the use of simple

correlation, the investigators attempted to establish a relationship be-

tween costs and factors, e.g., admissions, which may be thought to

influence costs.

Another, and perhaps the most complete study available, is one which,

although monumental in its comprehensiveness, is limited to the hospitals
2
of Michigan. Designed as a pilot study, it required that much attention

be given to the development of appropriate investigative methods. Typi-

cal of such problems dealt with was that of determining a probability sample

when choosing the hospitals and patients' records for investigation. The

basic analytical technique was cross sectional multiple regression.

An extension to the entire nation of some aspects of the Michigan study

was recently published by the American Medical Association. Like the

Michigan study, it is concerned with the cost of medical care in general

and deals with hospital costs as a component of total medical care. The



1Charles U. Letourneau and Melinda Ulveling, "Hospital Costs Some
Influential Factors," Hospital Management (Nov., and Dec., 1960), pp.
36f. and pp. 40f.

2Walter J. McNerney et al, Hospital and Medical Economics (2 vols.;
Chicago: Hospital Research and Educational Trust), 1962.

3Commission on the Cost of Medical Care, The Report of the Com-
mission on the Cost of Medical Care.Vol. I: General Report. Vol. IV:
Changing Patterns of Hospital Care (4 vols.; American Medical Associa-
tion, 1964, n.p.)








methodology used is primarily that of a cross sectional analysis by

multiple regression techniques to derive a demand function for medical

care and incidentally for hospital care. The data used are the result of

a survey conducted by the National Opinion Research Center in 1958 to

determine family medical expenditures.

The explanatory variables included family income, age, size and edu-

cation, location, price of care and per cent of bill covered by insurance.

For medical care generally, income was the most significant economic

variable while the insurance variable was the most significant in demand

for hospital care.

Neither the static demand curve of economic theory with its coefficient

of price elasticity was computed nor was the coefficient of income elasti-

city.

In both the Michigan and the American Medical Association studies

costs were dealt with indirectly. Attention was directed to (1) the

changing nature of diseases treated in the three years 1946, 1954 and

1961, and (2) a description of the quality change in medical care of

hospitalized illnesses in 1946 and 1961. Economic cost curves were not

computed.

In 1954, the Commission on the Financing of Hospital Care published

its report. 1 Volume one of the report deals with some of the factors dealt



John H. Hayes (ed.) Factors Affecting the Costs of Hospital Care.
Vol. I of the Report of the Commission on Financing of Hospital Care in
the United States (3 vols.; New York: The Blakiston Co., Inc., 1954).








with in the following pages of this dissertation. However, that study

was for the period 1938 through 1953 and the emphasis was upon finding

or suggesting ways by which increasingly costly hospital care could be

purchased by the consumer. The study was largely descriptive. Metho-

dology consisted of tabular cross classification of data. Causes of

changes in costs were deduced from the material shown in the cross

classifications.

A cross sectional study; 1 published in 1961, of sixty hospitals attempted

to obtain short-run and long-run average total cost curves as well as

short-run marginal cost curves. Data observed were monthly costs for

the 60 hospitals during 1957. To supplement the long-run cost informa-

tion computed, the costs of Gary/Indiana Methodist Hospital for the

period 1956 through 1958 were used in computing short-run cost curves.

Multiple linear regression equations were found for predicting departmental

expenses and total expenses for the hospital.

Essentially the same approach, cross sectional, was used by Dr.

Ingbar in her study of the 1958 costs of 72 Massachusetts hospitals.2


1
Paul J. Feldstein, An Empirical Investigation of the Marginal Cost
of Hospital Services. (Chicago: Graduate Program in Hospital Adminis-
tration, University of Chicago, 1961).

2
Mary Lee Ingbar, A Statistical Study of Differences in Hospital
Costs: Cost Functions for 72 Massachusetts Hospitals (Graduate School
of Public Administration, Harvard University, n.d.) (Mimeographed.)






10

Detailed statements of methodology for the present study are made in

a later section of chapter one and at appropriate points in chapters five

and six. However, in general, this study differs from those mentioned

above in the following respects. First, time series of costs reported by

all short-term general non-federal hospitals rather than cross sectional sample

data are used. Also, unlike any of the others, this study attempts to

obtain the static price-output demand curve of economic theory. In

addition, an attempt is made to ascertain the effects of shifts in both

demand and cost curves on price of hospital care.

There are some differences also in findings. The Feldstein study

shows that average long-run costs decline as size of hospital increases

while the Ingbar study shows little difference in cost as size varies.

This study's findings are similar to those of the Ingbar study.

Demand is found to have become more elastic when the data are ad-

justed for socio-economic changes than it is generally thought to be.

Although the variables are defined differently, there is general agree-

ment in the predicting equations computed in this and the American Medi-

cal Association studies.

Since 1946, the American Hospital Association has conducted an

annual survey of institutions listed by it as hospitals. The institutions

surveyed included both members and non-members of the Association.

The survey includes data relating to the capacity, utilization, expenses

and assets of these institutions.








Purpose

It is the purpose of this study to examine the data reported by the

annual hospital survey and other relevant data concerning the general

economy for the following ends.

1. Derive a statistical demand function for hospital care.

(a) Determine, if possible, how and why it shifted, if it did
shift.

2. Derive statistical cost functions for providing hospital care.

(a) Determine, if possible, how and why they shifted, if any
shifts did occur.

3. Draw implications from the results obtained in pursuit of the
foregoing purposes for the management of hospitals. These
implications will be of a dual nature, (a) those involving only
the internal policies and procedures of a hospital, and (b)
those that collectively involve a group of hospitals.

Statement of Hypothesis

Although hospital costs, and consequently the prices for service

which are based on these costs, appear to be determined by a complicated

interaction of many factors, there seems to be no evidence to indicate

that they are not amenable to economic laws just as are other economic

phenomena. Therefore, it is the working hypothesis of this study that

the changes in hospital costs are explained both by shifts in the demand

for hospital care and by shifts in the costs incurred in supplying such care.

Shifts in demand could be expected to occur because of certain societal

and economic changes. Specifically, these changes involve increases in

population, employment, net civilian salaries and wages, median income






12

of spending units and hospitalization insurance coverage carried by the

population.

The total amount of hospital costs may be expected to be influenced

by such factors as (a) size of hospital, expressed in bed capacity, (b)

type of ownership, hereafter referred to as control, (c) service, (d)

accreditation, (e) admissions, (f) average daily census, (g) average length

of stay, (h) personnel, (i) assets, and (j) price level changes. Admissions

and average daily census should affect total expenses by causing a point

to move along the cost curve. The other factors should affect the level

of the curve itself.


Methodology

Some explanation should probably be made as to why only short-term,

non-federal general and other special hospitals are included in this study.

First, this group of hospitals is the largest single category of hospitals

in the United States constituting approximately 75 per cent of all hospi-

tals.1 Although these hospitals contain less than 40 per cent of all beds

and have an average of only about one-third of the total number of patients

hospitalized on any day, approximately 90 per cent of all patients are

admitted to them. Second, it could reasonably be assumed that federal

hospitals and non-federal long-term hospitals, such as psychiatric and

tuberculosis, could be expected to have different characteristics which

would unduly complicate the investigation. Finally, inasmuch as the



"1 Text Table I," Hospitals, Journal of the American Hospital Associa-
tion, Vol. 36, Part 2 (August 1, 1962), p. 404.





13

scope of the study must be circumscribed within the purview of limited

resources, it seems reasonable to deal with those hospitals which are

most numerous and which affect the greatest number of people.

If the independent variables are indeed causally related to the de-

pendent variables, one would expect changes in the independent vari-

ables to result in shifts in the dependent variables. Such changes could

be determined in a crude manner by simple visual inspection of the amounts

of change occurring in the different variables, then making comparisons

among the various amounts of change. These comparisons could most

easily be made by determining the percentage change in each variable

with respect to a base year, then examining the relationships among the

per cent change figures.

Therefore, the various tables of chapters two, three and four show

not only the observations of the variables, but in addition contain sections

showing per cent change figures. The accompanying text in those chapters

discusses the changes and their percentage relationships.

The relevant data of chapters two, three and four are further combined

and analyzed in chapter five. An effort is made to show the simple demand

curve relating output to price of service. Patient-days and admissions are

used as the measure of output. Price is adjusted for changes in popula-

tion and income. The curve is shown in two parts, 1946-1952 and 1953-

1960. A comparison of these two curves is made in order to detect shifts

in demand.








After the simple analysis of demand is completed, a least squares

multiple regression demand equation is obtained for prediction purposes.

Also, the partial regression coefficients are obtained in order to ascertain

the net influence of each independent variable in the multiple regression

equation.

Ideally, a statistical demand function should have been computed for

each sub-set of hospitals. However, the data are in such form that this

is not possible. Consequently, total industry demand is computed.

In chapter six, short-run statistical cost functions are obtained by

analysis of the relevant information of chapters two, three and four. Cost

functions are computed for the total industry grouped into the various

categories of size. Because of the nature of the data, average total cost

functions are computed. Little additional useful information would be

yielded by total and marginal cost functions, and the data are too limited

to permit computation of long-run cost functions. Hence, these three

cost functions are not computed. Nevertheless, the various cost functions

computed should yield some useful information for purposes of managerial

control.

Detailed explanations of the techniques of analysis are presented in

chapters five and six along with the presentation of the results of the

analysis.

Data

Some question may be raised as to the comparability of the data. Even

though fairly precise definitions of size, control, service and length of





15

stay are used, there may be considerable variation among the hospitals

classified into any group. For example, short-term, general hospitals

presumably provide the general run of services required in a community

hospital for patients whose average length of stay is less than 30 days.

However, one such general hospital may have a much larger average length

of stay than another. This suggests that one may actually be specializing

to a considerable extent. The author knows of one general hospital which

had at one time the majority of its admissions receiving obstetrical or

ear, nose and throat care. Such specialization results in non-homogeneous

units in each classification.

There is really no way of estimating from data available the seriousness

of this lack of homogeneity. Therefore, for the purposes of this study, it

is disregarded completely. No attempt is made to determine or correct

such distortion.

For some years, data were not available for some of the variables.

See, for example, Tables IV-35, IV-36, IV-37, plant assets. Where such

omissions occurred, the assumption was made that such change as was

occurring was at a constant amount. Hence, a straight line interpolation

was made and the computed values were used in subsequent computations.

To illustrate, in Table IV-35, plant assets of voluntary hospitals, no value

was reported for 1959. Observe the "Under 25 Beds" category. Between

the contiguous figures, the midpoint, $44,609, was computed and used in

subsequent computations.







16

This lack of full information became rather serious with respect to

proprietary and governmental hospitals inasmuch as no data were reported

for the larger size categories -- 200-299, 300-499, 500 and over -- until

1957. The data shown in the tables for the 100-199 beds group is really

for "100 and over" except for the years 1957 and 1960. No reliable

method by which these values could be distributed to the larger size

groupings seemed to be available. Consequently, they are not distributed.

From 1953, analysis of proprietary and governmental hospitals' data in the

larger size groupings is combined into the one classification -- 100 beds

and over.

Finally, one other problem with respect to data was encountered. From

1946 when the surveys were begun through 1952, there were four size

classifications -- Under 50 beds, 50-99 beds, 100-249 beds and 250

beds and over. Beginning in 1953, the size groups were revised with

only one of the old sizes, 50-99, being retained. Rather than attempt to

try to reclassify either set of data, 1946-1952 or 1953-1960, into the same

classes as the other and probably introduce error, it seemed better to leave

the data as reported and seek explanations for the variation in each set.














CHAPTER II

Selected Economic and Social Changes

In this and the two following chapters, the information required to

test the hypothesis is developed in considerable detail. The general

rationale for the inclusion of each type of information has already been

presented in chapter one. Therefore in chapters two and three, the data

are presented with accompanying descriptive comments. Chapter four

contains additional data and descriptive comments; in addition, an effort

is made to relate the three classes of material presented in these three

chapters. Thus, not only data with descriptive statements are presented

in chapter four, but also there is discussion of the significance of the

various changes and some explanation of the causes of the changes re-

vealed in the data. The statistical procedures used in testing the hypo-

thesis are presented in chapters five and six.

Although not all the data shown in chapters two, three and four are

used in the analyses of chapters five and six, they were useful in pre-

liminary analyses. Also they help to define the milieu, thereby providing

background against which the analyses may be viewed.

In this chapter, specific information dealing with changes in popu-

lation, employment, price levels, capital accumulation and income is

presented.









Population

Changes in total population between 1946 and 1960 are shown in

Table II-1. Also shown is the percentage change for each year from 1946.


TABLE II-l.-Estimated total population (in thousands), and per cent change
from 1946, as of July 1, 1946-1960, inclusive


Number of people

141,389
144,126
146,631
149,188
151,683

154,360
157,028
159,636
162,417
165,270

168,176
171,198
174,054
177,103
179,323


% change from 1946

0
1.9
3.7
5.5
7.3

9.2
11.1
12.9
14.9
16.9

18.9
21.1
23.1
25.3
26.8


aSource: Figures for 1946-1949 and 1951 are taken from U. S. Bureau
of the Census, Historical Statistics of the United States, Colonial Times
to 1957 (Washington, 1960), p. 8; Figures for 1950, 1952-1959 are from
U. S. Bureau of the Census, Statistical Abstract of the United States:
1960 (81st edition; Washington, 1960), p. 22; 1960 figures are from U. S.
Bureau of the Census, Statistical Abstract of the United States: 1961
(82nd edition; Washington, 1960), p. 26.


Because of computer capacity limitations only the aggregate figures are

used in relating population to other data. However, during the time period

encompassed by the study some rather striking changes occurred in other

characteristics of population. One interesting change was in the age

distribution.


Year

1946
1947
1948
1949
1950

1951
1952
1953
1954
1955

1956
1957
1958
1959
1960








Age

Total population increased 26.8 per cent from 1946 to 1960. All

age groups experienced at least some growth in absolute numbers al-

though the percentage increase was rather small in the "15 through 24"

category and almost nil in the "25 through 34" group. While the "35

through 44" and "45 through 54" groups experienced growth somewhat

less than the total population growth, the "55 through 64" group grew

at almost the same rate as did the total population. The really rapid

growth changes occurred, however, in the "Under 15" and the "65 and

Over" age groups.

If a graph of the population distributed by age groups were drawn

for 1946, it would be fairly well described by a straight line having a

rather steep negative slope. However, by 1960 the effects of the sharp

increase in the extreme age groupings require a curve more in the shape

of a parabola.

Estimates of total population classified by age are 'shown"in Table I-A

of Appendix I.


Race

Although both the white and non-white segments of the population

have grown rather rapidly, there have not been any large changes in

the racial composition of the total population. As one can observe in

Appendix I, Table I-C, there has been a small, but steady, increase in

the non-white component as a per cent of the total population with a

corresponding decrease in the white segment.






20

The per cent change from 1946 to 1960 was about 50 per cent greater

in the non-white component than in the white even though the white

component grew somewhat more rapidly during the early years of the

period. The yearly growth rate for the white component has been

rather constant while the non-white yearly growth rate has increased

sizeably.

Sex

Changes in the sex characteristics of the population during the

period of interest were not large. In 1946, the population was almost

equally composed of males and females. Slight changes took place

during the ensuing years so that in 1960, 49.3 per cent of the popu-

lation was male while females composed the remaining 50.7 per cent.

The percentage increase from 1946 to 1960 was slightly larger among

the female segment of the population than among the male. The female

yearly rate of increase was also somewhat larger than the male as well

as being less variable. Detailed sex characteristics are presented in

Appendix I, Table I-D.

Age, Sex, Race

Reclassification of the population by age, sex, and race serves

to reiterate the findings derived from other classifications.

The white male population declined from 44.3 per cent of the total

population in 1946 to 43.7 per cent in 1960. Although the white under

20 years age group increased from 14.4 per cent to 17.0 per cent, all

other white male age groups declined as a per cent of total population.






21

The only non-white male age group showing a decline was the 20-34

group which dropped from 1.3 per cent of total population in 1946 to

1.0 per cent in 1960. Non-white males as a whole increased from

5.2 per cent in 1946 to 5.6 per cent of the total population in 1960.

The white female "Under 20" as well as the "65 and over" age

groups both increased although all white females as a per cent of the

total population decreased slightly from 45.2 per cent of the popu-

lation in 1946 to 44.9 per cent in 1960. The only non-white female

group failing to show an increase was the 20-34 group. Total non-

white females increased from 5.3 per cent to 5.9 per cent during the

period.

Percentage increases were greater among the female population

than among the male; and, for both males and females, the non-white

population grew faster than the white population. Sharp increases

among males and females both white and non-white occurred in the

"Under 20" age group and in the "65 and over" age group. As one

would expect, the annual rates of change were also greatest in these

same two age groups. Appendix I, Tables I-E, I-F, I-G, and I-H

contain the detailed information concerning population classified

according to age, sex, and race.

Marital Status

Relative changes in the population 14 years old and older classified

according to marital status were rather minor. The single group drop-

ped from 25 per cent of total population in 1947 to 22.5 per cent in 1960.






22

The married group increased from 65.2 per cent to 67.0 per cent while

the divorced group increased from 1.8 per cent to 2.4 per cent. The

widowed group was practically unchanged as a per cent of the total

population. There were increases in number of population in all

classifications. While the per cent increase in the total population

14 years of age and over was at the simple rate of 1.27 per cent, the

single group after declining for several years increased enough in the

later years of the period to show a simple average rate of gain of 0.2

per cent. The married, widowed and divorced groups increased 1.60,

1.51 and 3.36 respectively.

Although no further pertinent information is gained by analysis

of marital status by sex, Appendix I, Table I-I contains information

concerning marital status of the population classified by sex, while

Table I-J contains information concerning marital status of the total

population.

Urbanization

The long run movement of the American population from farms to

the cities continued during the period of interest. In 1950, 63.8 per

cent of the population lived in urban areas and had increased to 69.9

per cent by 1960. The change is shown in Table II-2.

Total population increased 18.5 per cent from 1950 to 1960, but the

increase in urbanization amounted to 29.3 per cent while rural popu-

lation declined in the amount of 0.8 per cent.






23

TABLE nI-2.-Estimates of total U. S. population (in thousands) and per
cent distribution classified by urban or rural location


1950 151,326 96,847 63.8 54,479 36.2
1960 179,323 125,269 69.9 54,054 30.1

aSource: U. S. Bureau of the Census, Statistical Abstract of the
United States: 1961 (82nd edition; Washington, 1961), p. 22.


Births, Deaths, Marriages, Divorces

Previous classifications have shown increases in nearly every

category of population. However, along with the increase in total

population, there has been a striking increase in the birth rate

through the mid-fifties followed by somewhat of a decline thereafter.

Death, marriage and divorce rates have all exhibited sizeable de-

creases during the period. Table II-3 shows these rates.


TABLE II-3.-Birth,


death, marriage and divorce rates
lation, 1946-1960 inclusive


per 1,000 popu-


Marriages

16.4
13.9
12.4
10.6
11.1

10.4
9.9
9.8
9.2
9.3


Divorces

4.3
3.4
2.8
2.7
2.6

2.5
2.5
2.5
2.4
2.3


Year

1946
1947
1948
1949
1950

1951
1952
1953
1954
1955


Births

23.6
26.0
24.4
24.0
23.6

24.4
24.6
24.5
24.9
24.6


Deaths

10.0
10.1
9.9
9.7
9.6

9.7
9.6
9.6
9.2
9.3


- --


I -








TABLE II-3-Continued


Year Births Deaths Marriages Divorces

1956 24.9 9.4 9.5 2.3
1957 25.0 9.6 8.9 2.2
1958 2..3 9.5 8.4 2.1
1959 24.1 9.4 8.5 2.2
1960 23.6 9.5 8.5 na

aTaken and calculated from: U. S. Bureau of the Census,
Historical Statistics of the United States, Colonial Times to 1957
(Washington, 1960), p. 30; and, U. S. Bureau of the Census,
Statistical Abstract of the United States: 1961 (82nd edition; Washington,
1961), p. 48.

naNot available.


One of the most striking changes occurring during the years of

the study had to do with the place of birth and the kind of medical

attendance given the newborn. A rather large percentage, 82.3,

of births occurred in hospitals with physicians in attendance in 1946.

But by 1960 this percentage had increased to 96.6. Table U1-4 shows

the change.

Physicians

If all hospital care were increased as much as obstetrical care,

it would seem that there would have to be an increase in the number

of physicians per unit of population. However, this was not the case.

In 1949, the first year of this study for which information is available,

there were 201,277 civilian physicians gainfully employed or 135 per

100,000 population. While the total number of physicians engaged in

the practice of medicine as civilians increased by several thousands,








the rate per 100,000 of population remained almost constant, being 133

in 1959. Table I-K of Appendix I shows the change in number of

physicians.


TABLE II-4.-Registered births (in thousands) by type of attendance with
percentage distribution, 1946-1960 inclusive

(columns 2, 3 and 5 are rounded independently; therefore, the sum of
columns 3 and 5 may differ somewhat from column' 2)

Attended by Physician Attended by physicians
Total in hospital or others not in hospital
Year births
Births % of tot. births Births % of tot. births
(1) (2) (3) (4) (5) (6)
1946 3,289 2,708 82.3 581 17.7
1947 3,700 3,137 84.8 563 15.2
1948 3,535 3,025 85.6 509 14.4
1949 3,560 3,087 86.7 473 13.3
1950 3,554 3,126 88.0 428 12.0

1951 3,751 3,377 90.0 374 10.0
1952 3,847 3,529 91.7 318 8.3
1953 3,902 3,621 92.8 281 7.2
1954 4,017 3,760 93.6 257 6.4
1955 4,047 3,819 94.4 229 5.6

1956 4,,163 3,959 95.1 203 4.9
1957 4,255 4,070 95.7 184 4.3
1958 , 2G4 4,037 96.0 168 4.0
1959 4,245 4,091 96.4 154 3.6
1960 4,258 4,114 96.6 143 3.4

aTaken and calculated from: U. S. Bureau of the Census,
Statistical Abstract of the United States: 1962 (83rd edition; Washington,
1962), p. 56.


Population Density

The total land area of the United States changed only slightly during

the early years of the period of analysis. However, upon the acquisi-






26

tion of statehood by Alaska and Hawaii the area increased by about one

sixth as shown in Table H-5.


TABLE II-5.-Land area in square miles of the United States, 1946-1960a


1946 2,977,128 2,977,128

1950 2,974,726 2,974,726

1958 2,974,726 3,552,197

1959 2,974,726 3,552,197

1960 2,971,494 3,548,974


aSource: U. S. Bureau of the Census, Statistical Abstract of the
United States: 1946, 1951, 1952, 1959, 1960, 1961 (67th, 72nd, 73rd,
80th, 81st, 82nd editions; Washington, 1946, 1951, 1952, 1959, 1960,
1961), pp. 3, 5, 5, 160, 160, 161 respectively.


Inasmuch as land area has remained almost constant, the popu-

lation density has increased at about the same rate as the total

population -- slightly over 25 per cent during the 15 years. Popu-

lation density shown in the following table excludes both Alaska and

Hawaii.






27

TABLE nI-6.-Estimated population of the United States per square mile
of land area, 1946-1960 inclusive

Year Population
1946 .................. 47.0
1947 . . . . . . . . 48.2
1948 ......,...... .... 49.1
1949 ..... .. ........., 49.9
1950 .... .... .... 50.7

1951 ., .. ... .. .... 51.6
1952 . . ..... . . 52.4
1953 . . . . 53.2
1954 .. . . . . . 54.2
1955 . . ...... . . 55.2

1956 .... ....... . . 56.2
1957 . . .... .. . . 57.2
1958 . ........ 58.2
1959 . . ....... . 59.2b
1960 .................. 60.3b

aCalculated from: Tables 2 and 8.

bAlaska and Hawaii are not included.


Employment

Among the points of interest concerning employment is the

growth of the labor force, the number unemployed, the movement of

wages and changes in productivity. These will all be examined in

this section.

Employment Status

Except for the agricultural labor force, every segment of the

American non-institutional population 14 years old and older increased

in terms of absolute numbers from 1946 to 1960. During the 15year -

period the total non-institutional population increased 17.7 per cent






28

while the total civilian labor force increased 22.8 per cent and those

not in the labor force increased only 14.7 per cent. These different

growth rates result in a different percentage distribution of the total

population between the labor force and those not in the labor force

for the years involved. Table II-7 shows these data.

The net result of the changes has been that a steadily increasing

proportion of the total population has sought employment while there

has been a corresponding decrease in the sum of the military forces

and those not in the labor force.

Within the labor force itself, some striking changes have occurred.

First, although the total labor force experienced growth and the total

number of people employed increased by 20.7 per cent, those actually

employed declined 1.7 per cent as a per cent of the total labor force.

The unemployed portion of the labor force increased 1.7 per ceat in the

distribution of the total labor force. Second, if the change in the un-

employed is considered, there is a cyclical pattern resulting in size-

able growth. Table II-A of Appendix U reveals that, at least from 1950

on, the increase in unemployment was greater among the female work

force than among the male; and, by referring to Table II-B in the same

appendix, one can see that the female portion of the labor force was

growing more rapidly than the male portion.

A third important change is that of the distribution of the total

employed labor force between agricultural and non-agricultural employ-

ment. The actual number of people in the agricultural labor force








TABLE 11-7.-Employment status of the non-institutional population (in
thousands of persons 14 years old and older), 1946-1960 inclusive,
with per cent distribution and per cent change from 1946a


Total non- Civilian labor force
Year inst.
Employed
pop. Total Unemployed
Total Agri. Non-agri.
(1) (2) (3) (4) (5) (6) (7)

Number of people
1946 106,520 57,520 55,250 8,320 46,930 2,270
1947 107,608 60,168 57,812 8,256 49,557 2,356
1948 108,632 61,442 59,117 7,960 51,156 2,325
1949 109,773 62,105 58,423 8,017 50,406 3,682
1950 110,929 63,099 59,748 7,497 52,251 3,351

1951 112,075 62,884 60,784 7,048 53,736 2,099
1952 113,270 62,966 61,035 6,792 54,242 1,931
1953 115,094 63,815 61,945 6,555 55,390 1,870
1954 116,219 64,468 60,890 6,495 54,395 3,578
1955 117,388 65,847 62,944 6,718 56,225 2,903

1956 118,734 67,530 64,708 6,572 58,135 2,822
1957 120,445 67,946 65,011 6,222 58,789 2,936
1958 121,950 68,647 63,966 5,844 58,122 4,681
1959 123,366 69,394 65,581 5,836 59,745 3,813
1960 125,368 70,612 66,681 5,723 60,958 3,931

Per cent distribution


1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960


54.0d
55.9
56.6
56.6
56.9
56.1
55.6
55.4
55.5
56.1
56.9
56.4
56.3
56.3
56.3


96.1e
96.1
96.2
94.1
94.7
96.7
96.9
97.1
94.4
95.6
95.8
95.7
93.8
94.5
94.4


15.1f
14.3
13.5
13.7
12.5
11.6
11.1
10.6
10.7
10.7
10.2
9.6
9.1
8.9
8.6


84.9f
85.7
86.5
86.3
87.5
88.4
88.9
89.4
89.3
89.3
89.8
90.4
90.9
91.1
91.4


3.9e
3.9
3.8
5.9
5.3
3.3
3.1
2.9
5.6
4.4
4.2
4.3
6.8
5.5
5.6










TABLE nI-7.-Continucd


Not in labor force
SMilitary
Total Keeping house In school Other

(8) (9) (10) (11) (12)

Number of people
45,550 31,020 6,360 8,170 3,450
45,850 32,441 6,446 6,962 1,590
45,733 32,850 6,178 6,706 1,457
46,051 33,067 6,093 6,=891 1,617
46,181 33,058 6,197 6,926 1,649

46,092 33,105 5,829 7,159 3,099
46,710 33,334 6,040 7,335 3,594
47,732 34,225 6,034 7,675 3,547
48,401 33,893 6,310 8,198 3,350
48,492 33,722 6,569 8,201 3,049

48,348 33,399 6,593 8,356 2,856
49,699 33,892 7,047 8,759 2,800
50,666 34,233 7,524 8,909 2,637
51,420 34,487 7,761 9,172 2,552
52,242 34,543 8,162 9,538 2,514

Per cent distribution


42.8d
42.6
42.1
42.0
41.6

41.1
41.2
41.5
41.6
41.3

40.7
41.3
41.5
41.7
41.7


3.2d
1.5
1.3
1.4
1.5


2.8
3.2
3.1
2.9
2.6

2.4
2.3
2.2
2.0
2.0








TABLE II-7. -Continued


Total non- Civilian labor force
inst.
Year pop Employed
Total Unemployed
Total Agri. Non-agri.
(1) (2) (3) (4) (5) (6) (7)

Per cent change from 1946

1946 0.0 0.0 0.0 0.0 0.0 0.0
1947 1.0 4.6 4.6 0.8 5.6 3.8
1948 2.0 6.8 7.0 4.3 9.0 2.4
1949 3.1 8.0 5.7 3.6 7.4 62.2
1950 4.1 9.7 8.1 9.9 11.3 47.6

1951 5.2 9.3 10.0 -15.3 14.5 7.5
1952 6.3 9.5 10.5 -18.4 15.6 -14.9
1953 8.0 10.9 12.0 -21.2 18.0 -17.6
1954 9.1 12.1 10.2 -21.9 15.9 57.6
1955 10.2 14.5 13.9 -19.3 19.8 27.9

1956 11.5 17.4 17.1 -21.0 23.9 24.3
1957 13.1 18.1 17.1 -25.2 25.3 29.3
1958 14.5 19.3 15.8 -29.8 23.8 106.2
1959 15.8 20.6 18.7 -29.9 27.3 68.0
1960 17.7 22.8 20.7 -31.2 29.9 73.2
Average 1.26 1.63 1.48 -2.23 2.14 5.23

aTaken and calculated from: U. S. Bureau of the Census, Statistical
Abstract of the United States: 1962 (83rd edition; Washington, 1962),
p. 215.

bThis column represents 100 per cent for all years.

The percentages for these columns were not computed since they are
not particularly pertinent to this study.
dThe figures are percentages of total non-institutional population
shown in Column 2.

eThese columns show percentages of total civilian work force, Column 3.


fPercentages of Column 4, total employed, are shown here.









TABLE II-7.-Contined


Not in labor force
Military
Total Keeping house In school Other

(8) (9) (10) (11) (12)


Per cent change fizn 1946
0.0 0.0 0.0 0.0
0.7 4.6 1.4 -1..8
0.4 5.9 -2.9 -17.9
1.1 6.6 -4.2 -15.7
1.4 6.6 -2.6 -15.2

1.2 6.7 -8.3 -12.4
2.5 7.5 -5.0 -10.2
4.8 9.7 -5.1 -6.1
6.3 9.3 -0.8 0.3
6.5 8.7 3.3 0.4

6.1 7.7 3.7 2.3
9.1 9.3 10.8 7.2
11.2 10.4 18.3 9.0
12.9 11.2 22.0 12.3
14.7 11.4 28.3 16.7

1.05 0.81 2.02 1.19





33

decreased while there was an increase in numbers in the non-agri-

cultural portion. As percentages of the total employed civilian labor

force, agricultural workers dropped from 15.1 per cent in 1946 to

8.6 per cent in 1960 while for the same time period the non-agri-

cultural workers increased from 84.9 per cent to 91.4 per cent. The

percentage decline in number of agricultural workers was 31.2 per

cent while non-agricultural workers increased 29.9 per cent in

actual numbers.

Wage and Salary Income

If it is assumed that there were no change in the earnings per

person, income from wages and salaries could be expected to rise

at least 20 per cent between 1946 and 1960 since the total number

of people employed increased by this amount. But, the actual in-

crease was much greater as shown in Table 11-8.

The increase in wage and salary income was almost four times

as large as could be expected to result solely from the increase in

size of work force. The percentage increase in income expressed

in current dollars was twice as large as the percentage increase

shown for income change measured in constant dollars. One would

infer, therefore, by observing only the current dollar changes that

income had increased more than eight times as much as would be

expected from the change in size of labor force.








TABLE II-8.-Salary and wage income (in millions) in current and


constant


dollars (1947-49=100), with per cent
change from 1946a


Net civ. % change Net civ. sal. & % change
Year sal. & from wages in constant from
wages 1946 $ (1947-49=100) 1946

1946 104,018 0.0 124,722 0.0
1947 124,690 19,9 130,565 4.7
1948 136,999 31.7 133,268 6.9
1949 136,586 31.3 134,171 7.6
1950 149,191 43.4 145,127 16.4

1951 171,643 65.0 154,633 24,0
1952 184,540 77.4 162,590 30.4
1953 198,475 90.8 173,492 39.1
1954 197,644 90.0 172,164 38.0
1955 214,074 105.8 186,964 49.9

1956 232,839 123.8 200,378 60.7
1957 245,855 136.4 204,538 64.0
1958 247,375 137.8 200,304 60.6
1959 268,655 158.3 215,614 72,9
1960 283,771 172.8 224,325 79.9
aCalculated from: U. S. Department of Commerce, Office of
Business Economics, Survey of Current Business, National Income
Number, Vol. 42, No. 7 (Washington: July, 1962), p. 6; and U. S.
Department of Commerce, Office of Business Economics, National
Income: 1954 Edition (Washington: 1954), p. 163.


Personal Income

Although not increasing as rapidly as wage and salary income,

personal income increased almost twice as rapidly as total population,

about 2.5 times as fast as the labor force and about three times as fast as

the total non-institutional population 14 years old and older. Inasmuch

as wage and salary income constitutes roughly two-thirds of personal

income, it is apparent that other types of income grew considerably





35

less rapidly, if at all. Table II-C of Appendix II shows the change in

personal income.

Average Income of Spending Units

Another measure of the change in income for the period of time

involved in this study may be obtained by observing the change occur-

ring in average income. The mean and median income for professional

and semi-professional workers as well as for service and unskilled

workers increased both in current dollars and in constant dollars.

The real increase, measured in constant dollars, in the mean income

per spending unit of professional workers was of about the same magni-

tude as the increase in population and labor force. However, the median

income increased more rapidly than did total population, 43.1 per cent

and less than 28.5 per cent respectively. It also increased more than

the 22.8 per cent increase in total labor force from 1946 through 1960.

These changes indicate that more of the professional and semi-

professional workers spending units are obtaining larger incomes while

the extremely large incomes constitute a smaller proportion of total

income obtained by this category of workers.

Just the opposite results occurred among the unskilled and service

workers. Their mean income increased 40.3 per cent while the median

income increased only 31.2 per cent. So, although this entire category

of workers received larger incomes through the years, some increased

their incomes sufficiently large enough to raise the entire category's

mean above the median.






36

One would expect that while population increased, total personal income

would also increase. However, this could occur even if the mean and median

incomes remained constant. For the period of time under study, the mean and

medians both increased while population also increased. It follows, then,

that there must necessarily have been a much larger percentage increase in

total income than in total population. This has been shown in the two pre-

ceding sections to be true.

Table II-9 shows the yearly changes in mean and median income of

spending units by occupational classification. Table II-10 shows median

income for all spending units.


Productivity

In order for the economy to sustain the increasingly large wage and

salary payments, one would expect that there would be a corresponding

increase in productivity. Table II-10 shows that the index of productivity

for the entire economy increased slightly in excess of 50 per cent. The

large increase in agricultural productivity is explained partially by move-

ment of labor from the agricultural to the non-agricultural segment of the

economy as well as by technological improvements, increased capital

investments, et cetera.1



1U. S. Department of Commerce, Office of Business Economics,
National Income (1954 Edition; Washington: U. S. Government Printing
Office, 1954), pp. 2-4.








TABLE 11-9.-Mean and median income in current and constant dollars (1947-
49=100) of spending units by occupational groups, 1947
to 1960; with per cent change from 1947a


Professional and semi-professional
Year
Current % change Constant % change
dollars from 1947 dollars from 1947
(1) (2) (3) (4) (5)
Mean
1947 5,450 0.0 5,707 0.0
1948 5,140 -5.7 5,000 -12.4
1949 5,350 -1.8 5,255 7.9
1950 5,630 3.3 5,477 4.0
1951 6,020 10.5 5,423 5.0

1952 6,670 22.4 5,877 3.0
1953 6,790 24.6 5,935 4.0
1954 7,380 35.4 6,429 12.7
1955 8,140 49.4 7,109 24.6
1956 7,770 42.6 6,687 17.2

1957 8,150 49.5 6,780 18.8
1958 8,270 51.7 6,696 17.3
1959 8,520 56.3 6,838 19.8
1960 9,090 66.8 7,186 25.9
Median
1947 4,000 0.0 4,188 0.0
1948 4,000 0.0 3,891 7.1
1949 4,000 0.0 3,929 6.2
1950 4,500 12.5 4,377 4.5
1951 4,500 12.5 4,054 3.2

1952 5,310 32.8 4,678 11.7
1953 5,540 38.5 4,843 15.6
1954 6,020 50.5 5,244 25.2
1955 6,250 56.2 5,459 30.3
1956 6,250 56.2 5,379 28.4
1957 7,000 75.0 5,824 39.1
1958 7,450 86.2 6,032 44.0
1959 7,270 81.8 5,835 39.3
1960 7,580 89.5 5,992 43.1
aTaken and calculated from: U.S. Bureau of the Census, Statistical
Abstract of the United States: 1962 (83rd edition; Washington, 1962), p. 337.
bConstant dollars were obtained by dividing current dollars by the
Consumers' Price Index, All Items, of Table 15, p. 29.










TABLE II- 9.-Continued


Unskilled and service
Current % change Constant % change
dollars from 1947 dollars from 1947
(6) (7) (8) (9)
Mean
1,900 0.0 1,990 0.0
2,280 20.0 2,218 11.5
2,200 15.8 2,161 8.6
2,350 23.7 2,286 14.9
2,320 22.1 2,090 5.0

2,620 37.9 2,308 16.0
2,760 45.3 2,413 21.3
2,990 57.4 2,605 30.9
2,840 49.5 2,480 24.6
3,250 71.1 2,797 40.6

3,210 68.9 2,671 34.2
3,190 67.9 2,583 29.8
3,320 74.7 2,665 33.9
3,530 85.8 2,791 40.3

Median

1,750 0.0 1,832 0.0
2,100 20.0 2,043 11.5
2,100 20.0 2,063 12.6
2,100 20.0 2,043 11.5
2,100 20.0 1,892 3.3

2,470 41.1 2,176 18.8
2,530 44.6 2,212 20.7
2,810 60.6 2,448 33.6
2,540 45.1 2,218 21.1
3,000 71.4 2,582 40.9

2,850 62.9 2,371 29.4
2,840 62.3 2,300 25.5
2,950 68.6 2,368 29.3
3,040 73.7 2,403 31.2








TABLE II-10.-Median income of all spending units, 1947 to 1960a


Median Income


Year

1946
1947
1948
1949
1950

1951
1952
1953
1954
1955

1956
1957
1958
1959
1960


aSource: U. S. Bureau of the
United States: 1957, 1959, 1963
inton, 1957, 1959, 1963).


Census, Statistical Abstract of the
(78th, 80th, 84th editions; Wash-


"Spending unit" is defined as all persons living in the same dwelling
and belonging to the same family who pool their incomes to meet their
major expenses; a spending unit may consist of only 1 person.


$ na
2,530
2,840
2,700
3,000

3,200
3,430
3,780
3,700
3,960

4,250
4,350
4,400
4,880
5,100





40

TABLE II-11 .-Indexes of real output per man-hour for the private
economy: 1947 to 1960a

Total economy Farm Non-farm
Year
Index % change Index % change Index % change
from 1947 from 1947 from 1947
1947 96.7 0.0 90.5 0.0 97.5 0.0
1948 100.2 3.6 107.1 18.3 99.4 1.9
1949 103.1 6.6 102.2 12.9 103.3 5.9
1950 110.4 14.2 116.2 28.4 108.8 11.6
1951 113.2 17.1 114.5 26.5 110.6 13.4

1952 115.7 19.6 124.5 37.6 112.0 14.9
1953 120.4 24.5 138.6 53.1 115.1 18.1
1954 122.6 26.8 148.3 63.9 116.9 19.9
1955 128.0 32.4 153.5 69.9 121.9 25.0
1956 128.3 32.7 156.4 72.8 121.5 24.6

1957 133.0 37.5 166.7 84.2 125.2 28.4
1958 136.3 41.0 186.9 106.5 127.4 30.7
1959 142.3 47.2 185.4 104.9 133.1 36.5
1960 145.5 50.5 195.8 116.4 135.7 39.2


aTaken and calculated from: U. S.


Bureau of the Census,


Statistical Abstract of the United States: 1961 (82nd edition;
Washington, 1961), p. 217.


Price Level

Along with the increase in population, work force and income

there was an accompanying increase in both wholesale and consumers'

prices.

Consumers' Prices

Consumers' prices, as measured by the Consumers' Price Index,

increased approximately 50per.:cent from 1946 to 1960 making many of

the gains in economic growi uu-,wing this period more apparent than

real. Table Il-12 -hows the change in consumers' prices.






41

TABLE II-12.-Consumers' price indexes for all items and medical
care 1946-1960 (1947-49=100)a


Year All items Medical care
1946 83.4 87.7
1947 95.5 94.9
1948 102.8 100,9
1949 101.8 104.1
1950 102.8 106.0

1951 111.0 111.1
1952 113.5 117.2
1953 114.4 121.3
1954 114.8 125.2
1955 114.5 128.0

1956 116.2 132.6
1957 120.2 138,0
1958 123.5 144.6
1959 124.6 150.8
1960 126.5 156.2
aSource: U. S. Bureau of the Census, Statistical Abstract of the
United States: 1962 (83rd edition; Washington, 1962), p. 348; and,
U. S. Congress, Joint Economic Committee, 1957 Historical and
Descriptive Supplement to Economic Indicators, 85th Congress, 1st
Session, 1957, p. 53.


The increase in cost of medical care was greater than the general

increase in prices. Although the medical care component of the all

items index measures room rates as the only direct item of hospital

cost, hospital costs are measured indirectly through hospitalization

insurance costs. This indirect measure may be subject to somewhat

of a time lag but in the long run should be quite indicative of changes

in cost.1


Some question may be raised concerning how accurately the
Consumers' Price Index measures change in all consumers' prices.
The sample for this index is taken from a universe containing about







Wholesale Prices

Movement of wholesale prices was quite similar to that of consumers'

prices. The largest increases occurred at the end of World War II and

during the first year of the Korean War, 1950-51. Table 11-13 presents

an index of wholesale prices.

Capital Accumulation

Accompanying the growth of population, work force and productivity,

annual capital expenditures increased nearly twice. Much of this

expenditure, particularly during the early years of the period, was

for expanded capacity. However, expenditures during the last few

years were almost entirely for replacement of worn-out or obsolete

assets. Table II-14 shows these changes both in current and constant

dollars.


two-thirds of all city families and nearly 40 per cent of all families.
For a detailed presentation of the issues involved see, Kathryn Smul
Arnow, The Attack on the Cost of Living Index (New York: The Inter-
University Case Program, printed by Polygraphic Company of America,
Inc., 1952). The Bureau of Labor Statistics answers some of the
criticisms in, "The Revised Consumer Price Index," Monthly Labor
Review (February, 1953).
The following items and services are priced in formulating the
medical care component: physicians' services; dentists' fees;
optometrists' fees; hospital room rates; group hospitalization premium,
monthly rate for family; prescriptions; multiple vitamin concentrates;
aspirin, unbranded; milk of magnesia. See, Mary S. Bedell, The
Consumer Price Index: A Layman's Guide, U. S. Department of Labor,
Bureau of Labor Statistics, Bulletin No. 1140 (Washington: U. S.
Government Printing Office, 1953), p. 27.









TABLE II- .13.-Indexes of wholesale prices for all commodities and
construction materials (1947-49=100)a


Year All Construction
commodities materials


1946

1947

1948

1949

1950


1951

1952

1953

1954

1955


1956

1957

1958

1959

1960


78.7

96.4

104.4

99.2

103.1


114.8

111.6

110.1

110.3

110.7


114.3

117.6

119.2

119.5

119.6


69.3

94.0

104.0

102.0

109.5


119.6

118.2

119.9

120.2

125.5


130.6

130.6

130.5

134.6

132.6


aTaken and calculated from: U. S. Department of Labor, Bureau
of Labor Statistics, Wholesale Prices and Price Indexes, Bulletin
Nos. 1257 and 1295 (Washington: U, S. Government Printing Office,
1958 and 1959), pp. 28-32; and, U. S. Bureau of the Census,
Statistical Abstract of the United States: 1961 (82ndedition;
Washington, 1961), p. 751.





















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Health Insurance

The number of Americans purchasing health insurance protection more

than doubled from 1946 to 1960. The extent of protection may have varied

widely, but over 74 per cent of the population was insured to some extent

in 1960 in contrast to about 30 per cent in 1946. The growth in percentage

of population having health insurance is shown in Table 11-15.


TABLE II-15.-Voluntary health insurance coverage in the United States,
1946 to 1960a


Year Percentage of civilian population
having health insurance

1946 30.3
1947 36.7
1948 41.8
1949 44.6
1950 50.8

1951 56.3
1952 59.1
1953 62.1
1954 63.6
1955 66.1

1956 69.8
1957 71.8
1958 71.4
1959 73.0
1960 74.1

aSource: Commission on the Cost of Medical Care, The Report of the
Commission on the Cost of Medical Care Vol. 1: General Report (4 vols.;
American Medical Association, 1964, n.p.)








Summary

Among the more notable changes in the economy during the years

included in this study were the following.

Total population increased substantially with the largest gains

being registered by the youngest and oldest categories. There were

only minor changes in the per cent distribution of population classified

by sex or race. The long term trend in increased urbanization con-

tinued. While the birth rate initially increased then subsequently

declined during the period, both the death rate and marriage rate dropped

sharply. Births attended by physicians in hospitals increased while the

number of physicians per 100, 000 population remained stable. The

population density increased at about the same rate as did total popu-

lation.

The size of the labor force, number employed as well as the number

unemployed all increased while the number of people engaged in

agricultural employment decreased sharply. Salary and wage income in-

creased greatly although the percentage increase in productivity was

only about one-half as great.

Prices as measured by both the consumers' price index and wholesale

price index were up sizeably.

Capital accumulation was somewhat cyclical with substantial ad-

ditions to net investment in the economy being made dGuing the early

years of the period of study. A marked decline in investment occurred

about mid-way of the period.














CHAPTER III

Capacity and Utilization of Short-term General and Other Special
Hospitals: 1946-1960

Enactment of the Hospital Survey and Construction Act in 1946

promoted widespread interest in the construction of new hospital

facilities. Subsequently, many entirely new hospitals were constructed

while many existing hospitals were modernized and expanded.

The result of this construction activity is apparent not only in the

total number of hospitals and beds available, but also in the personnel

ratios, expense ratios, total assets and utilization of the facilities,

In this chapter, information showing changes in capacity and

utilization is presented while the changes in personnel and expense

ratios and total assets are deferred to chapter four.

Capacity and Utilization

Capacity for hospital care is affected not only by the number of

hospitals available, but also by their bed complement and the length

of treatment cycle. Attention is directed in this section, therefore,

to changes in number of hospitals, beds and admissions as well as

to changes in occupancy percentage, average daily census and average

length of stay.









Hospitals

As one may have expected, a sizeable increase in hospital facilities

accompanied the increase in population during the years of this study.

The actual number of all short-term general and other special hospitals

increased nearly as rapidly as the total population. However, one of

the striking features of the changes in number of hospitals was the

rapid increase in hospitals controlled by state or local governmental

units while a substantial decline occurred in the number of hospitals

under various kinds of proprietary control.

Table HI-1 shows the actual numbers of hospitals in the United

States by control as well as per cent distribution and per cent change

from 1946.


TABLE III-1.-Number of short-term general and other special hospitals
in the United States, 1946-1960, by control, with per cent distri-
bution and per cent change from 1946a


Year Total Voluntary Proprietary Governmental


Hospitals


1946 4,444 2,583 1,076 785
1947 4,475 2,641 1,070 764
1948 4,499 2,682 1,056 761
1949 4,585 2,688 1,104 793
1950 5,031 2,871 1,218 942

1951 5,066 2,922 1,155 989
1952 5,122 2,973 1,109 1,040
1953 5,212 3,010 1,117 1,085
1954 5,212 3,056 1,052 1,104
1955 5,237 3,097 1,020 1,120

1956 5,299 3,165 981 1,153
1957 5,309 3,209 932 1,168


I I I I I i ii [ 1 1


i i i








TABLE m- 1.-Continued

Year Total Voluntary Proprietary Governmental
1958 5,290 3,203 896 1,191
1959 5,364 3,259 890 1,215
1960 5,407 3,291 856 1,260

Per cent distribution
1946 58.1 24.2 17.7
1947 59.0 23.9 17.1
1948 59.6 23.5 16.9
1949 58.6 24.1 17.3
1950 57.1 24.2 18.7

1951 57.7 22.8 19.5
1952 58.0 21.7 20.3
1953 57.8 21.4 20.8
1954 58.6 20,2 21.2
1955 59.1 19.5 21.4

1956 59.7 18,6 21.8
1957 60.4 17.6 22.0
1958 60.5 16.9 22.5
1959 60.8 16.6 22.7
1960 60.9 15.8 23.3
Per cent change from 1946


1946
1947
1948
1949
1950

1951
1952
1953
1954
1955

1956
1957


0.0
0.7
1.2
3.2
13.2

14.0
15.3
17.3
17.3
17.8

19.2
19.5


0,0
2.2
3.8
4.1
11.1

13.1
15.1
16.5
18.3
19.9

22.5
24.2


0.0
-0.6b
-1.9
2.6
13.2

7.3
3.1
3.8
-2.2
-5.2

-8.8
-13.4


0.0
-2.7
-8.1
1.0
20.0

26.0
32.5
38.2
40.6
42.7

46.9
48.8








TABLE III-1. -Continued


Year Total Voluntary Proprietary Governmental

1958 19.0 24.0 -16.7 51.7
1959 20.7 26.2 -17.3 54.8
1960 21.7 27.4 -20.4 60.5

aSource: American Hospital Association, Hospitals, Journal of the
American Hospital Association, Guide Issue, Vol. 35, Part 2 (Chicago:
August 1, 1961), p. 394. Percentages were calculated.

bin this and subsequent tables, percentage increases are shown
without a sign. Percentage decreases are preceded by the negative
sign.


In 1946 short-term hospitals comprised 72.6 per cent of the nation's

6,125 hospitals. By 1960 the total of all hospitals had increased to

6,876 of which 5,826 or 84.7 per cent were short-term. However, 361

of the short-term hospitals were operated by the Federal Government.

The remaining 5,407 hospitals constituted 78.6 per cent of all hospitals

doing business in the United States.1

Until 1958 no information showing the number of hospitals classified

by specialized services, i. e., orthopedic, obstetric or other hospitals,

was available. Data showing hospitals by service from 1958 through

1960 are shown in Table III-A of Appendix III.

The American Hospital Association's classification of hospitals into

size categories according to number of beds available was made on two



1American Hospital Association, Hospitals, Journal of the American
Hospital Association, Guide Issue, Vol. 35, Part 2 (August 1, 1961),
p. 394.






52

different bases during the period of investigation. The first basis,

using four size categories, was used for the years 1946 through 1952.

Beginning in 1953 seven categories were used. Only one of the seven

was identical with any of the four used previously. Although this

change of classification bases is somewhat confusing, one may still

derive useful information concerning trends in size.

For all short-term hospitals, not much change occurred in the

percentage distribution among the four size categories before 1953.

However, the total number of hospitals increased slightly faster than

did population. For the entire period, 1946-1960, hospitals did not

increase as rapidly as population.

With the increase in number of size categories in 1953, it became

apparent that some striking changes were occurring in hospital sizes.

These changes may be summarized by stating that the very small

hospital was seemingly becoming a vanishing phenomenon while the

number of larger hospitals, 200 beds and larger, was increasing rapidly.

These changes are shown in Table II-2. Tables II-3, lII-4 and III-5,

respectively, show changes in the number of hospitals in the various

size categories according to type of control, i. e., voluntary,pro-

prietary and state and local governmental.


















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61

Beginning in 1953, data showing the number of accredited1 hospitals

were available. Other characteristics of accredited hospitals such as

beds, admissions, et cetera cannot be determined from extant informa-

tion. However, it may be assumed that essentially the same per cent

distribution relationship as is found among the accredited and non-

accredited hospitals in the various size categories also would be found

among the other characteristics.

While this assumption is probably erroneous, the size of error could

be expected to have a high probability of being immaterial. Such an

inference is justified in the four largest size categories inasmuch as

89.5 per cent or more of the hospitals are accredited -- 98.0 or more

being accredited in the three largest. In these categories there is no

margin for a very large error. Likewise, the same reasoning would seem

to hold for the smallest category. Here, 99.7 per cent of the hospitals

are not accredited. The number accredited are so few that for all effects

on this study they could be disregarded.

In the two remaining size classifications, accredited hospitals

constitute approximately 40 per cent of the total number. However,

these two groups account for approximately 25 per cent or less of total



1Hospital accreditation is the responsibility of the Joint Commission
on Accreditation of Hospitals which is comprised of 18 members -- six
appointed by the American Medical Association, six appointed by the
American Hospital Association, and three each appointed by the American
College of Physicians and the American College of Surgeons. For further
information see "Joint Committee for Accreditation of Hospitals," The
Journal of the American Medical Association, Vol. 147, No. 8 (October
20, 1951), p. 761.






62

beds, admissions, et cetera in all short-term hospitals. Therefore,

even if the characteristics are distributed differently than the hospitals

as between accredited and non-accredited, the net erroneous per-

centage effect in the aggregate would only be one-fourth, or somewhat

less, the absolute size of the percentage error. This net error could

be increased or reduced by some small amount depending upon whether

there were either similar or offsetting errors in other size groups.

In view of the foregoing considerations, it appears that the per-

centage of accredited hospitals may be used as a measure of the other

characteristics of hospitals classified into accredited versus non-

accredited groups.

For all short-term hospitals, the increase in per cent accredited

approximated 10.0 per cent, from 44.7 to 54.6, for the eight years from

1953 through 1960. However, the actual number of accredited hospitals

increased 26.8 per cent. This larger percentage increase in actual

number of accredited hospitals as opposed to the increase in accredited

hospitals as a per cent of all hospitals is explained by the increasing

proportion of all hospitals being accredited and by the increase in number

of hospitals. The changes for all accredited hospitals classified by

size may be observed in Table II-6.

The increase in the percentage of accredited hospitals in each control

category was voluntary 7.5, proprietary 9 3 and governmental 9.5. Thus,

by 1960, 69.2 per cent of all voluntary hospitals were accredited, while






63

among proprietary and governmental hospitals respectively, there were

18.0 and 41.6 per cent accredited.

For all control categories there was a progressive increase in the

proportion of accredited hospitals as one moved in his observation from

the smallest to the largest size groupings.

For all three types of control the proportion accredited in the "Under

25 beds" size was practically nil. The reason for this situation is that

hospitals with less than 25 beds are not eligible for accreditation.1

The fact that any hospitals having less than 25 beds are accredited is

probably explained by a change in capacity after accreditation is re-

ceived. Such change would reduce the capacity below 25 beds.

Nearly all of the large hospitals, 200 beds or larger, were accredited

throughout the entire period. However, in the smaller hospitals, ac-

creditation seemed to be somewhat more important to the voluntary

hospitals than to either proprietary or governmental hospitals. This

inference is drawn from the fact that by 1960 in the "25 to 49", "50 to

99" and "100 to 199" size categories2 there were respectively 27.9,

69.3 and 95.3 per cent of the voluntary hospitals accredited. The



1See Accredited Hospitals-December 31, 1960 (Chicago: Joint
Committee on Accreditation of Hospitals), p. 1.

2Henceforth in this study, size categories will be designated as
25-49, 200-299, et cetera. Quotation marks will be omitted as will
the word "beds" following the size specification.






64

corresponding percentages for proprietary hospitals were 12.2, 39.8

and 69.5 while for governmental hospitals the percentages were 17.3.,

44.0 and 72.8.

Data showing (1) number and percentage of all short-term hospitals

accredited by size, and (2) number and percentage of accredited short-

term hospitals by control and size, are presented in Tables III-6, III-7,

III-8 and 111-9.

Beds

Total beds in all non-federal short-term general hospitals were

increased approximately 166,000 from 1946 through 1960. This repre-

sents an increase of 35.1 per cent. Beds in voluntary hospitals were

increased 145,000, rounded to the nearest thousand, which is an increase

of 48.1 per cent. State and local hospitals increased their bed comple-

ment by about 23,000 while proprietary hospitals' bed capacity decreased

almost 2,000. These figures represent an increase in the number of beds

in governmental hospitals in the amount of 17 3 per cent and a percentage

decrease of 4.9 for beds in proprietary hospitals,

Voluntary hospitals contained 63.6 per cent of all beds in short-term

hospitals in 1946 while proprietary hospitals had 8.2 per cent and

governmental hospitals 28.2 per cent. By 1960 these percentages had

changed to the extent that 69.8 per cent of all short-term beds were found

in voluntary hospitals and only 5.8 per cent and 24.4 per cent were availa-

ble in proprietary and governmental hospitals respectively.









TABLE III-6.-Total number of accredited short-term general and other


special hospitals in the
size, with percentage


United States, 1946-1960, classified by
accredited in each size category


Under 25- 50- 100- 200- 300- 500 &
Year Total 25 bds 49 99 199 299 499 over

Accredited hospitals
1953 2330 5 188 634 799 368 238 98
1954 2433 3 223 651 826 387 248 95
1955 2526 2 231 666 856 411 260 100

1956 2635 2 249 705 862 430 276 111
1957 2725 3 264 738 875 449 287 109
1958 2765 4 278 738 875 449 300 121
1959 2866 3 294 775 915 448 312 119
1960 2954 2 297 800 905 484 337 129
Percentage accredited
1953 44.7 0.5 13.8 52.5 84.6 93,9 97.5 99.0
1954 46.7 0.3 16.4 54.5 86.6 95.8 97.3 97.9
1955 48.2 0.2 17.1 55.1 87.0 96.9 98.5 100.0

1956 49.7 0.2 18.0 56.2 89.3 96,6 97.9 100.0
1957 51.3 0.4 19.0 58.3 89.8 97.4 99.3 99.1
1958 52.3 0O5 20.0 57.8 88.4 97.2 99.7 99.2
1959 53.4 0.4 20.9 59.5 90.0 97.2 99.4 100.0
1960 54.6 0.3 21.0 59.5 89.5 98.0 98.8 100.0


aTaken and


calculated from: American Hospital Association, Hospitals,


Journal of the American Hospital Association, Guide Issue (Chicago:
1954-1961).









TABLE III-7.-Number of accredited voluntary short-term general and
other special hospitals in the United States, 1946-1960, classi-
fied by size, with percentage accredited in each size category

Year ToUnder 25- 50- 100- 200- 300- 500 &
25 bds 49 99 199 299 499 over
Accredited hospitals
1953 1856 1 119 496 670 325 200 45
1954 1932 1 146 499 697 334 210 45
1955 1998 1 152 506 712 357 222 48

1956 2069 1 159 535 715 368 238 53
1957 2125 3 173 553 712 383 246 55
1958 2151 4 178 544 717 386 259 63
1959 2226 2 189 569 747 385 271 63
1960 2276 2 184 588 725 415 292 70

Percentage accredited
1953 61.7 0.3 19.6 63.5 90.5 96.4 98.5 97.8
1954 63.2 0.3 23.3 65.6 91.5 97.4 98.1 97.8
1955 65.4 0.3 24.6 65.1 93.2 98.9 99.6 100.0

1956 65.4 0.3 24.9 65.2 95.3 98.4 99.2 100.0
1957 66.2 1.1 26.1 67.0 95.1 99.2 99.2 100.0
1958 67.2 1,6 27.1 66.2 95.1 99.0 100.0 100.0
1959 68.3 0.8 28.1 68.4 95.5 99.0 100.0 100.0
1960 69,2 0.8 27.9 69.3 95.3 99.5 99.0 100.0

aTaken and calculated from: American Hospital Association, Hospitals,
ournal of the American Hospital Association, Guide Issue (Chicago: 1954-
1961).








TABLE II-8.-Number of accredited proprietary short-term general and
other special hospitals in the United States, 1946-1960, classified
by size, with percentage accredited in each size category

Year Total Under 25- 50- 100- 200- 300- 500 &
25 bds 49 99 199 299 499 over
Accredited hospitals
1953 126 3 42 48 28 3 1 1
1954 126 2 45 50 25 3 0 1
1955 123 1 39 49 29 4 0 1

1956 132 1 42 54 29 5 0 1
1957 142 0 41 61 34 5 0 1
1958 138 0 39 61 32 5 0 1
1959 147 0 38 68 35 4 1 1
1960 154 0 41 64 41 6 1 1

Percentage accredited
1953 11.3 0.6 10.3 32.2 65.1 60.0 100.0 100.0
1954 12.0 0.4 12.1 35.7 59.5 60.0 0 100.0
1955 12.1 0.2 10.4 35.8 63.0 57.1 0 100.0

1956 13.5 0.2 11.3 40.3 60.4 62.5 0 100.0
1957 15.2 0 11.7 43.0 64.2 71.4 0 100.0
1958 15.4 0 11.1 42.1 61.5 71.4 0 100.0
1959 16.5 0 11.1 44.7 67.3 66.7 100.0 100.0
1960 18.0 0 12.2 39.8 69.5 85.7 100.0 100.0


aTaken and


calculated from: American Hospital Association, Hospitals,


Journal of the American Hospital Association, Guide Issue (Chicago: 1954-
1961).








TABLE III-9.-Number of accredited state and local governmental short-
term general and other special hospitals in the United States, 1946-


1960, classified by size,


with percentage accredited in
categorya


each size


Under 25- 50- 100- 200- 300- 500 &
Year Total
25 bds 49 99 199 299 499 over
Accredited hospitals
1953 348 1 27 90 101 40 37 52
1954 375 0 32 102 104 50 38 49
1955 405 0 40 111 115 50 38 51

1956 434 0 48 116 118 57 38 57
1957 458 0 50 124 129 61 41 53
1958 476 0 61 133 126 58 41 57
1959 493 1 67 138 133 59 40 55
1960 524 0 72 148 139 63 44 58

Percentage accredited
1953 32.1 0.6 7.7 32.4 62.7 80.0 92.5 100.0
1954 34.0 0 8.9 34.8 69.3 89.3 92.7 98.0
1955 36.2 0 11.1 37.8 66.1 89.3 92.7 100.0

1956 37.6 0 12.9 38.7 70.7 90.5 90.5 100.0
1957 39.2 0 13.3 41.6 75.0 89.7 100.0 98.1
1958 40.0 0 16.0 42.9 68.5 89.2 97.6 98.3
1959 40.6 0.6 17.1 43.3 72.7 89.4 95.2 100.0
1960 41.6 0 17.3 44.0 72.8 90.0 97.8 100.0

aTaken and calculated from: American Hospital Association, Hospitals,
Journal of the American Hospital Association, Guide Issue (Chicago: 1954-
1961).






69

A comparison of the changes in number of hospitals with the changes

in number of beds reveals some pertinent facts.

First, the number of all short-term non-federal hospitals increased

21.7 per cent from 1946 to 1960 but the number of beds in these hospi-

tals increased 35.1 per cent. This means that there was a dispro-

portionate growth of hospitals among the various size categories. The

greatest growth occurred in the larger sizes. This was especially true

of voluntary hospitals which increased in number an amount representing

27.4 per cent but the bed capacity of which increased 48.1 per cent.

Second, although the number of proprietary hospitals declined by

20.4 per cent the number of beds decreased only 4,9 per cent. The

loss of hospitals in this control group was concentrated to a great extent

in the smaller sizes.

Finally, there seems to have been some reversal among governmental

hospitals of the growth patterns exhibited by voluntary and proprietary

hospitals. The number of governmental hospitals increased 60.5 per

cent but their bed capacity increased only 17.3 per cent.

These observations are apparent when one compares percentage

increases of hospitals and beds in the various size categories for each

type of control. Table III-10 shows the summary of total beds classified

into control categories. Tables 1M-11 through 111-14 show the changes

in beds for the control categories further classified by size. Appendix

III, Table III-B shows beds classified by service.






70

It was mentioned in the previous section dealing with hospitals

that population increased somewhat more than did hospitals during the

period of this study. The rate of increase for population was 28.5

per cent while that for hospitals was 21.7 per cent. It thus appeared

that by 1960 there may have been a shortage of facilities to provide

adequate care for the population. This is assuming that there was

little, if any, excess capacity in 1946. However, bed capacity in-

creased during the period by 35.1 per cent. Therefore, one may infer

that, to the extent bed capacity represents total capacity, there was

either an over capacity by 1960 or less of a shortage in capacity than

there had been in 1946, if there were a shortage in 1946.

The assumption is implicit in the foregoing paragraph that the change

in utilization of hospitals was roughly comparable with change in popu-

lation size. Whether this is true is partially examined in the next section

of this chapter.

Admissions

Admissions to all short-term hospitals increased spectacularly during

the years of this study. The total percentage increase was 68.2 per cent.

Both voluntary and governmental hospitals had large increases -- 75.7

per cent and 71.9 per cent respectively. However, there was only a

10.1 per cent increase in admissions to proprietary hospitals.

Inasmuch as the increases in population, number of hospitals, and

number of hospital beds varied between 20 and 35 per cent, it may be

concluded that changes in utilization of hospital facilities were not








TABLE II-10.-Number of beds in short-term general and other special
hospitals in the United States, 1946-1960, by control, with
per cent distribution and per cent change from 1946a


Year Total Voluntary Proprietary Governmental
Beds

1946 473,059 300,943 38,940 133,176
1947 465,000 307,000 38,000 120,000
1948 471,555 315,439 36,543 119,573
1949 477,000 318,000 38,000 121,000
1950 504,504 331,862 41,591 131,051

1951 516,020 344,775 39,216 132,029
1952 530,669 357,365 38,423 134,881
1953 545,903 369,445 38,601 137,857
1954 553,068 377,863 36,444 138,761
1955 567,612 389,059 36,770 141,783

1956 586,000 405,000 37,000 145,000
1957 595,000 412,000 36,000 146,000
1958 610,000 424,000 36,000 150,000
1959 619,877 432,920 36,210 150,747
1960 639,057 445,753 37,029 156,275
Per cent distribution
1946 63.6 8.2 28.2
1947 66.0 8,2 25.8
1948 66.9 7.7 25.4
1949 66.7 8.0 25.4
1950 65,8 8,2 26.0

1951 66.8 7.6 25.6
1952 67.3 7.2 25.4
1953 67,7 7.1 25.3
1954 68.3 6.6 25.1
1955 68,5 6.5 25.0

1956 69.1 6.3 24.7
1957 69.2 6.1 24.5
1958 69.5 5.9 24.6
1959 69.8 5.8 24.3'
1960 69.8 5.8 24.4








TABLE III-10.-Continued


Year Total Voluntary Proprietary Governmental
Per cent change from 1946
1946 0.0 0,0 0.0 0.0
1947 -1.7 2.0 -2.4 -9.9
1948 -0.3 4.8 -6.2 -10.2
1949 0.8 5.7 -2.4 -9.1
1950 6.6 10.3 6.8 -1.6

1951 9.1 14.6 0.7 -019
1952 12.2 18.7 -1.3 1.3
1953 15.4 22.8 -0.9 3.5
1954 16.9 25.6 -6.4 4.2
1955 20.0 29.3 -5.6 645

1956 23.9 34.6 -5.0 8.9
1957 25.8 36.9 -7.6 9.6
1958 28.9 40.9 -7.6 12.6
1959 31.0 43.9 -7.0 13.2
1960 35.1 48.1 -4,9 17.3

aSource: American Hospital Association, Hospitals, Journal of the
American Hospital Association, Guide Issue, Vol. 35, Part 2 (Chicago:
August 1, 1961), p. 394. Percentages were calculated.
























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81

comparable with changes in population and facilities available. On the

contrary, there was a larger increase in utilization at least to the extent

that number of admissions measures utilization.

Not a great amount of change was apparent in the percentage distri-

bution of admissions among the three hospital control categories. Slight

increases were registered by voluntary and governmental hospitals at

the expense of a fairly large decrease by proprietary hospitals. These

changes may be observed in Table III-15.

That there was an increase in utilization may be observed in a slightly

different manner. There were approximately 17 million admissions in all

short-term hospitals in 1950. This means that about one person out of

every nine in the United States was hospitalized in that year. By 1960

there were almost 23 million admissions, or one of every eight persons

in the population was hospitalized.

Admissions classified by service categories are shown in Table II-C,

Appendix II.

When admissions are categorized according to the size of hospital in

which they occurred, an already familiar pattern reappears. There was a

percentage decrease in the number of admissions to hospitals having

capacity of less than 25 beds, moderate increases occurred in admissions

to hospitals having between 25 and 199 beds while large increases were

recorded by hospitals having 200 or more beds. In 1946, 32 per cent of

all admissions were to hospitals having fewer than 100 beds. By 1960

this percentage had dropped to 25.3 per cent.





82

This same pattern was generally manifested by the hospitals of each

control group. Admissions to governmental and voluntary hospitals de-

creased less than admissions to proprietary hospitals in the smallest

size category. Admissions to proprietary hospitals in the 25-49 beds

size also decreased while both governmental and voluntary hospitals

had increases in this size category. All control groups showed in-

creases in all other size categories with the largest increases being

shown in the largest sizes.

The net result of these changes was that while in 1946 admissions

to voluntary, proprietary and governmental hospitals of less than 100

beds were respectively 26.7 per cent, 77.5 per cent and 27.3 per cent

of all admissions to these hospitals, by 1960 these percentages had

changed to 19.3, 72,6 and 31.9. The increase in admissions to

governmental hospitals of fewer than 100 beds is largely explained by

the increase in admissions to hospitals having between 50 and 99 beds

although there was an increase in the sum of admissions to the two

smaller size categories.

These changes are shown in Tables III-16 through III-19.








TABLE III-15.-Number of admissions (in thousands) to short-term general
and other special hospitals in the United States, 1946-1960, by control,
with per cent distribution and per cent change from 19468

Year Total Voluntary Proprietary Governmental
Admissions
1946 13,655 9,554 1,408 2,694
1947 15,908 10,935 1,604 3,370
1948 15,072 10,587 1,479 3,007
1949 15,428 11,070 1,489 2,868
1950 16,663 11,629 1,661 3,374

1951 16,677 11,946 1,545 3,186
1952 17,413 12,509 1,575 3,329
1953 18,098 12,993 1,600 3,504
1954 18,392 13,364 1,465 3,562
1955 19,100 13,875 1,459 3,766

1956 20,107 14,690 1,495 3,922
1957 21,002 15,374 1,524 4,104
1958 21,684 15,825 1,532 4,327
1959 21,605 15,929 1,425 4,252
1960 22,970 16,788 1,550 4,632
Per cent distribution
1946 70.0 10.3 19.7
1947 68.7 10.1 21.2
1948 70.2 9.8 20.0
1949 71.8 9.7 18.6
1950 69.8 10.0 20.2

1951 71.6 9.3 19.1
1952 71.8 9.0 19.1
1953 71.8 8.8 19.4
1954 72.7 8.0 19.4
1955 72.6 7.6 19.7

1956 73.1 7.4 19.5
1957 73.2 7.3 19.5
1958 73.0 7.1 20.0
1959 73.7 6.6 19.7
1960 73.1 6.7 20.2









TABLE II-15 .-Continued


Year Total Voluntary Proprietary Governmental
Per cent change from 1946
1946 0.0 0.0 0.0 0.0
1947 16.5 14.5 13.9 25.1
1948 10.4 10,8 5.0 11.6
1949 13.0 15,9 5,8 6.5
1950 22.0 21.7 18,0 25.2

1951 22.1 25.0 9.7 18.3
1952 27.5 30.9 11.9 23.6
1953 32.5 36,0 13.6 30.1
1954 34.7 39,9 4.0 32.2
1955 39.9 45.2 3.6 39.8

1956 47.3 53.8 6.2 45.6
1957 53.8 60.9 8.2 52.3
1958 58.8 65.5 8.8 60.6
1959 58.2 66.7 1.2 57.8
1960 68.2 75.7 10.1 71.9

aSource: American Hospital Association, Hospitals, journall of the
American Hospital Association, Guide Issue, Vol. 35, Part 2 (Chicago:
August 1, 1961), p. 394. Percentages were calculated.












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Average Daily Census

As indicated in the preceding section on admissions, the number of

admissions is one indicator of the utilization of hospitals. Admissions

measure, at least to some extent, the number of people using hospital

facilities. However, with both population and hospital bed capacity

expanding, it would be expected that the number of admissions should

increase. But even though this increase was greater than the increases

in population and hospital capacity, the inference that there was an

increase in utilization does not necessarily follow. If the average

length of stay decreased, 1 there should have been a reduced utilization

of capacity unless the increase in admissions was great enough to

increase the average daily census and occupancy percentage. Whether

this occurred can be determined by an examination of the tables in this

and the following section. Thus admissions, average daily census and

occupancy percentage examined in combination reveal a more complete

picture of utilization changes.

In 1960, the daily average number of patients in all short-term non-

federal hospitals was 477,000 in contrast to an average daily census of

341,000 in 1946. This is an increase of 39.9 per cent while total popu-

lation increased only 26.8 per cent during this same period. It may be

inferred either that there was an increase in illness severe enough to

require hospitalization or if there were no such increase that there was


lIn a subsequent section of this chapter, it will be shown that a
general decrease in length of stay did occur in short-term hospitals.






94

an increased ability to purchase hospital care and an increased willing-

ness to make such purchases. There also could have been some com-

bination of these two alternatives.

This increase in average daily census of 39.9 per cent when compared

with an increase of 21.7 per cent in number of hospitals and 35.1 per cent

in bed capacity supports the conclusion that there was an increased

utilization of hospital resources.

The usual control pattern again reveals itself -- there was an increase

of 47. 6 per cent in the average daily census of Voluntary hospitals, a

decrease of 4.0 per cent for proprietary hospitals, and an increase of

33.3 per cent for governmental hospitals.

The distribution of total census among the various control categories

did not change greatly -- voluntary hospitals' proportion increased 3 8

per cent while there was a decrease of 2.4 per cent and 1.2 per cent in

the proportions attributable to proprietary and governmental hospitals

respectively. The remaining 0.2 per cent is the result of rounding errors.

The data on which the foregoing statements are based are found in

Table III-20. Classification by service categories is shown in Table

III-D of Appendix III.

The effect of size of hospital on average daily census is shown in

Tables 11-21 through III-24. In general, the usual pattern prevails --

there is a decrease recorded in the small hospital and rather large in-

creases shown by larger hospitals. Specifically, in the smallest size




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