J_Wojcikowski_TeamB_HCA_Healthcare_Industry_Labor_Employment_Analysis_Research_Paper

Running head: HCA AND THE HEALTHCARE INDUSTRY RESEARCH PAPER 1
HCA and the Healthcare Industry Research Paper
Melissa Beck, Brad Sidaras, Jared Wojcikowski
Submitted to Professor Wayne Moening in partial fulfillment of requirements for
MBA 620: Management of Human Resources
Fall, 2015
The University of Findlay

HCA AND THE HEALTHCARE INDUSTRY RESEARCH PAPER 2
Table of Contents
Abstract…………………………………………………………………………………………... 3
Introduction ……………………………………………………………………………………… 4
Part I: The Healthcare Industry ...………………………………………………………………... 6
Part II: Hospital Corporation of America (HCA)........................................................................... 9
Part III: The Healthcare Industry Compared to Other Industries and the U.S. Economy............ 10
Part IV: Recent/Current Employment and Unemployment Trends.............................................. 12
Part V: Other Employment and Labor Trends.............................................................................. 14
Conclusion and Future Research.................................................................................................. 16
References..................................................................................................................................... 19
Appendix A.................................................................................................................................. 23
Appendix B.................................................................................................................................. 25
Appendix C................................................................................................................................... 27
Appendix D................................................................................................................................... 29
Appendix E................................................................................................................................... 31
Appendix F................................................................................................................................... 34

Abstract
The purpose of this research paper is to discuss and analyze recent and current employment/labor
trends and issues affecting Hospital Corporation of America (HCA), a Fortune 500 company,
and the healthcare industry in the form of a comprehensive report. HCA is described and
compared to other companies within the healthcare industry, and the healthcare industry is
analyzed and compared to other industries and the U.S. economy, in general. Employment and
unemployment are analyzed and described within HCA and the healthcare industry.
Keywords: Hospital Corporation of America, HCA, healthcare industry, Fortune 500

HCA and the Healthcare Industry Research Paper
Americans want to work. Those who have jobs are working hard, learning new skills,
caring for their parents and supporting their families. Those who do not have jobs are willing to
do anything to find work. Putting Americans to work is not only imperative for the economy but
it is a moral responsibility, as well. Americans value job security, independence and the personal
responsibility of their own lives. The U.S. has been slowly recovering from one of the worst
unemployment crises seen in the last seventy years.
The 9/11 terrorist attacks and the burst of the housing market have left Americans feeling
poor and not optimistic. It also left many industries struggling to survive financially. Many
changes in the population, technology, and government regulation help to keep the healthcare
industry in high demand. Even when the other industries struggle, healthcare continues to put
people to work.
Team B researched the healthcare industry and Hospital Corporation of America (HCA)
from a labor and employment-related perspective in order to discuss recent and current trends
and issues. HCA is listed under the 622110 NAICS code, general medical and surgical hospitals.
This industry is comprised of establishments primarily engaged in providing diagnostic and
medical treatment to patients with a variety of medical conditions (Census.gov, n.d.).
Recent/current employment and labor issues and trends that are explored throughout this
research paper include, but are not limited to, rising healthcare costs and expenditures that are
outpacing inflation and cost of living increases, rising employment levels and total compensation
per employee, the impact of the Patient Protection and Affordable Care Act (PPACA) on the
healthcare industry and HCA, the increasing elderly population due to the migration of the Baby
Boomer generation and rising life expectancies, expected increases in future demand for

healthcare-related services and positions, the supply of postsecondary and advanced degree
graduates and skills/training shortages, the growth in technology that is furthering increased
healthcare expenses and expenditures, mergers and acquisitions in the healthcare industry and
HCA due to changes in the law and increased competition, changes in the types of compensation
offered to current and prospective employees, and collective bargaining disputes.

Part I: The Healthcare Industry
The world of business has undergone many changes over the years, and continues to do
so at a relentless, unstoppable pace. From the social issues that are reshaping the ways that we
view and solve problems, to the methods we utilize to conduct business, change is inevitable in
every facet of life. Healthcare is a particular industry that is especially undergoing dramatic
changes and seems to only be starting its path toward a revolution of sorts. The news is
constantly reporting stories about major healthcare systems merging with other healthcare
organizations, or acquiring smaller healthcare-related providers. Almost everyone in the United
States is affected by the healthcare industry in one way or another. From those that have been
diagnosed with serious illnesses or those that rarely ever need to see a doctor, to those who have
family members undergoing different types of treatments, each person living in the United States
has somehow been touched by the healthcare industry.
The future holds many expected increases in demand for specific areas within the
healthcare industry. According to the U.S. Bureau of Labor Statistics, healthcare-related jobs are
at the top of the list of those expected to increase in demand the most for the period ending in
2020 (Mathis, Jackson & Valentine, 2014, page 19). Those specific healthcare-related positions
include personal/homecare aides, biomedical engineers, and physical therapy assistants.
Many of the anticipated changes like those mentioned above do not always come cheap.
Healthcare-related costs are already, and have been, skyrocketing with no signs of stopping, or
even slowing down. The rise in these costs can currently be attributed to many different factors,
such as advancing technologies requiring more resources to develop and deploy across the
industry, expensive malpractice lawsuits, changes in the law, like the Patient Protection and
Affordable Care Act (PPACA), increased demand for more innovative and expensive

procedures, etc. The PPACA has further added to the complicated world of healthcare, affecting
everyone in the U.S., one way or another. The PPACA includes mandates that require everyone
to have health insurance (Mathis et al., 2014, pages 462 – 463). Healthcare companies are
rethinking current business processes and structures, and are merging and acquiring other
healthcare companies as a result.
Current trends affecting the healthcare industry that are only expected to continue in
growth include such factors as increases in employee compensation, corporate revenues, and the
elderly population. According to the U.S. Department of Health and Human Services’
Administration on Aging, the elderly population is expected to drastically increase in the near
future due to the Baby Boomer generation entering the elderly population and the increase in
American life expectancy (“Aging Statistics”, 2015). Considering the increase in the elderly
population, the boom in the healthcare industry, and the rising costs of healthcare-related
services, the U.S. must meet the future healthcare needs of our society through adequate
planning and allocation of resources.
Since everyone in the United States is affected by the healthcare industry in various
ways, it is no secret that healthcare costs and insurance premiums are continuing to increase,
which is digging deeper into the pockets of American consumers. The cost of seeing a doctor or
going to the hospital is increasing faster than cost-of-living increases and inflation (Mathis et al.,
2014, page 462). This burden has begun to negatively affect the common U.S. household and
the overall U.S. economy. Future predictions about the healthcare industry do not offer much in
the way of hope for relief.
From 2002 to 2007, the number of healthcare establishments in the United States
increased almost 9% (“Industry Snapshop US Healthcare and Social Assistance”, n.d.). From

2007 to 2012, the amount of healthcare establishments in the United States increased by 5.9%
(see Appendix A for U.S. Healthcare and Social Service Industry Key Statistics). An increase in
the amount of establishments could be a positive because it means there is potential growth in the
amount of healthcare entities available with the ability to assist in aiding our growing elderly
population. However, the difference in the growth rates from 2002 to 2007 and 2007 to 2012
could indicate a decreasing growth rate that may not be able to sustain the future needs of
society.
Healthcare employment increased by 10.7% from 2007 to 2012 (“Industry Snapshop US
Healthcare and Social Assistance”, n.d.). Increases in employment are needed to provide
services to more and more healthcare consumers; however, adding more and more employees
indicates a need for companies to remain competitive in their offering to their employees in order
to retain talent. Fortunately, payroll per employee increased 9.6% from 2007 to 2012 (see
Appendix A for U.S. Healthcare and Social Service Industry Key Statistics). Although the
growth rate in payroll per employee is not equal or greater than the growth rate of employment,
the two statistics could be close enough to be sustainable. Annual payroll increases could
indicate that the healthcare industry maintains desirable compensation and keeps up with cost-of-
living increases. However, more research is needed to determine if the current growth rates in
the healthcare industry are adequate enough to meet the demands of a growing elderly population
and rising healthcare costs.
Looking specifically at the State of Ohio, it appeared that Ohio was not growing as much
as the U.S., as indicated by the national statistics. From 2007 to 2012, the number of
establishments increased 1%, employment increased 7.8%, and payroll per employee increased
11.3% (see Appendix B for Ohio Healthcare and Social Service Industry Key Statistics).

Compared to the national statistics, the growth of establishments in Ohio is worrisome due to the
uncertainty of being able to meet future healthcare needs. Increases in employment and payroll
per employee can also be considered statistically satisfactory as a means to meet future demand
expectations. More research is needed to determine if Ohio’s current ability to meet healthcare
and social assistance needs is sustainable, and if the current methods Ohio is already developing
and deploying in order to meet those needs are presently adequate.
Putting the entire United States into perspective against the State of Ohio is somewhat
startling considering the amount of resources that will be needed to help sustain the expectations
of future healthcare needs. Considering all of the issues facing Ohio and the U.S., it is uncertain
if the American society will be able to meet future healthcare needs. Providing sustainability
will require new and innovative solutions.
Part II: Hospital Corporation of America (HCA)
Headquartered in Nashville, Tennessee, Hospital Corporation of America (HCA) is a
publicly traded for-profit healthcare company that is the largest in the world, and is number 75
on the Fortune 500 list (“75. HCA Holdings”, n.d.). HCA was founded in 1968 and was one of
the nation’s first hospital companies (“About Our Company”, n.d.). Ever since then, HCA has
undergone many different transformations through adapting to environmental changes, the
evolution of our legal system, advances in technology, etc. HCA started out as a private
corporation, went public, then private, and then public again (“Our History”, n.d.). As a result of
these circumstances, HCA has continued to grow through mergers and acquisitions, and the
establishment of new healthcare facilities.
As of December 31, 2014, HCA had 225,000 employees and 279 healthcare
establishments in twenty different states in the U.S. and England (“2014 Annual Report to

Stockholders”, 2015). HCA is committed to serving the community through the establishment of
community service foundations and charities. HCA promotes a patients-first culture and
believes in a healthy work environment for all of its employees in all of its establishments
(“Healthy Work Environment”, n.d.).
HCA is consistently growing across many different measures, year after year. In fact, the
number of people they employ has increased each year, and as a result, the amount of salaries
and benefits have also consistently increased (see Appendix E for HCA Employment Data).
HCA also continues to acquire and build new hospitals and other freestanding facilities which
has attributed to HCA’s consistently rising annual revenues.
HCA has also experienced its fair share of controversy, scandal, and negative publicity.
In 2000, HCA agreed to pay more than $800 million to settle criminal and some of its civil
Medicare fraud charges (Martinez, 2012). HCA has also undergone countless mergers and
acquisitions, including the merger with Columbia in 1994 (“Our History”, n.d.). In 2003, HCA
reached one of the largest fraud settlements of $2 billion with the Department of Justice to settle
claims that HCA physicians were receiving kickbacks (Herman, 2014). Some of HCA’s
facilities are unionized, which has also created unique areas of employment related issues, such
as work stoppages. The Bureau of Labor Statistics released a report listing two work stoppages
in late 2012 that HCA experienced (“Major Work Stoppages (Annual) News Release”, 2013).
Part III: The Healthcare Industry Compared to other Industries and the U.S.
Economy
According the Bureau of Labor Statistics, overall employment in the United States
declined 2.4% from 2007 – 2012 (“Employment, Hours, and Earnings from the Current
Employment Statistics Survey (National)”, n.d.). One of the most prominent contributors to this

statistic was the Great Recession caused by the housing market collapse and the need for a
financial bailout of the big three U.S. automobile manufacturers in 2008: General Motors,
Diamler Chrysler, and Ford Motor Company. It wasn’t until the beginning of 2010 that the U.S.
economy began to see employment rebound and increase. From 2012 to 2013, U.S. employment
rose by 2% (see Appendix F for National Employment, Hours, and Earnings from Current
Employment Statistics). The healthcare industry actually experienced a 10.7% increase in
employment from 2007 to 2012 (“Industry Snapshop US Healthcare and Social Assistance”,
n.d.). The difference in these two statistics conveys a significant difference in growth rates, and
indicates that the healthcare industry is currently experiencing a large rate of growth in
employment compared to the United States overall. Even during the Great Recession and all of
the financial turmoil experienced throughout the world, the U.S. healthcare industry weathered
the economic downturn and continued to boost employment. National employment rates finally
returned to pre-recession levels in earlier 2014 during the recovery period from the recession.
The retail industry has experienced some different statistical outcomes in comparison to
the healthcare industry. From 2007 to 2012, the number of retail establishments decreased 5.9%,
and total employment decreased 5.2% (“Industry Snapshot Retail Trade”, n.d.). However, there
were increases in the amount of sales at 7.7%, payroll per employee of 7.3%, and a small
increase of employees per establishment of 0.7% (see Appendix C for U.S. Retail Trade Industry
Key Statistics). The retail industry seemed to represent the overall U.S. economy better than the
healthcare industry due to actual decreases in employment. The comparison of the two
industries is further proof that the healthcare industry is in a period of dynamic growth, even
during periods of economic turmoil.

PART IV: Recent/Current Employment and Unemployment Trends
Healthcare is one of the largest, fastest growing, and most complex industries in the
world. The healthcare field is undergoing some significant changes that are contributing to the
increased opportunities and challenges. Despite the economic recession, the healthcare field has
seen a continuous increase in employment. There are over 18 million jobs in the healthcare
industry as of 2015. There were also an additional 900,000 job openings (“Job openings and
employment by industry comparison”, 2015). Forecasters expect this trend to continue into the
year 2020.
Employment trends at HCA and in the healthcare industry are heavily impacted by new
or revised government regulations. The implementation of the PPACA has provided insurance
to thousands of additional Americans who would otherwise not be insured. The government is
ensuring that people get the medical attention they deserve. However, hospitals, clinics and other
medical facilities have had to increase their staffing capacity to meet the increased influx of new
patients. HCA payroll increased $900,000, adding 21,000 full-time positions and 5,000 part-
time positions between 2013 and 2014. Many have seen the PPACA as an opportunity and the
market has seen many new medical facilities as a result. With increased competition, qualified
personnel are limited. HCA has had to enhance their compensation packages to attract and retain
qualified personnel. According to the Department of Health and Human Services, about 87% of
people who signed up through federal healthcare exchanges were previously uninsured
(LoGiurato, 2014). The more consumers that are insured imply more patients. As of December
31, 2014, HCA employed approximately 225,000 full-time employees and 56,000 part-time
employees. HCA has a comprehensive employee program to help retain staffing and prevent
burnout. HCA considers schedule preferences to accommodate a work/life balance, posting

schedules at least fourteen days in advance, at least one-half of the weekends off in a scheduling
period, and limiting the number of scheduled shifts staff may work (“Healthy Work
Environment”, n.d.). These are just a few of the perks that HCA offers to attract and retain
highly qualified staff that will continue to allow the hospitals to provide top notch customer care.
Electronic health records (EHRs) are another ongoing trend. Beginning in 2009,
healthcare facilities have been required to demonstrate meaningful use of EHRs in their facilities.
Those companies that do not comply by the year 2015 will suffer a 1% decrease in Medicare
reimbursement rates. Meaningful use is designed to decrease errors. The theory is to have one
system that, no matter where a patient is at the time of services, doctors will have the ability to
pull up an individual’s complete medical history. A reduction in reimbursement rates could have
a potential negative impact on staffing for healthcare companies.
There has been an increase in freestanding specialty hospitals, surgery centers,
emergency departments, and urgent care facilities. HCA is forced to enhance wages and benefits
to recruit and retain staff. The increase in facilities also leaves a shortage in qualified personnel
for hire; HCA is often forced to utilize more expensive temporary or contract personnel. The
ability to stay competitive depends in part on being able to renew or enter into new managed care
contracts with favorable terms. Quality of services and quality of staff is important in securing
those service contracts.
HCA is committed to the communities they serve and are willing to meet these
challenges by expanding, updating current facilities and offering new or expanded programs. All
are good signs for those looking for employment.

Part V: Other Employment and Labor Trends
Since September 2001, the US economy lost approximately 400,000 jobs. The number of
Americans with jobs decreased from 63.5% to 58.2% (New, 2011). The September 11th terrorist
attacks on the U.S. exacerbated an already struggling economy. The attack caused flights to be
grounded in several areas across the country for days, further contributing to the financial
troubles the airline industry was already dealing with. Even after the air space was cleared for
flights, people were afraid to travel. Businesses suspended employee travel and airlines saw a
30% reduction in business. Shortly after the 9/11 attacks, the airline industry was forced to lay
off a high number of employees (Logan, n.d.).
In 2012, the housing market hit an all-time low. The US Secretary of Treasurer referred
to the housing bubble burst as “the most significant risk to our economy” (“American Housing
Collapse”, 2014).
The crash of the housing market had a ripple effect that was felt across many industries
such as mortgage companies, home builders, real estate agencies, home supply retail outlets and
banks. Americans also saw their home values nose dive, leaving many underwater. Their homes
were no longer a symbol of financial security. Retiring comfortably was out of the question for a
lot of people. The affected industries were forced to downsize or layoff staff while new home
construction came to a halt as banks were forced to tighten the ropes on lending. The people that
saw their financial stability diminish almost instantly found it necessary to find or continue
employment well into their golden years.
According to the 2013 - 2014 Human Capital Effectiveness Report published by
PricewaterhouseCoopers, several labor trends were affecting the healthcare and hospital
workforce. First among the trends noted was a rise in employee productivity with a concurrent

decrease in labor costs. Secondly, the voluntary turnover rate increased from 8.9% in 2011 to
9.5% in 2012. Third, the report showed an increase in employer-paid employee healthcare costs
that is being compensated by a decrease in payments toward benefits such as pensions and
retirement funds. The fourth trend noted was an improvement in the first-year turnover rate,
decreasing from 28.3% in 2011 to 27% in 2012. An emphasis on creating an ethnically diverse
workforce is the fifth noted trend in the report. The number of diverse management employees
increased from 8.4% to 12.5%, and the number of diverse executives increased from 6.7% to
8.2%. The sixth trend noted was a slight decrease in the HR costs per employee. While these
costs averaged $1,923 across the entire market in 2012, within the healthcare industry it was only
$794 for the same year (Herman, 2013).
As reported by InsideARM, major for-profit hospital systems are increasingly seeking
ways to consolidate their internal operations for revenue collections. One reason for this is an
increase in patient debt expenses (Wilson, 2007). Beginning as early as 2000, HCA began
creating what evolved into at least twelve regional patient account service centers tasked with
covering customer accounts for all of its hospitals (Wilson, 2007). These services would have
previously been provided by employees and departments housed in each of the local hospitals.
When asked about the effect this transition had on the company, Jeff Prescott, a company
spokesperson, reported “patient service centers have made a difference to HCA’s operations and
customer service. The centers’ staff can access patient records quickly to provide faster response
to customer inquiries. And the centralized setups have helped HCA reduce costs through
economies of scale” (Wilson, 2007).

Conclusion and Future Study
Some of the most prevalent issues affecting consumers are the rising costs of healthcare
related services, the recovering U.S. economy from the Great Recession, and the implementation
of the PPACA. These issues have affected the ability of consumers to afford healthcare-related
expenses because increases in the cost of living and inflation have already been outpaced.
However, consumer affordability and the Great Recession did not appear to affect the healthcare
industry and HCA as much as other industries and the overall U.S. economy.
The higher costs of more innovative healthcare related technologies and procedures are
increasing which also did not appear to affect the growth of healthcare company profits.
Healthcare company revenues, employment, and overall compensation per employee have
continuously increased, even during times of economic downturn. The rise in the number of
healthcare-related establishments is continuing to increase, which is improving patient access to
care through the greater availability of healthcare services within proximity of more patient
residencies. HCA is an adequate example of a company within the healthcare industry that
continues to grow in these areas. HCA is also continuously growing in the level of employment,
salaries and benefits per employee, and company revenues.
Increased costs of healthcare benefits for companies have been attributed to the
implementation of the PPACA. The rise in healthcare employment levels can also be attributed
to the PPACA due to an increase in the amount of consumers that are able to afford additional
healthcare services who were once unable to do so. With this increase in the number of potential
patients seeking healthcare related services, more healthcare-related positions will need to be
filled. Employment positions within the healthcare industry are among the highest in expected
future demand by the year end 2020. The pool of successful younger workers with

postsecondary educations and advance knowledge and skills to replace an abundance of aging
workers is decreasing (Mathis et al., 2014, page 505). As a result of the increased competition
for healthcare positions and limitations of available personnel for skilled healthcare positions,
healthcare companies have enhanced their compensation packages to attract more talent. HCA
has increased its utilization of nontraditional workers, like contract and part-time employees.
Even with the increase in total compensation per employee within the healthcare industry, the
number of healthcare establishments and revenues has continued to grow.
The amount of companies that are rethinking and changing the traditional mix of
employment practices and compensation are increasing, both in and outside of the healthcare
industry. According to Mathis et al., the Bureau of Labor Statistics stated that the number of
pediatricians, obstetricians, gynecologists and pharmacists working part-time has increased
markedly. Around 40% of companies (not healthcare specific) allow employees to move back
and forth between full-time and part-time status (Mathis et al., 2014, page 117). Other
healthcare companies have utilized innovative approaches in their offerings to employees as a
way to attract more talent, such as providing employees with forgivable loans in order to
purchase homes or offering eldercare services (Mathis et al., 2014, pages 470 and 472).
More research is needed to determine if the current growth rates in the healthcare
industry are adequate enough to sustain the demands of a growing elderly population and rising
healthcare costs. Further research is also needed in order to determine the resulting effects of the
PPACA upon the healthcare industry due to the amount of criticism and pressure that the
healthcare overhaul initiative has faced along with many proposed attempts at amending or
reversing the law. Lastly, a reduction in Medicare reimbursement rates as a result of healthcare

providers not utilizing EHRs could have a potential negative impact on staffing for healthcare
companies, but more time is needed in order to determine the resulting effects.
While the healthcare industry has seen both job loss and new job creation in the years
since the Great Recession, it is ultimately projected to continue to grow, adding more than four
million jobs between 2010 and 2020 (“Health Care Employment Projections”, 2012). As HCA
continues to focus on advancing healthcare in more cost-effective ways to the communities in
which it serves and places an emphasis on attracting and retaining top talent, it too can continue
to maintain and grow as the industry’s top healthcare system.

References
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Appendix A
U.S. Healthcare and Social Service Industry Key Statistics

Appendix B
Ohio Healthcare and Social Service Industry Key Statistics

Appendix C
U.S. Retail Trade Industry Key Statistics

Appendix D
Ohio Retail Industry Key Statistics

Appendix E
HCA Employment Data

Appendix F
National Employment, Hours, and Earnings from Current Employment Statistics Survey

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