Hospital & Physician Capacity

Regional variation in capacity reveals the irrational distribution of valuable and expensive health care resources. Capacity represents the capital investments and labor that permit the delivery of medical services. Two types of capacity determine the majority of health care costs. The first is hospital capacity, including the number of general and intensive care beds, imaging devices, and procedure suites like operating rooms and cardiac catheterization labs. Health care labor is the second and related component of capacity, and includes the physicians, nurses, allied health professionals and administrative staff who work in hospitals and physician practices.

Unfortunately, the distribution of capacity fails to reflect the regional need for health care, either for beds or for physicians and hospital staff. Even after controlling for differences in age and sex, some regions had more than twice the number of beds per capita than other regions. More beds means that patients are more likely to receive their care during a hospital admission, with greater costs, and a higher likelihood of hospital-acquired infections and medical errors. Higher physician supply offers little benefit in population health or in patients’ satisfaction with access to care and with the care received. Better planning of future growth in capacity can help build a more effective and affordable health care system.

The American Hospital Association (AHA) hospital survey was used as the primary source for measurement of acute care hospital beds and employment. We used staffed beds as the best indicator of the hospital’s capacity to admit patients. When a hospital did not report to the AHA, we used the CMS Cost Report file, then the CMS Provider of Services file, to determine the hospital’s capacity. In the unusual situation that none of these sources provided measures of beds and employment, we used the AHA survey estimates.

The count of physicians was derived from the American Medical Association (AMA) Masterfile, which includes a record for nearly every allopathic and osteopathic physician in the U.S. with information about physician location and self-reported specialty. Primary care physicians included family and general practitioners, general pediatricians, and general internists. Almost all other physicians were categorized as specialists. We limited our physicians to those who have completed post-graduate medical education (residency) and work for more than 20 hours a week in an office or hospital-based practice. Residents are reported separately. The age of physicians was limited to 26 to 65.

All rates were adjusted for regional border crossing of patients and for differences in population age and sex using the indirect method.


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The Dartmouth Atlas of Health Care is based at The Dartmouth Institute for Health Policy and Clinical Practice and is supported by a coalition of funders led by the Robert Wood Johnson Foundation, including the WellPoint Foundation, the United Health Foundation, the California HealthCare Foundation, and the Charles H. Hood Foundation.