Healthcare Job Growth Stubbornly Weak

John Commins, for HealthLeaders Media , May 9, 2011

"It's a mystery to me," Lavanon says. "You would think that as the U.S. population is getting older the demand for healthcare services is going to get stronger as well. What we see is that in this decade, the increase in the number of healthcare workers is much slower.

"In many cases, the explanation could be outsourcing or productivity growth, but I don't think that is a good explanation for healthcare, where things can't be outsourced and it is labor intensive," Lavanon says.

Is the healthcare sector --  which already employs more than 14 million people -- becoming more efficient and productive, and thus not in need of as many workers? Or, is job growth slowing because there aren't enough people to fill the positions? Or, is job growth slowing because the healthcare sector can't afford to add to the labor force, nor can consumers continue to support that added cost? I suspect that the answer involves all three questions.

Slow job growth does have its upsides. It would appear that this halving of the rate of job growth in the healthcare sector has slowed the growth of healthcare inflation, at least in the short-term. Labor costs constitute about 60% to 70% of the budgets at many healthcare organizations.

As I reported a couple of weeks ago, Standard & Poor's Healthcare Economic Indices shows that the average per capita cost of healthcare services covered by commercial insurance and Medicare grew 6.19% over the 12 months ending in February. (The Consumer Price Index showed that overall inflation grew by 2.1% for the same period.)

That's high -- unsustainable, actually -- but the rate of growth in healthcare inflation has been steadily decelerating since it hit a high water mark of 8.74% for the 12-month period ending May 2010. S&P analysts have noted that hospital employment growth has correspondingly slowed significantly, falling from 2%-3% increases between 2008 and early 2009, to 1% since the middle of 2009. S&P analysts believe that slowing rate of inflation in healthcare is also tied to high unemployment in the overall economy, but they also warn that the slowing trend could quickly reverse.

1 | 2 | 3

Comments are moderated. Please be patient.

1 comments on "Healthcare Job Growth Stubbornly Weak"

Jennifer at Braiv Healthcare (5/18/2011 at 2:17 AM)
Job postings have been climbing in healthcare significantly since the first of the year. The dilemma that many facilities are facing is the shortage of qualified candidates. The workforce in healthcare is aging along with the population and our schools are not producing enough candidates with the experience necessary to fill the roles. Additionally, many facilities have been on the fence with hiring initiatives until they understood fully what the impact of healthcare reform was going to have. We should begin to see an uptick soon.




FREE e-Newsletters Join the Council Subscribe to HL magazine


100 Winners Circle Suite 300
Brentwood, TN 37027


About | Advertise | Terms of Use | Privacy Policy | Reprints/Permissions | Contact
© HealthLeaders Media 2015 a division of BLR All rights reserved.