If there is—for want of a better term—a silver lining in this black cloud that bedims our economy, it may be that the nation's projected shortage of healthcare workers will be somewhat alleviated in the coming years because many Baby Boomers in our aging workforce will be too financially strapped to retire.
This doesn't even qualify as making lemonade from lemons. But it may well be the new reality, and along with everybody else, America's hospitals should prepare to adapt accordingly.
I asked around and I scoured the Internet, but I couldn't immediately find any studies or sources that have dealt specifically with this financial collapse and its impact on aging healthcare workers. The American Medical Association says it has heard anecdotally that a few physicians are delaying retirement for financials reasons, but the AMA has no data to suggest a trend. Nevertheless, it would be foolish to think that healthcare providers are not affected adversely.
The McKinsey Quarterly this month issued a new study that shows that at least two-thirds of Boomers will have to delay retirement because they can't afford to give up a paycheck. Even worse, many of the more than 5,100 Boomers surveyed by McKinsey weren't even aware that they had a problem.
Home prices have fallen off a cliff. The Center for Economic and Policy Research in June reported that the U.S. housing market has lost $4 trillion in value, at an average loss of about $50,000 per homeowner since the housing bubble burst.
The stock market has lost nearly 30% of its value in the last year, about $7 trillion. And the Congressional Budget Office reports that Americans' retirement accounts lost $1 trillion in equity in the year before the market tanked this fall.
McKinsey says Americans may simply have no choice but to delay retirement, even if only for a year or two. "If they worked long enough to increase the median retirement age from 62.6 today to 64.1 by 2015, they could continue accumulating assets longer and avoid tapping them until age 70," the report states. Delaying retirement would also generate more income and reduce the strain on Social Security, Medicare, and other big-ticket government programs.
Marcie Pitt-Catsouphes, a sociologist with the Sloan Center on Aging & Work at Boston College, says it's hard to predict the fallout for retiring Boomers because we've never seen a situation like this. "With economics, we base predictions on our understandings of patterns that have emerged in the past and adjust them for new situations, but these are very special circumstances," Pitt-Catsouphes says.
McKinsey says the nation's businesses must press the federal government to provide more incentives for older workers, such as flexibility with Medicare eligibility. Government must also lower the age eligibility (now at 62) for part-time workers who want to access their defined benefits pensions. And, the payroll taxes that fund Social Security have to be reduced for older workers earning less, to provide more incentives to continue working.
Ironically, the healthcare industry's attempts in recent years to deal with its anticipated future staffing needs has put hospitals in a better place to adapt to the reality of older workers. For example, hospitals are among the leaders in offering innovative plans to retain older workers, such as flexible scheduling.
In addition, many hospital clerical and administrative jobs are less-physically demanding, and could be undertaken by older employees. Younger nurses' assistants and other staff could help with more-arduous tasks, like lifting patients.
"In general, the healthcare industry has been very forward-thinking in looking at this, because they've been for some period of time addressing experienced labor force shortages, particularly around highly skilled nursing," Pitt-Catsouphes says.