Hospital Job Growth Flat-Lines in 2009

John Commins, for HealthLeaders Media , April 27, 2009

Hospital job growth, until recently one of the few bright spots for a nation deep in recession and high unemployment, has all but flat-lined so far this year, Bureau of Labor Statistics show.

For the first quarter of 2009, preliminary BLS figures show that the hospital sector created slightly less than 6,200 jobs nationwide. In the first three months of 2008, the hospital sector created 32,500 new jobs.

BLS reports that there were more than 4.7 million hospital jobs nationwide through the end of March 2009.

“It’s a response to the fact that volumes are weak and hospitals are adapting their staffing to adjust to that,” says David Bachman, an analyst with Longbow Research in Cleveland. “Employee expense is a huge cost center for hospitals, so the extent that they can manage that appropriately that is one of the few levers they have to try to keep margins from deteriorating too much in this environment.”

If hospital job creation continues at this pace, fewer than 25,000 new jobs will be created in 2009, as compared with 137,100 new hospital jobs in 2008; 105,700 new jobs in 2007; and 81,400 new jobs in 2006, according to BLS data.

“We are going to see subdued job growth throughout the remainder of this year,” Bachman says. “The sentiment among hospital leaders could be we are not going to see a big upswing in patient volumes and margins are so tight, or negative, so they are going to try to continue to do more with less. Essentially, there is no real employment growth in the hospital space over the course of the year, which is very different from what we’ve seen recently.”

The stagnant job growth in the hospital sector comes as the American Hospital Association today released a nationwide survey of more than 1,000 hospitals, nearly half of which report layoffs.

“The fact that hospitals are cutting staff challenges the notion that hospitals are recession-proof,” says AHA President and CEO Rich Umbdenstock.

The job growth is also adversely affected by reduced patient volumes, which are being reported by hospitals across the nation.

It’s not all bad news. The slowdown in job growth and the weak economy have helped hospitals—at least temporarily—quell an acute shortage of nurses and other clinical staff. Hospitals are reporting that turnover has declined, and that many former nurses have returned to the workforce for any number of pocketbook reasons.

Bachman says the recession has created a “bunker mentality” among nurses and other healthcare workers. BLS data show that—like everyone else—nurses and other healthcare workers are digging in, putting their heads down, and staying put until the economy improves.

Historic trends have shown an uptick in hospital hiring in the second quarter of each year, as hospitals get a better idea of their patient volume projections and they look to graduating nurses and other clinicians to fill jobs. “You start to get some pickup again in March, based on what we’ve seen historically,” Bachman says. “Probably if you look out over April, May, and June, those are a good test to see what is going on here.”

John Commins is a senior editor with HealthLeaders Media.

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