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Healthcare Sector Job Growth Continues, But Slower Than Previous Years

John Commins, for HealthLeaders Media, July 2, 2009

The nation's hospital payrolls grew by 3,700 new jobs in June, and the healthcare sector was one of the few job growth areas in the economy in the first half of 2009, Bureau of Labor Statistics preliminary data released today show.

While hospitals are reporting payroll increases, the growth is well off the pace set in recent years, when the hospital sector added 6,800 jobs in June 2008, and 13,400 jobs in June 2007, BLS data show.

"I see nothing in these numbers to suggest that the slow down in employment growth is turning around in hospitals or healthcare, or anything that would indicate that people might be feeling more optimistic about the back half of the year," says David Bachman, a senior analyst with Cleveland-based Longbow Research LLC. "My sense is that the belt tightening continues here and hospital administrators and human resources managers are expecting that the back half of this year will be as tough, or tougher, than last year."

Overall, the healthcare sector—from physicians' offices, to residential mental health homes, to blood and organ banks—reported 20,800 payroll additions in June, and 127,300 new jobs in the first half of 2009, BLS preliminary data show. In the first half of 2008, the healthcare sector grew 179,400 new jobs, and averaged about 30,000 new jobs per month.

The fastest area of job growth in the healthcare sector continues to be in the ambulatory healthcare services, which reported 12,400 new jobs in June, and 83,700 new jobs in the first half of 2009, BLS preliminary data show.

"That is a continuation of this longer-term trend we've seen toward more healthcare being delivered in the outpatient setting, away from the traditional inpatient hospital setting," Bachman says. "That is going to continue for a number of years to come. There is sill a long runway for that to play out."

In the first half of 2009, the nation's hospitals reported 19,400 payroll additions, preliminary data show, compared with 67,400 payroll additions in the first six months of 2008, and 37,000 additions for the same period in 2007. BLS reports that there were more than 4.7 million hospital payroll jobs at the end of June, 2009.

If hospital payroll increases continue at this pace, fewer than 40,000 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, BLS data show.

Bachman says BLS figures for the healthcare and social assistance sector show that there were 726,000 job openings in April 2008, compared with 514,000 job openings in April 2009, the latest figures available. "The need for fewer new jobs than we had a year ago comes as patient censuses at hospitals continue to be soft," Bachman says. "Importantly, existing staff are not leaving positions and are probably willing to pick up extra shifts, so we are getting more productivity from existing workforce."

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