Economist: 2013 a 'Banner Year' for Healthcare Jobs

Healthcare hiring is accelerating at a striking rate: 60-80% faster than the rest of the economy.  And it's not just physicians and nurses that are in high demand.

In the overall economy, jobs grew at an annual growth rate of 1.4% in 2012, according to the December jobs report from the Bureau of Labor Statistics.  In the healthcare sector, jobs grew at a comparatively blazing pace of 2.4%.

And while hospital and health system CFOs are bearish on the overall financial picture for the new year, at least one healthcare economist expects the decades-long positive record for job creation in healthcare to continue into 2013, as healthcare reform implementation continues to roll out.

"[The year] 2013, I believe, will be a banner year compared to recent years because of the anticipation and current expansion of insurance coverage," says Randall P. Ellis, a professor of economics at Boston University. "As we come out of the recession, and as more people have incomes and earnings go up, then we will be more inclined to visit the doctor and go to the hospital."

While the national economy is recovering and spending is rebounding, unemployment remains  steady at 7.8%, the level it has held since September.

But "healthcare employment just keeps chugging along, creating a disproportionately large fraction of the jobs," says Mark. V. Pauly, PhD, a professor of healthcare management and economics at The Wharton School at the University of Pennsylvania.

"The only thing I think could negatively impact the industry in terms of hiring is a shortage of workers, not a shortage of jobs."

As 2013 unfolds and Washington debates our nation's debt, spending, and taxes, healthcare spending will definitely be on the table, but there is little expectation that cuts at the federal level will impact hiring.

Healthcare will probably maintain its 20% portion of the economy, predicts Pauly, especially with the government's emphasis on a reduction of healthcare spending and recovery in other sectors continuing.

"There's a bit of a conflict of course, because the government wants to get healthcare spending under control, and almost all of healthcare spending comes from labor. That also means getting job growth under control in healthcare—now I don't know if that's optimistic or pessimistic—but I'm not sure if they're going to be all that successful in doing that," Pauly says.

That cost reduction focus will continue to translate to an increase in ambulatory care and outpatient staffing and services, as the emphasis for reducing spending also emphasizes reducing unnecessary hospital visits and tests, he says.

Last month, for example,  ambulatory care created 23,000 jobs, approximately 57% of healthcare's total job growth. These numbers are fairly consistent with a year ago, when ambulatory care services created 59% of the industry's monthly job growth. Ambulatory care created 187,000 jobs total in 2011. And In 2012, ambulatory care created 192,100 jobs. Pauly expects that trend to continue through 2013.

"In the composition of healthcare jobs, more than half of them are in ambulatory care, which probably reflects the shift to primary care and outpatient care that is emphasized in healthcare reform. People are trying to get a head start on that. It continues to be a source of solid growth," says Pauly.

"There was a decline in doctor's visits from 2008 to 2011 in terms of the number of office visits and that should turn around now that the economy is recovering, along with the demand for staff and supplies that come along with that," Ellis says.

Even with the New Year's Day fiscal cliff deal's moderate impact on reimbursements for hospitals, Pauly doesn't anticipate shifting budgets to impact hiring.

"Hospitals are irritated because they might need to move some of their employment around, but I think they'll be able to do it. It's easier to postpone capital spending than it is to postpone the hiring of workers to treat the people sitting in your waiting room. With [healthcare] reform, hiring is only going to increase to serve the new patients that are coming in because they now have insurance," he says.