Healthcare Faces 'Interesting Times'

John Commins, for HealthLeaders Media, January 19, 2009

There's an old saying: "May you live in interesting times." It's allegedly from China, and there is debate about whether it's meant as a blessing or a curse.

If you're an HR executive in the healthcare industry, there is no denying that we are living in interesting times right now, and it's hard to say if that's a blessing or a curse. So, let's take a little time to review the world we're working in, and what is likely in store for at least the near future.

On the one hand, we've got critical shortages of doctors, nurses, and other healthcare workers in almost every area of the nation, and that has led to steady job growth in the healthcare sector.

The Bureau of Labor Statistics reports that 372,000 healthcare jobs were created in 2008, despite the gray economic climate. This happened, BLS reports, at the same time that 3.6 million people joined the ranks of the unemployed. In the last 10 years, the healthcare sector has created about 300,000 new jobs every year. A further BLS breakdown shows that the hospital sector created 138,000 new jobs in 2008 for a total of more than 4.7 million. In the last 10 years, the hospital sector has created 788,000 new jobs. Although the shortage of healthcare workers creates hardship for people needing medical care, particularly in rural areas, it also provides an employment opportunity for the tens of thousands of newly jobless people, albeit with some assembly required.

On the other hand, we've got daily reports from across the nation of hospital layoffs. It's not immediately clear how many jobs have been lost, but there is also nothing to indicate that this trend won't follow the moribund economy well into this year, and beyond. How can there be layoffs at a time when healthcare workers are at a premium? How can one industry have two trends heading in diametrically different directions? How do you as an HR professional simultaneously plan for a labor shortage, a recruiting drive, benefits enticements, benefits cuts, and layoffs, all of which could occur with no reduction in the demand for medical services?

Marick Masters, a professor of business at Wayne State University in Detroit, says it's not unusual for a particular industry to face conflicting internal trends, particularly an industry as large, vital, complex, and all-encompassing as healthcare. For example, the automobile industry saw foreign automobile manufacturers like Toyota, Nissan, and Mercedes-Benz building strong operations in the United States in the last 25 years at the same time that domestic manufacturers suffered declining markets.

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