The growth in the demand for healthcare workers -- though healthy when compared with the rest of the economy – slowed in the last two quarters of 2010, and likely will continue to expand at a tepid pace well into 2011, says David Cherner, managing partner with Health Workforce Solutions.
"Our results this quarter were a little disappointing given what we had seen earlier this year," said Cherner, who this month issued the HWS Labor Market Pulse Index, at a quarterly barometer of local market healthcare workforce fluctuations released.
"Like the broader economic data, the healthcare labor market began 2010 with some marked improvement over the prior year and the promise of great strength by Q4. Unfortunately that didn't materialize as many of us had hoped," Cherner said. "We are not likely to see more meaningful gains until later this year but those gains should be much more sustainable."
LMPI found that near-term demand for healthcare workers is growing fastest in Orlando and in Detroit in the second quarter, while the Las Vegas, New York City, and Houston markets ranked at the bottom of the 30 markets tracked. "There are select parts of the country that are still weak," Cherner says. "But on the whole, the healthcare labor market as measured by our composite index, continues to strengthen."
Cherner says the fourth quarter of 2010 showed the near-term demand for healthcare workers is the strongest in Tampa, Riverside/San Bernardino and Phoenix. The San Jose, Chicago and San Francisco Bay Area markets ranked at the bottom of the 30 markets tracked.
"We've have seen some stagnation in the fourth quarter in the index so that is two straight quarters. In the third quarter it went down about 13% and this quarter went down about 3%. There is no reason why the healthcare labor market is not going to continue to outperform other sectors. We just don't expect from what we have seen in the fourth quarter of 2011 that any meaningful improvements will happen until later in 2011, most likely the third or fourth quarter."
Cherner attributes the slowdown to continued layoffs by hospitals that are coping with reimbursement cuts from Medicare, declines in demand for elective surgeries, and the continuing waves of hospital and health system consolidations that are likely to continue into the near future.
"That being said, looking forward there are some bright spots," Cherner says. "Community health centers, a key component of healthcare delivery, are getting a tremendous amount of investment over the next five years that will likely fuel notable additional hiring across the country in 2011 and beyond. And on the hospital side, on the patient care services side, there is not much more for hospitals to cut without impacting quality. So, many of the cuts that will be made because of the decline in demand will be made in non-patient care personnel."
Among the LMPI findings for the fourth quarter of 2010:
- After a relatively strong year compared to other sectors, the strength of the national healthcare labor market remained flat across a number of major metropolitan areas.
- The LMPI composite index, a representative basket of the 30 largest markets, posted a 3% decline in the fourth quarter of 2010 from the 3rd quarter of 2010, after a 13% decline the prior quarter.
- For the 4th quarter that ended Dec. 31, 14 markets of the 30 tracked by the LMPI showed signs of accelerated expansion -- compared with 10 markets in the third quarter.
It's important to remember that while things could be better in healthcare hiring, they could be a lot worse, too.
The Bureau of Labor Statistics reported this month that hospitals created 50,100 jobs in 2010, nearly double the rate of job creation from 2009, and the entire healthcare sector - everything from allergists to X-ray technicians -- created 265,800 jobs for the year.
Overall, the healthcare sector employed 13.9 million people at the end of 2010, including 4.7 million jobs at hospitals, 6 million jobs in outpatient ambulatory services, and 2.3 million jobs in physicians' offices, BLS preliminary data show.
For December, the healthcare sector recorded 35,700 payroll additions, including 8,000 hospital jobs. However, ambulatory healthcare services continues to be the major driver of healthcare job creation, with 20,600 payroll additions in December, and 160,200 payroll additions recorded in 2010, BLS preliminary data show.
So, we're not quite where we want to be, but it's not that bad, considering where we have been.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.