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Healthcare Job Growth Accelerating

 |  By John Commins  
   March 12, 2012

Job growth in the healthcare sector has been strong in the first two months of 2012, accounting for one in five new jobs in the overall economy, and even surpassing the robust pace of job growth throughout most of 2011, new federal data shows.

The Bureau of Labor Statistics reports that the healthcare sector created 49,000 jobs in February, including 28,200 jobs in ambulatory services, and 15,400 jobs in hospitals.

J.D. Kleinke, a fellow at the American Enterprise Institute, said the explosion in healthcare job growth "is just more of the same."

"Healthcare is recession-proof. Healthcare costs always go up. There is always going to be growth," Kleinke says. "For all its capital and technology, it is still a labor intensive industry. People want to see their doctors. Nursing is very labor-intensive.  You can't automate healthcare like you can manufacturing."

Revised BLS figures show that healthcare created 43,300 jobs in January, continuing a strong trend in job growth that saw 296,900 payroll additions in 2011. Healthcare accounted for more than 18% of new jobs in the overall economy last year, Bureau of Labor Statistics data shows.

In 2011, ambulatory services, which include physicians' offices, accounted for 64% of the job growth in healthcare. The subsector created 18,500 jobs in January and 191,400 jobs in 2011, after creating 166,100 jobs in 2010.

Michael T. Rowan, COO at Englewood, CO-based Catholic Health Initiatives, says he expects healthcare job growth to continue well into the future as Baby Boomers age, and healthcare reforms expand health insurance coverage to an additional 30 million people and place more demands on healthcare providers.

"Certainly healthcare is one of the few bright spots in the economy," he says. "It is the nature of healthcare that we are always going to be around. Health is one of those universal issues that affect everyone. We are an industry that is everywhere. Even the smallest community has healthcare in one form or another."

Rowan says the top driver for job growth at CHI is information technology.

"There is a mandate to get to meaningful use under healthcare reform and people are putting in clinical information technology systems and that is fueling significant hiring," he says. "In our organization we are looking at about $1.5 billion we are going to spend over five years to upgrade our clinical IT and we are hiring nearly 400 additional people just to be able to install and then manage those systems. That doesn't even count toward the hiring that has taken place in our local markets."

The physician-employee model is also driving hospital employment.

"More and more physicians are looking to be employed versus out there in private practice," Rowan says. "Using CHI as an example, we have hired more than 1,000 additional physicians over the last 24 months."

Another driver is the demand for administrators who can help hospitals and health systems navigate through new federally mandated payment models. "With the move from volume-based fee-for-service reimbursement to going at risk for episodes of care and the like and population health management, all of that is calling for some new competencies related to risk and insurance," Rowan says.

"Those are not skill sets that most hospitals and health systems have. So, we are hiring people with that background and expertise. It's not at the level that you see for IT and physicians, but it is still significant."

Kleinke says the high demand for technicians to install and operate complex electronic medical records systems are creating new opportunities for American workers who've been left behind in the recession and changing economy.

"It's a perfect job in the new economy for somebody who used to work in an assembly plant or a service job or used to do something that's been off-shored," he says. "It is something you can learn to do in a couple of years at a technical school. There are federal grants available for that and the jobs are there and the jobs are good."

More than 14.2 million people worked in the healthcare sector in February, with nearly 4.8 million of those jobs at hospitals, and more than 6.2 million jobs in ambulatory services, which includes more than 2.3 million jobs in physicians' offices.

The 49,000 jobs created in healthcare in February represent 21.5% of the 227,000 jobs created in the overall economy for the month. In 2011, the 296,900 jobs created by healthcare represented more than 18% of the 1.6 million jobs created in the overall economy that year.

BLS data from January and February are preliminary and may be revised considerably in the coming months.

In the larger economy, the nation's unemployment rate stayed unchanged in February at 8.3%—maintaining a level last seen in early 2009. BLS said the 227,000 new jobs created in February came from healthcare and social assistance, professional and business services, leisure and hospitality, manufacturing, and mining.

Even with the modest gains, BLS said 12.8 million people were unemployed in February, matching January's measure. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, was little changed at 5.4 million in February, and represented 42.6% of the unemployed.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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