Healthcare Job Growth: What Lies Ahead?

In recent weeks there have been dizzying developments that will have an impact on job growth in the healthcare sector. The problem is, nobody really knows what that impact will be.

Let’s start with some favorable trends.

Healthcare job growth continues to be steady and strong, and one of the few bright spots in an increasingly grim economy. The Bureau of Labor Statistics monthly jobs report for July showed that the healthcare sector created 31,300 new jobs for the month, and 170,900 new jobs so far this year. Healthcare, everything from hospitals to ambulatory services centers to podiatrists’ offices, is responsible for 18.4% of the 930,000 non-farm payroll additions in the overall economy in 2011.

Why is this happening?

The easiest answer is simple demographics. We Americans are getting older, fatter, and sicker, all of which require more care. And there are more of us. The population was about 281 million in 2000, 311 million in 2010, and is projected to reach 392 million by midcentury. 

The healthcare reform law is also a factor in job growth. Hospitals, physicians’ offices, and other providers across the nation are hiring for the expected ramp up of healthcare services created by the new law, which will add about 30 million Americans to the ranks of the insured in 2014. 

Unfortunately, there are several issues out there that are creating uncertainty in the healthcare sector.

The most immediate concerns are the Medicaid cuts that almost every state government has imposed on their providers. In the past few months, media outlets have been full of stories about hospital layoffs—some of them involving hundreds of employees—acquisitions, mergers, or outright closures that were prompted by financial distress that hospital leaders often directly attribute to Medicaid cuts.

Even more ominous is this new 12-member, bipartisan Congressional “super committee” that will meet later this year to whack $1.5 trillion from the budget. Lawmakers insist that “everything” will be on the table and considered, and that includes Medicare, Medicaid, and other safety-net programs.

If this were all a one-shot deal, perhaps hospitals and other providers could be expected to take the hit and move on. However, it is becoming painfully obvious that the first recourse of many elected officials at the state and federal level is to cut safety-net programs like Medicare and Medicaid.  

Causing more uncertainty is the speculation that we are on the cusp of—if not already in—a double-dip recession. The recent stock market dive has evaporated considerable wealth for a lot of folks, including healthcare providers. The last time the market crashed in 2008, it prompted a lot of workers to delay retirement because they couldn’t afford it. Will that happen again?

At some point, regardless of what the stock market does, these folks will have to retire. They may have to adjust to a lower standard of living, but they aren’t getting younger.

In the past few months I’d been hearing from HR professionals across the country who said they believed that many of their staff were feeling confident enough to consider to retiring. After the stock market blood-letting of late last week, is that is still the case?    

And finally, how will the prospect of a double-dip recession impact provider operations. In the most-recent recession, providers complained they were being required to make huge increases in the amount of charity care they provided, as the newly unemployed sought essential healthcare services. Will that happen again?

And, given this uncertainty about the economy, will that dampen any enthusiasm for capital improvement projects like new hospitals, or expansions, or delay employment of new staff?

Throughout the last recession, the healthcare sector showed that while it wasn’t recession proof, it was recession resistant. People need healthcare in good economic times, and bad. If we are double-dipping into another recession, we may soon find out how much that resistance was been worn down.