Is the recession responsible for the flat job growth in the hospital sector? Or, is something larger at play? Are we seeing a fundamental shift in the way healthcare is being delivered in this country? Is the idea of the single, monolithic brick-and-mortar hospital giving way to a more fluid construct where hospitals play a less-centralized role?
Consider Bureau of Labor Statistic preliminary data for August, which showed that the overall healthcare sector reported 27,900 payroll additions in August, and 180,400 new jobs in the first eight months of 2009. Nearly two-thirds of job growth in the healthcare sector is in ambulatory healthcare services, which reported 18,300 new jobs in August and 119,600 new jobs in the first eight months of 2009.
Hospitals, however, lost 700 jobs in August, and 200 jobs in June. In the first eight months of 2009, the nation's hospitals reported 17,100 payroll additions, compared with 94,100 payroll additions in the first eight months of 2008, and 66,800 additions for the same period in 2007.
David Bachman, a senior healthcare analyst with Longbow Research, says the recession is accelerating a long-term trend away from the hospitals and toward the outpatient setting. "There is some evidence that the tough economic times might be accelerating the shift that we have been seeing over the past several years," he says. "We've been picking up some anecdotal comments in the surveys we've been doing about patients choosing the outpatient setting, where their out-of-pocket costs are lower."
"As the data comes in on the effectiveness of the outpatient or freestanding setting, insurance companies are steering more volume that way, and part of the way they do that is by cost-sharing with patients. It makes sense to move to the lowest cost, most convenient setting that can provide the same quality of care."
Kurt Mosley, vice president of business development for Merritt Hawkins & Associates, the Dallas-based physician recruiters, blames hospitals' slow job growth and other woes on the economy.
"It did go away for a little bit but it will go back to the hospitals," he says.
He believes the Obama administration and healthcare reform will serve hospitals well. For starters, he says, the White House is trying to shutter physician-owned hospitals, which would put hospitals in a strong position to recoup business that had been siphoned off by ambulatory imaging centers and other lucrative specialty service lines.
In addition, most of the $20 billion the federal government is prepared to spend on electronic medical records will be funneled through hospitals. "Hospitals are going to be the center for this whole electronic medical records movement," Mosley says.
"Doctors now are asking hospitals to employ them, and not own them like they did in the 1990s, but help them run their practices. That is where the hospitals are stepping up. They are pulling the doctors back into the fold and they are going to get the money for EMR and things will start to refocus on the hospitals."
Bachman concedes that healthcare reform is the "wildcard" in any debate. While the expansion of health insurance could mean more short-term business for hospital emergency departments, Bachman says most of the new demand will be for primary care services, most of which is more effectively provided outside the hospital.
"There are something like 500 million primary care visits in the U.S. annually. And you can assume that the vast majority of those are coming from the insured population, who can schedule a primary care visit instead of going to the ER," Bachman says. "If we expand coverage for primary care across all the population you could see another 85 million primary care visits. By definition, those are outpatient visits. The sorts of services that come along with that like follow-on or diagnostic or imaging work happen in the outpatient setting. I really think that healthcare reform, first and foremost, accelerates the trend to outpatient setting."
In my opinion, hospitals will remain a central part of healthcare delivery in this country, but not in the way that they have been. Hospitals are already expanding their primary care, walk-in clinics, and urgent care and specialty ambulatory services, either through affiliations or direct ownership.
Hospitals will have to accelerate the move toward retail-friendly care delivery. We no longer live in the 1950s. Most of the United States is on a 24/7 clock, and right now the only place providing that level of access is the emergency department. If you can access a pharmacy at 2 a.m., you should be able to access a physician outside of an ED. Healthcare delivery has to adapt to the demands of the population, even if that means working late and on weekends, as millions of Americans already do.
The healthcare sector will continue to grow jobs as the population grows, and grows older and sicker. One constant will be the need for hospital staff, although their duties, work hours, and even their location within the hospital setting will be subject to constant change as hospitals adapt to the nation's healthcare needs.
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