What's Behind Slow Hospital Job Growth?

HealthLeaders Media Staff, September 14, 2009

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.

Facebook icon
LinkedIn icon
Twitter icon