Healthcare Job Growth Continues at Tepid Pace

Despite the lukewarm climate for overall employment, healthcare job growth figures have yet to reflect any slowing demand for physicians, clinicians, and executives. Merritt Hawkins saw its physician and advanced practice recruiting assignments increase by 14% from 2012 to 2013.

Healthcare job growth held its tepid pace in September as hospitals and other providers dial back on new hires in the face of lower reimbursements, industry consolidation, the healthcare reform rollout, and myriad bottom line pressures.

Bureau of Labor Statistics job growth data for September was released on Tuesday after a two-week delayed caused by the government partial shutdown. It showed that the healthcare sector created 6,800 jobs for the month, compared with 36,600 new jobs created by the sector in September 2012. So far this year, healthcare has created 166,800 new jobs, down from the 226,400 new jobs created in the first nine months of 2012.

Travis Singleton, senior vice president at Merritt Hawkins, the Irving, TX-based physician recruiters, says nobody who's been paying attention should be surprised by the latest BLS figures.

"What you are seeing is simple action-reaction," Singleton says. "I don't mean to over simplify it, but if you cut reimbursements, you increase potential penalties that have already been and will be levied on these hospitals in the future you are going to see people react and that is through right-sizing."

"In healthcare we do this to ourselves. We create this bubble and think that no other logic applies to us, but anytime you have mass change to an industry you are going to get a reaction. And the first reaction you are going to get is around labor because it is the largest cost. So, I am not sure what people expected if they expected the healthcare job growth to keep pace, that was an unrealistic expectation, certainly when you look year-over-year."

Hospitals created only 300 new jobs in September and 8,600 new jobs so far in 2013, compared with 53,200 new jobs in the first nine months of 2013. Job growth in the volatile residential and nursing home sector was even worse, recording a net loss of 1,600 jobs in September. The sector has created 15,100 new jobs so far this year, compared with 25,900 new jobs for the same period in 2012.

So far, the job growth figures have yet to reflect any slowing demand for physicians, clinicians, and executives. Merritt Hawkins saw its physician and advanced practice recruiting assignments increase by 14% from 2012 to 2013. Singleton says he doesn't expect the demand for clinicians will abate any time soon.

"You won't see for at least the next couple of years cuts to providers. In fact, you are going to still see a pretty robust increase in providers and physicians by a large part because they hold up the walls as far as revenues," he says.

"But it doesn't stop there. It also goes to physician extenders and nursing. I expect to see huge increases in nursing over the next couple of years, primarily because of the changes they've made to quality and readmissions. So many people now have studies that directly tie a nurse-to-patient ratio with readmissions and quality components. At the end of the day they can't afford to cut in those areas. That kind of leads you back to, 'OK what can you do?' And unfortunately that gets to the support staff. So it is a right-sizing more than anything."

Rachel Polhemus, a senior partner at the executive search firm Witt/Kieffer, says that while overall healthcare hiring is slowing, the competition for executive leadership remains strong, especially as a generation of senior healthcare executives can afford to contemplate retirement.

"There was a period of time when in 2008 and 2009 and the market dipped and instead of retirements occurring, folks stayed on the job and decided not to retire and really to focus on rebuilding their nest eggs," she says. "We have seen retirements happening because those nest eggs have been rebuilt and there are folks who are much more comfortable about retiring at this point."

She says new leadership roles are being created as well as healthcare organizations learn to adapt to consolidations and restructuring.

"Much of it surrounds these physician enterprises that are being formed, with organizations employing physicians and they've had to create new leadership teams to support that," she says. "You are seeing many times the leadership in dual relationship with a physician executive and an administrator who focuses on the operations of that infrastructure."

Polhemus says the slow hospital job growth underscores a new focus away from bricks and mortar.
"It's more external," she says. "There is a big shift focusing on the post-acute world and building organizations developing post-acute care practices."