Job growth in healthcare is chugging along while other industries deal with a stagnation due to economic pressures.
Despite job growth across all industries declining last month, healthcare continued to add jobs at an encouraging rate.
The sector gained 62,200 jobs in May, a step up from the 50,600 jobs added in April and well above the average monthly increase of 44,000 over the past 12 months, according to a report by the Bureau of Labor Statistics.
The growth was largely driven by hospitals and ambulatory healthcare services, which saw an increase of 29,900 and 28,700 jobs, respectively.
Within ambulatory healthcare services, 9,800 jobs came from physician offices and 12,300 were contributed by home healthcare services.
Skilled nursing care facilities chipped in 6,300 jobs, but job loss across other parts of nursing and residential care facilities resulted in the subsector adding 3,600 jobs, a significant decrease from the 7,100 jobs created in April.
Overall, the U.S. added 139,000 jobs in May, down from the increase of 177,000 jobs in April and below the average monthly gain of 149,000 over the prior 12 months.
The unemployment rate, meanwhile, held at 4.2% last month and has remained in a narrow range of 4% to 4.2% since May 2024. In total, 7.2 million people were unemployed.
Even with healthcare demonstrating job growth, hospitals and health systems across the country have been reducing their workforce to contend with rising labor costs.
PeaceHealth became one of the latest health systems to opt for layoffs earlier this month when the Pacific Northwest-based organization announcedthat it would cut 1% of its staff.
Leaders recognize they must adjust with the times to improve their recruitment and retention efforts.
In the face of ongoing workforce shortages and rising labor costs, hospital CEOs are revamping their approach to designing and building teams.
Whether it’s investing in education partnerships, strengthening nurse residencies, or responding to the evolving needs of younger generations, hospital leaders are thinking creatively about workforce sustainability.
CEOs shared their experiences with workforce strategies at their respective organizations on the first day of the HealthLeaders CEO Exchange, which brought together dozens of top-level executives for discussions on operating in an ever-changing industry.
Be flexible
One of the themes that emerged from conversations between members was the need for flexibility with the clinical workforce.
Rigidity and sticking with standard procedures can no longer be the prevailing mindset. Instead, leaders must innovate and think outside-the-box to fill in gaps.
For example, one executive said their hospital is exploring a seasonal model in which staff move between facilities based on patient volume at different times of the year to better match staffing levels with fluctuating demand.
Create a pipeline
Another area of focus for leaders was how to build a workforce pipeline to ensure a steady, reliable flow of qualified talent
Several systems are partnering with high schools and secondary schools to help students gain certifications soon after graduation. Some are even creating their own educational institutions to ensure a steady talent pool.
One CEO highlighted a nursing residency model that’s showing strong results. Their organization offers a one-year nurse residency program paired with a two- to three-year commitment to remain with the system. The outcome has been a retention rate of 99%, with the goal of building deep institutional knowledge and turning participants into subject matter experts through structured training and frontline experience.
Meet generational needs
With millennials and Gen Z comprising a growing share of the workforce, organizations are evolving how they support and communicate with their employees.
That starts with recognizing what you don’t know or aren’t familiar with. One CEO shared how they brought in a generational expert to help their leadership understand the needs of younger workers.
By recognizing that millennials and Gen Z often crave more real-time, positive feedback, as well as mental health support, can allow hospitals to enhance their management style and expand their mental health benefits to help staff navigate stress and burnout.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
The Catholic nonprofit is reportedly close to adding AmSurg’s network of more than 250 surgery centers.
Ascension’s portfolio alignment could soon include the acquisition of a major ambulatory surgery center company.
The St. Louis-based health system is in talks to purchase AmSurg for $3.9 billion, according to Bloomberg, with sources indicating that a deal could be reached within weeks.
AmSurg, which operates more than 250 outpatient surgery centers across 34 states, was previously part of Envision Healthcare before splitting from the company as a result of its 2023 bankruptcy. Now, it is owned by Pacific Investment Management Co, King Street Capital Management, and Partners Group, Bloomberg noted.
For Ascension, an acquisition of AmSurg would significantly boost its outpatient offerings and follow the trend of health systems investing in the cost-effective care setting.
The move would also align with Ascension's ongoing efforts to shift its portfolio, with the organization having recently transferred or sold several hospitals to other health systems.
Ascension reached a definitive agreement with Beacon Health System in April to divest its Michigan southwest region, which includes four hospitals, 35 outpatient clinics, and an ambulatory surgery center.
Prior to that, Ascension completed a sale of eight hospitals to Prime Healthcare, transferred eight hospitals to Henry Ford Health in a joint venture, and sold three Michigan hospitals and an ambulatory surgery center to MyMichigan health.
The divestitures were reflected in Ascension’s most recent earnings report, showing a $466 operating loss and a dip in operating revenue to $6 billion, compared to $7.4 billion over the same period last year.
Nemours Children’s Health CEO R. Lawrence Moss shares his outlook on the changing dynamics of pediatric care.
Children’s health is shifting on a granular level, with hospitals continuing to evolve to meet the demands of care settings.
Holistically, Nemours Children’s Health president and CEO R. Lawrence Moss, MD, FACS, FAAP, wants to see whole child health become more of an emphasis for reducing chronic disease and healthcare spending.
Moss recently spoke with HealthLeaders about the path children’s health is on, in terms of where it is going and where it should be heading.
Another health system is going down the road of major layoffs and citing financial headwinds for the decision.
In the face of financial uncertainty, PeaceHealth is taking a significant step to slim down its workforce.
The Pacific Northwest-based health system, which operates in Washington, Oregon, and Alaska, said that it plans to cut 1% of its workforce and freeze nonclinical hiring throughout 2025. PeaceHealth did not offer details on which roles would be affected or when the layoffs would go into effect. The hospital operator has 16,000 employees.
It’s the latest move by a health system to trim its workforce to alleviate financial constraints amid a challenging environment that is making it hard for organizations to operate profitably.
"After months of discernment, financial analysis and a thorough review of the dynamic healthcare market, we are making a 1% reduction in our workforce, including eliminating some caregiver roles and closing some open positions," A PeaceHealth spokesperson said in a statement. "In line with our value of respect, we offer comprehensive transitional support consistent with our policies and practices to all impacted caregivers. Where possible, we are working to match qualified caregivers with open clinical roles across PeaceHealth."
The last time PeaceHealth underwent a round of layoffs was in 2023, when around 250 workers were let go.
The Oregon Nurses Association (ONA), which represents some of PeaceHealth’s employees, has stood in opposition to the cuts and expressed concern that the most recent round will harm workers and the public.
“We are deeply concerned about how PeaceHealth’s job cuts will impact local patients and healthcare providers,” Kevin Mealy, a spokesperson for the ONA, in a statement. “Cutting frontline caregivers at PeaceHealth Sacred Heart RiverBend would strain workers who are already stretched thin. PeaceHealth must be open and honest with the public about its plans and partner with local nurses and healthcare providers to ensure caregivers and community members have a voice in our healthcare and are treated with compassion and respect.”
Many health systems have recently resorted to layoffs or hiring freezes to save on rising expenses.
The reductions have mostly been focused on nonclinical roles, with organizations still working to strengthen their base of providers through recruitment and retention efforts.
The cuts have often reached management and administrative levels as health systems opt to slash concentrated salaries over position volume.
CEOs will convene this week to discuss strategies and best practices to operate effectively in a new era of healthcare.
The first half of 2025 has thrown more uncertainty at hospital CEOs amid an already-challenging environment.
Between potential policy changes, financial headwinds, and regulatory concerns, hospitals and health systems everywhere are forced to navigate a landscape that is shifting constantly and often without warning.
Here are three pain points that CEOs will explore at this week's HealthLeaders CEO Exchange to better position their organizations for success and sustainability in the rest of the year and beyond.
Workforce
With expenses rising across the board, designing an optimal workforce is no longer a luxury, but a necessity.
To build and maintain that type of workforce in 2025, CEOs must consider the generational differences of their workers and how to meet their specific needs. For example, millennials and Gen Z value factors like career development and work-life balance when choosing to work for organizations or stay in their current role.
Though technology's presence continues to increase, it's as important as ever to prioritize the human touch by focusing on strengthening communication and relationships between staff and management. Improving engagement can significantly boost retention and minimize worker turnover, allowing CEOs to save money in the long run.
Workplace
Still, it's vital that leaders identify opportunities to implement technology like AI to supplement their staff and make their workers' lives easier.
Reducing the administrative burden clinicians face by utilizing generative AI for notetaking or other tasks can make for happier physicians and further lessen organizations' reliance on contract labor.
CEOs must also cultivate a more welcoming environment for staff through initiatives that fortify worker safety. Violence in the workplace is a major driver for burnout, which can worsen staffing shortages and place greater pressure on hospitals.
Cybersecurity
One area that has recently come to forefront for CEOs is cybersecurity, with several high-profile cyberattacks wreaking havoc on organizations in the past couple years.
Cybersecurity strategies shouldn't just safeguard from attacks, but also include a response plan in case a threat is realized. Leaders should ensure open communication with their IT teams and work closely with fellow executives like CTOs to emphasize the importance of protecting their and their patients' data.
Having a protocol in place to mitigate the consequences of an attack and continue operations can defend organizations against a disastrous level of lost revenue.
Our 2025 CEO Exchange is June 4-6 at Park Hyatt Aviara Resort in Carlsbad, California.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
From layoffs to strategies for improving retention, here's what leaders need to be following regarding the workforce.
Through nearly the first half of 2025, hospitals and health systems continue to wrangle with workforce challenges that are pressuring bottom lines and forcing organizational change.
Hospital CEOs have their hands full balancing the need to create a sustainable workforce with reducing expenses to maintain financial health.
Here are three workforce trends that HealthLeaders has tracked in its recent coverage:
Layoffs
With margins slim and costs mounting, many hospitals have turned to either cutting staff or freezing hiring to save money.
Mass General Brigham made waves in February when it announced it would be undertake the largest layoffs in the health system's history to close a projecting $250 million budget gap over the next two years.
Providence, meanwhile, has paused nonclinical hiring, with president and CEO Eric Wexler citing low reimbursement from payers and elevated labor and supply expenses as factors in the decision.
Across the country, hospitals are feeling a workforce crunch that isn't expected to ease up anytime soon.
Leadership turnover
The turnover isn't just happening among clinical and nonclinical staff—it’s affecting leadership levels as well.
According to a recent survey by B.E. Smith, a division of staffing solutions company AMN Healthcare, 46% of 588 provider executives said they plan to leave their organization in the next year.
In many cases, executives are being forced out. The University of New Mexico Hospital dropped 53 executive roles in April, while Yale New Haven Health announced it was restructuring its management and administration positions.
Targeting leadership cuts can allow hospitals to shed high salaries without sacrificing a large number of staff, but it comes with the downside of disrupting organizational continuity.
The importance of engagement
To hold on to the workers that hospitals don't want to lose, CEOs must prioritize engagement to improve retention.
Disengaged employees are 1.7 times more likely to leave their roles, especially among younger generations, according to a recent report by Press Ganey. The analysis also found that employee engagement fell 0.02 points on a five-point scale in 2024, following a slight improvement in the prior year.
Strengthening culture can go a long way in creating a working environment that staff want to be part of, both in the short- and long-term.
Leaders must change their approach to the employment of physicians and the acquisition of their practices.
Hospitals have long accepted physician losses, but that mindset is becoming untenable as rising employment costs continue to add to the significant financial strain many organizations face.
Though employing physicians—regardless of profitability—can help hospitals achieve strategic goals and better serve their communities, CEOs should evaluate whether these physicians are consistently generating losses and consider alternative arrangements.
Due to a variety of factors, hospitals currently lose an estimated $306,792 per physician annually, which is an increase of 5% from the previous year, according to Kaufman Hall's Physician Flash Report.
The leading reason for those losses is the dwindling reimbursement advantage, Kaufman Hall wrote. Regulatory changes and the growing presence of ambulatory surgery centers (ASCs) are offsetting the higher reimbursement rates for physician services billed under hospital outpatient department.
Meanwhile, the overuse of low- or negative-margin services that are encouraged by hospitals to boost patient volume, and the integration costs stemming from administrative burden are also weighing down organizations financially.
To counteract these challenges, here are other strategies hospital CEOs can utilize instead of directly employing physicians, as posited by Kaufman Hall.
Target ASC joint ventures
By pursuing ASC partnerships, hospitals can adapt to the trend of decentralized care and bring in physicians through shared financial incentives. These collaborations also allow hospitals to maintain their market share.
Transition to FQHC facsimiles
Converting primary care clinicals into federally qualified health center look-alikes can unlock financial benefits for hospitals. In addition to FQHC look-alikes receiving better Medicaid and Medicare reimbursement, reducing the need for direct subsidies, physicians working at these facilities often receive medical school loan forgiveness as well.
Implement value-based care models
A fee-for-service environment can make the cost of employing physicians outweigh the revenue they bring in. Shifting to value-based care models like accountable care organizations or bundled payment arrangements can provide a win-win for both hospitals and physicians without requiring employment. These models also place on emphasis on quality over quantity, potentially leading to improved care for patients.
Tight margins and rising costs are threatening the sustainability of hospital and health systems.
Several factors are placing immense pressure on the bottom lines of hospitals and health systems everywhere, putting the onus on CEOs to financially steer their organizations through a complex and challenging environment.
In response, hospitals leaders must make calculated decisions with resources to ensure short-term operational needs are being met while supporting long-term strategic goals.
Here are three ways CEOs can be effective financial stewards:
New buildings and facilities in Florida and Delaware will allow Nemours to reach more children in need of care.
In this episode of HL Shorts, Nemours Children's Health president and CEO R. Lawrence Moss shares how the health system's recent capital investments are driving growth and expanding access to care.
