Given that hospitals are typically the largest employers in any given region, progress in this sector is usually reflective of overall economic growth. However, while the number of private sector and healthcare jobs (sans hospitals) has grown steadily since July 2012, hospital employment has not followed suit.
- Payment cuts due to Obamacare which were especially impactful to states that didn’t support Medicaid
- The increase in hospital merger and acquisition activity which led to layoffs
- The significant incentives introduced by payers and provisions in the Affordable Care Act to shift care to outpatient settings and treating patients at home
Another reason is thought to be a concentration of investments in the complete continuum of care, such as post-acute care, physician practices and other non-hospital providers, in an effort to lower the number of hospital admissions.
The Changing Tide in Hospital Jobs Growth
The last year has brought a significant change to this downturn. According to the Bureau of Labor Statistics (BLS), the hospital sector has gained over 100,000 jobs in the past year, the largest improvement since 2008. In fact, the May 2015 jobs report marked the 10th straight month of jobs growth for hospitals.
While jobs growth in hospitals turned the corner during March 2014, the overall economy has been trending upwards since March 2010–the month after the Affordable Care Act was signed into law. Four years after the ACA was enacted, hospitals are finally benefiting. Aspects of the law which have kicked in over the last year have had a pronounced effect on Medicaid growth and the launch of insurance exchanges, leading to a record low of about 11% in the nation’s uninsured rate. This has translated into less debt and more revenue for hospitals, enabling expansion.
Statistics indicate that 2014 was the first bounce-back year for hospital jobs after many years of slowed growth. However, it is yet to be seen if this job growth will continue, considering the financial challenges hospitals face as the population ages and healthcare expenditures increase. Finding ways to operate more efficiently will be paramount regardless of how well the general economy is faring.
How do you think hospitals will handle the challenge of treating a population with a growing percentage of elderly patients? Will the hospital jobs growth observed in the past year continue to meet this demand?