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Major Jump in Job Growth: Big Boon for Hospitals?

February 22, 2024

Whenever historians want to categorize a ruler as particularly impactful, they will sometimes bestow a title that includes the word “great.” Cyrus the Great, Peter the Great and Catherine the Great come to mind. But certain eras or events have also been characterized with this same descriptor: the Great Migration, the Great War, the Great Depression and so on. Recently, someone came up with a clever way of describing the significant movement of nurses and other clinicians out of the hospital setting over the last few years: the Great Resignation.

We have over the last few years occasionally chronicled for our readers the shortage of doctors and particularly nurses in our nation’s hospitals. Some researchers of the phenomenon have even characterized it in terms of a crisis. So, it may come as somewhat of a surprise to learn that there are recent indications of job growth within the healthcare sector. The question is: is it enough?

By the Numbers

According to a recent report released by the non-profit research organization, Altarum, approximately 654,000 jobs were added to the healthcare industry last year, marking the fastest rate gain in over three decades. We are all aware of the pre-pandemic doctor shortage issue, and we all remember how the circumstances involving, and in response to, COVID decimated the ranks of nurses in many of our nation’s hospitals. However, according to data from the Bureau of Labor Statistics, jobs in the healthcare sector began to bounce back by October 2022. By the end of 2023, hirings within the healthcare industry had actually eclipsed those of other major U.S. industries by a factor of two.

This historic upturn in job growth is certainly remarkable. The addition of over 650,000 jobs in the healthcare industry accounts for nearly a quarter of all jobs added across all economic sectors. There were 157,232,000 jobs across all sectors of the U.S. economy by the end of 2023, according to a CES survey of employers. Of these, 216,000 were characterized as newly added in the month of December. So, the U.S. experienced job growth, generally, with healthcare leading the way.

Remaining Circumspect

Hospital administrators shouldn’t pop the cork on their celebratory bubbly just yet. Even with all these positive figures, there are still reasons for concern. Researchers state that the job growth reported in the healthcare sector was primarily realized within the ambulatory care setting. Since 2020, ambulatory care jobs have grown at a 9.2 percent clip, according to the Altarum report. In 2023, ambulatory care settings added 26,700 jobs per month on average, while hospitals only added 15,300. So, while this still represents real growth, the hospital sector’s job growth was not as robust as that found in ambulatory surgical centers, for example.

Furthermore, December of 2023—the last month studied in the Altarum report—showed signs of a slowdown in job growth. According to researchers, the healthcare industry added just 37,700 jobs, which amounts to less than half of the 78,300 jobs added in November. This dip at the tail-end of the year could mark the beginning of a more ominous trend for 2024. It could also mean nothing more than a momentary blip in an otherwise positive job market.

It is with interest that we now note the importance of wages in this story. Healthcare salaries grew 2.9 percent in November 2023, year over year, compared to 4.0 percent for other industries. Wage growth in healthcare settings was highest in nursing and residential care, at 4.0 percent year over year, followed by hospitals at 3.3 percent and ambulatory care settings at 2.4 percent. While wage growth dipped for the healthcare sector overall between 2022 and 2023, the growth in nursing salaries may point to the fact that hospitals are being forced to pay more to attract and retain RNs. Nevertheless, December numbers indicate that the nursing and residential care facilities industry added only 3,200 jobs, which is significantly lower than the average of 12,600 jobs per month in the previous year.

All in all, the Altarum report presents a mixed bag of results. As it pertains to hospitals in particular, the jury is still out on the long-term prospects for shoring up the staffing gaps—especially in the area of nursing. Indeed, according to one credit agency, “recruitment is the single largest issue facing health systems today.”

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