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Job growth seen in healthcare despite hospitals cutting labor costs

Although many hospitals are searching for ways to become more efficient and cut costs, which can include cutting certain positions, the outlook for U.S. healthcare job growth looks positive, as evidenced by the Bureau of Labor Statistics' recent report that 44,000 healthcare jobs were added to the economy in September.

[Also: Healthcare workforce continues to grow with addition of 44K jobs in September]

Andrew Chastain, board vice chair and senior vice president of Witt/Kieffer, a healthcare executive search firm, said while it’s true that many hospitals are cutting back labor in certain areas, the spike in healthcare jobs overall is due to the growth in outpatient care services.

“I think that the overall healthcare employment outlook is strong. Actually, it’s the strongest growth we’ve had in over a decade with hiring in the healthcare sector. However, the jobs are shifting from being more hospital-based,” said Chastain. “Our clients are looking at how to treat patients in the most appropriate way. This includes not adding more beds, but adding outpatient services without beds – anything across the continuum that keeps people out of the hospitals.”

Chastain said as hospitals are trying to become more profitable on Medicare by looking for ways to become efficient, there is an increasing need for outpatient services.

[Also: Healthcare a U.S. job growth leader in March]

“Labor costs are often 60 percent of hospital spend. Hospitals are figuring out how to decrease labor costs but still become more efficient and part of that is having patients going to outpatient services because it’s less expensive,” he said. “A lot of the hospital staff reductions we are seeing are actually movements among health systems from one place in the hospital to places outside of the hospital where there are more opportunities.”

Chastain added that as aging baby boomers begin to utilize more healthcare services, there will be a need for additional healthcare employees, despite the fact that hospitals are trying to decrease labor costs.

“Just the sheer numbers of people that will be going through the healthcare system – there’s a big bubble in the system that will cause staffing to rise even if we become more efficient over time. So if you’re a nursing student in college, your career path looks pretty bright,” he said. “The patients might be cared for in a different way, like more outpatient care, but they are still patients that need to be cared for.”

Finally, Chastain also said that as many medical groups and smaller practices are merging with larger hospital systems, there are growing needs for various healthcare executives.

“There are new places for executives that didn’t exist before. As medical groups are merging into hospital systems, there are infrastructures that need to be created in order to lead and support those operations,” he said. “They need a president or chief quality officer or an IT executive. So it’s actually creating job growth and added opportunities at the executive level.”

[Also: Healthcare jobs predicted to grow at swift rate]

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