Is Hospital Job Growth in the Cards in 2010?

For most of us, watching 2009 recede in the rearview mirror is a pleasant sight. Good riddance to a lousy year and a lousy decade!

But even within the worst economic climate since the Great Depression, 2009 was not such a bad year for job growth in the healthcare sector—which includes everything from hospitals to outpatient surgery centers to podiatrists' offices—when compared with the overall economy.

Yes, healthcare job growth was slower than in years past. Bureau of Labor Statistics preliminary data show the healthcare sector created 267,000 new jobs in 2009, including 22,000 payroll additions in December. That's a considerable drop from 2008, for example, when healthcare created 363,600 new jobs.

Before you grouse, let's get some perspective. That we are even talking about "job growth" in this economy should be a cause for celebration. Healthcare has created 631,000 jobs since the recession began in December 2007. In that time, the number of jobless people in the nation has risen from 7.7 million to 15.3 million, BLS figures show.

"One thing we've learned is that healthcare was not completely recession-proof over the last year and a half as we've seen a number of large-scale layoffs across the board," says David Cherner, managing partner of Health Workforce Solutions, LLC, a San Francisco-based research firm. "But, certainly, it is much stronger than any other segment of the economy."

The ambulatory services sector, for example, has shown itself to be remarkably resilient and consistent, having created 179,000 new jobs in 2009, 182,400 jobs in 2008, and 180,600 jobs in 2007.

Cherner says he was surprised to see that job growth at the nation's hospitals was essentially flat in December, with only 1,400 new jobs reported. That—at least temporarily—puts a halt to an encouraging uptick in hospital job growth over the last few months of 2009. The hospital sector added 37,600 jobs in 2009, the lowest level of growth in the decade. Hospitals created 137,100 jobs in 2008, and 105,700 jobs in 2007, BLS data show.

"What I found interesting was the increase was not larger, based upon some notable hiring announcements we've seen over the last few months in a number of large markets," Cherner says. "That tells me that the bulk of these jobs have yet to be filled and will be filled over the course of 2010."

"After several quarters of delayed expansions and in some cases layoffs, even of patient care staff, the last two quarters we saw slight improvement across the board, and in the last quarter we have seen some healthy improvement across many areas," he says.

Cherner says many of the cutbacks and project delays during 2009 were a response to the economic unease about deteriorating financial conditions.

"But as a result of the belt tightening, we are also seeing many institutions reporting better-than-expected results over the last couple of quarters," he says. "Anecdotally, I've heard from a number of hospitals that they may have overreacted in terms of staff reductions and they are now trying to put stuff back on track."

Cherner's take on all of this strikes me as a fair assessment of the prospects for hospital job growth in 2010. It only makes sense that hospitals would cut back on labor costs in the face of tanking investment portfolios, adverse patient mixes, and other attacks on the bottom line.

But, it also appears that many hospitals have taken the last few months to assess their financial situations, as many investment markets have rebounded, and reassess their strategic visions.

All of this is occurring as Congress cobbles together reforms that could make health insurance available to another 30 million people, and as our nation's population—now at 308 million—gets older, fatter, and sicker.

Predictions are just that. But there is one thing you can bank on in healthcare, even when everything else is in flux. The demand will always be there.