This morning’s wretched jobs report tells a now-familiar tale: Employment has risen nicely in health care (a net gain of more than 340,000 jobs between May 2011 and May 2012). But almost every other sector has been flat or worse.
You might think that would mean that new-graduate nurses are having an easy time finding work. That’s still true in rural areas — but elsewhere, no.
In many U.S. cities, especially on the west coast, there’s real evidence of a nursing glut. The most recent survey conducted by the National Student Nurses’ Association found that more than 30 percent of recent graduates had failed to find jobs.
How is that possible?
While demand for nurses has been rising, it actually hasn’t risen as fast as most scholars had projected. Meanwhile, the supply of nurses has spiked unexpectedly, at both ends of the age scale: Older nurses have delayed retirement, often because the recession has thrown their spouses out of work. And people in their early twenties are earning nursing degrees at a rate not seen in decades. We’re now in the sixth year in which health-care employment has far outshone every other sector, and college students have read those tea leaves.
So what will happen next? Here are crude sketches of two possible futures:
I. THE NURSING SHORTAGE OF 2020
(This scenario draws from a talk that Vanderbilt University’s Peter Buerhaus gave two weeks ago at the U. of Maryland School of Nursing. Buerhaus still sees a shortage coming, though a less severe one than the shortage that he and two colleagues had predicted in a widely-cited 2000 paper.)
- In June 2012, the Supreme Court upholds the Affordable Care Act, and Republicans never manage to do much to weaken the law. Tens of millions of Americans gain access to insurance, and the demand for nurses rises in tandem.
- Some time around 2014, the general labor market finally recovers. There’s less desperation in the air. Sixty-year-old nurses are more likely to retire, and twenty-year-old college students who aren’t actually that interested in nursing go back to majoring in anthropology or accounting or whatever, because they’re reasonably sure they’ll find jobs.
- The millions of soon-to-retire Baby Boomers utilize Medicare at rates similar to previous cohorts of 70-year-olds.
- Changes in health care delivery mean that nurses and nurse practitioners are heavily deployed to provide primary care and to coordinate patients’ services.
II. THE NURSING GLUT OF 2020
- In June, the Supreme Court strikes down the ACA’s insurance mandate. Mitt Romney wins the 2012 election and pushes his health proposals through Congress. In this scenario, at least 45 million fewer people have health insurance than would have been the case with an intact ACA.
- The EU zone goes to hell, and the ensuing financial crisis means that the U.S. labor market stays miserable for years. College students continue to pour into health care fields, because that’s the one sector with better-than-zero growth.
- The millions of soon-to-retire Baby Boomers utilize Medicare at significantly lower rates than previous cohorts of 70-year-olds. (Unlike the other items on this list, this one is good news.)
- Changes in health care delivery don’t lead to a relative increase in the deployment of nurses and nurse practitioners. Accountable Care Organizations use social workers and other non-nurses to coordinate patients’ care across providers.
What will actually happen? Probably something in between, of course. (Or maybe the Yellowstone volcano will erupt and this will all be moot.)
We had better hope that it is something close to halfway in between. Both shortages and gluts are bad for patients and bad for the nursing profession. Nursing shortages, because patients are even more likely than usual to face understaffed units and overstretched nurses. Nursing gluts, because nurses are so afraid of unemployment that they don’t speak up about problems on their units.
David Glenn is a student at the University of Maryland School of Nursing and author of the blog, Notes on Nursing, where this post originally appeared.
Hospitals tend to be among the largest employers in their communities — which means that any individual decision to lay off staff can have an outsized local impact. And taken together, a dozen recent announcements seem to paint an especially dire picture for hospitals (and their communities) around the nation.
For example, NorthShore in Illinois says it will lay off 1% of its workforce. The staffing cuts “ensure NorthShore remains well positioned to deal with the unprecedented changes brought on by the Affordable Care Act,” according to a memo from the health system’s chief human resources executive.
And California’s John Muir Health is offering staff voluntary buyouts ahead of ACA implementation. “We’re being paid less, and we either stick our head in the sand or make changes for the future so patients can continue to access us for their care,” according to John Muir spokesperson Ben Drew.
When Obamacare was being debated in Congress, its opponents tried to tar it with a deadly label: “the job-killing health law.” So is the ACA finally living down to its sobriquet?
Not exactly. While the recent news makes for provocative headlines, the devil’s in the details — and the financial reports.
A Closer Look at Industry Pressures
It’s clear that something is shifting in the hospital market. After years of employment growth, hospitals’ hiring patterns have largely leveled off. Collectively, organizations shed 9,000 jobs in May — the worst single month for the hospital sector in a decade.
Some of those decisions reflect industry-wide belt-tightening, as Medicare moves to rein in health spending by moving away from fee-for-service reimbursement and penalizing hospitals that perform poorly on certain quality measures.
And uncertainty around ACA implementation is trickling down to hospital staffing decisions, economists told me. Many organizations still aren’t sure how the pending wave of newly insured patients will affect their profit margins, given that many of these individuals may be sicker and will be covered by Medicaid, which reimburses hospitals at lower rates than Medicare and private payers.
The U.S. Bureau of Labor Statistics came out with its June jobs report this week and, consistent with usual trends, healthcare jobs are booming. In June 2013 there were approximately 20,000 new healthcare jobs in the U.S., ¾ of which were in the ambulatory care sector and ¼ of which were in hospitals. Healthcare jobs represented 10% of all new jobs created this month.
The June growth in healthcare jobs matches up to the average 19,000 new healthcare jobs we have seen created in each of the prior months of 2013 and the 12% job growth we have seen over the last five years. In a country where new jobs are viewed as even better than baseball, apple pie and mom herself, these new jobs should elicit a huge round of applause, or at least a stadium style wave, right?
Or should they?
Change the channel and a different set of policy makers, employers and industry experts will tell you that the only way to save our economy from ruin is to cut healthcare costs. Cutting healthcare costs means making the people who work within the system vastly more efficient, eliminating unnecessary medical care (and thus reducing the labor that goes along with it), and helping empower consumers to do things for themselves, including taking a more active role in reducing their own demand for healthcare services and, in some cases, doing at home what they might previously have used the healthcare system to do (e.g., diagnostics, home care, etc).
An old data series got new life, when the Brookings Institution issued a report that compared health care jobs growth versus all other industries.
It’s “a truly astonishing graph,” according to Derek Thompson at The Atlantic. “I knew health care had been the most important driver of national employment over the last few years, but I had never seen the case made so starkly.”
Thompson wasn’t alone in his surprise. (Hopefully, readers of The Health Care Blog would be less astonished.) But lost within the reaction—and even mostly overlooked within the industry—is that not all health care jobs are growing, or at least not growing at the same pace.
Take a look at the following chart. It resembles the Brookings data, with one major change: The hospital employment curve has been separated from all other health care jobs growth.
Notice how hospital employment essentially flatlined across 2009—a hard year for the sector, which was still insulated compared to the rest of the economy. But many organizations pared back on staff and sought to cut non-essential services to survive the Great Recession.
The stunning election results will put even more pressure on Congress to deal with the economy and jobs when it reconvenes in mid-November. But as it turns out, one way to boost the economy is to reconsider the health reform bill.
Most people intuitively know that the worst thing government can do in the middle of the deepest recession in 70 years is enact policies that increase the expected cost of labor. Yet that is exactly what happened last spring, with the passage of the Affordable Care Act (ACA).
How bad is it? As I explained at my own blog the other day, right now we’re estimating the cost of the minimum benefit package that everyone will be required to have at $4,750 for individuals and $12,250 for families. That translates into a minimum health benefit of $2.28 an hour for full time workers (individual coverage) and $5.89 an hour (family coverage) for fulltime employees.
Granted, the law does not specify how much of the premium must be paid by the employer versus the employee — other than a government requirement that the employee’s share cannot exceed 9.5% of family income for low- and moderate-income workers and an industry rule of thumb that employers must pick up at least 50% of the tab. But the economic effects are the same, regardless of who writes the checks.
In four years’ time, the minimum cost of labor will be a $7.25 cash minimum wage and a $5.89 health minimum wage (family), for a total of $13.14 an hour or about $27,331 a year. (I think you can see already that no one is going to want to hire low-wage workers with families.)Continue reading…
From a deeply depressing survey of the unemployed in today’s NY Times:
Nearly half of respondents said they did not have health insurance, with the vast majority citing job loss as a reason, a notable finding given the tug of war in Congress over a health care overhaul. The poll offered a glimpse of the potential ripple effect of having no coverage. More than half characterized the cost of basic medical care as a hardship.
Meanwhile what is Joe Lieberman concerned about? Playing politics against liberals who, correctly, think he erred terribly in his support for Bush’s war and McCain’s candidacy.
And even if we pass legislation, when does the help arrive for these unemployed? 2013.