Yahoo Finance Healthcare workers are in demand — and the industry can't get enough of them
Healthcare job gains have been on a hot streak, adding positions faster every month than most other sectors and continuing to climb as demand for care surges.
In May, the sector added a whopping 68,000 jobs — or 25% of the 272,000 total job gains reported in the month, according to a report from the US Bureau of Labor Statistics (BLS).
The number of added health jobs — which includes everything from nurses to physical therapists to specialty doctors — consistently ranks healthcare among the top three sectors for total jobs added to the economy every month since April 2023. The trend is expected to continue when BLS reports jobs this week.
Experts say the boom is in part a recovery from trends in worker demand during the pandemic, when nurses were in higher demand while other specialties were less in demand, as well as evolving demands for an aging population.
"Every sector except for nursing homes has more than recovered from the pre-pandemic employment level. Everybody ... who looks at the data and the trends expects it to keep ramping up because of the aging baby boomer population," Joanne Spetz, director of the Institute for Health Policy Studies at the University of California San Francisco, said in an interview with Yahoo Finance.
But the numbers hide a contradicting truth: The industry is facing an ongoing labor shortage.
The added jobs every month are not all new jobs, as the industry is plagued by labor shortages from nurses to doctors. The underlying issues are high levels of burnout, different needs in different parts of the country, and opportunities outside of traditional healthcare like telehealth and consulting for startups.
This is a growing problem that is affecting patient care, according to Philips North America CEO Jeff DiLullo. The company's 2024 Future Health Index report highlights the problems stemming from the labor shortage, which impact other areas of healthcare.
In the report, 81% of healthcare leaders say there are delays in care due to staff shortages.
As a result, hospitals are paying more to attract and retain staff, and the trade-off is 49% of leaders delaying or limiting investment in medical equipment or technology solutions, according to the report.
The report, Di Lullo said, is "showing, very visibly, the challenge that sits ahead of us."
A burdened system
Labor problems in the health system are not new, but the burnout caused by the pandemic has exacerbated the issue and is now affecting patient care, as shown in the Philips report.
High turnover, less experienced hires, and a focus on incentivizing retention are just some of the concerns for healthcare leaders, UCSF's Spetz said.
The Affordable Care Act opened the floodgates in 2012 to increased demand for care services — especially in lower-income populations — which meant more insured patients seeking care, resulting in a need for more doctors to feed that demand in care, according to Bhavneet Walia, associate professor of public health at Syracuse University.
That surge coincided with the aging of baby boomers, which needed more primary care and specialists. Then came the pandemic, which introduced an entirely new way of treating patients through more digital options.
That has created a desire to have more work-life balance, which is contributing to the high rates of turnover.
"Physicians are very stressed about why they are doing what they are doing," Walia told Yahoo Finance. Which means healthcare leaders have to offer larger salaries.
"We don't have a lot of data yet about how rapidly wages are rising for healthcare workers. But I think some of the data that we do have suggests that they have been rising more rapidly, and the places where unions represent healthcare workers have been getting some pretty nice looking contracts," Spetz said.
In recent years, the idea of a "care team," which comprises physician assistants and nurse practitioners, has been viewed as a way to alleviate the provider shortage problem. And that figure will continue to grow, according to BLS.
But critics point out that this means that nurses and physician assistants (PAs), who go through less rigorous training than doctors, are involved in providing care beyond their training.
Walia said that doctors receive more diagnostic training than physician assistants. This can result in physician assistants ordering more tests than doctors, which in turn drives up the cost of care, she said.
The laws governing physician assistants vary by state, but PAs are largely operating under a licensed physician — which increases doctors' responsibilities and liabilities. A handful of states, such as Utah, have recently provided assistants more autonomy to practice without physician oversight.
All this adds to the costs for providers, which increases the reimbursement demand on insurers and increases patient costs.
"So that's going to make us even worse when we talk about healthcare expenditure for the country," Walia said.
The US healthcare industry currently accounts for 17% of the economy, or more than $4 trillion in spending.
Editor's note: This story was updated to reflect that state rules vary on the roles of physician assistants.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. Follow Anjalee on all social media platforms @AnjKhem.
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