Healthcare Business News

Healthcare employment drops for first time in decade

By Melanie Evans
Posted: January 10, 2014 - 1:00 pm ET

Healthcare, an engine of employment through the recession, shed 6,000 jobs in December with payroll declines in ambulatory care and hospitals.

The drop comes at the end of a year in which healthcare hiring flagged, adding a below average number of jobs, new figures from the U.S. Bureau of Labor Statistics show. Healthcare added 271,000 jobs last year to bring the industry's total to 14.57 million. Hiring fell about 2% below the annual average since 1990.

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Healthcare employment figures are closely watched by some economists, who see the industry's hiring trends as an indicator of health spending growth. Continued hiring suggests to some a potential rebound from the recent historically low rates of health spending, as employers see opportunities to recover labor expenses in negotiations with insurers.

The loss in healthcare came as the overall U.S. economy added a disappointing 74,000 jobs. Unemployment fell to a five-year low of 6.7%, driven largely by job seekers leaving the workforce. All figures for monthly job growth or declines are seasonally adjusted and preliminary. For the 2013 numbers, no seasonal adjustment is used because the figures include the entire calendar year.

Hiring trends across healthcare sectors were mixed in 2013.

Job growth was weak among hospitals, nursing homes and residential healthcare facilities, but ambulatory-care hiring was strong despite a dip in December.

Hospitals added 40,000 jobs last year. That's down 30% from the annual average since 1990 of 57,300. Hospitals account for roughly one-third of healthcare's employment and ended 2013 with 4.81 million on the payroll.

Hiring by nursing and residential homes was also sluggish last year. They added 24,600 employees in 2013, down roughly 40% from the annual average of 43,200. The sector accounts for about one-fifth (22%) of the industry's total employment. Nursing homes and residential facilities employed 3.22 million at the end of last year.

Ambulatory-care hiring, however, ended last year with hiring up nearly 30%. Ambulatory settings, which include dentists, chiropractors, outpatient care centers, diagnostic laboratories in addition to physician offices and home health agencies, added 270,200 jobs in 2013 compared with an average of 160,100 since 1990.

Ambulatory care accounts for about 44% of total healthcare employment and ended the year with 6.52 million jobs.

Kara Sullivan, a healthcare economist for the Bureau of Labor Statistics current employment statistics program, who described the sector as a “major driver” of healthcare employment, noted that the sector's 4,100 layoffs in December followed a hiring surge in November of 25,200.

The overall drop in healthcare employment in December is only the second time in 23 years of employment tracking that the industry has shed jobs. The last was in July 2003, when healthcare employment shrank by 9,000 jobs.

Follow Melanie Evans on Twitter: @MHmevans

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