In the past 26 years I have had the pleasure of meeting some wonderful people in our industry, both providers and vendors. Healthcare is filled with talented, dedicated people. But sometimes all of us become so busy doing our jobs that we lose our perspective on what is going on in our business.
Right now healthcare is going through a boom period, although when I talk to people in healthcare about how well things are going, some of them look at me like I don't have all my oars in the water. Yet I see healthcare as being in the midst of a very prosperous cycle, even if many people don't know it.
In the past couple of weeks there have been stories in the Wall Street Journal, New York Times, Chicago Tribune and this magazine about the vitality of the healthcare market, a trend that will remain for a while. Here are a couple of statistics that ought to get your attention: In October alone, the healthcare industry increased the number of people it employs by about 24,000, bringing the year-to-date total job increase to 274,000. Contrast this with the fact that some 730,000 people lost their jobs in other sectors of our economy in October.
In a Modern Healthcare special report (Dec. 10, p. 38), reporter Jeff Tieman wrote, "Revenue and admissions are up. Healthcare stocks are performing ahead of major indices. Construction projects are increasingly common. And growing unemployment may provide hospitals with the manpower they need in the midst of widely reported staffing shortages." Uwe Reinhardt, a healthcare economist and professor of economics at Princeton University, echoes these sentiments: "In healthcare, people are building, expanding and hiring. People thought old-economy jobs like nursing were for losers, and now those positions are looking good. The old economy really wasn't that bad."
Not everyone in the old economy is looking that great. Look around and observe the trouble so many companies have gotten themselves into. They're overstaffed, overcommitted and overdiversified. In other words, they have forgotten to concentrate on their core business, and now are paying a terrible price of plummeting profits and the need for large-scale layoffs. Many of the companies involved are household names, and all of us have been surprised at the extent of the wreckage that has been wrought on the economy and people. But while a lot of this was going on in corporate America, the healthcare industry generally was downsizing, living within its means, emphasizing frugality in purchasing and generally rethinking the way it does business.
None of this means that healthcare is perfect. A lot of mistakes were made as the industry tried new ways of business, particularly when it tried to integrate into unwieldy systems. But I believe a lot of the soul-searching this industry has been through over the past few years is beginning to pay off. The industry doesn't seem to want to give itself credit for all this, but it should. Some of the best-run businesses in this country are healthcare organizations that corporate America would do well to emulate. Gail Wilensky, a senior fellow with Project Hope, a Millwood,Va.-based humanitarian relief and problem-solving organization, and a HCFA administrator under the first President Bush, states, "The health sector appears robust, continues to be robust, and does not appear to be affected by the same soft demand in the rest of the economy. I don't see anything in the short term that will change that."
Healthcare companies' growth plans also serve as a barometer of the industry's health. Walgreen Co., for example, expects by 2010 to have 6,000 stores in the U.S., up from 3,600 today. It also expects to double the number of pharmacists it employs to 26,000. Abbott Laboratories, long considered one of the premier drug companies in the world, says this year it will hire 2,000 new employees at its suburban Chicago location and another 5,000 companywide. GE Medical Systems reports its revenue will have grown 14% in 2001 to $8.3 billion from $7.3 billion in 2000.
So healthcare is alive and well, and we should all be proud we are part of this great growth industry.
Keep things in perspective,
Charles S. Lauer