Hospitals and the healthcare industry posted another month of robust job growth in February even as a looming repeal of the Affordable Care Act hangs over the sector.
The healthcare sector created 26,800 jobs in February, surpassing the 18,300 new positions in January, according to the February jobs report issued Friday by the Bureau of Labor Statistics.
Healthcare was among the sectors that drove total national jobs creation in February to a better-than-expected 235,000 jobs. Analysts had expected the number to be just shy of 200,000. The national unemployment rate stands at 4.7%.
Strong jobs growth raises the specter that the Federal Reserve may increase the benchmark interest rate in the coming weeks from a near-historic low of 0.5% to 0.75% where it now stands. The Fed raised the rate a quarter point in December, which was the only increase in 2016.
Even with an interest rate increase, the rates remain so low so as not to hamper healthcare borrowing, said Megan Neuburger, a managing director with Fitch Ratings. Hospitals, most of which are not-for-profit, rely on debt to finance growth and facility replacement.
Only very low-rated debt issuers would be affected if their interest payments were to increase slightly, Neuburger said. A small interest rate uptick would not be material enough to affect most healthcare companies, she said.
Healthcare companies are more concerned with the ACA repeal and replacement process, Neuburger said.
Hospital revenues and profits could be hurt by continuing uncertainty over insurance reforms. The changes could also restrict access to capital for some systems, particularly “lower rated issuers with debt maturities in 2018-2020,” Neuburger and colleagues at Fitch wrote in an analysis Wednesday.
Despite the long-term uncertainties, the industry still needs more workers to care for patients. The aging population remains a long-term tailwind for the industry as does growing consumer awareness of the importance of early and preventative care, Neuburger said.
Of the 26,800 jobs added last month, the ambulatory healthcare services subsector grew the most with 18,300 jobs created. Ambulatory services grew by 7,100 jobs in January.
Hospitals added jobs in February as well. Hospital jobs grew by 6,300 positions compared to 1,700 added in January.