Blog Post

Hospitals lost jobs—again

August 2, 2013

    Dan Diamond, Managing Editor

    The latest employment numbers are out—and for the third time in 2013, they're bad for hospitals.

    According to the latest Bureau of Labor Statistics estimates, the hospital sector lost about 4,400 jobs in July. Taken on its own, that figure's not so great; if it holds up, July 2013 would be one of the five worst-performing months for hospitals in the last decade.

    But a rough July follows a slow June (just 400 new hospital jobs across the nation) and a near-historically terrible May (hospitals lost 9,000 jobs). And that was the worst month for hospital job growth since July 2003.

    (The latest BLS report is also eye-catching because the broader health care sector added only 2,500 jobs...the worst month for the entire sector since, again, July 2003.)

    Some labor expects aren't surprised by this rough patch for hospital hiring—they've been expecting it. When I spoke with economists like Harvard University's Amitabh Chandra and Carnegie Mellon's Martin Gaynor a few weeks ago, they suggested a few hypotheses for why hospital job growth has been slowing down. Gaynor pointed to shifting patterns in care delivery—with more patients seeking care outside of the hospital—and Chandra noted that a recent wave of mega-mergers has contributed to consolidation and job loss.

    I asked Chas Roades, the Advisory Board's Chief Research Officer, for his take on the latest jobs numbers, given that he speaks with dozens of hospital CEOs every month.

    "It reflects a growing theme of belt-tightening," Roades agreed. Hospital executives are wary of hiring, he noted, given that they anticipate reductions in payment over the coming years.

    When I reached Chandra on Friday afternoon, he pointed out that a slowdown in health care employment also has positive connotations; the data could suggest that hospitals are achieving improvements in productivity. "So this is a good thing, right?" said Chandra. "[Although] not for the people who lost their jobs."

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