December 2007 marked the start of the most severe recession in modern times. For more than two years, the economy shed jobs. By the start of 2010, there were 8.6 million fewer jobs than at the start of the recession. These losses would have been greater had health care employment not continued to grow; jobs outside health care fell by 9.2 million while health care added nearly 600 thousand jobs. It took until November 2014 for non-health jobs to return to their pre-recession level, at which point health jobs had grown by 1.7 million. As of January 2017, there are 2.5 million more health jobs than at the start of the recession, an increase of 19 percent over a 9-year period during which the U.S. population grew by only 7 percent. While health jobs make up about 11 percent of total jobs, they have accounted for 35 percent of the jobs added since the start of the recession.
The remarkable performance of the health sector in continuing to create jobs through the recession and recovery has garnered much attention over the past few years. On the positive side, it has been credited with cushioning the impact of the recession, not only for those fortunate enough to land the new health jobs, but also for those whose non-health jobs were preserved by a health job “multiplier effect,” as health workers spent their income on other goods and services. On the other hand, it has been argued that this health job growth should not be celebrated because it has been wasteful, producing little in the way of improved health outcomes. According to this line of thought, we would have been better off curbing health job growth and investing the saved resources in other areas such as education, infrastructure, food, shelter, and retirement savings. A nice recent summary of these issues can be found here. This post informs continued assessment of the growth in health jobs by looking more closely at the nature of the 2.5 million health jobs added since the start of the recession.
Health Jobs Grew Fastest in Ambulatory Settings
The Bureau of Labor Statistics (BLS) monthly Current Employment Statistics (CES) survey measures numbers of jobs and wages based on responses from a sample of establishments. The data are reported by industry, including health care delivery in institutional, residential, office, and home settings.
An examination of the CES data from 2007 to 2017 reveals that two-thirds of the 2.5 million new jobs in health care were in ambulatory care settings. Ambulatory care includes home health, physician and other provider offices, freestanding clinics, dental offices, and labs. Health care jobs overall grew by 19 percent, with growth rates of 11 percent in hospitals, 12 percent in nursing and residential care, and 30 percent in ambulatory care settings. Within ambulatory care, home health had the fastest rate of job growth at 49 percent, physician offices grew by 17 percent, and jobs in all other ambulatory settings grew by 34 percent.
These patterns of growth have shifted the mix of jobs by delivery setting slightly since 2007. Currently, hospitals employ about one-third of health care jobs, down from 35 percent in 2007. The share of health jobs in ambulatory care settings is 46 percent, up from 42 percent in 2007, and nursing and residential care represents the remaining 21 percent, down from 22 percent in 2007.
It is important to note that jobs associated with ambulatory care delivered in hospital settings are counted as hospital jobs in the CES data. The American Hospital Association reports that 46 percent of hospital revenues in 2014 were from outpatient services, up from 38 percent in 2007. Thus, a large and rapidly growing share of the hospital jobs we report here are in ambulatory settings (note 1)
Health Jobs Grew Fastest in the Diagnosing and Treating Occupations
The monthly BLS CES data allow for very timely tracking of job growth in health care by industry, but they don’t answer the question of which occupations have been growing. To break out jobs by detailed occupation and industry, we used the annual Occupational Employment Statistics (OES) survey, an establishment survey implemented by the BLS and State Workforce Agencies. The most current OES results, representing 2015, combine data collected every 6 months from November 2012 through May 2015, with counts by occupation and industry benchmarked to the average of November 2014 and May 2015 results. The OES methodology creates a large enough sample size to estimate jobs and wages for detailed occupations within detailed industries, but trends over time will be muted. The 2015 OES data do not extend through the full period of robust health job growth we have seen through 2016; however, they do allow us to examine occupation-specific growth by setting from the start of the recession through the acceleration in job growth seen in the first year of expanded coverage.
Major occupational categories employed in health care include diagnosing and treating practitioners such as physicians, nurses, and therapists; other health care technical and support occupations such as aides, assistants, technologists, and technicians; and non-health occupations including administrative, management, and maintenance staff. Based on the OES data, the diagnosing and treating practitioners represent 27 percent of health care jobs, with registered nurses (RNs) the largest component (16 percent) and physicians, nurse practitioners, physician assistants, and other diagnosing and treating practitioners making up the other 11 percent (Exhibit 3). Other health occupations represent 35 percent of health care jobs. The largest share of jobs among these broad categories is the non-health occupations, which represent 38 percent of all jobs in health care.
Based on the OES data, between 2007 and 2015, health jobs overall grew by 15 percent (note 2). The fastest growth was in the diagnosing and treating occupations at 23 percent over this period, broken further into 21 percent growth in RNs and 25 percent growth in other practitioners such as physicians, nurse practitioners, physician assistants, therapists, dentists, pharmacists, optometrists, and chiropractors (Exhibit 4) (note 3). Growth in other health care occupations, such as aides and technologists, was much slower at 13 percent over this period. This category includes more than half a million licensed practical and vocational nurses (LPNs), an occupation that showed no growth overall, as declines in hospital employment of LPNs offset gains in home health and nursing homes. The major category with the slowest rate of growth was non-health occupations (12 percent), a diverse group that includes secretaries and administrative assistants, information and records clerks, personal care and service occupations, food preparation and serving, and management, among many others. Note that because non-health jobs make up a large share of total jobs in health care delivery (38 percent, as noted earlier), this lower rate of growth was still associated with six hundred thousand new jobs over this period.
Health jobs grew at an average annual rate of 1.8 percent from 2007 to 2013, increasing to 2.3 percent growth as coverage expanded between 2013 and 2016. While the coverage expansion may be largely exhausted, and could even reverse, population aging will increasingly place upward pressure on the health care workforce as the baby boom population ages into their peak years for health care demand.
Changes in how health care is provided to different populations may have implications for the growth of specific occupations. For example, the greater increase in home health versus residential care may reflect increasing efforts to provide more home and community supports rather than institutional care for the elderly, which should generally reduce costs and improve quality of life. The relatively higher growth in ambulatory care occupations may reflect increased efforts to focus on primary care and prevention and substitute outpatient settings whenever possible for inpatient care (as noted above, this trend is also apparent within the hospital category where care is increasingly outpatient). This trend also has the potential to reduce growth in health care spending over time, as much of the recent focus toward value-based care is essentially designed to reduce hospital use.
Finally, the OES data show a downward trend in the ratio of support personnel to those engaged in the direct diagnosis and treatment of patients. This is, perhaps, a sign that ongoing efforts to improve efficiency are having a desired effect.
If the ambulatory share of hospital jobs mirrors its share of revenue, then hospital ambulatory jobs grew by 35 percent over this period while inpatient jobs dropped by 3 percent.
Over the same time period, the monthly CES data show a comparable 16 percent growth.
The 2015 OES data separate NPs and other advanced practice nurses from RNs but this was not done in the 2007 data. Our growth rate calculations required us to approximate this breakout in 2007.