Healthcare Staffing Report: April 11, 2019

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SIA publishes updated overview of the US healthcare staffing market

SIA recently published its US Healthcare Staffing Market Assessment: 2019 Update report, which provides a concise discussion of supply and demand drivers, employment trends by setting and occupation, and highlights key staffing industry data for the four subsegments of travel nurse, per diem nurse, locum tenens and allied healthcare staffing. We discuss a sampling of report findings below.

According to a recent Modern Healthcare CEO Power Panel survey, hospital CEOs anticipate their top growth strategies in 2019 to be updating current business lines (42%) and innovation (25%). Only 13% named M&A as their top growth strategy, down from 26% the year before.

The CEOs surveyed anticipate their biggest challenges in 2019 to be rising expenses (71%), competition for talent (58%), regulatory and reimbursement pressure (46%), Medicaid changes (25%) and transitioning to value-based payments (17%). Half of CEOs reported that hiring would stay the same in 2019, with 13% anticipating increased hiring. Three quarters responded that front-line caregivers are most in need. According to the US Bureau of Labor Statistics, the 2018 unemployment rate was 1.4% for healthcare practitioners and 3.4% for healthcare support occupations (assistants/aides). 

The cost pressures cited were in line with a recent Moody’s report, which noted that hospital expenses grew faster than revenues in both 2016 and 2017. Although the median expense growth rate of hospitals decelerated from 7.1% in 2016 to 5.7% in 2017, revenue growth declined faster from 6.1% in 2016 to 4.6% in 2017. Hospital median operating margins decreased from 2.7% in 2016 to 1.6% in 2017. The share of hospitals with operating losses increased from 17% in 2016 to 28% in 2017.

The decline in hospital spending growth was due to better control of labor and supply costs. The moderation in revenue growth was due to ambulatory competition, the shift from inpatient to outpatient care and lower reimbursement rates.

Despite these near-term pressures on hospitals, long-term healthcare employment trends continue to be positive. According to the Bureau of Labor Statistics, approximately 16 million people were employed in the healthcare industry in 2016. This is expected to grow 19% to 19 million employed by 2026. Additionally, the Health Resources and Services Administration, an agency of the US Department of Health and Human Services, anticipates that demand for RNs will increase 28% by 2030 and the Association of American Medical Colleges projects the physician shortage will reach between 42,600 and 121,300 physicians by 2030.

Although hospital employment is projected to grow 7% from 2016 to 2026, faster growth is anticipated across other healthcare facility settings, resulting in a continued expected mix shift to the home healthcare and ambulatory healthcare settings. During the same period, employment growth in healthcare support occupations of 28% is also expected to outpace growth in healthcare practitioners of 15%.

After the influx of newly insureds from the Affordable Care Act peaked in 2016 and began to level off, the healthcare staffing market growth rates returned to more normalized levels in line with the overall temporary staffing market.

The US temporary healthcare staffing market is projected to grow 4% in 2019 to a record $17.4 billion. This projection will be updated in SIA’s upcoming US Staffing Industry Forecast report to be released by the end of April 2019.

The trends mentioned in this article are discussed in greater detail in SIA’s US Healthcare Staffing Market Assessment and can be downloaded here.

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