Some hospital executives have said they are slowing their hiring amid uncertainty over the ACA, according to anecdotal reports.


Feb. 6—Hospitals added 4,200 positions in January—far less than half as many as were created in the previous month and far below the 2016 monthly average, according to new federal data.

The total for January was a big drop from December, when hospitals added 10,700 positions, and finished far short of the 12-month average of 11,600, according to an Altarum Institute analysis.

But it probably is too soon to see the drop in new positions as indicative of a larger trend, according to industry observers.

“It could be an indication of a slowing down in hiring; it’s just hard to say after one month,” said Ani Turner, co-director of the Center for Sustainable Health Spending at the Altarum Institute.

Turner had been expecting for a while to see a slowdown in hiring at hospitals, which added an average of 10,000 jobs per month over the last two years. The slowdown likely stemmed from a leveling off of Affordable Care Act (ACA) coverage expansions, which were lagged by both the newly covered seeking care and providers hiring to meet that increased demand.

Also expected to slow hospital hiring was the increased uncertainty around Republican plans to repeal and replace the ACA. Impacts from such a change would depend on numerous factors, including the breadth of insurance coverage, the allocation of payments for hospital uncompensated care costs, and the status of Medicare pay cuts that have been required by the ACA.

Hospitals could be particularly vulnerable to a reduction or elimination of the ACA’s expansion of Medicaid eligibility. Medicaid programs have added 16.4 million enrollees since the expansion started in October 2013, according to a recent report from the Centers for Medicare & Medicaid Services (CMS). While elimination of the Medicaid expansion would directly affect only funding to the 31 states that expanded eligibility, the loss of that $78.5 billion in 2019 would result in 451,000 fewer healthcare jobs that year, according to a new projection. Another 86,000 healthcare jobs would be lost in non-expansion states because of indirect economic impacts from expansion states.

“With that kind of study out in the news media, it would make absolute sense that hospitals are going to be tightening their belts at this point until they see what happens,” said Patricia Pittman, PhD, co-director of the GW Health Workforce Institute at George Washington University and an associate professor of health policy and management.

Hospital hiring limits are common tools amid uncertainty, finance experts note.

“It’s unclear if hospitals have tightened hiring in response to uncertainty related to the continued coverage of some portion of the expansion population,” said Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA. “That said, cash conservation strategies are a reasonable response until there’s more clarity on health policy moving forward.”

Turner noted that imminent legislative changes to the ACA sound increasingly unlikely. Still, the latest employment numbers come amid anecdotal reports that some hospitals are slowing hiring in response to uncertainty over the fate of the healthcare reform law. Andy Slavitt, former acting administrator of CMS, said in an interview that more than one-third of large health system executives surveyed at a meeting he attended in early February were taking such steps.

Slavitt said freezing hiring—a commonly used cost control measure—can shrink hospitals’ workforces by up to 20 percent in one year.

“There are plenty of folks who have said ‘No, this is about jobs; this is impacting jobs,” Slavitt said about the impact of federal policy uncertainty that hospital leaders have raised in recent conversations.   

The latest hiring numbers thus may be the first indication of post-election caution regarding employment.

“We were a little surprised that through the end of the year things still seemed to be going gangbusters; we thought there might be a little bit of a pause, but it may be that things were already in motion in November and December … so we’re just starting to see it in January,” Turner said in an interview.

Regional trends also may differ from the national employment figures. For instance, many rural locations are facing shortages of hospital nurses, especially experienced nurses and specialty nurses, Pittman said.

An overall slowdown also could be impacted by pre-existing market factors, such as an aging nursing workforce that may put off or accelerate retirements based on how the economy is performing.

Other Providers Affected

The January hiring slowdown was widespread in the healthcare sector, which added 18,300 jobs overall—far less than the 30,000 monthly average over the past two years.

Far fewer new positions were added in various outpatient settings—11,000 in January, compared with 20,000 per month over the last two years. Specifically, physician offices added only 800 jobs in January, compared with about 5,000 per month over the past two years.

“Those were areas—hospitals and physicians’ offices—where we saw an uptick for quite a while,” Turner said. “We’re assuming there was more demand for services in those settings with more people having insurance. It wouldn’t be unexpected to see some leveling off in the growth there.”

Areas Affected

Although public data lags on which professions have been part of the healthcare hiring boom in recent years, Turner’s analysis has found that as of 2015, hospitals were focusing on hiring higher-paid medical professionals: physicians, nurses, nurse practitioners, physician assistants, and therapists. Business office positions also were added but at a slower pace.

“It isn’t the case—as some people have speculated—at least nationally, that all of the growth has been in administrative jobs; there’s been plenty of growth in the provider categories as well,” Turner said.

Meanwhile, Pittman and colleagues have identified a small decline in clinical support staff amid the recent hiring boom, even as hiring of nurses and other clinical staff accelerated. If hospitals undertake large job cuts in response to coverage rollbacks, such data may indicate that cuts would come amid clinical support staff.

“It’s likely, in part because they don’t have professional associations to squawk on their behalf and because there are no clinical-support staffing laws—whereas in nursing there are staffing laws in a subset of states,” Pittman said.


Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

Publication Date: Monday, February 06, 2017