News | Labor Cost Management

Hospital industry sheds jobs for the first time in 20 months

News | Labor Cost Management

Hospital industry sheds jobs for the first time in 20 months

  • Hospitals dropped about 2,000 positions in July amid a historically tight job market.
  • Ambulatory care added the vast majority of new positions in healthcare jobs.
  • A hospital executive identified challenges in finding clinicians and described how his organization is responding.

Hospitals cut a net 2,000 positions in July, marking the first time this year they lost jobs as a sector.

The decline in seasonally adjusted hospital positions was the first since November 2017, when hospitals shed 2,400 positions, according to data from the U.S. Bureau of Labor Statistics (BLS).

The hospital job losses came amid otherwise strong growth in healthcare jobs in July, with a net gain of  30,400. No other category or subcategory of healthcare lost jobs.

Nearly all those gains (28,900) came in ambulatory care. Within that category, the biggest job gainer was home healthcare services, which added 10,700 positions.

The July decline for hospitals left their 2019 total growth at 31,900 seasonally adjusted jobs. Since the start of 2009, hospitals have added 572,200 jobs, according to BLS data.

Hospitals have added about one-sixth of the 2.97 million healthcare jobs created since the start of 2009, according to BLS. In total, 16.4 million Americans are employed in healthcare, including 5.2 million by hospitals.

Other July healthcare job gains included:

  • 3,000 in physician offices
  • 3,800 in dentist offices
  • 7,300 in offices of healthcare practitioners (including physicians)
  • 2,400 in outpatient care centers
  • 1,500 in medical and diagnostic laboratories
  • 3,600 in nursing and residential care facilities

Hospital facing labor supply pressures

The hospital hiring downturn came as hospital leaders report increasing challenges finding staff in an economy with the lowest unemployment rate in 50 years.

For instance, this week leaders of Universal Health Services, a large, for-profit hospital operator, identified challenges in finding enough qualified clinical personnel.  Responses that UHS outlined to investors included:

  • Focusing on outperforming local competitors in the hiring of clinical personnel
  • Emphasizing recruitment and retention policies
  • Maintaining flexibility and adopting a “willingness to be creative” in staffing

“But it's absolutely a challenge,” said Steve Filton, CFO of the hospital company.

Credit outlook

The July jobs growth in ambulatory care highlighted the increasing financial pressures on hospitals due to the shift from inpatient to outpatient care, which ratings agencies have noted for years. In a March ratings outlook from Fitch Ratings, the shift in sites of services was one of the reasons it expected hospitals to face “weaker reimbursement.”

In addition, the unusual challenges hospitals face in an expanding economy were outlined in an April report from Moody’s Investors Service.

“During periods of stable and rising economic growth, hospitals often face nursing shortages, greater scheduling challenges, higher overtime pay and wage inflation,” the report stated. “But during economic slowdowns, the labor market for hospitals improves as some nurses come out of retirement seeking employment. Meanwhile, others who work part-time seek to take on more shifts and a greater workload.”

About the Author

Rich Daly, HFMA senior writer/editor,

is based in the Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare

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