Expanding Healthcare Workforce Beyond Federal Budget Allocation
In recent years, healthcare employment has witnessed significant growth, bucking some recent perceived notions. However, it's important to note that this surge isn't solely due to increased government spending. Instead, the COVID-19 pandemic has played a significant role in exacerbating workforce shortages in the healthcare sector, which are only now starting to be addressed.
Since the 1990s, healthcare employment in the United States has outpaced overall employment growth. By 2021, healthcare employment had risen from 7% to 11% of the total employment pool. Several factors have contributed to this trend. Firstly, there's been an increase in the consumption of healthcare services per person, as well as an escalating number of elderly individuals, as the baby boomer generation ages.
Seniors, who make up 18% of the population, account for 36% of overall healthcare consumption, according to a study published by the Peterson-KFF Health System Tracker. It's also worth noting that the elderly population has seen a 39% increase over the past decade, while the under-65 population has only grown by 3%.
The pandemic introduced numerous labor challenges across various sectors, with healthcare seeing some of the most dramatic issues. During the lockdown phase, numerous non-urgent medical facilities and clinics had to close their doors. Some employees opted not to return to work once these establishments reopened. The pandemic also led to an uptick in retirements within the healthcare sector. A growing number of workers, who were already considering retirement, seized the opportunity to retire early. Family pressure and safety concerns, particularly within healthcare facilities, further influenced these decisions.
Another factor contributing to labor shortages in healthcare was the closure of schools during the pandemic. The majority of healthcare workers are female, with 79% being women in 2019. With schools closed, many employees were required to stay home and take care of their children.
Stress also played a significant role in exacerbating labor shortages within the healthcare sector. When healthcare managers attempted to resume normal operations, they faced understaffing. As a result, remaining employees were overwhelmed, leading to an increase in voluntary resignations. In 2021 and 2023, the quit rate in healthcare surged by 25%, a stark contrast to the stable quit rates observed in 2018 and 2019.
Since then, the healthcare industry has begun to rebound, with younger workers replacing retired staff members and schools resuming normal operations. As a result, workplace stress levels have decreased, and the voluntary quit rate has dwindled.
However, healthcare managers will now have to navigate the challenges of a slowing growth rate in the working-age population, while also coping with an increasing elderly population. (I have written various articles on this topic, as well as one discussing how artificial intelligence can enhance productivity within the healthcare sector.)
In light of these challenges, investing in innovative healthcare solutions, such as telemedicine and AI, could potentially alleviate employment pressures by improving efficiency and reducing workload for healthcare providers. Moreover, these advancements could also attract a new generation of tech-savvy workers to the healthcare industry, contributing to its employment growth.
