Is Healthcare Still a Promising Field?

Healthcare has clearly been the bright spot in this recessionary job market. The industry has added more than a half-million jobs since the recession started, while most other industries cut workers and slashed payrolls in equal measure. Ask any career expert about the most promising field right now and you'll hear "healthcare."

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But the recession has done damage to the industry. Some hospitals have suffered as their access to credit has tightened and patients have delayed medical care, leading to some hospital closings, downsizing, and hiring freezes. Hospital employment actually dipped by a negligible amount last month, the Labor Department reported. Still, the key phrase among workforce experts, as regards the healthcare slowdown, seems to be "short term." And some industry sectors are doing better: Jobs were added last month in nursing and residential services and in ambulatory health services, which includes home health services and physicians' offices.

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A new report on California's healthcare field could shed some light on the situation nationwide. The study, conducted by Beacon Economics and funded by a grant from the California Wellness Foundation, finds that California's population will grow by 10.2 million people by 2030, and the number of its residents age 65 and older will more than double. The researchers estimate that the state will need to employ 1.2 million healthcare workers next year and 2 million workers in 2030. Factor in annual turnover, and the number of workers needed over the next two decades or so is actually much higher.

Although the recession has slowed healthcare job growth, "the overall trend remains upward," according to the study's authors. Government projections estimate that nationwide, overall healthcare employment will grow by 22 percent between 2006 and 2016. The California study's authors focused on the demand for allied health workers (think physical therapists, lab technicians, and dental hygienists, rather than nurses and physicians), and Susan Chapman, director of Allied Health Workforce Studies at the University of California-San Francisco, says that the state is facing a "serious shortage" in allied health positions because it lacks sufficient accredited training programs.

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News of healthcare labor shortages in recent years has tended to focus on nursing, in part because there are so many—more than 2.5 million registered nurses—employed in the United States. Healthcare providers that faced a shortage of nurses over the past decade should be able to breathe freer now, says Peter Buerhaus, director of the Center for Interdisciplinary Health Workforce Studies in the Institute for Medicine and Public Health at Vanderbilt University. The recession has caused many workers to return to the workforce because of financial pressures, helping alleviate the shortage. The fastest-growing nursing demographic is workers 50 years and older. Younger workers are also heading back into the field. Some nursing schools have tallied a record number of undergraduate and graduate applications this year.

But today's positive trends in nursing could cause trouble down the road. Buerhaus says that if the job market recovers quickly, many nurses may jump back out of the workforce similarly quickly. If, however, the recession is followed by a jobless recovery and unemployment remains high and older workers stay in their jobs, then job prospects for new graduates may suffer. In that scenario, news of a disappointing job market may discourage other young people from entering the field, and when older workers eventually retire, healthcare providers will be in an especially tight spot. "I think life's going to get interesting around 2015," Buerhaus says. "That's when I suspect we're really going to see these components begin to really exert their influence."