The Hospital Industry and Workforce – Before and After the Pandemic Recession

by Lynn Wallis

May 5, 2022

The hospital industry is a sub-sector of the one of the largest industries in the nation – the health care and social assistance industry. National employment in the health care and social assistance industry reached 20.3 million in March 2022 and made up 13.6% of total industry employment. The hospital industry made up 25% of the health care and social assistance industry, employing 5.1 million workers in March 2022.

Oregon’s hospital industry made up 23.4% of employment in the state’s health care and social assistance sector, which employed 288,504 workers with a payroll of $17.4 billion in 2021. The hospital industry is made up of four ownerships — private, and local, state, and federal government. In 2021, Oregon’s hospital industry (all ownerships) employed 67,202 workers and had a payroll of $5.7 billion. The majority of hospitals in Oregon are privately owned (86%) with the remaining hospitals being run by local government (8.8%), federal government (2.6%), and state government (2.6%).
Higher Demand but Lower Supply of Workers

Oregon’s economy is continuing to recover the jobs lost during the initial pandemic recession and has regained about 9 out of 10 jobs lost in spring 2020. The number of job openings is greater than the labor force available to fill them in a number of industries. According to the Oregon Employment Department’s Winter 2022 Oregon Job Vacancy Survey, the number of private job vacancies totaled 100,145, and 71% of vacancies were reported as difficult to fill. The health care and social assistance sector reported the second-highest vacancies of any industry at 17,256. 

In the first half of 2020, Oregon’s hospital industry (all ownerships) shed 1,705 jobs. The industry has continued to lose more jobs, with declines totaling 2,647 by the end of 2021. As of fourth quarter 2021, employment in hospitals was 3.8% below its level in fourth quarter 2019, just prior to the pandemic.
One Year after the Pandemic

Before the COVID pandemic, there were 74,263 workers in Oregon whose industry of highest earnings was the hospital industry. Of those, only 58,928 (79%) were still employed by hospitals in Oregon as of spring 2021, just one year later. To compare what retention looks like in any given year, the first quarter 2018 cohort of the hospital industry was examined. One year later, 81% of this 2018 cohort remained employed in a hospital, a slightly higher share than the 79% among the COVID-impacted cohort. Where did these workers go?
The analysis showed that nearly one out of 10 (9%) or 6,682 hospital workers who remained employed in Oregon in third quarter 2021 shifted their industry of highest earnings to a different industry. The largest shares moved to jobs in other health care and social services (3.7%); professional and business services (2.8%); and local government (1.1%). There could be numerous reasons for hospital workers to change their industry of employment during the heavy throes of the COVID pandemic. Some of the reasons cited in a health care worker survey conducted by included insufficient pay or opportunities, burnout, overwork, and COVID-19 safety concerns.
Typical Occupations in the Hospital Industry

Workers from many types of occupations and with various types of skills work in hospitals, including health care professionals, office workers, food services, housekeeping, and grounds keeping and maintenance workers. In Oregon, the largest occupation in hospitals during 2020 was for registered nurses, who made up nearly one-third of the industry’s employment. The next largest occupations were nursing assistants (5.7%), maids and housekeeping (2.9%), medical secretaries (2.9%), medical assistants (2.8%), interviewers (2.4%), and physicians (2.0%).

Current Industry News

As stated in the American Hospital Association’s February 2022 Fact Sheet, “The COVID-19 pandemic has precipitated extraordinary challenges for hospitals and health systems and the communities they serve.” Since February 2022, there have been almost 80 million confirmed COVID-19 cases, 900,000 reported COVID deaths, and over 4.5 million inpatient admissions with COVID-19 in the nation.

Health care services is but one role that hospitals play in their communities. They also provide economic stability by creating jobs and purchasing goods and services from others in their communities. According to AHA, hospitals in the U.S. supported 17.6 million jobs (one out of eight jobs in the nation) and supported $3.6 trillion in economic activity in 2020.

A recent journalism article from Healthcare Dive reported, “Healthcare workforce shortages today are unprecedented. Some hospital leaders fear the worst is yet to come.” According to the Bureau of Labor Statistics, health care organizations in the U.S. will need to fill nearly 200,000 open nursing positions every year until 2030. The aging nursing population who will be retiring over the next two decades will create more staffing shortages. A survey from the National Council of State Boards of Nursing showed that the average age of a registered nurse in the U.S. was 51 years old in 2020.  
The aging of the workforce is also apparent in Oregon’s hospital industry. In the second quarter of 2021, nearly one-quarter of hospital workers (all occupations) were 55 years or older and another 22.5% were 45 to 54 years. In an attempt to increase the supply of nurses in Oregon, House Bill 4003 was introduced in the 2022 legislative session and eventually signed into law. This bill increases the scope of nonresident emergency nursing licenses, increases access to mental health supports and creates new internship licenses to allow more entryways in the workforce for student nurses.

From 2014 until the start of the COVID-19 pandemic, the workforce in Oregon’s hospitals increased at an average annual rate of 2.1%. Then from 2019 to 2021, the hospital workforce fell by 1,501 workers, a decline of 2.2%, while the number of hospitals in the state actually increased by 12 establishments.

The aging workforce is but one factor that could be contributing to the current labor shortages. According to a survey conducted in February 2022 by staffing firm, Incredible Health, more than one-third of nurses said that it is very likely that they will leave their roles by the end of 2022 and 44% cited burnout and a high-stress environment as the reason. Nurses also cited benefits and pay were the second leading reason (27%) for quitting their jobs.

Although the race to retain and attract an adequate and talented workforce is intensifying, hopefully, emerging technologies such as artificial intelligence to augment health care delivery and an emphasis on improving conditions for health care providers will help to mitigate the impending shortage.

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