As manufacturers shed workers and once-hot technology companies cut staffing to the bone, the nation’s health-care industry–to the delight of its workers–is showing no similar signs of distress.
Take registered nurse Nancy Moser and her colleagues, who recently won pay hikes of up to 24 percent over the next three years: Their employer, Great River Medical Center in southeast Iowa, is expanding even as two nearby manufacturers are laying off scores of workers.
Moser understands why she’s in the money despite hard times around her: “We’re hurting at the hospital for staff at a lot of units,” she said. “So they had to come through with some cash.”
Her experience isn’t that unusual–at least for health-care workers. Some hospitals, nursing homes and even drugstores, faced with record numbers of open positions, have resorted to dangling five-figure bonuses to help fill empty slots.
Moreover, the hiring binge is expected to continue for the $1.3 trillion health-care industry, as it expands to serve a rapidly aging population of Baby Boomers while embracing sophisticated technology that requires more medical technicians and information specialists.
Last month alone, health-care concerns added 32,000 jobs, government figures show. Other industries eliminated more than 300,000 jobs, driving up the nation’s unemployment rate to 5.7 percent in November, the fastest rate for job cuts in two decades, according to the U.S. Department of Labor.
In Illinois alone, struggling giants such as Motorola Inc. and UAL Corp. have laid off workers by the tens of thousands as the recession deepened.
“In health care, people are building, expanding and hiring,” notes health-care economist Uwe Reinhardt of Princeton University. “People thought old-economy jobs like nursing were for losers, and now those positions are looking good. The old economy really wasn’t that bad.”
Health care pays off
A number of forces that go beyond the aging population have converged to create the demand for health workers. For one, managed-care rules that had limited patient access to care have eased, creating more demand for services. And the rise of the dot-com industry also had siphoned off talent that needed to be replaced.
Those who stuck with the health-care field are now reaping the benefits.
Nurses at Iowa’s Great River will receive raises of between 6 percent and 12 percent in the first year of their contract, and between 5 percent and 6 percent in the second and third years.
By 2003, Great River’s registered nurses will make, on average, $21.10 an hour.
“Our raise sounds like a huge amount, but it just kept us even with a lot of areas,” said Moser, an obstetrics nurse at Great River and president of Local 7181 of the Communications Workers of America in Burlington, Iowa. “We don’t compare with what they are paying on the coasts and other areas of the country for nurses and other health-care jobs.”
Indeed, clinical staff pharmacists are being offered between $40 and $50 an hour and $15,000 sign-on bonuses for certain openings at McHenry County-based Centegra Health System, which owns two hospitals in the northwest Chicago suburbs.
“In health care we don’t have enough staff as you look at the demographics with Baby Boomers going forward and retiring,” said Carolyn Bowmer, vice president of human resources at Centegra.
Nationally, average hourly earnings for health workers rose 5 percent in October from a year ago, to $15.69, while other private employers gave raises of 3.8 percent, to $14.50 an hour, government figures show.
Of course, raises and signing bonuses play a role in pushing up medical-care costs, now rising at 16 percent a year and showing no signs of slowing.
Higher insurance premiums remind economists of the health inflation of the late 1980s, when there also was a shortage of nurses and other medical workers. Premiums rose 18 percent to 20 percent in the late 1980s, economists said.
Inflation unchallenged
This time, however, the forces that reined in health inflation a decade ago have been tamed by consumer backlash against those very efforts.
Managed-care plans that helped control costs by squeezing payments to doctors and hospitals in the early 1990s have lost clout as consumers and lawmakers rebelled.
“The insurance industry has now been burned by the managed-care backlash,” Princeton’s Reinhardt said. “So now hospitals and doctors are raising rates, and insurance companies are powerless to turn them down. I don’t see anything that is going to stop this.”
The drug sector alone could see a huge increase in business, should Congress expand the Medicare health insurance program for the elderly to include a pharmaceutical benefit for its nearly 40 million beneficiaries.
But even without a drug benefit for millions more Americans, pharmaceutical companies and drugstore chains are expanding at a record pace as newer and more effective treatments come on the market.
Deerfield-based Walgreen Co. is opening more than one store a day. “We will be at that pace for the foreseeable future,” said spokesman Michael Polzin.
By 2010, Walgreens expects to have 6,000 stores, up from 3,600 today. It also expects to nearly double its number of pharmacists from the 13,000 it employs.
“Our growth is primarily driven by the aging population,” Polzin said. “The older you get, the more prescriptions you need. But the manufacturers are coming out with more prescription medications to treat more diseases.”
Abbott Laboratories, the giant North Chicago-based maker of drugs and other medical products, said it will hire 2,000 new employees at its sprawling Lake County headquarters next year and another 5,000 companywide. Abbott last year received 200,000 applications for 5,000 open positions.
Although Abbott said its hiring for next year is “typical,” and reflects both turnover and expansion, the company will expand as a result of its $6.9 billion acquisition this year of BASF AG’s Knoll Pharmaceuticals.
Because jobs abound in the health-care sector, employers are beginning to educate the next generation of job seekers about opportunities to avoid shortages in future years.
Centegra Health System is working with northwest suburban junior high schools to encourage students to at least be thinking about the health-care field as a potential career.
“I would say we have a 10-year period of time where the health-care industry needs to be working with public schools, government and universities,” Centegra’s Bowmer said.
