The number of D.C. health care jobs was down by more than 2,000 in October compared with the previous year — the largest drop in any sector, according to a recent economic report from the District’s economists.
One regional economist pegs it to two things: industry consolidation and the simple fact that the health care industry just looks differently than it used to. Providers continue to be squeezed by health care reform, not to mention the uncertainty from the political wrangling around that issue and federal insurance reimbursement programs in the last year.
“There is a lot of pressure for cost containment,” said Stephen Fuller, head of the Stephen S. Fuller Institute at George Mason University. “They do that by cutting back on labor, but also changing the mix of labor within the health sector.”
According to his center’s figures, the District faced slightly fewer net job losses in health care last year, roughly 1,600 in all, including in hospitals, social services sectors and outpatient doctor’s offices. The drop comes after slowing growth in D.C. health care jobs in recent years.
The city’s drops contrast sharply with the Maryland and Northern Virginia suburbs, where there was a significant increase in health care jobs in the last year, mostly due to rising populations, according to the Fuller Institute. That’s helped offset D.C.’s dips resulting in about 3,400 net new health jobs regionwide in the last 11 months, Fuller said.
The economic impact of D.C.’s health job losses can be consequential, according to state-by-state data released this month from The American Medical Association. Its most recent report estimated the District’s 4,528 doctors contributed about $5.6 billion in economic impact and supported more than 34,000 jobs in 2015.
In D.C., “there are some specialties that are being dropped in certain locations,” Fuller said. “Even the biggest hospitals seem to be very tight.”
I’ve seen some hospital cuts in my own reporting in the last year. Seeking to cut about $9 million from its budget, Johns Hopkins Medicine-owned Sibley Memorial Hospital embarked on a round of buyouts over the summer. MedStar Washington Hospital Center announced in June it planned to lay off 100 employees, or about 2 percent of its workforce.
Meanwhile, smaller groups such as Providence Health System announced in August it would cut more than 260 jobs as it eliminated its behavioral health and obstetrics services by mid-October. United Medical Center made an undisclosed number of cuts after its obstetrics unit was shuttered in August.
The numbers, Fuller said, are also reflective of the shifting demand for certain health services. For instance, as hospitals and physicians offices seek more outside vendors to offer cloud-based data services for population management or to conduct data analytics for precision medicine, those jobs are increasingly counted in a sector such as “professional business services.” Or as more patients seek wellness or alternative health services, such as a fitness center, those services might be counted under “recreation,” Fuller said.
“The industry is reinventing itself and as a consequence, it’s defying easy measurement,” he said. “It used to be very easy to measure. You had hospitals and doctors offices and not much else.”
Health providers have been feeling the pinch from the job cuts, even as they also have trouble finding qualified workers for the jobs they have available. Several health care leaders such as Inova Health System CEO Knox Singleton and Children’s National Health System CEO Dr. Kurt Newman have raised concerns in recent months about the supply of health care talent in the local market.
“When physicians are under economic stress, they don’t grow their practices, they don’t bring on new partners, they don’t add mid-level practitioners. They basically freeze,” Singleton told me this fall. “The supply — because it can’t afford to grow — is staying stable or shrinking in areas like Northern Virginia.
“The next dynamic you’re going to hear in Washington,” he added, “is that you don’t have any health care workers.”
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Copyright Washington Business Journal, reprinted with permission