Healthcare Employment Faces a Long Recovery After Pandemic

Declines in both healthcare employment and revenue because of the COVID-19 pandemic spell trouble for providers, a recent analysis by Peterson-KFF indicates. 

In previous years, healthcare employment has been almost unaffected by recessions, unlike other non-health sector jobs. However, during the COVID-19 recession, the health sector suffered a sharp decline alongside employment in other sectors. 

Health employment experienced an unprecedented drop of 9.3 percent in April 2020 from the previous month. Meanwhile, non-health employment dropped over 14 percent.  

Health and non-health sector jobs started to bounce back in May of 2020 after the drastic fall they faced at the beginning of the pandemic, but the recovery remained incomplete.

The report stated, by July of 2020, the healthcare industry achieved 95 percent of pre-pandemic job numbers. In November of 2021, employment in the healthcare industry remained 2.7 percent lower than it did in its previous peak during February of 2020.

The study found that nursing homes and community care facilities experienced a prolonged decrease in healthcare employment, despite other healthcare service industries reporting an upturn in jobs from drops in employment by the summer of 2020. 

In February of 2020, for example community elder care facilities had over 970,000 employees nationwide. However, in November of 2021, they faced an 11.1 decrease with only 867,700 employees. 

Nursing facilities have experienced a 15.0 percent drop in employment since February 2020. The industry went from having 1.59 million employees to 1.35 million in November of 2021, with declines in employment every month. 

Before the pandemic, nursing facilities had an average decline of 0.09 percent per month. The pandemic accelerated this rate of decline, employing 13.4 percent fewer workers than projected in the absence of the pandemic. 

Outpatient care and physician’s offices increased employment rates by November of 2021, exceeding the number of healthcare workers employed in February of 2020.

Despite slight growth, these industry employment rates remain below their expected pre-pandemic levels. 

In addition, home and hospital healthcare organizations were within 2.0 percent of their pre-pandemic employment number. 

The analysis showed that in February of 2020, 1.55 million Americans were employed in-home health services versus 1.53 million in November of 2021. 

There is a progressive recovery of lost jobs compared to the beginning of the pandemic, but between 2017 and early 2020, employment in home health was growing at a rate of 0.28 percent per month. 

The KFF analysis predicts that if this projected growth had continued throughout 2020 and 2021, home health services would have 1.64 million employees instead of 1.53 million. 

The analysis also notes that job openings in the healthcare sector are higher than their pre-pandemic levels by 51.9 percent. 

Workers have been quitting their job at higher rates than before the start of the pandemic. 

Healthcare and social assistance workers are quitting increased to 35 percent higher in comparison to pre-pandemic levels, 29 percent higher all workers in the same period. 

“The increase in job quitting among healthcare workers has received attention in the media, though a large number of workers are quitting jobs across all industries (the ‘great resignation’) – in fact, quit rates were at the highest levels ever recorded in October 2021,” the report stated. 

Healthcare job wages have seen an increase since February of 2020. Average weekly wages increased by 10.8 percent from $1,037 before the pandemic to $1,148 in October 2021. 

 Industries that were the quickest to recover from employee drops have seen the slowest wage growth since February 2020, such as physician offices at 5.6 percent.