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April 13, 2022
Health Care Practice / Quality COVID-19
Gail R. Wilensky
May 23, 2022
Back to The Milbank Quarterly Opinion
Although it may be premature to regard the United States as in a postpandemic world, the health care workforce is showing signs of returning to its prepandemic level. In December 2021, employment in health care remained largely flat, followed by a relatively small gain of 17,000 jobs in January 2022. After adding 64,000 jobs in February 2022—including gains in home health services of 20,000, physician offices of 15,000, and other practitioners’ offices of 12,000—health care employment remains down approximately 2% from what it was in February 2020.1
At least some of the labor shortage in health care may be pandemic-related, although a portion of it is probably related only indirectly. During the pandemic, some health care workers were forced to work long hours to cover for colleagues who had contracted COVID-19 or who were reluctant to work because of COVID-vulnerable family members. Other workers used their time at home to consider potential alternative sources of employment and may have decided to pursue other areas of work that were more appealing, or more lucrative, or would allow for different types of learning experiences. This phenomenon of considering other potential work options was not restricted to health care workers, the period already having been dubbed the “great resignation.”
Unlike the experience of recent decades, it was not only the supply of health care and health care workers that was affected. This time, both the demand for health care and, therefore, the demand for health care workers were also affected. Previously, health care had seemed to be recession-proof. During the Great Recession of 2008, for example, health care served as an important stabilizer to the economy. Unlike other sectors, health care employment continued to grow during the recession, although at a less robust pace than it had been growing before the downturn.
In the early stages of the COVID-19 pandemic, the entire economy went from a period of record growth and historically low unemployment to a complete standstill. Whole sectors of the economy—particularly those involving nonessential services such as recreation, retail sales, and personal services—shut down completely. Even health and medical care that was deemed nonemergent came to a halt, with patients postponing preventive services and even cancer treatment and other surgery that was regarded as not immediately essential. Some of the care was deferred; other care may have been postponed indefinitely. Already reports suggest some cancer patients are showing up with more advanced stages of cancer as a result of delayed care, although it is unclear whether mortality rates will also be affected.
As late as November 2021, when most of the economy had reopened, employment in health care was still 2.7% below what it had been immediately before the start of the pandemic. In non-health-care sectors, employment was 2.5% lower than it had been. The number of people who had decided not to return to the labor force—which impacts the labor force participation rate—was also down almost two full percentage points, from 63.3% to 61.6%.
Overall, unemployment and labor force participation rates were not distributed equally by geography or gender. As of the spring of 2021, men were employed at rates comparable to the prepandemic period. The same, however, was not true for women, especially those who were working in nursing home and residential care facilities. According to a report by Pew Research Center, the labor force participation rates for women fell more than they did for men, while the adjusted unemployment rate for women was 9.8%, similar to men at 9.9%. Many health care workers also reported that they were considering leaving their jobs and, in some cases, the field entirely because of the burnout they had experienced during the pandemic or because of the reduced pay they had received relative to the working conditions they had endured.
The pandemic-induced stress and burnout also were observed with the staffing shortage reported during the recent Omicron wave of COVID-19. One result has been a large increase in hospitals’ demand for traveling nurses, even though these nurses are usually able to demand larger salaries and sometimes sign-on bonuses. That can lead to increased levels of dissatisfaction among existing nursing staffs at community health centers, hospitals, and nursing care facilities if existing staff are not paid at the same level as the traveling nurses.
To no one’s surprise, health care workers have been demanding increased pay, increased fringe benefits, and other perks, along with reductions in hours worked. Other industries are also seeing increased demands by workers for better pay, expanded benefits, and better working conditions. According to the Economist, higher rates of churn are likely to be an ongoing part of the economy.2
Responses to the health care worker shortages, particularly shortages of nurses, can most usefully be viewed in two categories: those that can be implemented in the short term versus those that will require more time before they can be implemented.
In the short run, hospitals and other providers of health care can provide child care for health care workers who need it, perhaps using a sliding payment scale so that lower-wage workers are not shut out of this option. This can be done on the hospital or other health care campus or contracted out to existing child care facilities, if available.
A second short-term measure is to increase the number of nurses and other health care workers who are allowed to immigrate to the United States. This solution was not available during the pandemic, since the borders were closed. While some may question the appropriateness of encouraging a medical “brain drain” from other countries, the backlog of health care professionals seeking clearance to the United States should be resolved. The American Association of International Health Recruitment reported that, as of fall 2021, 5,000 international nurses were awaiting final visa approval.3
The way health care will be organized and delivered over the next decade will affect the numbers of physicians, nurses, and other health care workers that will be needed, but the shortages that had been predicted for nurses and physicians before the pandemic make it highly likely that postpandemic shortages will be substantial. Prepandemic predictions estimated shortages of 139,000 physicians and 500,000 nurses.4,5 Even if the majority of these professionals become part of integrated delivery systems, such as Kaiser Permanente, Intermountain Healthcare, and Geisinger Health, and even if the mix of nurses at various levels of training and physicians of various specialties approached the care delivery models used by the military and the Veterans Health Administration, it would be hard to imagine the United States not needing significant numbers of new health care workers.
Over the long term, US policymakers will need to decide whether to expand the number of nursing schools or the class sizes of existing nursing schools. Lawmakers in several states have passed legislation expanding nursing schools.6 In response to concerns about future physician shortages, 29 new accredited medical schools and 17 new schools of osteopathy have opened since 2002. The focus is now on expanding the number of paid residency positions available for the increased numbers of medical school graduates. The recently completed 2022 residency match program showed a 5.4% increase from 2021 and a record-high 39,205 positions filled.
Employers can also help. Experts recommend conducting “stay interviews” rather than exit interviews to find out what keeps employees working, rather than focusing on what has driven people to quit. Interviewers also should spend more time helping employees think about career paths.2
The concerns about future physician and nursing shortages are real. Both short- and long-term solutions will be needed to avert a crisis in health care delivery. Whether the distribution of physicians by specialty and geographic location will meet the nation’s needs is another matter.
Gail R. Wilensky, PhD, is an economist and senior fellow at Project HOPE, an international health foundation. She directed the Medicare and Medicaid programs and served in the White House as a senior adviser on health and welfare issues to President Georege HW Bush. She was also the first chair of the Medicare Payment Advisory Commission. Her expertise is on strategies to reform health care, with particular emphasis on Medicare, comparative effectiveness research, and military health care. Wilensky currently serves as a trustee of the Combined Benefits Fund of the United Mine Workers of America and the National Opinion Research Center, is on the Board of Regents of the Uniformed Services University of the Health Sciences (USUHS) and the Board of Directors of the Geisinger Health System Foundation, United Health Group, Quest Diagnostics and Brainscope. She is an elected member of the Institute of Medicine, served two terms on its governing council and chaired the Healthcare Services Board. She is a former chair of the board of directors of Academy Health, a former trustee of the American Heart Association and a current or former director of numerous other non-profit organizations. She received a bachelor’s degree in psychology and a PhD in economics at the University of Michigan and has received several honorary degrees.
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