Something is Happening Here

Last Friday’s March job report revealed some interesting numbers about those that work in healthcare.  The review in HealthLeaders is very interesting (find article here).  The folks on CNBC stressed the slowdown in hiring in healthcare from roughly 40,000 new jobs in both January and February to 26,000 in March.  A monthly slowdown maybe, but note that in the first quarter there were 40,000 more new jobs than in the first quarter last year.  This is very impressive in that healthcare added close to 300,000 or 18% of all new jobs in 2011.  Healthcare is very important to the health of our labor market.

It is very interesting to contrast the huge growth in healthcare with the reports last week that in 2011 there were 4-5% percent fewer office visits than the year before and this was compounded on a similar decline the year before.  Looking just at that data, it seems the healthcare world may be in a downturn, but perhaps that might be erroneous.  We need to look at ways where these two sets of data make sense.  Remember that total healthcare spending growth still continues to outpace GDP.

Perhaps all of this can be explained through the lens of a sector in transition.  Could it be the healthcare world is ramping up for the changes mandated by the Affordable Care Act, where millions more patients should be brought into the system?  Everyone seems to be gearing up to take advantage of Accountable Care Organization contracts with the government, commercial insurers or both.  As electronic medical records are becoming more fully utilized, there is a tremendous need for IT professionals.  Physician offices and retail clinics are making greater use of PA’s and NP’s and with each of these there is a need for more support staff as well.  Perhaps the positive aspects of “greed” may be emerging as organizations recognize that with some investment in people, they may be able to take greater financial advantage of the changing market situation.  In so many ways, this is the indication of an upswing.

The question not asked by the pundits is what is the right number of workers given the changing healthcare environment?  There are still so many inefficiencies in the way things are done.  Go into any physician office and you see patients filling out gobs of paperwork, and reading/signing lots of legal release forms.  Everyone is trying to understand their portion of their bills after the insurance companies, often mistakenly, decide what they will cover.  There is very little coordination of care between different physicians.  The patient, unless they meticulously keep their own data, has no permanent health record other than what exists in several physician offices.  All this seems to take a lot of time by healthcare workers and it doesn’t seem too productive.

Hope can come from the fact that everyone seems to now understand the problem and work is beginning to rectify these things.  To me, an example of a world in transition is seeing nurses lugging around bulky outdated laptop computers from room to room in order to take the same history you just wrote out while sitting in the waiting room.  They may be starting to fix things but still have a ways to go.  Wouldn’t it be nice to have all doctors be able to access information on say an iPad that connects to a patient’s total medical record from perhaps a cloud storage area?  It is coming, but until then we are in a state of transition.

With all this energy around hiring and reinventing healthcare it may be time for the pharmaceutical part of the industry to do the same.  We have gotten very good at dismantling sales teams and even downsizing research and other headquarters groups.  What seems to be missing is the massive hiring in new areas to take advantage of the new healthcare environment.  When the rest of the healthcare world is hiring, retooling and building and the branded pharmaceutical companies are not, this may be setting up a less than ideal future situation.

I don’t know if all the hiring is good, bad, or a little of both but I am excited that it seems everyone is preparing for change.  Companies are experimenting, and for sure some will not be going down the right path and there may be some waste.  The hope is that from this chaotic environment a new more efficient world will emerge.  Definitely something significant is happening here.

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