Hospitals at the frontline of healthcare job growth, accelerated by Medicaid expansion

Editor’s note: This is the second of two stories about rising employment in Arkansas’ education and health services sector. Link here for the first story.
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As Arkansas lawmakers prepare to take up the debate on Medicaid expansion in the upcoming special session next month, hospital administrators, executives and industry representatives are already dealing with the impacts of the state’s newly insured population.

According to Bob Sarkar, president of Arkansas Health Network, changes are seen at every level of hospital operations, from hiring doctors and nurses to enhancing recruitment efforts and finding IT personnel to handle the mountains of data on newly insured patients.

As the chief executive of physician’s network within the within CHI St. Vincent Health System in Arkansas, Sarkar is centrally involved in improving patients’ healthcare outcome, while controlling costs for doctors within the hospital group’s statewide system.

“Being in the frontline of care …, we are almost seeing a 10% increase in our patients just in Little Rock,” said the healthcare executive. “Our hospital beds are almost full, but if you research it – it is not just in Little Rock but across the state. And what is happening in Little Rock is happening across the rest of the country.”

According to state workforce statistics, there were 167,200 health care and social assistance jobs in Arkansas in December 2015, up 7,400 jobs compared to December 2014, and up an impressive 43% compared to the 117,000 jobs in December 2000.

EXPANDING TO MEET DEMAND
In a wide-ranging interview concerning the myriad of growth challenges that Arkansas hospitals are facing, Sarkar touted recent statistics that support recent state and federal labor data forecasting health jobs will grow faster than any other sector over the next decade, adding 400,000 to 500,000 jobs to the U.S. economy each year.

Sarkar mentioned a widely-cited study by the Kaiser Family Foundation from August 2015 showing the state’s private option expansion dropped the state insured rate among non-elderly adults from 27.5% to 15.6%, and led to a 55% drop in uncompensated care in the state’s hospitals between 2013 and 2014.

“That is very commendable from the perspective of patients who didn’t use to get health care coverage. We can directly attribute that to our 245,000 covered population through our exchanges under the Medicaid expansion,” Sarkar said “As a result, to support that kind demand in the market and our ministries, we have to have the right caregivers to support that demand.”

With Medicaid expansion now a reality in Arkansas and other 18 states in which Catholic Health Initiatives (CHI) operates, Sarkar said the nonprofit, faith-based hospital group has made considerable investments to improve its level of care and stay ahead of the patient “demand curve.” For example, CHI announced in early 2014 an ambitious companywide plan to invest $1.7 billion on strategic initiatives that included market expansion, a system wide information technology infrastructure and improved capabilities in areas such as virtual health, insurance products and clinically integrated networks.

In Arkansas, Sarkar said those investments in every area of the hospital group’s operations have been key in addressing the state’s growing high-risk population now accessing the healthcare system.

MORE PATIENTS, MORE JOBS
Paul Cunningham, executive vice president of Arkansas Hospital Association, said that group’s members at local hospital across the state are also now dealing with consumers brought into the healthcare system through Medicaid expansion. Cunningham said recent growth, as shown in state and federal job market data, can be directly traced to the fact that there are more people insured.

“That is bringing more people into hospitals on in inpatient and outpatient basis,” said the representative for the 86-year old state healthcare trade association. “The combination in Arkansas of what has been “private option,” and what hopefully turns into Arkansas Works has certainly paved the way for lot of people to access healthcare services who have not accessed it before.”

But beyond that, Cunningham said, the number of Arkansans who get healthcare insurance off the federal exchange has also increased demand for services, which eventually “takes you down the road of hiring more people.”

University of Arkansas for Medical Sciences Chancellor Dr. Dan Rahn said the state’s only academic health sciences center participates in the healthcare job market on three levels: as an educator, a health care provider and contributor to the state’s business community.

“That gives us a window into the existing areas of shortage in the state and what are projected to areas of shortage in the future,” he said.

On the educational side, Rahn said almost all of UAMS graduates get a job in their respective field at the time of graduation.

“The vast majority of them do that in Arkansas, and there is a demand of skilled individuals in the health profession across a very wide spectrum,” he said. “People think of primary care doctors, but really across a very wide spectrum in the industry there is more demand than supply.”

Rahn added there will be a strong demand for health care professionals in nearly every category of the industry. In the hospital setting, the UAMS Chancellor mentioned nursing, physical therapist, IT professionals and other physician specialists as high-need areas across the state.

“In Arkansas, there is a distribution issue,” he said. “It is easier to fill positions in areas of Northwest Arkansas and Central Arkansas than it is in our rural areas. Addressing the pipeline issue those areas is a very important thing to do.”

TECHNOLOGY SUPPORT NEEDED
Like Sarkar and Cunningham, UAMS’ chief executive officer also said the need for health information technology professionals in the industry has increased with the push for information sharing, electronic medical records, and what he called “healthcare and biomedical informatics.”

“The individuals who have the capability of managing large amounts of data and information and the data that is in our electronic health information systems and converting that into useful information that helps us improve our practice – that is an area of real demand,” he said. “The former role of medical record technician system has changed because we are on medical electronic information systems now.

“So it’s not pulling files and things like that, or filing information in a paper file – it’s really knowing how to provide the technical support to the growing electronic health information systems,” Rahn said.

HEALTHCARE POLITICS
Like others in the healthcare industry, Rahn will be watching the upcoming legislative session that begins April 13, and if asked, will participate in the proceedings.

“I think that the governor’s proposals for Arkansas Works are very sound and sensible proposals that take advantage of the options available to Arkansas at the present time to make access to healthcare available across the state and to the entire population,” Rhan said. “A healthy, well-educated population is in my opinion the foundation economic development in the future and the best way that we approach that focusing our systems on way to becoming healthier as a society and address issues when they arise as early as possible.”

Still, there are some who consider the recent and projected healthcare growth as a double-edge sword, given that nearly 18 cents of every dollar from the U.S. economy as measured by Gross Domestic Product (GDP) was dedicated to healthcare spending in 2015.

According to Ann Arbor, Mich.-based Altarum Institute’s Center for Sustainable Health Spending, the health sector added 38,100 new jobs in February, the sixth straight month of annual growth above 3%. Hospitals added 10,600 jobs, comparable to the 24-month average. Consistent with recent patterns, health jobs grew 3.2% year over year, while non-health jobs grew 1.7%, putting the health share of total employment at a new all-time high of 10.71%.

In his monthly report on the healthcare sector, Altarum’s founding director Charles Roehrig wondered if the surge health spending is sustainable over the long term.

“Health spending growth in 2015 was considerably higher than the previous 6 years, yet it decelerated throughout the year, indicating that the 2015 surge was temporary,” Roehrig said in the think tank’s March report. “While the return to slower growth is comforting, we remain concerned about what rate of growth will be slow enough to be sustainable long term.”

THE QUESTION OF ‘DESIRABLE’ GROWTH
Kathy Deck, director of the Center for Business and Economic Research in the Sam M. Walton College of Business at the University of Arkansas, also said the political conversation about the state’s growth of health care infrastructure should also consider whether the lion’s share of GDP and job growth is desirable.

“In some ways it is desirable because we are able to spend our money being … a healthier population – in that way it’s fantastic,” said the university economist. But, Deck continued, “in many ways it is undesirable because we want to get a good value for good health. I think what happens sometime in the conversation that gets lost is – especially when you talk about keeping healthcare cost in check – is that you really want to pay less to providers of that healthcare, whether it is being more efficient by fewer doing more work, or actually paying people who do the work less reimbursement.”

Deck said another way to look at the Labor Department’s projections of more than 20% growth and the addition of more than 2.3 million jobs to the healthcare sector over the next decade is that “as a society we are not being successful in realizing efficiencies in healthcare.”

“It means we are going to see an ever increasing part of our population and GDP growth devoted to healthcare, while other industries, like manufacturing and retail, are expected to have the kind of efficiencies that will allow them to employ, or have a lower growth rate with fewer employees,” she said.

Rahn, however, called the provision of healthcare a “team sport.” He said UAMS and other healthcare providers will need a team of employees that are at the top of the game in every area of the industry.

“There is a lot of change going on as we focus more and more on how to get healthy as a community and a society as a whole,” he said.