Hospital layoffs hardly dented employment growth

March 3, 2014
Back to TopCommentsE-mailPrintBookmark and Share

You wouldn’t know it, judging by the federal government’s employment data, that three of the five largest hospital layoffs in the nation last year occurred in Indiana.

Even though the state’s three largest hospital systems eliminated a combined 2,700 jobs, it created just a blip in the long-term run-up in hospital employment.

You can see the growth in employment in Indiana’s hospitals in this chart, courtesy of the U.S. Bureau of Labor Statistics:

Indiana Hospital Employees
Hospital payrolls December were down 1,500 compared with the same month a year earlier. But employment in physician offices was actually up, by about 900 positions. So overall health system employment dropped by 600.

These are preliminary numbers, so the results could change. But, assuming they don’t, the cuts of 2013 had the effect of setting back hospital employment to the level it was at in August 2012.

That’s it.

That doesn’t make the job losses any easier for the people affected—both those let go and those left with more work to do in their absence.

But, in spite of some other indicators to the contrary, the job cuts don’t lead me to conclude that hospitals are fundamentally changing their ways. With 60 percent of hospital expenses tied up in labor, the cuts of 2013 were a slight trim, really, to the high-spending ways of many Indiana hospitals.

Consider that Indiana hospitals employ 17.7 workers for every 1,000 residents in the state. That’s a fair bit higher than the 15.2 workers employed by hospitals nationally, per 1,000 U.S. residents. (To calculate these ratios, I used the Census Bureau’s estimated 2013 population totals.)

And the rate of employment growth has been faster in Indiana—even after the cuts of 2013—than it has been nationally. From December 1997 to December 2013, U.S. hospital employment grew by 25 percent. But employment at Indiana hospitals during the same period grew 32 percent.

Indiana also employs slightly more people in physician offices than the rest of the country--7.88 workers per thousand residents in Indiana versus 7.84 workers per thousand nationwide. However, the long-term growth in physician office employment has actually been a tick higher nationally than in Indiana—46 percent versus 43 percent, respectively, since December 1997.

There are many reasons why Indiana needs more health care workers than the rest of the country. Hoosiers are, in general, older and sicker than their peers nationwide. As a case in point, consider my story from a couple years ago on Anderson, Ind., being the most expensive metro area in the country for health care spending by private payers—76 percent higher than the national average.

But it’s also true that some communities in Indiana feature much higher hospital prices than their peers nationally. Consider this study showing much higher prices in Kokomo and Indianapolis than in comparable cities. Physician prices in those communities are somewhat higher, too, though not nearly as off the charts as hospital prices.

As I showed last year, these factors are causing Hoosiers to spend $5 billion more per year on health care than they would be if health status and prices here equaled the national average. That excess spending costs employers and workers an extra $2.3 billion per year. And it costs the state government about $534 million per year.

No matter who’s at fault, that’s a problem.

And it’s a problem that, in spite of the unprecedented nature of the 2013 layoffs, is far from really being addressed. Those cuts only bought the state a one-year reprieve in the onward march of health care spending.

  • Haas
    For the record they replaced higher paying jobs with office workers? My bet is they are not even close to the end result. This bill will urbanize health care. You as a consumer will not have the choice to get treated by whom you desire or in the place you desire. You will be shipped to a large medical center. The bill just lowered the bar across the whole country and with that note we changed the system because some people found it unaffordable . How is your coverage now?

Post a comment to this blog

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
  1. Gay marriage is coming, whether or not these bigots and zealots like it or not. We must work to ensure future generations remember the likes of Greg Zoeller like they do the racists of our shame.

  2. Perhaps a diagram of all the network connections of all politicians to their supporters and those who are elite/wealthy and how they have voted on bills that may have benefited their supporters. The truth may hurt, but there are no non-disclosures in government.

  3. I'm sure these lawyers were having problems coming up with any non-religious reason to ban same-sex marriage. I've asked proponents of this ban the question many times and the only answers I have received were religious reasons. Quite often the reason had to do with marriage to a pet or marriage between a group even though those have nothing at all to do with this. I'm looking forward to less discrimination in our state soon!

  4. They never let go of the "make babies" argument. It fails instantaneously because a considerable percentage of heterosexual marriages don't produce any children either. Although if someone wants to pass a law that any couple, heterosexual or homosexual, cannot be legally married (and therefore not utilize all legal, financial, and tax benefits that come with it) until they have produced a biological child, that would be fun to see as a spectator. "All this is a reflection of biology," Fisher answered. "Men and women make babies, same-sex couples do not... we have to have a mechanism to regulate that, and marriage is that mechanism." The civil contract called marriage does NOTHING to regulate babymaking, whether purposefully or accidental. These conservatives really need to understand that sex education and access to birth control do far more to regulate babymaking in this country. Moreover, last I checked, same-sex couples can make babies in a variety of ways, and none of them are by accident. Same-sex couples often foster and adopt the children produced by the many accidental pregnancies from mixed-sex couples who have failed at self-regulating their babymaking capabilities.

  5. Every parent I know with kids from 6 -12 has 98.3 on its car radio all the time!! Even when my daughter isn't in the car I sometimes forget to change stations. Not everybody wants to pay for satellite radio. This will be a huge disappointment to my 9 year old. And to me - there's so many songs on the radio that I don't want her listening to.