2010 Rural Partners Forum

Health Care: the context

Health care has remained an important economic catalyst for rural communities even as North Carolina experiences the most severe economic downturn in modern memory. In fact, it is challenging in rural parts of the state to find another more universally relevant economic driver.

Over the coming years, the health care sector will become an even more important segment of the total employment makeup of rural communities. The health care sector provides many points of entry for individuals with all levels of educational attainment while also offering multiple career pathways for individuals seeking to progress to higher paying and higher demand positions. Furthermore, any business taking the measure of a community’s economic development effort and making a decision about whether to grow or expand in that community will evaluate the quality and viability of the local health care delivery system.

The scope of the health care sector

All health care jobs fall within three categories: ambulatory (able to walk about, not bed-ridden or hospitalized), hospitals, and nursing and residential care facilities. In 2008, 595,800 establishments made up the health care sector in the United States. These establishments vary greatly in size, staffing patterns and structure. Currently, ambulatory health care services account for approximately 43 percent of all health care employment and 87 percent of all health care establishments; hospitals account for 35 percent of all health care employment and 1 percent of establishments; and nursing and residential care facilities account for 23 percent of employment and 11 percent of establishments.

Professions within the health care sector are defined as the allied health professions plus medicine, dentistry and nursing. Allied health professionals make up 60 percent of the total health care workforce, with medicine, dentistry and nursing making up the other 40 percent.  Definitions of allied health vary but generally agree that it is those health professions that are clearly distinct from medicine, dentistry and nursing, including professions such as audiology, dietitian, paramedic, massage therapist, medical coder, occupational therapist, optometrist, pharmacist, phlebotomist, radiologist, etc.

Most workers in the health care industry have jobs that require a degree or certification beyond high school but less than a four-year college education. Almost half of workers in nursing and residential care facilities, however, have a high school diploma or less. In hospitals, one worker in five falls into that category. On the other hand, the industry has some of the most highly educated workers in the entire United States labor force.

Large and growing sector

In 2008, health care provided 14.3 million jobs for wage and salary workers in the United States. Ten of the 20 fastest growing occupations are health care related. According to the U.S. Bureau of Labor Statistics, health care will generate 3.2 million new wage and salary jobs between 2008 and 2018, making it the single biggest generator of new jobs among all industries, largely because of the rapid growth in the nation’s elderly population.

Employment across all health care occupations is projected to grow approximately 23 percent, going from 14.3 million to 17.5 million by 2018. A range of skills, education and experience are represented in the fields with the greatest projected increases: physician assistants (41% increase), secretaries and administrative assistants (27%), physicians and surgeons (26%), registered nurses (23%), counselors (23%), and licensed practical and licensed vocational nurses (22%).

It is also important to note that the health care sector employs many part-time workers. Part-timers accounted for about 20 percent of all health care workers in 2008, but accounted for 37 percent of workers in dental offices and 32 percent of workers in offices of other practitioners. Shift work is common within the health care sector, but it is uncommon for the same worker to hold more than one part-time job.

The economic benefit of health care facilities on communities

The economic impact of the local health care system on a community is considerable. According to a recent study by the Kaiser Family Foundation, U.S. spending on health care totals $2.5 trillion or about 17.5% of the nation’s gross domestic product, compared with 13.8% in 2000 and 5.2% in 1960.

Many communities across the country have undertaken a financial analysis of the direct, indirect and induced spending effects of local health care facilities on the community. Clearly, these communities see a direct correlation between the presence of a health care infrastructure and the economic well-being and viability of the community. These communities also recognize that an evaluation of the quality of the local health care system will be high on the list of a company deciding whether to locate or expand in a given community.

One economic impact analysis of a rural county in Kentucky lists four major roles that the health care sector plays in rural economic development: 1) a local health care system keeps health care dollars within a local economy; 2) it attracts external dollars into a community from outside a local area; 3) a strong local health care system can retain existing businesses as well as attract new industries into a community; and 4) a local health care system can support and promote a healthy and productive workforce within a community. As an example, in Lyon County, Kentucky, 100 new health care jobs would generate an additional 21 jobs in the rest of the community. The health care system in Lyon County was responsible for a total of 374 local jobs, $14.3 million in revenue in the local economy and $8.5 million in wages.

The North Carolina picture

Between 2005 and 2009, total employment for health care and social assistance in North Carolina increased 15 percent, rising from 395,692 to 457,963.  Also since 2005, health care and social assistance surpassed manufacturing in terms of total employment.

The trend is expected to continue. In a recent list of North Carolina’s long-term occupational projections for 2006-2016, all three distinct areas of the health care sector rank in the top 10 for projected growth. Ambulatory health care services ranked No. 1 with 7,660 new jobs projected. Hospitals came in seventh with 3,379 new jobs, and nursing and residential care facilities ranked eighth with 2,290 new jobs.

Of all health care employment in North Carolina in 2005, 5% were physicians; 5% were licensed practical nurses; 24% were registered nurses; 26% were nurse aides, orderlies and attendants; and 37% were allied health professionals. With allied health being the largest segment of North Carolina employment, the 10 fastest growing allied health careers are:

• medical assistants (average salary $24,610);
• cardiovascular technologists and technicians (average salary $38,690);
• diagnostic medical sonographers ($52,490);
• physician assistants ($74,264);
• respiratory therapists and respiratory therapist technicians ($43,140);
• athletic trainers ($33,940);
• surgical technologists ($34,010);
• clinical laboratory technologists ($45,730);
• medical and health services managers ($67,430); and
• dietitians and nutritionists ($43,360).

Rural challenges

A shortage of health professionals in rural areas poses a significant problem. In 2005, 11 whole counties were in a designated a persistent health professional shortage area. Seven of the 11 were located east of I-95. Another 27 counties had a special population or a portion of the county that was in a persistent shortage area. Of those 27, all but five were rural. There is also a high correlation between the areas facing recruitment challenges and the relatively high rates of certain diseases, such as heart disease, stroke and diabetes.

Initiatives

Recruitment. A great deal of emphasis is being placed on medical placement services to assist rural communities and health care employers in the recruitment of primary care physicians, dentists, dental hygienists, physician assistants, nurse practitioners, and certified nurse midwives. The N. C. Office of Rural Health and Community Care offers a number of incentive programs including federal and state loan repayment and a high needs service bonus.

Workforce development. Because of the growing demand for allied health professionals statewide, the North Carolina Commission on Workforce Development solicited proposals from and awarded grants to seven regions of North Carolina. The purpose was to connect employers, training providers, community organizations, workers and other key stakeholders around the allied health sector to address the workforce needs of health care providers and the training, employment and career advancement needs of allied health workers.

Sources

“A Rural-Urban Comparison of Allied Health Average Hourly Wages,” N.C. Rural Health Research and Policy Analysis Center, January 2009.

“Allied Health Regional Skills Partnerships: Experiences and Recommendations,” N.C. Commission on Workforce Development, August 2009.

Career Guide to Industries, U.S. Bureau of Labor Statistics, 2010-2011 Edition.

Fraher, Erin P., et al. “Allied Health Job Vacancy Tracking Report.” Cecil G. Sheps Center for Health Services Research, April 2007.

Fraher, Erin P. “Creating a Healthy Economy and a Healthy Population: Why we need to pay attention to the rising demand for allied health workers in North Carolina,” Cecil G. Sheps Center for Health Services Research, August 22, 2006.

Johnson, Linda A. “Why health care’s economic impact matters,” The Associated Press, appearing in USA Today, June 19, 2009.

Industries at a Glance: Health Care and Social Assistance: NAICS 62, U.S. Bureau of Labor Statistics.

McDermott, Richard E., et al. “Calculating the economic impact of health care facilities on communities,” May 1994.

Scorsone, Eric. “The Economic Impact of the Local Health Care System on Lyon County Economy,” Kentucky Rural Health Works, August 2004