The mass exodus of workers recorded at the beginning of the COVID-19 pandemic sloganed as "The Great Resignation" once applied to hospitals. But not anymore, according to an analysis published in NEJM Catalyst.
To compare healthcare employment trends and wages in a systematic way, Amitabh Chandra, PhD, director of health policy research at the Harvard Kennedy School of Government and professors of business administration at Harvard Business School in Cambridge, Mass., and Louis-Jonas Heizlsperger, doctoral student in economics at University of California, Berkeley, explored healthcare employment, hours and wages from March 2006 to June 2023.
Their analysis of Bureau of Labor Statistics data shows employment in hospitals (including occupations of physicians, physician assistants, registered nurses, licensed practical nurses, medical technicians, and non-clinical workers) is now slightly higher than what it was at the start of the pandemic and substantially higher in physician offices. Real wage growth in these settings has exceeded inflation — in the short run and over the long run. Nursing homes make up the one setting that has not seen an employment rebound; as of June 2023, employment in nursing homes was 6% lower than pre-pandemic levels.
"The pandemic introduced sharp declines in employment, particularly in physician offices, nursing homes and residential facilities, and to a lesser degree in hospitals," the authors write. "However, within a year, employment in physician offices and hospitals had been close to fully restored, which was substantially faster than the rest of the economy, where it took 2 years for employment to return to pre-pandemic levels."
The finding is in line with a previous analysis from Altarum, which reported that by the end of summer 2023, healthcare employment was 3.2 percent above where it was before the pandemic began and exceeded the non-healthcare employment gain over the same period.
Dr. Chandra and Mr. Heizlsperger went one step further in the latest analysis to propose four explanations why the 'Great Resignation' narrative has sticking power with hospitals, even after their employment levels have adjusted to exceed pre-pandemic levels.
1. Healthcare leaders may be overfocused on quit rates versus hiring rates or employment growth. Negativity bias may have leaders more attuned to the effects of losing employees than hiring them, "but it is not reassuring for society if healthcare leaders are prone to ignoring highly relevant data," the authors note.
2. Hiring is harder. Hospital employment has exceeded pre-pandemic levels, and the work it takes to hire may be greater, too. Posting advertisements, negotiating and recruiting new employees, and training and onboarding them at increased wages — only to risk seeing them quit again and get hired elsewhere — is demanding work. Worth mentioning, too, is the scrutiny and tighter management of contract labor costs that health systems have demonstrated the past couple of years.
3. Workers — both those who never quit and new hires — could be burned out and may want to resign. "Well-being and labor shortages are different economic concepts but may manifest themselves in the same way to employees," the authors note. While healthcare employment has largely recovered, real wages have lagged inflation, which would amplify feelings of burnout. Separately, the CDC measured healthcare workers' mental health, safety and well-being pre- and post-pandemic and published findings this past fall, noting increases in experiences of harassment, feelings of burnout and intent to resign.
4. Healthcare workers view all existing shortages as pandemic-induced. "While this is possible, it bears repeating that current employment levels and hours worked exceed pre-pandemic levels (and this does not even count the short-term, stop-gap use of healthcare professionals hired through and attributed to the employment services segment), so it is difficult to argue that preexisting shortages have worsened," the authors write. "However, if the workforce is burned out, it is possible that it feels like there are shortages, which introduces a very different policy problem than addressing shortages."
"Outside of nursing homes, the narrative of stagnant wages, vacancies, and low employment receives no empirical support, and policy makers should be skeptical of advocacy by hospitals for financial assistance to overcome labor shortages induced by the pandemic, without obtaining better facts about these alleged shortages," the study authors conclude.
Read the analysis in full on NEJM Catalyst.