ShareThisHospitals continue hiring and new medical offices are opening, providing a glimmer in a gloomy economy. But jitters over the economy are putting retirements on hold and forcing hospitals to rethink once-aggressive expansion plans.
"We are not in a position of business as usual," said Nancy Turner, spokeswoman for Sutter Health, a medical provider in Northern California. Sutter may delay projects that have yet to break ground, including construction of a long-awaited hospital in Elk Grove, Calif.
Aging baby boomers and a surge in the region's population will keep demand for health care strong, hospital officials say. But the boom of the past decade is clearly on the wane, revealing how the industry - while still outpacing other sectors of the economy - can suffer.
Last month, the American Hospital Association released an ominous report on how the financial crunch could make it difficult for hospitals to raise capital for expansions and major equipment purchases. The report also warned that the poor economy could cause patients to delay care.
In California, about two in five hospitals have halted construction plans or put off major purchases such as sophisticated imaging equipment, according to a yet-to-be released survey by the California Hospital Association. About 25 percent of the hospitals surveyed said they are having difficulty securing financing for construction projects.
Kaiser Permanente recently opened a $138 million emergency room in Roseville, and is moving forward on other projects in Roseville and south Sacramento. But the big HMO is delaying opening new hospitals in Vacaville and Vallejo.
As the economy bleeds more jobs, hospitals could face even more challenges.
Higher unemployment typically means more people without medical insurance, leading to fewer doctor visits. Financial worries compel more people, even those with insurance, to hold off non-urgent treatment.
That could lead to more uninsured people showing up at emergency rooms for primary care, forcing hospitals into the dilemma of treating patients who can't pay.
Officials say they haven't seen a noticeable drop in admissions at area hospitals, but the prospect is a growing worry.
Still, analysts see the health care industry as a stabilizing force in tumultuous times. The region has lost more than 10,000 jobs in the past year, but the health care industry remains a bright spot, according to Diane Patterson, a labor market analyst with the California Employment Development Department.
New employment numbers released Friday showing some job growth bear out the relative strength of the health care industry.
"We're going to see the health sector slow, but it's going to remain a healthy sector in the Sacramento region. Other sectors? Not so much," said Ryan Sharp, director of the Sacramento Regional Research Institute, a joint venture of California State University, Sacramento, and the Sacramento Area Commerce and Trade Organization.
The number of physicians, nurses, radiologists, admissions clerks, hospital bookkeepers and other health care jobs is expected to grow by nearly 31,000 positions, or 3 percent, by next fall, compared with the same period last year, according to projections by the state Employment Development Department. The health care industry accounts for nearly a third of the state's job growth.
California's overall job growth is expected to be just 0.6 percent.
But just as the slumping economy is bearing down on hospital construction, its effect on health care workers is unavoidable. Overtime hours are under increased scrutiny at. Both Turner at Sutter and Moran at Mercy say hospitals will continue to need staffing because people need care when they're sick or injured.
Yet hospital officials also are finding that job growth is being limited by a postponement of retirement by a growing number of veteran workers. At Sutter, for example, job vacancy rates have fallen dramatically as the economy has soured. Two years ago, the hospital system had a vacancy rate of 6.1 percent for all employees. The rate has fallen to 3.4 percent this year.
Health worker who do retire are speedily replaced by people eager to get into the field. Young job seekers are increasingly looking for careers in hospitals, dental offices and other health fields, according to a survey commissioned by the Wellness Foundation.
"They are tired of the downturns in their own industries and are wanting to get a new career," said Maria Steele, a job coach with Sacramento Works, a government-funded job and training program. "We've been seeing lots of young people trying to get into the work force, people laid off from AT&T and Mervyn's."
(E-mail Bobby Caina Calvan can be reached at bcalvan(at)sacbee.com.)
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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