There’s good news about the job market; but behind the positives there are some troubling realities.
April marked the 103rd straight month of job gains and resulted in a 50-year low unemployment rate of 3.6%. Specifically, a Bureau of Labor Statistics (BLS) report observed that notable job gains occurred in professional and business services, construction, healthcare, and social assistance. However, underlying this in post-acute and long-term care facilities, hospitals, and other healthcare settings, labor costs are increasing and operating margins are shrinking.
According to one report, labor costs in healthcare organizations represent about 60% of net revenues. At the same time, operating margins have gotten smaller as Medicare and Medicaid, instead of private insurance, have become primary payors for most patients. While technology has increased labor intensity, this hasn’t resulted in substantially fewer jobs or lower labor costs.