Industry Overview: Health Care

Posted by The Editors on December 3, 2012

The numbers don't lie: Providing 13.5 million jobs and 8 out of the 20 fastest growing occupations, health care is the country's largest industry. Compared to other industries, the health-care industry as a whole is expected to realize a relative increase in the number of career opportunities across the spectrum of its many specialties.

People are living longer and thus demand more and higher quality preventive and long-term care. The demand for health-care workers is expected to grow faster than the average rate for all occupations between 2000 and 2010. In particular, the demand for home care aides, registered nurses, physician assistants, nurse practitioners, physical therapists, nontraditional health aides, and physicians will continue to increase at a healthy pace. This trend also applies to technical and administrative jobs, as hospitals continue to focus their energies on more efficient management and profitability.

Many people are attracted to the health-care industry for its human touch and service-oriented aspects. However, the harsh reality is that the industry as a whole is all business these days. Hospitals, nursing homes, home health care, specialized clinics-and even to some extent organizations that provide alternative medical treatments-are being run increasingly like any other major for-profit organization. Simply put, health care today is all about big business-with its focus sharpening on driving profits higher.

The health-care industry provides diagnostic, healing, rehabilitation, and preventive services. The individual physician is often the consumer's (or patient's) primary point of contact with the system. However, it is the health-care organization itself-that is, the hospital or health management organization (HMO)-that finances much of the industry today; it represents the preponderance of the physician's revenues. The lion's share of these revenues, in turn, comes from employee health insurance plans, Medicare (health insurance for Americans over the age of 65), and Medicaid (health insurance for Americans on welfare). Health-care organizations (with the exception of county hospitals) are generally run for profit. This disconnect between organizations based on the profit motive and those operating as nonprofits creates tension among doctors and other health-care professionals intent on prescribing the most cost-effective treatments and conducting diagnostic tests. Health-care organizations are increasingly driven to cut costs across the board.

Alternative Medicine
A growing segment of the population is turning to a wider, more diverse set of techniques and therapies to meet health-care needs. The catchall category of alternative medicine refers to any practice outside of conventional medical treatments, including homeopathy, acupuncture, massage therapy, and chiropractic. The granddaddy of the movement is Dr. Andrew Weil, who preaches the benefits of treating a patient holistically, serving the body, mind, and spirit.

Americans are increasingly turning to herbal remedies to treat ailments, spending over 4 billion dollars a year on herbs and other botanical remedies. Health-care providers and insurance companies are beginning to recognize the legitimacy of some of these alternatives and to accept some nontraditional techniques for treating chronic health issues.

Runaway Costs
Doctors and hospitals have been grappling with rising costs for a long time-and each year the problem seems to get worse. Malpractice insurance premiums, soaring prescription-drug prices, and the increasing numbers of uninsured Americans are all factors leading to ever-higher costs for caregivers. At the same time, revenues for doctors and hospitals keep falling, as insurers are doing everything in their power to lower payments for claims.

Meanwhile, insurers are not feeling the squeeze nearly as much as the caregivers. The reason: They make sure that revenue from premiums rises at a higher rate than claims payments.

The Uninsured Nation
Currently, some 43.6 million Americans have no health insurance. The number of uninsured Americans continues to grow like an epidemic. Why? Insurance premiums continue to skyrocket as health insurers consolidate their businesses through frequent mergers and acquisitions. The result of this trend is a continued decline in competition among health insurers-and higher premiums are one of the results. Indeed, employers are facing double-digit percentage increases in health premium costs each year. The upshot: More and more of the cost of health insurance is being passed on to employees, meaning many people simply can no longer afford health-care coverage-considered a necessity (indeed even a birthright, many argue) in any industrialized nation.

Despite the increased outsourcing (not uncommon in any industry today) of medical records, housekeeping, lab testing, and clinical services (e.g., orthopedics and radiology), hospitals remain the biggest employers in the health-care industry. The huge networks such as HCA and Tenet demand a steady supply of doctors, nurses, administrators, medical technicians, therapists, and other support staff. In areas where competition from HMOs is mounting and cost-cutting is a priority, former staff may move outside the immediate confines of a hospital. However, close and important links remain-particularly for any type of surgery or specialized treatment such as chemotherapy.

HMOs and PPOs
Health maintenance organizations (HMOs) and preferred provider organizations (PPOs) are hybrids-basically, a cross between a hospital and an insurance company. Each type of managed care plan covers primary care visits, preventive services, and copayments for prescription drugs, whereas only PPOs allow the enrollee to choose his or her physician (HMOs maintain a list of plan-approved doctors). Some of the largest organizations have their own medical staffs and facilities where they treat patients; smaller ones may simply access networks of private providers and hospitals. Competition is fierce in this arena-M&A and internal strife often destabilize the job market. Coventry Health Care, Humana, Harvard Pilgrim Health Care, and PacifiCare Health Systems (one of the leading Medicare HMOs) are a few of the better-known players.

Specialty Providers
As hospitals have attempted to cut costs, they have turned to firms that can provide specialized services at rock-bottom prices. These include everything from nursing homes (Beverly Enterprises) to home infusion therapy providers (Apria Healthcare) to diabetes treatment providers (American Healthways). Clinics that focus on special treatments such as chemotherapy, MRI and other scanning techniques, and physical therapy are also proliferating. Most are small and locally run; however, Gambro and Fresenius Medical Care are two enormous service companies that focus on this type of care; others will undoubtedly emerge as their popularity increases.

Home Care
Advances in technology have done much to improve efficiency and reduce costs for both patients and home care staff. Today, home care nurses and aides can administer complex treatments previously available only in hospitals and clinics to the elderly and severely disabled in their own homes. And because almost all hospitals and HMOs now release patients before they are self-sufficient, home care is often the most cost-effective choice. Most jobs in this sector don't require much training (they are closely supervised by RNs, NPs, or physicians)-just deep reserves of patience and kindness. The pay is low-often less than $10 an hour-and the work is arduous. The rewards? In addition to extremely flexible hours and plenty of personal contact with patients, there is the satisfaction of helping people when they are most in need.

The various health-care positions require varying levels of education and training. Registered nurses (RNs) are trained at the undergraduate level, whereas nurse practitioners (NPs) have received master's degrees in their specialties. Physician assistants (PAs) are licensed to practice medicine under the supervision of a physician. Doctors of osteopathy and medical doctors both complete 4 years of postgraduate work to earn the titles of DO and MD, enabling them to prescribe medicine and perform surgery. To qualify for some positions (including doctor, nurse, tech), technical training is required-and to actually land a job, you often need a strong network in a given area and practical experience in the industry.

RNs, pharmacists, and radiological technicians are currently in very high demand and will continue to be in the decade ahead. Why? The Baby Boomer population is maturing into retirement, the elderly population in the United States is growing, and health-care spending is being cut wherever possible-which means that today, whenever a nurse can do something a doctor used to be responsible for, that's exactly what's going to happen. Employers are looking to attract people to these in-demand professions by offering signing bonuses, tuition reimbursement or loan repayment, flexible scheduling, and incentives for voluntary overtime shifts.

The good news doesn't end there: Opportunities will also grow at a healthy clip for just about every other health-care function, including doctors, optometrists, occupational therapists, audiologists, medical record technologists, medical transcriptionists, and speech pathologists. The highest demand will be for physician assistants, physical therapists, lab clinicians, dental hygienists, respiratory technicians, substance abuse counselors, and especially home health-care workers.

Hospitals and HMOs offer jobs in management in addition to medicine-particularly if you have a background in information technology (IT) and data system development. As a job seeker, you should be aware that HMOs have been the catalysts for many of the efficient business practices adopted throughout the health-care industry in recent years. Technical and administrative support positions are in high demand as the industry evolves in an intensely competitive market. Health-care IT is a steadily growing sector; although the industry has been a late adopter of IT, it is catching up now. There will be lots of opportunity in this area for the tech-savvy.

Feels Good to Make Others Feel Good
Even if your medical career has only gone as far as plumping pillows and soothing a fevered brow, you can probably sense why the many dedicated people in this industry continue to selflessly perform often menial labor for scant compensation and recognition. Recent studies have shown that HMO technicians and doctors rate their job satisfaction significantly lower than that of nurses, aides, and therapists who care for the sick-often with significantly less pecuniary reward.

Need Flexibility?
One former teacher recalls arriving in a small town in Florida with little chance of finding work in the local schools. Finally, in desperation, she took a part-time job at a nursing home and discovered a whole new career. "I really love my work," she says. With five years' experience under her belt, she says, "I make my own hours, and I'm earning very good money." Many people who fall into this field stay put because they can better balance the demands of family, school, and other commitments-both with more ease and associated emotional rewards than is the case with most other kinds of part-time work.

Goodbye, Rusty Saw
Advances in medical technology over the last 30 years have been truly phenomenal. The same patients who were once read their last rites are now routinely patched up and returned to healthy, productive lives-often with procedures that can be handled on an outpatient basis. Whether or not you're a researcher at heart, playing an integral role in the ongoing medical revolution can be immensely personally rewarding and intellectually stimulating.

Care for Profit?
Most people pursue a career in health care because they want to help people in need. Increasingly, however, the business side of health care has come between patients and providers. "At my hospital, we're supposed to call the patients 'customers,'" says one insider. "I keep telling my boss this is not Lord & Taylor!" or "All I can say is it stinks, and corporate America has no business in the system," says another. Lots of strong emotions emerge in this discussion, and these days are certainly not easy or happy ones in this industry. The higher up the ladder you go, the more bruising and harsh the politics and economics tend to become.

The 15-Minute Consultation
With or without the capable assistance of a PA or NP, about 15 minutes is about how much time most physicians are allocated per patient these days. Think about it. If a patient showed up with searing pains in her legs, and two previous doctors apparently were not providing immediate assistance, how would you feel about giving yet another cursory inspection and diagnosis? Everyone's complaints, no matter how seemingly routine, deserve focus and attention. Most health-care professionals feel this even more strongly than their patients do. Physician practice management groups (PPMs) are proliferating and becoming increasingly vocal in their angry opposition to the heavy, restrictive hand of managed care. This is a problem that will likely get worse before it gets better.

Survival of the Fattest
Insiders readily acknowledge the fact that the poor receive a different standard of health care. Some would argue that for the richest nation in the world to be without a federally subsidized health program, particularly for the indigent, is unconscionable. Others insist that a rigorous level of medical excellence can only be maintained as a well-run, competitive business. It's troubling to everyone, though, that those most vulnerable to both chronic and emergency illness are those with fewer and fewer available avenues of recourse to fairly priced quality health care.

Although most medical students today will tell you that the industry has changed for the worse and that (in their opinion) new doctors will be lucky if they can pay back their school loans, physicians still enjoy the most pay and are accorded the greatest respect in the health care field today. Undeniably, however, they also have to do the most preparation; typically a doctor must complete seven years of schooling and residency before earning certification to practice medicine-and often much more in the case of specialties such as cardiac surgery or psychiatry.

Of the more than half a million physicians actively practicing in the United States, about one-third are primary-care physicians. Most of the rest are specialists: for example, surgeons, neurologists, anesthesiologists, and radiologists. The demands of the work, the pay, and the lifestyle vary considerably from one specialty to another. Salary range: starting as low as $32,000 for residents; from $110,000 to $205,000 for general practitioners; $160,000 to $400,000 or more for hospital-based doctors such as radiologists and anesthesiologists; $160,000 to $700,000 or more for surgeons, depending on specialty.

Registered Nurse (RN)
The United States is facing a fairly severe nursing shortage, due in part to declining nursing school enrollments and an aging workforce. It's a job seeker's market, which means that you have more leverage, for example, in the way of signing bonuses. On the other hand, the diminished quality of care for patients and the heavier workload for those entering this profession are bad.

Finally, however, nurses have proof to back up their contention that staff cuts and replacement of RNs with medical assistants and licensed practical nurses translates into harm to patients-something usually dismissed by managers and executives as anecdotal or as just complaints. The Journal of the American Medical Association documents the link between the increased risk to patients with decreases in nurse staffing as well as nurse burnout and job dissatisfaction. Investigators found that, when nurse caseloads exceeded four patients, the risk of patient death increased by some 7 percentage points per additional patient. That means that if eight patients are under the care of one nurse, those patients are 31 percent more likely to die. The prognosis for the improvement in working conditions for nurses in the future is unclear. Salary range: $30,000 to $65,000.

Licensed Practical Nurse (LPN)
LPNs represent the second-largest occupational title in the health-care industry and are projected to be the fourth fastest-growing employment category of positions requiring postsecondary or associate degrees. As with RNs, there is a shortage of LPNs, and employers report that recruiting candidates for this position is taking longer now-translating into more leverage and greater choice for the job seeker. In addition to jobs in hospitals, good job prospects can be found in nursing homes, home health-care services, medical centers, and ambulatory surgi-centers. Physicians' offices are also popular, particularly as more and more become outpatient clinics for orthopedics and other specialties. Salary range: $28,000 to $47,000.

Nurse Practitioner (NP)
NP is a good career target for those of you who have a master's degree and training in pediatrics or family health, but either can't afford or don't want to go to medical school. In many states, NPs can prescribe medicine and are increasingly allowed primary-care status for basic health problems. Oxford Health and Columbia-Presbyterian Hospital pioneered these new responsibilities for NPs in the New York area, and HMOs elsewhere are following suit. Salary range: physician's rates for primary care; $50,000 to $80,000.

Medical Technician
The medical technician position is a solid career choice, particularly for those with computer skills or an IT background. Med techs are in high demand everywhere in the country, particularly on the West Coast and in the Rockies, and in every type of facility-hospitals, medical labs, and anywhere else special tests such as EEG, MRI, and CT are administered. Budget cuts may come and go, but as is the case with so many other aspects of modern life, technical expertise commands its own price. Moreover, this is knowledge based on experience, not academic credentials; many technicians have only high school or college degrees, plus several years of specialized training. Salary range: $25,000 to $55,000; the best pay is in nuclear medicine technology.

Physical Therapist
As the general population ages and athletes-weekend warriors or otherwise-continue to get injured, physical therapy becomes ever more popular. One unexpected drawback is that PT master's programs are in such demand that, according to one insider, "those interested in PT should start early, because it may take a few attempts to get accepted into a program-and you need a master's to get a job." For communities where managed care predominates, home care and nursing homes are better long-term bets; their focus is on the benefit, not the cost, of physical therapy for their patients. Salary range: $42,000 to $72,000. PT assistants can expect to make between $25,000 and $40,000.

Health Care Manager
These are the jobs where an MBA comes in handy and a background in accounting (and experience with cost-cutting), marketing, and information systems management will give you an edge over the competition. Lots of people want these jobs, and though industry observers predict that the number of managerial slots in hospitals and HMOs will shrink to perhaps half the current number, the need for qualified executive staff in home health care, nursing homes, and clinics is expected to more than make up the difference. Salary range: $50,000 and up. Experienced managers with an impressive track record in meeting and maintaining strict budgets can earn well into the six-figure range.

Home Health Care Aide
This category runs the gamut from the high school student with minimal training who shops, cleans, and cooks part-time for an elderly or infirm patient to a full-time nurse who can perform many of the procedures available in a hospital and be on call 24 hours a day. Many states now require brief training and some form of certification for all such workers, but these regulations are difficult to enforce. Demand for these professionals is expected to grow as the population ages and hospital facilities become less available, especially for long-term care. But bathing, dressing, feeding, and ministering to the disabled and the gravely ill is difficult work. Not surprisingly, the greatest demand will be at the bottom end of the pay scale. Salary range: $9 to $14 per hour-lowest for those without formal training or state certification-up to $25 to $50 per hour for aides with a BS in nursing.

Medical Secretary
Mergers, budget cuts, financial and insurance misdeeds: Neither these nor any of the other more permanent structural changes in the industry have decreased the demand for medical secretaries. They have been counted on for years to dutifully answer the phones, juggle those canceled and emergency appointments, and comfort the tearful and frightened. Computer networking and sophisticated record-keeping skills are necessary these days, but even without much formal training, medical secretaries will remain essential in every doctor's office, clinic, outpatient center, and hospital. As with secretarial positions in other industries, training is generally done on the job, though classes in computer skills and administrative tasks will give you a leg up on the competition. Salary range: $25,000 to $40,000.

Much depends on the aspect of this diverse and changing industry that you choose to pursue. For a position demanding a particularly high level of medical aptitude or technical skill, you're going to need substantial training and equal amounts of personal dedication. For the growing home care sector, training is less important than stamina, patience, and empathy for the sick and elderly. Here are some things to consider before starting your job search:

  • Many health-care professionals now see an MBA as a vital career boost, and combined degrees in business and pharmacology or business and nursing are becoming quite common. A facility with technology is also a big plus on your resume, and degrees in such areas as computer science or even electrical engineering, coupled with some aspect of medical training, will become an increasingly useful job-hunting tool.
  • Whether you're caring for the ill directly or managing an office or business that looks after their needs, your bedside manner matters. This is not an industry for the impatient, the abrasive, or the weak-stomached. You may be working in front of a computer terminal all day and see very few patients, but don't expect to succeed or be happy in this field in the long-term if you tend to be squeamish.
  • You'll want to consider carefully what means most to you in a job. Start by talking to people in the field. In addition to inside information on job possibilities others don't know about, it will also help you choose the types of workplace that are right for you.