Chattanooga's economy is still more than 10,000 jobs short of its pre-recession peak reached five years ago, but one sector of the economy has been healthy enough to grow through the recession and its aftermath.
The health care industry has grown to employ nearly one of every nine workers in the Chattanooga area, according to a new report.
Although government budget cuts and consumer economic concerns have cut some hospital jobs, health care employment nationwide grew more than 10 times as fast as the economy as a whole over the past decade, expanding 22.7 percent, or 2.6 million jobs nationwide, from 2002 to 2012, the Brookings Institution found. Even during the recession from 2009 to 2010, health care employment grew in all 100 major metro markets in the country.
Brookings analyst Martha Ross said health care remains a bright spot for employment growth. "Even though the health care field is in the midst of major changes, it remains a labor-intensive enterprise," she said.
"Employment will only grow as baby boomers age and are more likely to use health care services."
Health care employs about 14.5 million people nationwide and accounts for 10.3 percent of jobs nationally.
"It's one of the few industries that has shown nothing but steadily upward growth in employment over the past decade," Ross said.
Across Tennessee, Brookings found that health care represented a bigger part of the economy in all of the state's major urban areas. Health care accounted for 11.4 percent of jobs in Knoxville, 11.1 percent in Nashville, 10.9 percent in Memphis and 10.6 percent in Chattanooga.
"Tennessee does have a bigger presence in health care than the national average, due in part to the hospital industry based in Nashville and some of the medical research facilities across the state," University of Tennessee Economist Bill Fox said. "And it has been relatively recession proof."
Fox said the funding for health care tends to be insulated from most normal economic pressures, both through government programs that guarantee health care benefits for the poor, disabled and elderly, and private insurance that tends to pick up most of the costs of services.
"I'm paying a relatively small portion of the costs at the margin so even when my income is tight, I don't face much constraint when I show up at the doctor's office," Fox said.
To be sure, many hospitals are putting the brakes on adding many new workers or overtime hours in response to recent cuts in government and insurance reimbursements for some services and the rise in uncompensated care. After growing through the recession, some hospitals are now cutting -- or at least not growing -- their staff.
Last week, Vanderbilt University Medical Center in Nashville announced it will cut somewhere between 100 to 300 jobs in response to pressure from Medicare cuts from sequestration and uncerthe tainty around the Affordable Care Act, including whether Tennessee will eventually approve Medicaid expansion.
"Everybody's tightening their belt," said Craig Becker, president of the Tennessee Hospital Association.
Erlanger and Memorial hospitals have trimmed or frozen staff levels over the past couple of years in response to Medicare program cuts and the rise of uninsured patients.
"With the uncertainty about health care spending and the pressure points in reimbursement, hospitals are definitely carefully evaluating their workforce since about 50 percent of their costs are labor," said Gregg Gentry, senior vice president of human resources at Erlanger Health System, the largest local hospital with about 4,800 full- and part-time employees. Erlanger trimmed about 175 jobs in early 2012.
From 2010 to 2011, Memorial had nearly a 12.4 percent increase in the number of employees, and then from 2012 to 2013, Memorial cut its overall staff nearly 12.5 percent. The federal budget sequestration this year trimmed Medicare spending, costing Memorial nearly $500,000 a month.
"On the face of it, we remained relatively stable throughout the recession," said Lisa McCluskey, vice president of marketing and communications at Memorial, which employs 3,774 workers. "But with fewer dollars coming in the door, you need to be very efficient."
Parkridge Hospital, owned by HCA, has fared somewhat better in the past couple of years with its staffing levels.
"Health care is a growing field and employment at Parkridge Health System reflects this," Parkridge Human Resources Director Carole Hoffman said. "Our employee base has grown over the past several years."
Even with some staffing adjustments, hospitals are still continually hiring due to normal turnover, especially in clinical care positions such as nursing and physical therapy. Gentry said Erlanger usually hires 600 to 800 persons a year just to fill vacancies due to retirements and resignations.
As a result, graduates in nursing, physical therapy and other medical fields have generally fared better than most other college graduates in finding jobs, especially during the recession from 2009 through 2010.
"Health care majors definitely did better through the economic downturn than most other graduates," said Jean Dake, director of UTC placement. "There are some hospitals that have laid off staff or are not hiring, but for our graduates there are usually so many other options at nursing homes, home health care, doctors' offices or other medical facilities that most people don't really have a problem."
With five area schools graduating registered nurses and a UT residency program at Erlanger, local hospitals say the labor market is better for hospitals in Chattanooga than in many markets.
"We are fortunate in this market to have a steady supply of applicants," Gentry said.
Contact Dave Flessner at email@example.com or at 757-6340