Is the Healthcare Industry Experiencing a Labor Shortage?

The healthcare industry is experiencing shortages of doctors, nurses, pharmacists, and technicians. The COVID-19 pandemic helped exacerbate burnout and stress, which led to people leaving the field. Hospitals, clinics, and pharmacies should motivate more people to become medical professionals, but also care more for the employees they already have.

By Lora Korpar

Everyone requires healthcare, so keeping hospitals, clinics, and pharmacies staffed is vital.

The American Hospital Association reported more than 33 million patients received care across the United States’ 6,093 hospitals in 2022. And this doesn’t include countless others who sought care in other healthcare centers or at home.

As Baby Boomers age and a combination of RSV, COVID-19, and the flu create a “tripledemic,” healthcare workers are even more necessary. 

“We think about the importance of this industry because so many people are affected,” said John Wiliams, a healthcare recruiter at TEEMA. “It's not like we're selling a gadget to somebody. So it's extremely important that anyone involved can continue to make the proper decisions so that we can make sure that our country gets the proper healthcare that they need.”

Is a Healthcare Labor Shortage Happening?

Many U.S. states are experiencing shortages of lower-wage healthcare workers like medical assistants and home health aides, according to Mercer’s 2021 U.S. Healthcare Labor Market report.

The report says states like California, New York, Pennsylvania, and Massachusetts need hundreds of thousands of workers to fill the gaps. And these holes are expected to grow over the next four years.

Many doctors will also soon reach retirement age, which will create openings new doctors must fill. Mercer’s report says more than 32,000 family medicine physicians, obstetricians, gynecologists, and pediatricians will reach retirement age by 2026. The pending retirees compose 21% of professionals in these fields.

Though the growth rate of nurse practitioners and physician assistants is expected to increase to over 21% by 2026, the growth rate for primary care physicians will remain mostly stagnant at 4.14% by the same year.

Also, a National Community Pharmacists Association survey found that more than three-quarters of community pharmacists are “having a tough time filling open positions.” 

Kevin Mero, the CEO of pharmacy recruiting platform JobRx.com, says pharmacies do not have a labor shortage as much as a labor “mismatch," meaning a shortage in one area and a surplus in another.

The U.S. Bureau of Labor Statistics predicts healthcare employment will grow 13% by 2031, resulting in about 2 million new jobs. But the field will only grow if people fill these jobs.

Why Is a Shortage Happening?

Burnout is one of the prime contributors to medical professionals leaving the field. The American Medical Association reported physician burnout reached an all-time high of 63% during the winter of 2021-2022. That figure is more than 24% higher than the 2020 burnout rate.

Nurses are feeling similar levels of burnout. An American Nurses Association survey found that 42% of nurses said “they have had an extremely stressful, disturbing, or traumatic experience due to COVID-19.” Nearly half of nurses who said they would be leaving the profession cited negative effects on their physical and emotional well-being as a top reason. 

“Nurses do so much work and they felt undervalued in many ways, but definitely in their pay,” Williams said. “Healthcare organizations and hospitals have to get their budgets back under control because they had to spend a lot of extra money during COVID. 

“The pay rates were higher in order to incentivize [nurses] and take care of them. And now we see hospital systems trying to get back to normal, and that has kept some nurses from going back into nursing.”

Williams said financial constraints also drive some doctors away from the medical industry. Though doctors often receive high wages, they have to worry about large amounts of student debt. And after a period of skyrocketing inflation, wage growth has not been able to keep the same pace for most physicians.

“It depends on your specialty, but let's just take a family practice physician. They basically have to increase the amount of patients they see in order to make the kind of living that they had hoped,” Williams said. “With the amount of money they're paying for schooling, they come out with some debt, and then they enter into whatever practice, and it feels like they're making less and less for doing the same amount of work or more.”

Mero said the main reason for staffing gaps in pharmacies is that many are unwilling to move for the job. 

“The problem is that where the people are or want to go, there's an oversupply of pharmacists, but there's a mismatch as to where the jobs are,” Mero said. “The people don't want to go to where the jobs are, which is primarily non-urban settings.”

The COVID-19 pandemic also exacerbated staffing issues in pharmacies, especially retail pharmacies. More patients were coming in to receive vaccines, stretching employees. 

“Retail pharmacists and technicians were already stressed, then you added a once-in-a-lifetime [pandemic,] with all the vaccinations, and then the boosters, and then their own illnesses taking place,” Mero said. “In retail, those pharmacists and those techs rarely ever get even a lunch break or a bathroom break. They're on their feet eight to 10 hours a day. So that's where we saw the real cracks with COVID. With all the immunizations on top of the flu, the pharmacists just got fed up and left because of the stress.”

What We Can Do to Find More Healthcare Workers

The most straightforward solution to hiring more medical professionals is to offer higher pay. However, not all hospitals, clinics, or pharmacies have the resources to raise wages.

“I think that they could maybe offer some better benefits or certain perks [if they can’t pay more],” Williams said. “Accepting some different flexible schedules could help, too. With the nurses that I work with, for example, many try to juggle being parents at the same time. So maybe being a little bit flexible on the days or the hours that they work could help.”

Organizational gaps can also cause hiring issues for pharmacies. Mero said hospitals used to have more layers of managerial positions. This would create a ladder employees feel motivated to climb to advance their careers.

“[Pharmacies] have become very flat organizationally,” Mero said. “A friend of mine is an associate director of pharmacy for a thousand-bed hospital and he has almost 100 direct reports. That would never have happened 15 years ago. There would've been at least three or four layers between him and those direct reports. The hospitals had to flatten organizationally, but then that presents a problem because there's no career ladder for those pharmacists to learn how to manage people.”

Part of the solution would be encouraging more women to apply for leadership roles. Though most pharmacy graduates are women, the leadership demographics in pharmacy haven’t changed in the past 40 years, according to Pharmacy Times. This is partly because women don’t feel qualified or supported enough to take on these roles.

“There are ‘directors of pharmacy’ positions at major facilities in America that have been open for years because they can't find anybody who wants the job,” Mero said.

Another way to recruit more medical professionals is to encourage young people to pursue medical degrees. However, this is more of a long-game strategy because medical school takes several years to complete.

The key is for companies to take better care of the employees they already have, especially the entry-level, low-wage ones. Prioritizing their mental and physical health and ensuring they make a livable wage will improve their likelihood of staying in the job.

Top Takeaways

The Healthcare Labor Shortage

• Labor shortages and mismatches are happening in hospitals, clinics, and pharmacies across the U.S.
• Healthcare labor shortages happen because of burnout, low pay, and stressful working conditions.
• Hospitals and businesses should offer more benefits and schedule flexibility if they can’t pay more to increase employee retention.
• Pharmacies should encourage more women to apply for leadership positions and provide more moving incentives to fill openings in rural areas.