While the health care ecosystem is broadly returning to work, nursing care facilities remain an exception. In the immediate aftermath of the pandemic and state-wide prohibitions on non-emergent, or elective, procedures the health care ecosystem shed 2.27 million jobs in August, the first broad job loss in health care in decades. Since then, we have seen health care jobs in total rebound to 94% of the February high.
All subsectors have seen consistent job gains except nursing and residential care facilities. While the subsector didn’t see the same sharp decline in April headcount, the rest of health care did; nursing and residential care facilities also haven’t seen an increase in headcount since February. Nursing and residential care is currently at 93% of the February high, or about 230,000 jobs short of the peak.
Source: Bureau of Labor Statistics
Much of the difference can be explained by the lagging effect the resumption of elective procedures has on nursing care relative to other subsectors. For example, most people are returning to the dentist. Dental offices have continued to lead the recovery in health care jobs and were also the hardest hit by pandemic-related closures.
By comparison, few Medicare patients are undergoing total joint replacements, which represent a significant portion of the typical pipeline for nursing and residential care facilities. Major medical device suppliers reported $980 million and $569 million of reductions in revenue for knee and hip replacements, respectively, in the first half of 2020 compared to the first half of 2019. As facilities face reduced volumes and patient pipelines, many have been forced to keep headcount low even six months into the public health emergency declaration.
Source: Public company filings
Additionally, the pandemic may be accelerating the trend of seniors aging or recovering “in place” (i.e. at home or otherwise outside a dedicated care facility). Pre-pandemic, more seniors were using remote patient monitoring, home automation and other technologies to live at home longer or recover from invasive procedures outside a dedicated care facility. Best Buy has spent nearly $1 billion to acquire Biosensics, Critical Signal and GreatCall as the company positions to capture this growing market. PitchBook has reported $575 million invested in remote patient monitoring technology companies so far in 2020, which is more than double the investment seen in calendar year 2019.
According to the Demographics Research Group, 90% of the 54 million seniors in the United States want to stay at home. Many seniors and their adult children will embrace technology to keep them home and keep them safe. With the labor market data, we’re beginning to see inklings of the long-term implications the post-pandemic accelerated adoption of technology will have for the nursing and residential care facilities subsector.
Christine Hanover, RSM partner, contributed to this article.
