Labor shortages in healthcare expected to rise as demand grows, report finds

Healthcare workers are retiring at a faster rate than anticipated, in part over burnout, while demand for them will increase over the next several years, according to a new report.

“The healthcare workforce is burned-out following a nearly two-year face-off against COVID-19,” said John Derse, healthcare industry vertical leader at Mercer, in a statement. “This impact will be felt by all of us, regardless of where we live or our field of work.” 

The Mercer report (PDF) estimated that about 9.7 million people currently work in low-paying jobs in the sector, like home health aides, and the need will continue to rise for the next five years. But at the current rate, more than 6.5 million workers will leave in that time frame, while less than 2 million will fill their spots. California and New York are expected to suffer the greatest hits, with each of the two states projected to lose half a million members of the workforce by 2026. The study suggests these states should look at recruiting nationally, in particular from states like Georgia or Florida, where demand for these workers is not growing at such a high rate. 

At the same time, the pace of physician retirement is expected to grow. By 2026, the number of physicians of retirement age will grow from the current 12% to 21%. The Northeast states of Maine, Rhode Island, Vermont and New Jersey will feel these retirements most rapidly.

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Family medicine is projected to have the largest number of physicians eligible for retirement in the next several years. To make up for primary care physicians leaving the field, Mercer projected that physician assistants and nurse practitioners will provide a steady stream of replacements. 

The report found that 29 states will not be able to keep up with demand for registered nurses in the next five years, as more than 900,000 are expected to permanently leave their roles. Pennsylvania and North Carolina are among those expected to be hit hardest. However, 21 other states will see a surplus in talent, particularly in the South.

The nation also will see a shortage in mental health workers, as demand increases 10% by 2026 while 400,000 professionals leave their roles for good, according to the report.

Similar to the anticipated registered nurse shortage, 27 states won’t be able to meet the hiring demand, and especially Massachusetts, Illinois and Pennsylvania. But 23 states will likely have a surplus, including Washington and Texas. 

Mercer suggests organizations prepare for these shortages now, for example with the aid of predictive analytics. The healthcare consultancy also suggests automating recruitment and onboarding to keep up with the pace of demand, adapting compensation and benefits to the needs of a younger workforce and improving workplace culture to help retain talent.

Health organizations also should not shy away from restructuring their care model, for example shifting to telehealth or more community-based care, taking into account where they draw the most value as a business, according to the report.