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Connecticut Economic Digest: February 2007 issue
Health Care and Social Assistance Industry Profiled

Health Care and Social Assistance Industry Profiled
By Edward T. Doukas, Jr., Research Analyst, DOL

The health care and social assistance (HCSA) sector comprises establishments providing health care and social assistance for individuals. The sector includes both health care and social assistance because it is sometimes difficult to distinguish between the boundaries of theses two activities. Trained professionals deliver the services provided by establishments in this sector. All industries in the sector share this commonality of process, namely, labor inputs of health practitioners or social workers with the requisite expertise.

Sector Description

In the first quarter of 2006 (1Q06), there were over 222,000 workers employed in HCSA. This represented Connecticut's largest employment sector, accounting for 16 percent of the State's total private employment. Since the first quarter of 2000 (1Q00), HCSA employment expanded 9.8 percent, the second highest gain among industry sectors ranking only behind educational services, which grew by 17 percent. Total private employment in the State declined 2.4 percent during the same period. This growth substantiates the outlook presented in the Connecticut Department of Labor publication, Connecticut's Industries and Occupations, Forecast 2014. This report projects employment in HCSA to grow 17.5 percent between 2004 and 2014, the highest percentage increase of any industry sector.

All industry sub-sectors within HCSA showed healthy gains in employment between 1Q00 and 1Q06. The social assistance sub-sector bolstered the increase, particularly individual and family services, which expanded nearly 43 percent. A watchful eye will have to focus on the employment level of social assistance to see if this level of employment gain will be sustained in the future. Federal budget decisions that affect "discretionary" programs will have a direct impact on any future gains. Continued proposals to reduce spending for programs that benefit housing, vocational rehabilitation, certain nutrition and children's services, the elderly, and persons with disabilities, will not only result in service cuts, but also in lost employment opportunities.

While the perception exists that workers in the health care field earn a high wage, the fact is that, on average, these employees earn significantly less than other private sector employees. The average wage for HCSA workers was $785 in 1Q06, compared to $1,238 in all private industries. Reviewing wage figures highlights that wages earned are not evenly distributed through the four sub-sectors that comprise HCSA. Workers in hospitals and ambulatory health care services earned higher wage levels, $991 and $929, respectively. Those in the other two sub-sectors, nursing and residential care facilities and social assistance, had lower earning levels, averaging $623 and $440 weekly.

There were 9,367 establishments in 1Q06. They accounted for 8.8 percent of the State's total number of private establishments and represented an increase of 5.0 percent from 1Q00, slightly higher than the total private increase of 3.3 percent. Within HCSA, establishments in nursing and residential care facilities had the greatest expansion, while hospitals showed the lowest growth. The lower level of growth in establishments classified in the hospitals sub-sector can be explained by the nature of the industry. Generally, establishments classified as hospitals require a higher level of property and equipment investment, making these establishments less volatile than those industries with less of these requirements.

Ambulatory health care services made up the greatest percentage of establishments in HCSA, 67 percent, while hospitals fell at the other end of the spectrum, accounting for just 0.6 percent of sector worksites. Overall, 92 percent of HCSA establishments fall in the small business category, defined as having fewer than 50 employees. Ambulatory health care services had the highest percentage of establishments considered small, 96 percent. Hospitals lean the other way, with 28 percent of establishments classified as small establishments.

Health Care

The health care industry includes establishments ranging from small-town private practices of physicians who employ only one medical assistant to busy inner-city hospitals that provide thousands of diverse jobs. Some examples of the type of establishments that make up the health care segment of HCSA includes the following: offices of health care practitioners (physicians and dentists), home health care services, hospitals, nursing and residential care facilities, medical and diagnostic laboratories, and other ambulatory health care services (patient transport services and blood and organ banks).

The health care industry is one of constant change. Technological advances used for the diagnosis and treatment of illness and injury have made many new procedures and methods of diagnosis and treatment possible. Cost containment also is shaping the health care industry, as shown by the growing emphasis on providing services on an outpatient, ambulatory basis; limiting unnecessary or low-priority services; and stressing preventive care, which reduces the potential cost of undiagnosed, untreated medical conditions. However, there are labor force issues that remain a constant in this sea of change. Within Connecticut, as well as nationally, there are difficulties in recruiting and retaining qualified workers. This shortage places additional mental and physical stress on existing providers. Longer work hours, which can include mandatory overtime, can have a negative impact not only on the health care worker, but also on the quality of care the patient receives.

On the bright side, studies point towards a strong demand for health care professionals. The number of people in older age groups, with much greater than average health care needs, will grow faster than the total population. According to the State Department of Labor's 2014 industry forecast, due to industry growth and the need to replace retirement-age health care workers, the window of opportunity should be open for nurses, pharmacists, radiological technologists and technicians, dental hygienists, and physical therapists, just to name a few occupations.

Social Assistance

Social assistance is an industry populated with professionals possessing a strong desire to help improve people's lives. Workers in this industry help people function the best way they can in their environment, deal with their relationships, and solve personal and family problems. These services include individual and family services, emergency and other relief services, vocational rehabilitation services, and child day care services.

Some of the fastest growing occupations are found in the social services sub-sector where employment is expected to increase faster than the average. The rapidly growing elderly population and the aging baby boom generation will create greater demand for social services. Our projections show that employment in the social services industries are expected to grow by over 32 percent between 2004 and 2014, ranking among the fastest growing industries. However, a large number of social service jobs are part-time and lower paying, evidenced by lower weekly wages referenced earlier in this article.

Labor force issues affecting this sub-sector include high job turnover, which impacts an employer's ability to provide sufficient and appropriate safety and health training. Workers deal with the mentally ill, physically disabled, and families in crisis. The work, while satisfying, can be emotionally draining. These factors contribute to mental and physical stress on the workers. Understaffing and large caseloads add to the pressure. Also, non-traditional worksites (homes opposed to institutional settings) and non-traditional work schedules can contribute to higher injury and illness incidents. However, it should be acknowledged that a society is judged not exclusively by productivity, but also by how it treats its poorest, weakest, and most vulnerable members.

Employment and Wages in Health Care and Social Assistance
SIC Description Establishments Employment Weekly Wages
1Q00 1Q06 % Chg 1Q00 1Q06 1Q00-1Q06 1Q00 1Q06 % Chg
No. % Chg
Total private 103,300 106,686 3.3 1,428,865 1,394,032 -34,833 -2.4 $929 $1,238 33.2
Health Care and Social Assistance 8,918 9,367 5.0 202,551 222,382 19,831 9.8 $629 $785 24.8
621 Ambulatory health care services 5,971 6,277 5.1 67,421 72,573 5,152 7.6 $736 $929 26.1
6211 Offices of physicians 2,595 2,657 2.4 26,020 29,537 3,517 13.5 $1,009 $1,212 20.1
6212 Offices of dentists 1,651 1,634 -1.0 10,085 10,901 816 8.1 $610 $797 30.6
6213 Offices of other health practitioners 1,172 1,344 14.7 6,685 7,586 901 13.5 $573 $668 16.6
6214 Outpatient care centers 147 191 29.9 4,208 5,444 1,236 29.4 $649 $846 30.2
6215 Medical and diagnostic laboratories 138 182 31.9 3,002 2,820 -182 -6.1 $886 $1,062 19.8
6216 Home health care services 188 178 -5.3 13,761 12,546 -1,215 -8.8 $440 $613 39.4
6219 Other ambulatory health care services 80 91 13.8 3,660 3,738 78 2.1 $539 $690 28.1
622 Hospitals 53 54 1.9 51,358 56,112 4,754 9.3 $765 $991 29.6
6221 General medical and surgical hospitals 40 42 5.0 48,382 53,260 4,878 10.1 $768 $997 29.8
6222 Psychiatric and substance abuse hospitals n n n n n n n n n n
6223 Other hospitals n n n n n n n n n n
623 Nursing and residential care facilities 1,065 1,149 7.9 54,357 57,070 2,713 5.0 $513 $620 20.8
6231 Nursing and residential care facilities 276 249 -9.8 38,607 37,696 -911 -2.4 $539 $662 22.7
6232 Residential mental health facilities 558 672 20.4 8,347 9,952 1,605 19.2 $445 $539 21.3
6233 Community care facilities for the elderly 147 149 1.4 4,568 6,747 2,179 47.7 $395 $498 26.0
6239 Other residential care facilities 84 79 -6.0 2,835 2,676 -159 -5.6 $548 $636 16.1
624 Social assistance 1,829 1,887 3.2 29,415 36,628 7,213 24.5 $360 $440 22.2
6241 Individual and family services 517 641 24.0 11,534 16,486 4,952 42.9 $410 $474 15.8
6242 Emergency and other relief services 143 157 9.8 1,813 2,096 283 15.6 $531 $695 30.8
6243 Vocational rehabilitation services 226 215 -4.9 4,861 5,935 1,074 22.1 $370 $443 19.7
6244   Child day care services 943 874 -7.3 11,207 12,111 904 8.1 $276 $347 25.4
      n = nondisclosable
Note: Data reflect employment covered by unemployment insurance

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Published by the Connecticut Department of Labor, Office of Research
Last Updated: February 5, 2007