Employment in the Local Healthcare Sector: Growing Strongly

by Dr. Patrick Jones

Healthcare in the greater Wenatchee area has come a long way in the past 15 years. As Indicator 2.3.3 shows, it is now the third largest sector, measured by employment. Only agriculture and government are larger.

The share taken by health care and social assistance of the total work force in the two counties has climbed from 10.5% in 2004 to 12.8% in 2019. Among the five largest employing sectors in the two counties, that growth has trailed only the hospitality industry. (Construction and manufacturing have also experienced higher growth rates but their employment levels are not nearly as large as healthcare and social assistance.) It is worth pointed out that the current importance of health care and social assistance to the two counties is not unique in the metro areas in eastern Washington. Several sported shares in 2019 that were higher than here:  Yakima at 14.4%, Walla Walla at 15.5% and Spokane at 18.6%.

A relatively new Trends addition, found here and below, and located in the Our Valley Our Future / Nuestro Valle Nuestro Futuro category, focuses solely on the sector’s numbers. It tracks the growth of employment levels, showing a climb from about 4,900 to 7,250 over the past 15 years. As the graph reveals, that growth rate closely matches that of the state.

What has driven the jump in the size of healthcare and social assistance in the two counties? Undoubtedly, the single most important factor is population growth. Over the same period (2014-2019), population in the two counties has moved from approximately 102,000 to 121,000. That represents a cumulative gain of 18%. Yet, the gain is lower than the cumulative growth of the sector, at 33%.

Another factor likely playing a role is the greater prevalence of health insurance among the residents of the two counties. As Indicator 5.4.1 shows, the rate of the uninsured has dropped by 46% between 2009, the start of the series, and 2019. A greater number of patients seeking care outside of a hospital emergency department will create a greater demand for medical professionals.

Yet another factor is age. As Indicator 0.1.2 lays out, median age in the two counties has risen over the largely same interval, from 37.5 to 39.5 years. (And note that the two counties have been consistently “older” than the benchmarks of the U.S. and the state.) Over the last decade, the share of the population that is 65+ has climbed from 14% to 20%. An older population simply requires more interaction with the healthcare sector.

Certainly, the efforts of the local hospitals to boost the numbers of healthcare professionals overall, and physicians in particular, have factored into the growing share of healthcare and social assistance here. Indicator 5.4.3 shows the steady growth path of physicians in the two counties. Between 2011 and 2019, the number of MDs and DOs climbed dramatically, by 74. While the concentration of physicians in the population is still considerably below that of Washington’s, it has increased – from 2.33 to 2.74 physicians per thousand residents.

Of course, as we consider this sector, we should be mindful that it encompasses more than physicians and hospitals. The largest sub-sector was, in fact hospitals, with about 50% of the total sector workforce in 2019. Within any hospital, physicians are but one, albeit highly important, component of staff. The second largest sub-sector was ambulatory care. While this refers to physician offices, it also covers the offices of dentists, counselors, and the gamut of therapists. It made up about 22% of sector employment in 2019. The third largest subsector was consisted of social assistance workers. This includes above all service providers to the elderly (but not nursing homes) and disabled, followed by childcare centers. In the 2019, these firms made up about 17% of the sector. The fourth largest sub-sector consists of nursing and residential care facilities; these operations contributed 12% of all sector jobs last year.

Among these subsectors, where has the largest growth occurred? Due to data constraints, we can only compare the past five years. The short answer:  hospitals. Staff in the hospitals in the two counties has climbed by over 800 since 2014. In contrast, the count at free-standing medical offices has actually declined. It appears that employment at residential care (nursing homes, assisted living) has not increased much at all. Social assistance employment, on the other hand, has shown modest growth over the past five years.

What might the next five years bring to the size of the healthcare sector here? In this observer’s opinion, it will most likely continue its rise, if population growth in the two counties continues its recent path. And compared to other eastern Washington metro areas, the share of the workforce here taken up by healthcare workers still has room to increase.