Vital Signs December 2023: Healthcare Sector Outlook

VITAL SIGNS

Beyond nursing, the shortage extends to other healthcare professions, including physicians and physician assistants. The demand for primary care physicians, specialists, and advanced practice providers has intensified, leading to concerns about access to timely and comprehensive healthcare services. Job postings for many of these roles reached record highs in 2022 and have moderated somewhat in 2023 as hospitals look to control labor expenses. This trend can also be seen in the overall trends in healthcare labor pools. Over the past two years, we’ve seen job counts for doctors soar in response to the pandemic, with similar substantial growth in administrative roles. Growth rates for nurses as well as assistant & technician roles have been more moderate, ranging from 2.1% - 2.5%. Going forward, we can expect the labor pool to increase on an approximately 2% annual basis across healthcare

provider professions while administrative roles grow at a 3% rate, according to Lightcast. Inflation, staff shortages and long shifts have driven a number of unions to strike and push healthcare systems to the negotiating table. While most of these labor strikes have since been resolved, they have added another cost pressure on hospitals. Fortunately, projections for talent are growing in the healthcare space, with talent estimated to surpass available space in the coming years. Quarterly deliveries for healthcare assets typically grow at a rate between 1% to 2% of existing inventory. Since the end of 2022, employment for both hospitals and physicians’ offices is growing between 3% and 4% to meet rising demand. This would suggest both a skilled and support labor pool that is growing, as well as future demand for additional space.

Employment for hospitals and physician offices has been growing at a faster rate than than newmedical office volume.

Healthcare Employment Growth vs. Healthcare CRE Volume Growth

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%

-8%

MOB Volume Growth % YoY Physicians Office Employment % YoY Hospital Employment % YoY

Source: RevistaMed, Moody’s Analytics, Cushman & Wakefield Research

VITAL SIGNS 2022: PERSPECTIVES ON HEALTHCARE AND MEDICAL OFFICE BUILDINGS