Help Wanted: Will Californians Miss Out on a Billion-Dollar Growth Industry?

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1 Help Wanted: Will Californians Miss Out on a Billion-Dollar Growth Industry? Funded by a grant to Fenton Communications from The California Wellness Foundation

2 California s Population California s Population + Michigan s Population Over the next 20 years, California s population will grow by 10.2 million people an increase that is equivalent to adding the entire state of Michigan million people 2 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

3 Executive Summary Help Wanted demonstrates the gap between how many allied health workers California will need versus how many it is prepared to train over the next 20 years and what these facts mean to the state s economy. To reach this conclusion, researchers analyzed population data (page 12), identified the increasing demand on the health care system (page 13), and compared the allied health workforce supply against demand (page 18). Demographic Forecast: Looking at California in 2030 California s population is growing and graying and these trends offer opportunities in the form of health jobs. Over the next 20 years, California s population will grow by 10.2 million people an increase that is equivalent to adding the entire state of Michigan. At the same time, the number of Californians over the age of 65 will more than double. This demographic shift has significant implications for the healthcare workforce. Because Americans over 65 use more health services than any other age group, the growth and aging of the state s population means that California will need more healthcare workers than ever. And the majority of those job opportunities will be in allied health a sector that includes a wide range of clinical, administrative, and support positions, from radiologic technicians and laboratory workers to nursing aides and medical secretaries. While the current economic recession means that health care is growing more slowly for the time being, the overall trend remains upward. And the results of this study clearly indicate that it will continue to be a growth industry for years to come. 3

4 Equal to approximately 20,000 allied health workers 605,000 allied health workers 988,000 allied health workers 4 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

5 Job Opportunities for California Workers Californians looking for strong, long-term job security will find opportunities in allied health. Health care will continue to be an engine of economic growth over the coming years as California s population grows and ages. And even though public attention often focuses on the need for doctors and nurses, the fastest growing sector will be allied health, with a projected 63 percent increase between 2010 and California already employs more than 605,153 allied health workers. Between new job creation and the need to replace workers who retire or otherwise leave the field, the state will need to train nearly 1 million more allied health workers by

6 Equal to $100,000,000 $1.9 Billion payroll taxes paid by allied health workers $9.6 Billion payroll taxes paid by allied health workers 6 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

7 Economic Value of the Allied Health Workforce Allied health workers are a significant force in the California economy. The allied health sector in California already generates approximately $23 billion in payroll. That amount will more than double every 10 years, and by 2030, the state s 1 million allied health workers will have a collective earning power of more than $116 billion. Income taxes paid by allied health workers contribute considerably to state coffers. Based on current tax rates, payroll taxes paid by allied health workers will translate into $1.9 billion in state revenues in 2010, and $9.6 billion in

8 Equal to approximately 20,000 graduates or unfilled allied health positions In , the state will only have the capacity to educate 297,000 allied health workers, shutting Californians out of 145,000 family-sustaining jobs. By 2030, California s education capacity will almost double to produce 634,000 allied health workers, but it will still need to train 375,000 more to meet the state s needs. 8 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

9 The Hundred-Billion Dollar Question The bottom line: Will California be able to provide enough certified allied health workers to meet demand? Of the number of allied health jobs that need to be filled by 2030, about half are entry-level positions that do not require post-secondary training or certification, and can therefore be filled by most high-school educated members of the labor pool. The remaining allied health workers require certifications or post-secondary training. However, researchers estimate that California s universities and community colleges will only have the capacity to train 634,000 of the needed workers, between 63 and 79 percent of the allied health workers the state will require. Unless California increases the capacity of its education system, by 2030 there will be between 170,000 and 375,000 jobs that must be filled either by out-of-state workers or by Californians who would be forced to leave the state to get the necessary training. Already today there are allied health training programs with waiting lists of one year or more. Certified allied health positions are well-paying, family-sustaining jobs. According to Current Population Survey (CPS) data, workers with certifications earn 60 percent more on average over their lifetime than those without any post-secondary certification. But based on current trends, the state s training programs will not have the capacity to give California workers the opportunity to train and qualify for them. The question for California now is: How important is it for the state to expand local access to the training programs Californians need to qualify for jobs in a multi-billion-dollar growth industry? 9

10 Table of Contents 11 Introduction 12 Research Findings 12 Demographics Forecast: What Will California Look Like in 2030? 13 Demand Forecast: How Many Health Workers Will the State Need? 19 Supply Forecast: How Many Certified Workers Will the State Produce? 21 Gap Analysis: Comparing Certified Allied Health Workforce Demand and Supply 22 Economic Impact: Value of the Allied Health Workforce 22 Lifetime Wages: Comparing Earnings of Certified and Non-Certified Allied Health Workers 24 Conclusions & Recommendations 26 Appendix 26 Regional Snapshot: Los Angeles Area 28 Regional Snapshot: San Francisco Bay Area 30 Regional Snapshot: San Diego 32 Regional Snapshot: Sacramento 34 Regional Snapshot: Fresno/Visalia 10 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

11 Introduction Funded by a grant from The California Wellness Foundation, Fenton Communications worked with Beacon Economics to study California s allied health workforce needs, projected shortages among trained and certified workers, and the allied health industry s economic impact. Beacon researchers conducted forecasts for demographics and healthcare occupational demand, assessed the supply the number of graduates of allied health educational and training programs in California and examined the economic implications by calculating total payroll for the allied health industry and projected state tax revenues based on current tax rates. This report uses data from the Bureau of Labor Statistics (BLS), Employment Development Department (EDD), Occupational Employment Statistics Survey (OES), U.S. Census Bureau, California Department of Finance (DOF), Integrated Postsecondary Education Data System (IPEDS), Centers for Disease Control (CDC), and Current Population Survey (CPS) to conduct its forecasts and research. Brad Kemp served as lead researcher for this report and is director of regional research at Beacon Economics. Prior to joining Beacon, Kemp was a labor research analyst for the California EDD. 11

12 Research Findings Demographics Forecast: What Will California Look Like in 2030? To better understand the projected demand for healthcare services in California, researchers forecasted changes in the state s total population (deaths/births and net migration) and changes in the age structure of the population through 2030 using data from the U.S. Census Bureau and the California Department of Finance. To simplify the analysis, the population was grouped into four age groups: Group 1 (0-29), Group 2 (30-44), Group 3 (45-64), and Group 4 (65+). California s population is growing bigger and getting older According to the forecasted data, California s population will grow by 10.2 million people over the next 20 years, an increase equivalent to adding the entire population of Michigan. At the same time, as the baby-boomer population moves into retirement age, and mortality rates among senior citizens decline, California is facing a significant aging of its population by Researchers estimate that the share of Californians age 65 and over will increase from 11.3 percent of the total population in 2010 to 15 percent in 2020, and to 18 percent in The total population of Californians age 65 and over will be more than double in the next 20 years, steadily increasing from just under 4.5 million in 2010, to almost 6.5 million in 2020, to almost 9 million in state will be faced with a rising demand for healthcare products and services and an increased need for trained and certified allied health workers. Figure A.1 Proportions of Total Population 50% 40% 30% 20% 10% Ages 0-29 Ages Ages Ages 65+ Table A.1 California s projected population by age groups Population/Share (%) Population/Share (%) Population/Share (%) Ages ,839,000 (43%) 18,459,000 (42%) 19,888,000 (40%) Figure A.2 Population Growth Rates by Age Group Ages ,977,000 (20%) 8,509,000 (19%) 9,940,000 (20%) Ages ,908,000 (25%) 10,817,000 (24%) 10,578,000 (21%) 150% Ages 0-29 Ages Ages Ages 65+ Ages 65+ 4,458,000 (11%) 6,470,000 (15%) 8,991,000 (18%) TOTAL 39,182,000 44,255,000 49,397, % *Population numbers rounded to the nearest thousand 90% Largest growth spurt to occur in coming decade 60% Another important finding is the immediacy with which this key population group is expected to grow. By decade (for each 10-year period, i.e. non- 30% cumulative), the growth rate of Californians over 65 is 45.1 percent from 2010 to 2020, and 38.9 percent from 2020 to 2030, making the coming 0% decade (2010 to 2020) the highest growth rate for this age group. By 2030, one out of every five Californians will have entered the age -30% bracket in which healthcare services are used most intensively. As a result, the 12 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

13 Demand Forecast: How Many Health Workers Will the State Need? In conducting their analysis, researchers took two steps to determine how changes in California s population would impact the labor needs of the state s healthcare industry. Researchers first used data from the Centers for Disease Control and Prevention (CDC) to estimate the future demand for health services (days of care per person) for the various age groups in each of the three sub-sectors within health care. Trends in healthcare demand per capita by age group were used to project future needs. These per person needs were multiplied by the changing population base to arrive at an estimate of the total days of care needed in 2020 and Using estimates of California s total demand for healthcare services, researchers then forecasted future demand for healthcare workers by occupation using industrial employment data and occupational staffing patterns from the California Employment Development Department s (EDD) Occupational Employment Statistics (OES) survey. Total health care employment To meet growth in demand for health services driven by changes in population, the healthcare sector in California will need to employ 1.2 million workers in 2010 and 2 million workers in 2030, a 61.4 percent increase. Allied health employment From total healthcare employment, allied health professionals will comprise 605,000 workers in 2010 and 988,000 in 2030, representing a faster rate of growth (63 percent) than other workers in the health sector (60 percent). Figure B Hospital, Ambulatory, and Nursing Shares of Total Allied Health Employment 49% Ambulatory 22% Nursing 29% Hospital How trends in health care delivery impact allied health growth The increase in allied health employment is a result of a shift in how services are delivered within the healthcare industry. According to the North American Industrial Classification System (NAICS), the healthcare industry consists of three main sub-sectors, divided by the types of services provided at each facility: Ambulatory healthcare settings (ambulatory): Primarily provides out-patient services at facilities such as doctors offices, out-patient clinics, and clinical laboratories. Hospitals: Primarily provides in-patient health services and may provide some out-patient services as a secondary activity. Nursing and residential care facilities (nursing care): Provides residential care, such as community care for the elderly or mental health and substance abuse facilities. Of the three, ambulatory is by far the largest employer of allied health workers: almost half (49.4 percent) of all allied health workers will be employed in ambulatory care in 2010, with 28.7 percent and 21.9 percent employed in hospital and nursing care, respectively. As ambulatory and nursing care grow, so do allied health jobs The researchers anticipate that health services will increasingly be delivered via ambulatory and nursing care, the two sub-sectors with the highest shares of allied health employment. The increase in nursing and residential facility use is the result of the state s aging population. The shift toward ambulatory care is driven by the industry s need to be cost efficient. Advancements in medical technology have also allowed for more services that formerly required expensive hospital stays to be delivered via ambulatory care. For example, laparoscopic surgery, a procedure that requires only a small incision, is replacing more traditional invasive forms of surgery, which used to require a multiple-night hospital stay. The new procedure now often allows patients to go home the same day. The data supports the conclusion that not only is total demand for health care in California on the rise a pattern that will continue through 2030 but the form of healthcare consumption is clearly shifting from hospital usage to ambulatory usage. In all, the total consumption of hospital days per person will decline from 4 days in 2010 to 3.2 days in 2020 to 2.5 days in In contrast, the number of ambulatory visits per person will increase from 3.2 visits per person in 2010 to 3.6 visits per person in 2020 to 4.2 visits in With this growing demand for ambulatory health care, researchers expect to witness a heavier demand for professions that are employed within the ambulatory sector. 13

14 Figure B.2 Hospital Care vs. Ambulatory Care Consumption Overview: California s Allied Health Workforce The hidden healthcare workforce. That s a term sometimes used for allied health workers, who represent an estimated 60 percent of the health workforce in California. While most patients are familiar with physicians and nurses, they rarely recognize how many other professionals work behind the scenes to provide timely, high-quality care. Comprising approximately 50 different positions from medical assistants to laboratory technicians to dental hygienists allied health professionals provide a range of diagnostic, technical, therapeutic, and direct patient care and support services that are absolutely critical to the other health professionals they work with and the patients they serve. The good news is that there are many job opportunities within allied health and for applicants with varying experience levels. For example, home health aides are entry-level positions that are high in demand yet require a minimal educational investment. Equally as important are more specialized occupations that require training and certification, such as clinical laboratory scientists and pharmacy technicians. Several allied health jobs only require a two-year degree or a few months training a characteristic that makes them an attractive choice for Californians unable to or uninterested in committing several years to a medical or nursing degree. The bad news is that Californians interested in these careers may find it difficult to find a space in a program. Our education system, especially with current funding cuts, is severely limited in its capacity to train allied health workers. The operating cost of training programs is often a barrier, since the necessary equipment for clinical training and low instructor-tostudent ratios make them considerably more expensive than non-scientific or non-technical programs. But inaction will only worsen this problem. There s a pressing need for the state to convene health service providers, educational institutions, and other stakeholders to engage in a sustained, long-term effort to expand our ability to train Californians for these critical jobs. Susan Chapman, Ph.D., RN, Director of Allied Health Care Workforce Program, UCSF Center for the Health Professions Hospital days of care per person Ambulatory visits per person The projected decline in hospital stays follows a historical pattern, a key driver in the researchers forecast model. A decline from 41 days per person in 1980 to 21.7 days per person by 2000 among age group 4 (65+) underscores the shift in how healthcare services are delivered in the state. On the other hand, demand for ambulatory health care has been on the rise for the past couple of decades. For age group 4 (65+), the number of clinic visits per person increased from 3.91 in 1980 to 5.72 clinic visits per person in 2000, supporting the hypothesis that demand for ambulatory health care will increase. Looking ahead, the forecast results show that the number of visits per person to a clinic will increase from 6.9 in 2010 to 8.4 in 2020, and to 10.1 in 2030 in age group 4 (65+). Table B.1: Hospital (primarily in-patient services) versus ambulatory care (primarily out-patient services) usage in days per person Age Hospital Ambulatory Hospital Ambulatory Hospital Ambulatory All ages Allied health employment is increasing in every sub-sector of health care The number of allied health workers in all three sub-sectors of health care will increase over the next 20 years: Hospital: In 2010, allied health workers will comprise 42.4 percent of total hospital employment. Allied health employment in hospitals will increase from 174,000 in 2010 to 194,000 in 2020, and to 225,000 in In all, allied health employment in hospitals will increase by 29.5 percent between 2010 and Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

15 Ambulatory: Allied health workers will comprise 51.9 percent of ambulatory care workers in Allied health employment will increase from 299,000 in 2010 to 383,000 in 2020, and to 495,000 in Total allied health employment in ambulatory care will increase by 65.7 percent between 2010 and Nursing: Allied health workers will comprise 51 percent of nursing care workers in Allied health employment will increase from 132,000 in 2010 to 193,000 in 2020, and to 267,000 in Total allied health employment in nursing care will more than double (an increase of percent) between 2010 and benchmark. Given historical levels of training and the observed job growth between 1990 and 2004, an implicit number of replacements (the number of replacements necessary to generate the observed employment levels historically) was calculated at 7.5 percent. This forms the low scenario and includes both permanent separations from the industry as well as vacant positions due to intra-industry job transfers/promotions. Because of the forecasted increase in people aging into retirement and the upward pressure it will put on net replacements, this number could grow up to 10 percent in the near future, which provides the alternative (high) scenario. The range of total replacements jobs that will become available as a Figure B.3 Allied Health Care Employment by Sector k Hospital Ambulatory Nursing Care 400k 300k 200k 100k Ambulatory care employs significantly more allied health workers than hospital or nursing care. It is also the fastest-growing sector of the three. Calculating the number of allied health workers needed There are two sources of demand for workers in the allied health industry. The first is the expansion of demand as driven by population growth. The second is the annual pace of turnover of the existing labor force. This rate represents the number of positions that will need to be filled due to permanent separations from the allied healthcare industry, such as from deaths, retirements, changing of career, or moving out of the state. Permanent separations do not come, for example, from a technician moving from one hospital to another within California, which just moves the opening from one employer to another but does not create a new opening in the state. The replacement rate in this study is adjusted to include the number of workers who will vacate an allied healthcare position, but who remain in the healthcare industry. These also represent positions that will need to be filled moving forward. In this study, the researchers provide two replacement rates, 7.5 percent (low scenario) and 10 percent (high scenario). The low number was generated by using past data on staffing and graduation rates as a result of the situations noted above calculated in the study are: 507, ,000 from 2010 to million million from 2010 to The total number of allied health workers required to meet California s needs over the coming decades was obtained by combining net replacements data with employment counts. By , California will need more than 2.5 million allied health workers in a high scenario case and 2 million allied health workers in a low scenario case. Table B.2 Total Allied Health Demand with Net Replacements Year Employment Counts 605, , , Net Replacements 506, ,993 1,154,686-1,539,581 Total Demand 605,153 1,276,832-1,445,830 2,142,840-2,527,

16 Total demand for each occupation is shown in table B.3, sorted by 2030 employment counts, from largest to smallest: Table B.3 Total Allied Health Demand By Occupation Occupation Nursing Aides, Orderlies, Attendants 93, , , , ,908 Medical Secretaries 61, , , , ,720 Medical Assistants 60, , , , ,713 Licensed Practical and Licensed Vocational Nurses 50, , , , ,837 Home Health Aides 45,768 96, , , ,174 Dental Assistants 43,589 91, , , ,071 Dental Hygienists 24,192 51,043-57,799 85, ,049 Medical and Health Services Managers Personal and Home Care Aides Radiologic Technologists and Technicians Healthcare Support Workers, All Other 16,455 34,718-39,314 58,266-68,732 15,801 33,339-37,751 55,951-66,001 15,038 31,729-35,929 53,250-62,814 13,512 28,510-32,284 47,848-56,442 Physical Therapists 13,186 27,821-31,503 46,690-55,076 Medical Records and Health Information Technicians Respiratory Therapists and Technicians Medical and Clinical Laboratory Technologists Emergency Medical Technicians and Paramedics Health Technologists and Technicians, All Other Medical and Clinical Laboratory Technicians Medical and Public Health Social Workers 12,750 26,901-30,462 45,147-53,256 11,660 24,602-27,858 41,288-48,704 11,660 24,602-27,858 41,288-48,704 10,494 22,142-25,072 37,159-43,834 10,243 21,613-24,473 36,272-42,787 8,718 18,394-20,828 30,869-36,414 7,955 16,784-19,006 28,168-33,228 Psychiatric Technicians 6,974 14,715-16,663 24,696-29,131 Surgical Technologists 6,974 14,715-16,663 24,696-29,131 Pharmacy Technicians 6,429 13,565-15,361 22,766-26,855 Occupational Therapists 5,993 12,646-14,320 21,223-25,035 Medical Transcriptionists 5,667 11,956-13,538 20,065-23,669 Physician Assistants 5,558 11,726-13,278 19,679-23,214 Opticians, Dispensing 4,686 9,887-11,195 16,592-19,573 Physical Therapist Aides 4,141 8,737-9,893 14,663-17,297 Medical Equipment Preparers 3,814 8,047-9,112 13,505-15,931 Dietitians and Nutritionists 3,487 7,358-8,331 12,348-14,566 Health Educators 2,942 6,208-7,030 10,418-12,290 Cardiovascular Technologists and Technicians Healthcare Practitioners and Technical Workers, All Other Nuclear Medicine Technologists 2,833 5,978-6,769 10,033-11,835 2,724 5,748-6,509 9,647-11,379 1,635 3,449-3,905 5,788-6,828 Recreational Therapists 1,090 2,299-2,604 3,859-4,552 Diagnostic Medical Sonographers 1,090 2,299-2,604 3,859-4,552 Dietetic Technicians 1,090 2,299-2,604 3,859-4,552 Occupational Therapist Aides Ambulance Drivers and Attendants, Except Emergency Medical Technicians Occupational Therapist Assistants 1,090 2,299-2,604 3,859-4,552 1,090 2,299-2,604 3,859-4, ,069-2,343 3,473-4,097 Psychiatric Aides 872 1,839-2,083 3,087-3,641 Medical Equipment Repairers ,158-1,366 Therapists, All Other Pharmacy Aides Orthotists and Prosthetists * * * Medical Appliance Technicians Total Demand 605,153 * * * 1,276,832-1,445,830 * Indicates that employment counts reported by EDD were less than ,142,840-2,527,735 By 2030, allied health occupations facing the largest demand, as shown in table B.3, will be nursing aides, orderlies, and attendants with up to 391,908 jobs; medical secretaries with up to 256,720 jobs; and medical assistants with up to 251,713 jobs. Ocupations with the smallest measurable demands are pharmacy aides with 455 jobs, medical equipment repairers with 910 jobs, psychiatric aides with 3,641 jobs, and occupational therapist assistants with 4,097 jobs. Regions Studied Region Los Angeles San Francisco Area San Diego Sacramento Fresno/Visalia Counties Included Los Angeles, Orange, San Bernardino, Riverside, Ventura, Kern, Inyo counties Alameda, San Francisco, Contra Costa, San Mateo, Santa Clara, Napa, Sonoma, Marin, Mendocino, Solano, Lake counties San Diego County Sacramento, San Joaquin, Stanislaus, Yuba, Yolo, Placer, Sutter, Tuolumne, Nevada, Plumas, El Dorado, Amador, Calaveras, Colusa, Sierra counties Mariposa, Madera, Fresno, Merced, Tulare, Kings counties Speech-Language Pathologists Physical Therapist Assistants 3,269 6,898-7,811 11,576-13,655 3,269 6,898-7,811 11,576-13,655 Table B.4 presents the range of total demand (from the lower 7.5 percent to the higher 10 percent net replacement scenarios) broken down by region. In 2030, the Los Angeles area will have the highest total demand for allied 16 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

17 healthcare employment at up to 1,279,631 jobs, where as the Fresno/ Visalia area will have the lowest total demand at 129,637 jobs. Table B.4 Regional Total Demand Data for Allied Healthcare Region Los Angeles Area San Francisco Bay Area Sacramento Area San Diego Area Fresno/ Visalia Area Population Share 2010 Demand 2020 Demand 2030 Demand 50.6% 306, , ,932 1,084,783-1,279, % 118, , , , , % 60, , , , , % 50, , , , , % 31,036 65,483-74, , ,637 * More detailed regional snapshots from each area are included as appendices. New Demand: The significance of looking at newly created jobs New demand is the increase in the number of job openings between 2010 and It combines new jobs created by the growth in the health industry with the number of net replacements occurring within the same time period. This number provides an important data point in comparing the state s workforce needs to its ability to train and certify Californians to work in allied health jobs. The distinction between total demand and new demand is that total demand takes into account the number of existing jobs already filled by workers who do not need to be trained or certified again in addition to the number of new jobs and net replacements. New demand, on the other hand, totals the number of new jobs and net replacements only. In other words, total demand is the number of existing workers in the industry plus the number of vacancies to be filled while new demand refers only to the number of vacancies to be filled. Again, the new demand data is presented as a range between two scenarios, with the 7.5 net replacement net on the lower end, up to a high scenario of 10 percent net replacement rate. Table B.5 New Demand Totals Period New Jobs 164, ,002 Net Replacements 506, ,993 1,154,686-1,539,581 New Demand 671, ,677 1,537,688-1,922,583 Occupational new demand data, organized by the standard occupational code, is similar to total demand data in terms of the occupations that show the highest number of job increases. Again, in the high scenario case (10 percent net replacements) nursing aides, orderlies, and attendants will have the highest increase in new demand between 2010 and 2030 at 298,083 new jobs, followed by medical secretaries at 195,260, and medical assistants at 191,452. The occupations that will have the lowest measurable number of new job increases are pharmacy aides at 346, medical equipment repairers at 1,039, and psychiatric aides at 2,770. Viewpoint: A Health Service Provider s Perspective When people think of health care, they picture physicians and nurses the people whom they interact with most. However, that s just one chapter in a much longer story. This report identifies 47 different allied health positions. The term may be vague, but the work of these trained professionals is specific and vital in the delivery of quality patient care. Think of the pharmacist who makes sure you get the right type and dose of medication. Or the radiological technician that takes and develops your x-rays. Or clinical laboratory scientists who test your blood so doctors can diagnose and treat what ails you. These behind-the-scenes workers are the unsung heroes of health care, and we face daunting shortages of them in coming years. California s graying population, including many of our most experienced workers, means more patients will require quality care. And there are simply not enough graduates from allied health programs ready to step in and fill that void. That s why Sutter Health Sacramento Sierra Region decided to be proactive. At SHSSR, which serves Placer, Sacramento, and Yolo counties, we work with our local education partners to create and/or enhance our communities allied health programs. One example is the Yuba College Radiological Technologist program. In partnership with local health systems, we provide financial support for the equipment, classrooms, and faculty needed to educate 50 students each semester. We also provide clinical training and instructors. This is our way of ensuring the continuum of quality care for which we re known. While economists are increasingly talking about allied health as an important and inevitable growth sector for the California economy, Sutter and other providers know firsthand that these positions are essential for quality care as well. That s why we must continue to look for ways to proactively develop this untapped workforce. Anette Smith-Dohring, Workforce Development Manager for Sutter Health Sacramento Sierra Region 17

18 Table B.6 New Demand By Occupation Occupation Nursing Aides, Orderlies, Attendants 104, , , ,083 Medical Secretaries 68,217-85, , ,260 Medical Assistants 66,886-83, , ,452 Licensed Practical and Licensed Vocational Nurses 55,759-69, , ,601 Home Health Aides 50,800-63, , ,406 Dental Assistants 48,381-60, , ,482 Dental Hygienists 26,851-33,607 61,471-76,858 Medical and Health Services Managers 18,264-22,859 41,811-52,277 Personal and Home Care Aides 17,538-21,951 40,150-50,200 Radiologic Technologists and Technicians Healthcare Support Workers, All Other 16,691-20,891 38,212-47,776 14,998-18,772 34,335-42,929 Physical Therapists 14,635-18,317 33,504-41,891 Medical Records and Health Information Technicians Medical and Clinical Laboratory Technologists Emergency Medical Technicians and Paramedics Respiratory Therapists and Technicians Health Technologists and Technicians, All Other Medical and Clinical Laboratory Technicians Medical and Public Health Social Workers 14,151-17,712 32,397-40,506 12,942-16,198 29,628-37,044 12,942-16,198 29,628-37,044 11,648-14,578 26,665-33,340 11,369-14,230 26,028-32,543 9,676-12,111 22,152-27,696 8,829-11,051 20,213-25,273 Psychiatric Technicians 7,741-9,689 17,721-22,157 Surgical Technologists 7,741-9,689 17,721-22,157 Pharmacy Technicians 7,136-8,932 16,337-20,426 Occupational Therapists 6,652-8,326 15,229-19,041 Medical Transcriptionists 6,289-7,872 14,399-18,003 Physician Assistants 6,169-7,721 14,122-17,656 Opticians, Dispensing 5,201-6,509 11,907-14,887 Physical Therapist Aides 4,596-5,753 10,522-13,156 Medical Equipment Preparers 4,233-5,298 9,691-12,117 Dietitians and Nutritionists 3,870-4,844 8,861-11,079 Speech-Language Pathologists 3,629-4,542 8,307-10,386 Physical Therapist Assistants 3,629-4,542 8,307-10,386 Health Educators 3,266-4,087 7,476-9,348 Cardiovascular Technologists and Technicians Healthcare Practitioners and Technical Workers, All Other 3,145-3,936 7,199-9,001 3,024-3,785 6,922-8,655 Nuclear Medicine Technologists 1,814-2,271 4,153-5,193 Recreational Therapists 1,210-1,514 2,769-3,462 Diagnostic Medical Sonographers 1,210-1,514 2,769-3,462 Dietetic Technicians 1,210-1,514 2,769-3,462 Occupational Therapist Aides 1,210-1,514 2,769-3,462 Ambulance Drivers and Attendants, Except Emergency Medical Technicians 1,210-1,514 2,769-3,462 Occupational Therapist Assistants 1,089-1,362 2,492-3,116 Psychiatric Aides 968-1,211 2,215-2,770 Medical Equipment Repairers ,039 Therapists, All Other Pharmacy Aides Orthotists and Prosthetists * * Medical Appliance Technicians * * Total 671, ,677 1,537,688-1,922,583 * Indicates that employment counts reported by EDD were less than Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

19 Supply Forecast: How Many Certified Workers Will the State Produce? To determine whether the state will be able to train and certify enough Californians to meet its allied health workforce needs, Beacon Economics researchers partnered with the Center for the Health Professions at the University of California San Francisco (UCSF) to study the supply of allied health workers in the state. For the purposes of this study, supply is defined as the number of graduates of certified allied health educational and training programs in California. To measure this supply, UCSF drew data from the Integrated Postsecondary Education Data System (IPEDS) database and determined the number of qualified training facilities for each of the targeted healthcare occupations and collected the number of possible annual graduates from each program. Another critical data source was the California Employment Development Department s (EDD) comprehensive list of training programs, coded by the classification of instructional programs and searchable by occupational code. Supply data for each occupation in the state was obtained and projected until 2030, using a 1.3 percent annual growth rate, which is the traditional average growth rate that has been historically observed for these programs. Defining certified allied health workers The supply forecast studied allied health occupations where a degree or training certificate is required for entry and are therefore dependent on the capacity of the state s post-secondary education system to produce qualified workers. These occupations will be referred to collectively as certified allied health occupations. In other words, it did not include a number of entry-level jobs that do not require specific training or certification and would thus be drawing from an unlimited labor pool. This certified group is forecasted to account for 52 percent (530,316) of total allied health employment in The remaining 48 percent (479,874) of allied health occupations do not require any post-secondary certification as a prerequisite for entry into the field. Figure C.1 Composition of Allied Health Employment 52% Certified (530,316) 48% Non-Certified (479,874) Regional Spotlight: San Diego s Investment in Allied Health Education Making dreams come true for students is what the life of an educator is all about. Most educators spend much of their lives dreaming about how many more dreams they could help come true if they only had the right equipment, better technology or a first-class classroom. In Southern California, such dreams are becoming reality. San Diego Mesa College just opened the doors of a state-of-theart teaching facility that is a model of technology and innovation, thanks to a visionary investment by voters. The brand new, $24.9 million, 50,000-square-foot allied health building provides training facilities and classroom space for degree and certificate programs for five health care fields: dental assisting, health information technology, medical assisting, physical therapy assisting and radiologic technology. The San Diego Workforce Partnership identifies four of these fields as among the 10 most in-demand health care fields through As this report shows, allied health is in high demand statewide and the demand will continue to rise. Mesa College will help fill that demand locally, as well as train incumbent health care professionals in the field. Like so many of our fellow community colleges, we are the primary training ground for the allied health workforce. My hope is that the public will come to see the benefit of what they voted for: putting students on the path to stable, family-sustaining jobs that will boost our local economy. The new allied health building at Mesa College will be one of the solutions to economic recovery in the San Diego region by training and placing high-skilled technicians in the health care field. When the public has confidence in an educational institution, and when those institutions work with industry to build the workforce that a community needs, dreams really can come true. Margie Fritch, Dean of the School of Health Sciences/Public Service, San Diego Mesa College 19

20 Researchers forecast the total supply of all certified allied health occupations from training facilities within the state to be 296,723 from 2010 to 2020, and 634,357 by 2030, more than doubling the in-state supply of certified allied health workers from one decade to the next. Table C Total Certified Allied Health Supply Period Supply , ,357 Table C.2 presents all certified allied healthcare worker supply numbers for each occupation, sorted from highest to lowest by occupation. Table C Supply by Allied Health Occupation Occupation Medical Assistants 109, ,292 Emergency Medical Technicians and Paramedics 33,187 70,951 Dental Assistants 32,823 70,171 Licensed Practical and Licensed Vocational Nurses 29,906 63,936 Pharmacy Technicians 21,004 44,904 Radiologic Technologists and Technicians 9,655 20,642 Surgical Technologists 6,033 12,898 Respiratory Therapists & Technicians 5,798 12,395 Physical Therapists 4,998 10,685 Dental Hygienists 4,610 9,856 Dietitians and Nutritionists 4,598 9,831 Cardiovascular Technologists and Technicians 4,410 9,428 Psychiatric Technicians 4,175 8,925 Speech-Language Pathologists 3,834 8,196 Physician Assistants 3,799 8,121 Occupational Therapists 3,799 8,121 Medical and Public Health Social Workers 2,846 6,084 Diagnostic Medical Sonographers 2,446 5,230 Opticians, Dispensing 2,129 4,551 Health Educators 1,929 4,123 Medical Records and Health Information Technicians 1,576 3,369 Physical Therapist Assistants 1,270 2,715 Medical and Clinical Laboratory Technologists 1,000 2,137 Recreational Therapists 729 1,559 Occupational Therapist Assistants 682 1,458 Dietetic Technicians Total 296, ,357 Medical assistants, emergency medical technicians (EMTs) and paramedics, and dental assistants are expected to produce the largest supply of workers by 2030 (233,292, 70,951, and 70,171, respectively). Dietetic technicians, occupational therapist assistants, recreational therapists, and medical and clinical laboratory technologists will supply the fewest workers with 779, 1,458, 1,559, and 2,137 by 2030, respectively. 20 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry?

21 Gap Analysis: Comparing Certified Allied Health Workforce Demand and Supply This analysis reveals a significant gap between the projected demand for health services within the state and the supply of California-certified applicants who will be working to deliver those services. The gap between supply and demand is derived by subtracting total supply from new demand (for certified allied health workers only) as defined in the previous sections. Since new demand is estimated at two different levels (7.5 percent and 10 percent) of net replacements, this report presents a range of the projected gap. Researchers project the overall shortage of workers among certified allied health occupations to reach up to 144,605 by 2020, and 374,936 by In this scenario, training institutions in California will only be able to meet as little as 63 percent of the need (new demand) for certified allied health workers by Table D.1 Projected Shortages in Certified Allied Health Period New Demand 352, , ,235-1,009,293 Supply 296, ,357 Gap 55, , , ,936 Most certified allied health occupations will experience shortages between 2010 and The largest shortages will occur among licensed practical and licensed vocational nurses (a shortage of up to 96,060), dental assistants (68,654), and dental hygienists (67,193). LVNs and dental assistants will have a large supply in terms of sheer numbers, but will be far below the number needed to meet rapidly growing demand for these workers. The smallest shortages will occur among dietitians and nutritionists (1,276), occupational therapy assistants (1,665), and recreational therapists (1,912). Table D.2 Certified Allied Health Worker Shortages by Occupation Occupation Licensed Practical and Licensed Vocational Nurses 25,983-40,055 64,010-96,060 Dental Assistants 15,671-27,881 51,758-68,654 Dental Hygienists 22,304-29,081 40,845-67,193 Medical Records and Health Information Technicians Medical and Clinical Laboratory Technologists 12,609-16,180 29,103-37,237 11,972-15,239 27,560-34,999 Physical Therapists 9,671-13,365 22,897-31,309 Radiologic Technologists and Technicians Medical and Public Health Social Workers Respiratory Therapists & Technicians 7,075-11,288 17,659-27,253 6,004-8,233 14,176-19,251 5,053-7,718 12,455-18,524 Psychiatric Technicians 3,584-5,538 8,837-13,287 Occupational Therapists 3,084-4,548 7,384-10,968 Opticians, Dispensing 2,869-4,397 7,144-10,373 Physician Assistants 2,384-3,941 6,034-9,579 Surgical Technologists 2,367-3,680 5,611-9,314 Physical Therapist Assistants 1,726-3,283 4,865-7,697 Health Educators 1,345-2,169 3,370-5,247 Dietetic Technicians 848-1,153 1,996-2,691 Speech-Language Pathologists ,217-2,216 Recreational Therapists ,040-1,912 Occupational Therapist Assistants (-) ,665 Dietitians and Nutritionists (-) (-)949-1,276 Cardiovascular Technologists and Technicians (-)1,258 - (-)464 (-)2,212 - (-)405 Diagnostic Medical Sonographers (-)1,234 - (-)929 (-)2,454 - (-)1,759 Pharmacy Technicians (-)13,851 - (-)12,050 (-)28,529 - (-)24,427 Emergency Medical Technicians and Paramedics (-)20,215 - (-)16,949 (-)41,254 - (-)33,815 Medical Assistants (-)42,081 - (-)25,200 (-)79,813 - (-)41,366 Total 55, , , ,936 * (-) indicates a Surplus In evaluating the accuracies of these estimates, it s important to consider that many assumptions were necessarily used in the analysis, and vagrancies in the data must be considered. On one hand, we may be underestimating the true shortage. Not everyone who graduates with an allied health degree necessarily goes on to obtain a job in the industry. Similarly, the research does not take into account workers with multiple degrees, resulting in a possible overcount of the available supply. Additionally, the industry has consistently moved toward requiring certification and licenses in an effort to maintain quality. A portion of the currently non-certified allied health workforce may start requiring a post-secondary education, further increasing the need to expand educational infrastructure in the state. On the other hand, the private sector has in the past shown the ability to step up when there is demand for a type of degree or training, and made money available for students in the form of educational loans. The capacity of the private sector to expand and respond is not explicitly handled in this research. Instead, these results should be viewed as a cautionary tale of what might happen if the education system, public and private, is unable or unwilling to invest in expanding programs. 21

22 Economic Impact: Value of the Allied Health Workforce Researchers also studied payroll and tax revenue data for allied health occupations to gauge potential wage gains for Californians should the state s post-secondary education system have the capacity to educate and train enough workers to meet demand. Allied health payroll data was obtained from the Current Population Survey (CPS). The payroll data was adjusted for inflation and projected to 2030 using a constant percentage growth. The data shows that total payroll for allied health workers will top $23.3 billion in 2010, $51.9 billion in 2020, and $116 billion in Table E.1 Allied Health Payroll Data Year Total Payroll Total Payroll Tax 2010 $23,354,060,403 $1,926,709, $51,940,787,662 $4,285,114, $116,559,361,642 $9,616,147,335 Assuming a constant tax rate from today, total revenues derived from California s allied health payroll tax will increase from $1.9 billion in 2010 to $4.3 billion in 2020 to $9.6 billion in Thus, tax revenues from allied health occupations will continually increase, more than quadrupling from 2010 to Lifetime Wages: Comparing Earnings of Certified and Non-Certified Allied Health Workers The final element of this research was to collect wage data for certified and non-certified allied health workers, by age group, from the Current Population Survey (CPS). Both categories, certified and non-certified, were analyzed and graphed to present a comprehensive view of the lifetime earnings of each group (Figure F.1). As stated throughout this report, certified occupations are those occupations that require enrollment in a training program or the completion of a certificate program. Non-certified occupations are those that do not require any form of post-secondary training or certification as a prerequisite to practice in that occupation. According to the CPS wage data, certified workers earn 60 percent more on average than those without certification over their lifetimes. Also, those without certificates/degrees reach their wage peak earlier in their career (typically in their 30s), after which their earnings remain flat (inflationadjusted). While these workers receive pay increases, the increases are not greater than cost of living increases in their area. In contrast, certified workers reach their wage peak much later in their careers, continuing to increase their earnings often until their late 50s. Figure F.1 Allied Health Workers Average Annual Wage by Age ( ) Figure E.1 California Tax Revenues from Allied Healthcare Payrolls Age Group $50k $40k $10b $30k $8b $20k $6b $10k Certified Non-Certified $4b $2b Overall, non-certified allied health workers reach their wage peak during their 30s at $35,273 while certified allied health workers peak at $45,388 much later in their lives, as shown in the graph above. This demonstrates a clear benefit in obtaining a training certificate or degree as it increases a worker s lifelong earnings and purchasing power a key factor in driving the movement of goods and services that fuel the state s economy and boosting the tax revenues that fill state coffers. 22 Help Wanted: Will California Miss Out on the Next Billion-Dollar Growth Industry? 10

23 Case Study: Addressing Shortages with Public-Private Partnerships A newborn spending the night in a neonatal intensive care unit. A patient recovering from a lung infection in intensive care. An elderly woman suffering from shortness of breath. These are just some of the common circumstances that require the care of a trained respiratory therapist vaguelyknown but critically important allied health professionals. In 2006, MemorialCare, a not-for-profit health care system that includes four Southern California hospitals, had a respiratory therapist vacancy rate of 17 percent. We relied on 41 traveling or registry replacements to fill the void an expensive solution. Looking ahead, future estimates revealed that the number of trained workers would fall far below our projected need, especially because nearly half of our respiratory therapists are over 50 and nearing retirement. MemorialCare recognized that one barrier to producing more respiratory therapists is a lack of clinical instructors for existing programs. In 2006, we formed a partnership with Orange Coast College (OCC), the Costa Mesa community college that supplied all of Orange County s respiratory therapy graduates. Key to the partnership was MemorialCare s decision to provide and pay for one of our best respiratory therapists to work as an instructor. MemorialCare also helped develop student recruitment and stipend processes, and we provided economic assistance to qualified students who would then work at least two years for MemorialCare. OCC, in return, agreed to expand the number of students in the program to help meet our hospitals needs. It worked. We produced 24 additional graduates between 2008 and And we estimate that by hiring OCC graduates instead of contractor replacements, we ll save nearly $1.4 million between 2008 and These promising numbers are just a start but they re the right start if providers, educators and state decision-makers want to proactively address shortages that affect our economy and our health care. Maria-Jean Caterinicchio, RN, MS, and Director of Workforce Development at Orange County MemorialCare Medical Centers & Memorial Care University 23

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