IPA Provides Useful Information about the Health Services Industry

Health Services

IPA Statistics on Health Services


  • As the largest industry in 2002, health services provided 12.9 million jobs— 12.5 million jobs for wage and salary workers and about 382,000 jobs for the self-employed.
  • Ten out of 20 occupations projected to grow the fastest are concentrated in health services.
  • About 16 percent of all new wage and salary jobs created between 2002 and 2012 will be in health services— 3.5 million jobs, which is more than in any other industry.
  • The majority of jobs require less than 4 years of college education, but health diagnosing and treating practitioners are among the most educated workers.


Combining medical technology and the human touch, the health services industry administers care around the clock, responding to the needs of millions of people—from newborns to the critically ill.

About 518,000 establishments make up the health services industry; all vary greatly in terms of size, staffing patterns and organizational structures. Three-fourths of all health services establishments are offices of physicians, dentists or other health practitioners. Although hospitals constitute only 2 percent of all health services establishments, they employ 41 percent of all workers.

The health services 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. Almost 3 out of 4 non-hospital health services establishments employed fewer than 10 workers. By contrast, more than 2 out of 3 hospital employees were in establishments with more than 1,000 workers.

The health services industry consists of the following nine segments:

Hospitals. Hospitals provide complete medical care, ranging from diagnostic services, to surgery, to continuous nursing care. Some hospitals specialize in treatment of the mentally ill, cancer patients or children. Hospital- based care may be on an inpatient (overnight) or outpatient basis. The mix of workers needed varies, depending on the size, geographic location, goals, philosophy, funding, organization and management style of the institution. As hospitals work to improve efficiency, care continues to shift from an inpatient to outpatient basis whenever possible. Many hospitals have expanded into long-term and home healthcare services, providing a wide range of care for the communities they serve.

Nursing and residential care facilities. Nursing care facilities provide inpatient nursing, rehabilitation, and health-related personal care to those who need continuous nursing care, but do not require hospital services. Nursing aides provide the vast majority of direct care. Other facilities, such as convalescent homes, help patients who need less assistance. Residential care facilities provide around-the-clock social and personal care to children, the elderly, and others who have limited ability to care for themselves. Workers care for residents of assisted-living facilities, alcohol and drug rehabilitation centers, group homes and halfway houses. Nursing and medical care, however, is not the main focus of establishments providing residential care, as it is in nursing care facilities.

Offices of physicians. More than a third of all health services establishments fall into this industry segment. Physicians and surgeons practice privately or in groups of practitioners who have the same or different specialties. Many physicians and surgeons prefer to join group practices because they afford backup coverage, reduce overhead expenses, and facilitate consultation with peers. Physicians and surgeons are increasingly working as salaried employees of group medical practices, clinics or integrated health systems.

Offices of dentists. About 1 out of every 5 health services establishments is a dentist’s office. Most employ only a few workers, who provide general or specialized dental care, including dental surgery.

Home healthcare services. Skilled nursing or medical care is sometimes provided in the home, under a physician’s supervision. Home healthcare services are provided mainly to the elderly. The development of in-home medical technologies, substantial cost savings, and patients’ preference for care in the home have helped make this once-small segment of the industry into one of the fastest growing in the economy.

Offices of other health practitioners. This segment of the industry includes the offices of chiropractors, optometrists, podiatrists, occupational and physical therapists, psychologists, audiologists, speech-language pathologists, dietitians and other miscellaneous health practitioners. Demand for the services of the segment is related to the ability of patients to pay, either directly or through health insurance. Hospitals and nursing facilities may contract out for these services. This segment also includes practitioners of alternative medicine, such as acupuncturists, homeopaths, hypnotherapists and naturopaths.

Outpatient care centers. Among the diverse establishments in this group are kidney dialysis centers, outpatient mental health and substance abuse centers, health maintenance organization medical centers, and freestanding ambulatory surgical and emergency centers.

Other ambulatory healthcare services. Included in this relatively small industry segment are ambulance services, blood and organ banks, and other miscellaneous ambulatory healthcare services, such as pacemaker monitoring services and smoking cessation programs.

Medical and diagnostic laboratories. Medical and diagnostic laboratories provide analytic or diagnostic services to the medical profession or directly to patients following a physician’s prescription. Workers may analyze blood, take x rays and computerized tomography scans, or perform other clinical tests. Medical and diagnostic laboratories provide the fewest number of jobs in health services.

In the rapidly changing health services industry, technological advances have made many new procedures and methods of diagnosis and treatment possible. Clinical developments such as organ transplants, less invasive surgical techniques, skin grafts, and gene therapy for cancer treatment continue to increase the longevity and improve the quality of life of many Americans. Advances in medical technology also have improved the survival rates of trauma victims and the severely ill, who need extensive care from therapists and social workers, among other support personnel.

In addition, advances in information technology continue to improve patient care and worker efficiency with devices such as hand-held computers that record notes on each patient. Information on vital signs and orders for tests are transferred electronically to a main database, eliminating paper and reducing record-keeping errors.

Cost containment also is shaping the health services 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 eventual cost of undiagnosed, untreated medical conditions. Enrollment in managed care programs— predominantly preferred provider organizations, health maintenance organizations and hybrid plans such as point-of- service programs—continues to grow. These prepaid plans provide comprehensive coverage to members and control health insurance costs by emphasizing preventive care. Cost-effectiveness also is improved with the increased use of integrated delivery systems, which combine two or more segments of the industry to increase efficiency through the streamlining of functions, primarily financial and managerial. According to a 2002 Deloitte & Touche survey, only 48 percent of surveyed hospitals expect to be stand-alone, independent facilities in 2005, compared with 61 percent in 2002. These changes will continue to reshape not only the nature of the health services workforce, but also the manner in which health services are provided.


Average weekly hours of nonsupervisory workers in private health services varied among the different segments of the industry. Workers in home healthcare services averaged only 28.5 hours per week in 2002, while those in medical and diagnostic laboratories and other ambulatory healthcare services averaged 35.9 hours, compared with 33.9 hours for all private industry.

Many workers in the health services industry are on part-time schedules. Part-time workers made up about 16 percent of the workforce as a whole in 2002, but accounted for almost 38 percent of workers in offices of dentists and more than 21 percent of those in offices of physicians. Students, parents with young children, dual jobholders and older workers make up much of the part-time workforce.

Many health services establishments operate around the clock and need staff at all hours. Shift work is common in some occupations, such as registered nurses. Numerous health services workers hold more than one job.

In 2002, the incidence of occupational injury and illness in hospitals was 7.4 cases per 100 full-time workers, compared with an average of 5.3 for private industry overall. Nursing care facilities and hospitals had much higher rates of 12.6 and 9.7 cases, respectively. Health services workers involved in direct patient care must take precautions to prevent back strain from lifting patients and equipment, to minimize exposure to radiation and caustic chemicals and to guard against infectious diseases such as AIDS, tuberculosis and hepatitis. Home care personnel who make house calls are exposed to the possibility of being injured in highway accidents, all types of overexertion when assisting patients and falls inside and outside homes.


As the largest industry in 2002, health services provided 12.9 million jobs—12.5 million jobs for wage and salary workers and about 382,000 jobs for the self-employed. Of the 12.5 million wage and salary jobs, more than 40 percent were in hospitals; another 22 percent were in either nursing or residential care facilities; and almost 16 percent were in offices of physicians. About 92 percent of wage and salary jobs were in private industry; the rest were in State and local government hospitals. The majority of jobs for self-employed workers were in offices of physicians, dentists, and other health practitioners—about 265,000 out of the 382,000 total self-employed.

Health services jobs are found throughout the country, but are concentrated in the largest States—in particular, California, New York, Florida, Texas and Pennsylvania.

Workers in health services tend to be older than workers in other industries. They also are more likely to remain employed in the same occupation, due, in part, to the high level of education and training required for many health occupations.


Health services firms employ large numbers of workers in professional and service occupations. Together, these two occupational groups account for 3 out of 4 jobs in the industry. The next-largest share of jobs, 18 percent, is in office and administrative support. Management, business and financial operations occupations account for only 5 percent of employment. Other occupations in health services made up only 2 percent of the total.

Professional occupations, such as physicians and surgeons, dentists, registered nurses, social workers and physical therapists, usually require at least a bachelor’s degree in a specialized field or higher education in a specific health field, although registered nurses also enter through associate degree or diploma programs. Professional workers often have high levels of responsibility and complex duties. They may supervise other workers or conduct research, as well as provide services.

Other health professionals and technicians work in many fast-growing occupations, such as medical records and health information technicians and dental Hygienists. These workers may operate technical equipment and assist health diagnosing and treating practitioners. Graduates of 1- or 2-year training programs often fill such positions; the jobs usually require specific formal training beyond high school, but less than 4 years of college.

Service occupations attract many workers with little or no specialized education or training. Among these workers are nursing aides, home health aides, building cleaning workers, dental assistants, medical assistants and personal and home care aides. Nursing or home health aides provide health-related services for ill, injured, disabled, elderly, or infirm individuals either in institutions or in their homes. By providing routine personal care services, personal and home care aides help elderly, disabled and ill persons live in their own homes instead of in an institution. Although some of these workers are employed by public or private agencies, many are self-employed. With experience and, in some cases, further education and training, service workers may advance to higher level positions or transfer to new occupations.

Most jobs in health services provide clinical services, but there also are many in occupations with other functions. Numerous workers in management and administrative support jobs keep organizations running smoothly. Although many medical and health services managers have a background in a clinical specialty or training in health services administration, some enter these jobs with a general business education.

Each segment of the health services industry provides a different mix of wage and salary health-related jobs.

Hospitals. Hospitals employ workers with all levels of education and training, thereby providing a wider variety of services than is offered by other segments of the health services industry. About 1 in 4 hospital workers is a registered nurse. Hospitals also employ many physicians and surgeons, therapists and social workers. About 1 in 5 jobs is in a service occupation, such as nursing, psychiatric and home health aide, or building cleaning worker. Hospitals also employ large numbers of office and administrative support workers.

Nursing and residential care facilities. More than 3 out of 5 nursing and residential care facility jobs are in service occupations, primarily nursing, psychiatric and home health aides. Professional and administrative support occupations are a much smaller percentage of employment than in other parts of the health services industry. Federal law requires nursing facilities to have licensed personnel on hand 24 hours a day and to maintain an appropriate level of care.

Offices of physicians. Many of the jobs in offices of physicians are in professional and related occupations, primarily physicians and surgeons and registered nurses. A third of all jobs, however, are in office and administrative support occupations, such as receptionists and information clerks.

Offices of dentists. About a third of all jobs in this segment are in service occupations, mostly dental assistants. The typical staffing pattern in dentists’ offices consists of one dentist with a support staff of dental hygienists and dental assistants. Larger practices are more likely to employ office managers and administrative support workers.

Home healthcare services. More than half of all jobs in this segment are in service occupations, mostly home health aides and personal and home care aides. Nursing and therapist jobs also account for substantial shares of employment in this segment.

Offices of other health practitioners. Professional and related occupations, including physical therapists, occupational therapists, dispensing opticians and chiropractors, accounted for about 2 in 5 jobs in this segment. Office and administrative support occupations also accounted for a significant portion of all jobs, about 34 percent.

Outpatient care centers. This segment of the health services industry employs a high percentage of professional and related workers, including counselors, social workers, and registered nurses.

Other ambulatory healthcare services. Because this industry segment includes ambulance services, it employs almost 2 out of every 5 emergency medical technicians and paramedics and a third of all ambulance drivers and attendants.

Medical and diagnostic laboratories. Professional and related workers, primarily clinical laboratory and radiologic technologists and technicians, make up about 42 percent of all jobs in this industry segment. Service workers employed in this segment include medical assistants, medical equipment preparers and medical transcriptionists.


A variety of programs after high school provide specialized training for jobs in health services. Students preparing for health careers can enter programs leading to a certificate or a degree at the associate, baccalaureate, professional or graduate level. Two-year programs resulting in certificates or associate degrees are the minimum standard credential for occupations such as dental hygienist or radiologic technologist. Most therapists and social workers have at least a bachelor’s degree. Health-diagnosing and -treating practitioners, such as Physicians and surgeons, optometrists and podiatrists, are among the most educated workers, with significant education and training beyond college.

The health services industry provides many job opportunities for people without specialized training beyond high school. In fact, more than half of workers in nursing and residential care facilities have a high school diploma or less, as do a quarter of workers in hospitals.

Some health services establishments provide on-the-job or classroom training, as well as continuing education. For example, in all certified nursing facilities, nursing aides must complete a State-approved training and competency evaluation program and participate in at least 12 hours of in-service education annually. Hospitals are more likely than other facilities to have the resources and incentive to provide training programs and advancement opportunities to their employees. In other segments, staffing patterns tend to be more fixed and the variety of positions and advancement opportunities more limited. Larger establishments usually offer a broader range of opportunities.

Some hospitals provide training or tuition assistance in return for a promise to work at their facility for a particular length of time after graduation. Many nursing facilities have similar programs. Some hospitals have cross-training programs that train their workers—through formal college programs, continuing education or in-house training—to perform functions outside their specialties. Persons considering careers in health services should have a strong desire to help others, genuine concern for the welfare of patients and clients, and an ability to deal with people of diverse backgrounds in stressful situations.

Health specialists with clinical expertise can advance to department head positions or even higher level management jobs. Medical and health services managers can advance to more responsible positions, all the way up to chief executive officer.


Average earnings of non-supervisory workers in health services are slightly higher than the average for all private industry, with hospital workers earning considerably more than the average and those employed in nursing and residential care facilities and home healthcare services earning less. Average earnings often are higher in hospitals because the percentage of jobs requiring higher levels of education and training is greater than in other segments. Those segments of the industry with lower earnings employ large numbers of part-time service workers.

As in most industries, professionals and managers working in health services typically earn more than other workers in the industry. Earnings in individual health services occupations vary as widely as the duties, level of education and training, and amount of responsibility required by the occupation. Some establishments offer tuition reimbursement, paid training, child daycare services and flexible work hours. Health services establishments that must be staffed around the clock to care for patients and handle emergencies often pay premiums for overtime and weekend work, holidays, late shifts and time spent on call. Bonuses and profit-sharing payments also may add to earnings.

Earnings vary not only by type of establishment and occupation, but also by size; salaries thus tend to be higher in larger hospitals and group practices. Geographic location also can affect earnings.

Although unionization is more common in hospitals, the health services industry is not heavily unionized. In 2002, only 11 percent of workers in the industry were members of unions or covered by union contracts, compared with about 15 percent for all industries.


Wage and salary employment in the health services industry is projected to increase 28 percent through 2012, compared with 16 percent for all industries combined. Employment growth is expected to account for about 3.5 million new wage and salary jobs—16 percent of all wage and salary jobs added to the economy over the 2002-12 period. Projected rates of employment growth for the various segments of the industry range from 12.8 percent in hospitals, the largest and slowest-growing industry segment, to 55.8 percent in the much smaller home healthcare services.

Many of the occupations projected to grow the fastest in the economy are concentrated in the health services industry. For example, over the 2002-12 period, total employment of medical assistants—including the self- employed—is projected to increase by 59 percent, physician assistants by 49 percent, home health aides by 48 percent and medical records and health information technicians by 47 percent.

Employment in health services will continue to grow for several reasons. The number of people in older age groups, with much greater than average healthcare needs, will grow faster than the total population between 2002 and 2012, increasing the demand for health services, especially home healthcare and nursing and residential care. Advances in medical technology will continue to improve the survival rate of severely ill and injured patients, who will then need extensive therapy and care. New technologies will enable conditions not previously treatable to be identified and treated. Medical group practices and integrated health systems will become larger and more complex, increasing the need for office and administrative support workers. Also contributing to industry growth will be the shift from inpatient to less expensive outpatient care, made possible by technological improvements and consumers’ increasing awareness of and emphasis on, all aspects of health. All these factors will ensure robust growth in this massive, diverse industry.

Employment growth in the hospital segment will be the slowest within the health services industry, a result of efforts to control hospital costs and of the increasing utilization of outpatient clinics and other alternative care sites. Hospitals will streamline health services delivery operations, provide more outpatient care, and rely less on inpatient care. Job opportunities, however, will remain plentiful because hospitals employ a large number of people. Besides job openings due to employment growth, additional openings will arise as workers leave the labor force or transfer to other occupations. Occupations with the most replacement openings are usually large, with high turnover stemming from low pay and status, poor benefits, low training requirements, and a high proportion of young and part-time workers, such as nursing, psychiatric, and home health aides. By contrast, occupations with relatively few replacement openings (such as physicians and surgeons) are characterized by high pay and status, lengthy training requirements, and a high proportion of full-time workers.

Fast growth is expected for workers in occupations concentrated outside the inpatient hospital sector, such as medical assistants and home health aides. Because of cost pressures, many health services facilities will adjust their staffing patterns to reduce labor costs. Where patient care demands and regulations allow, health services facilities will substitute lower paid providers and will cross-train their workforces. Many facilities have cut the number of middle managers, while simultaneously creating new managerial positions as they diversify. Because traditional inpatient hospital positions are no longer the only option for many future health services workers, persons seeking a career in the field must be willing to work in various employment settings.

Demand for dental care will rise due to population growth, greater retention of natural teeth by middle-aged and older persons, greater awareness of the importance of dental care, and an increased ability to pay for services. Dentists will use support personnel such as dental hygienists and assistants to help meet their increased workloads.

In some management, business and financial operations occupations, rapid growth will be tempered by restructuring to reduce administrative costs and streamline operations. The effects of office automation and other technological changes will slow employment growth in office and administrative support occupations, but because the employment base is large, replacement needs will continue to create substantial numbers of job openings. Slower growing service occupations also will provide job openings due to replacement needs.

Technological changes, such as increased laboratory automation, will negatively affect the demand for other occupations as well. For example, the use of robotics in blood analysis may limit job growth for medical and clinical laboratory technologists and technicians, although the hands-on nature of health services precludes significant productivity gains in many instances.

Health services workers at all levels of education and training will continue to be in demand. In many cases, it may be easier for jobseekers with health-specific training to obtain jobs and advance in their careers. Specialized clinical training is a requirement for many jobs in health services and is an asset even for many administrative jobs that do not specifically require it.

Industry data is republished with permission by the Bureau of Labor Statistics

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