Amid Tepid Economic Growth, Health Consulting Demand Skyrockets

While economic growth over the last month was just modest, health care has done well with demand for health care consulting services skyrocketing, according to the Federal Reserve's Beige Book.

Demand for health care consulting services has skyrocketed over the last month, only partly because of the Affordable Care Act (ACA), according to the Federal Reserve’s Beige Book.

The reports from the 12 Fed districts indicated “‘unprecedented’ levels of merger and acquisition activity among health care providers and the need for improved efficiency as a result of the ACA.”

Reports from Chicago, Minneapolis, Kansas City and San Francisco showed wage increases concentrated among certain highly skilled workers in a number of fields, including health care and information technology. Boston reported a significant increase in consulting services related to health care.

“At the same time, firms focused on the pharmaceutical industry have experienced slow growth because their clients have been hurt by blockbuster drugs losing patent protection and cost pressures from governments,” according to the Beige Book.

Although overall demand for recruiting firms’ services in Chicago — the seventh district — was flat compared to last year, demand was great in health care, where firms are having trouble filling positions and finding qualified candidates.

Cleveland — the fourth district — reported that primarily job vacancies were found in health care. In St. Louis — the eighth district — firms in health care technology reported plans to hire new workers or expand operations.

However, health growth wasn’t up everywhere. Philadelphia — the third district — reported slower demand for health care staff.

In general, the Beige Book reported that economic growth over the last month was only modest. New York — the second district — noted that its economic activity leveled off, while Kansas City — the tenth district — also indicated growth had slowed.

Wages and consumer spending were only slightly up; however, residential real estate conditions had improved since the last report in the beginning of September. Most districts reported that home sales were strengthening, prices were steady to increasing and some districts noted declining inventories.