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Executive Summary

Q2 HWS Labor Market Pulse® Index

LMPI Composite Index (historical)

July 2010

HWS is pleased to announce the release of Q2 results for the HWS Labor Market Pulse® Index (LMPI). The HWS LMPI is a leading indicator of local health care labor market demand as it is derived from announced expansion and contraction plans, among other data. The Index measures where near-term demand for health care workers is strongest based on a number of tracking variables including temporary health workforce shortages and surpluses, facility and bed closures, announced layoffs and expansions, and local economic trends.

2010 Second Quarter LMPI Highlights

• Despite a quarter where the hospital industry saw the largest number of mass layoffs in a year, overall, the health care labor market improved notably across most major metropolitan areas as measured by the HWS Labor Market Pulse Index® (LMPI).

• For the second quarter of 2010, the near-term demand for health care workers grew fastest in the Orlando, San Francisco Bay, Detroit, Riverside/San Bernardino, and San Diego metropolitan areas.

• Much of the growth was fueled by newly announced or modified expansion plans and/or large-scale hiring announcements at organizations including the University of Michigan Health System and Henry Ford Health System in Detroit, the UCSF Mission Bay Hospital, and the University of California-San Diego Medical Center.

• Of the 30 major markets tracked by the HWS Labor Market Pulse Index® (LMPI), the slowest areas for the quarter included the Las Vegas, New York metro/Northern New Jersey, Houston and Phoenix metropolitan areas.

• The LMPI composite index, a representative basket of the 30 largest markets, posted an 18% increase in the second quarter of 2010 from the 1st quarter of 2010, after an 8% drop the prior quarter. These findings are somewhat inconsistent with the announcements of a record 18 massive hospital layoffs in April. However, it now appears that some of those incidents may have been isolated or delayed cuts, and therefore not indicative of a larger trend. The LMPI indicates fairly unequivocally that health care hiring is coming back and will likely materialize in the next couple quarters.

• For the 2nd quarter ended 6/30/10, 20 markets of the 30 tracked by the LMPI showed signs of accelerated expansion (vs. 11 in the prior quarter).

2010 Second Quarter LMPI Market Highlights

Atlanta-Sandy Springs-Marietta, GA
The near term demand for health care workers in the Atlanta metropolitan area improved considerably during the 2nd quarter of 2010. Of particular note, WellStar Health System announced plans for an outpatient campus that would employ more than 300 and expand the provider’s footprint in east Cobb County, and Childrens Healthcare also announced plans for an outpatient medical center in Cumming, the first phase of a 28-acre medical campus that could include a new 100-bed hospital. Northside Hospital Health System also announced plans to develop a multi-specialty outpatient surgery center in Alpharetta, a project that will create 150 jobs.

Baltimore-Towson, MD
The near-term demand for health care workers in the Baltimore area continued to improve during the 2nd quarter of 2010. Of particular note during the quarter, the University of Maryland Medical Center broke ground on a $176 million expansion of the R Adams Cowley Shock Trauma Center that will house 64 new and replacement critical care beds, 10 new operating rooms, and add 250 new employees.

Boston-Cambridge-Quincy, MA-NH
The demand for health care workers in the Boston metropolitan area remained steady during the 2nd quarter of 2010. Of particular note during the quarter, Lowell General Hospital began a $95 million expansion project that is expected to pump $200 million into the local economy and add 160 new jobs. Also notable during the quarter was Boston Medical Center’s announcement that it will consolidate two of its emergency departments in July that will result only result in minor job loss but save the hospital an estimated $2.5 million a year.

Charlotte-Gastonia-Concord, NC-SC
The near-term demand for health care workers in the Charlotte metropolitan area strengthened during the 2nd quarter of 2010 and the number of workers required to meet announced expansion plans will likely exceed the number of announced positions eliminated or deferred.

Chicago-Naperville-Joliet, IL
The near-term demand for health care workers in the Chicago metropolitan area held relatively steady during Q2 2010. Of note during the quarter, Cook County unveiled a proposal to scale back expensive inpatient care in favor of expanding the county’s network of clinics and specialty-care sites, which would likely result in further reductions to the county’s health workforce.

Cleveland-Elyria-Mentor, OH
The near-term demand for health care workers in the Cleveland metropolitan area improved during the second quarter of 2010. Of particular note, TriHealth announced plans to construct a 67,000-sf medical office building at Good Samaritan Hospital, the Cleveland Clinic broke ground for a community health center at Huron Hospital in East Cleveland, and Hillcrest opened a portion of its $163 million expansion with 72 new private rooms, a Level III neonatal intensive care unit, and a larger emergency department.

Dallas-Fort Worth-Arlington, TX
The near-term demand for health care workers in the Dallas metropolitan area improved during the 2nd quarter of 2010. Of particular note during the quarter, Children’s Medical Center announced plans to build a $21 million pediatric specialty care center in Southlake that will house 54 staff members and physicians by this time next year, and an additional 82 staff within the subsequent 12-18 months.

Denver-Aurora, CO
The near term demand for health care workers in the Denver metropolitan area improved considerably during the 2nd quarter of 2010. Of particular note during the quarter, the University of Colorado in Aurora announced that it will break ground early next year on a $400 million expansion that includes a 12-story tower which will house 144 new beds and a four-story critical care wing. On a negative note, citing declining Medicare and Medicaid reimbursement Exempla Healthcare laid off 100 people, mostly at its St. Joseph Hospital.

Detroit-Warren-Livonia, MI
The Detroit health care labor market continued to rebound during Q2, and the near term demand for health care workers in the area improved considerably. Of particular note: the University of Michigan’s C.S. Mott Children’s and Von Voigtlander Women’s Hospitals are now slated to open a year ahead of schedule which will add 500 new jobs to the University of Michigan Health System. Henry Ford Health System announced a $500 million expansion of its main hospital campus in Detroit and is hoping to attract another $500 million from developers for a new 210-bed patient tower, surgical center, medical office building, cancer institute and emergency department. Havenwyck Hospital opened a new 22-bed acute inpatient unit that is part of a larger $27 million expansion project. And a final agreement was signed for the purchase of the Detroit Medical Center and its eight hospitals by Vanguard Health Systems Inc.

Houston-Baytown-Sugar Land, TX
The demand for health care workers in the Houston metropolitan area continue to fall slightly during the second quarter of 2010. Of note, the UT Medical Branch cut 360 prison health workers and the Village Healthcare Center laid off 120. On a positive note, The Heart and Vascular Hospital at Clear Lake Regional Medical Center is undergoing a $17 million expansion, which will add a dedicated radiology unit, a pharmacy, and dialysis unit.

Kansas City, MO-IL
The near-term demand for health care workers in the Kansas City metropolitan area improved modestly during the second quarter of 2010. Of particular note, Children’s Mercy broke ground on a new 73-bed tower and Overland Park Regional Medical Center announced plans for an expansion could add a 105-bed tower and double the size of the emergency room to 24 beds.

Las Vegas-Paradise, NV
The near-term demand for health care workers in Las Vegas fell significantly during Q2. Of note, Universal Health Services (parent of Desert Springs Hospital) announced the layoff of 41 that it said weren’t related to its recent acquisition of several Nevada psychiatric hospitals. St. Rose Dominican also announced that it was eliminating 57 jobs as part of a restructuring.

Los Angeles-Long Beach-Santa Ana, CA
The near-term demand for health care workers in the Los Angeles metropolitan area continued to improve during the 2nd quarter of 2010. Of particular note during the quarter, West Hills Hospital and Medical Center opened a $60 million, state-of-the-art emergency department and critical-care unit, nearly a decade after the project was first proposed. LA County also broke ground on a $20 million public health center that will provide outpatient services in South Los Angeles as part of the larger Martin Luther King, Jr. Medical Center Campus.

Miami-Fort Lauderdale-Miami Beach, FL
The near-term demand for health care workers in the South Florida metropolitan area improved during the second quarter of 2010. Of particular note, despite recent concerns over its financial stability, the Jackson Health System announced that plans for its new Jackson South Community Hospital are still on track with approximately 80 new hires on deck. National Health Holding Corp also added 40 new jobs at its Boca Raton headquarters. And Cleveland Clinic announced that it plans to start construction on a 9,750-square-foot expansion of its offices in West Palm Beach’s CityPlace Tower.

Minneapolis-St. Paul-Bloomington, MN-WI
The near-term demand for health care workers in the Twin Cities metropolitan area weakened slightly during the 2nd quarter of 2010 but the demand for health care workers in the area remains positive and the number of workers required to meet announced expansion plans will likely balance the number of announced positions eliminated or deferred. Of particular note during the quarter is the closing or downsizing of state mental health facilities. The elimination of 72 mental health jobs was announced in late April. Also announced were the opening of new heart clinics by North Memorial Health Care and the Minneapolis Heart Institute.

New York-Northern NJ-Long Island, NY
After a weak first quarter, the near-term demand for health care workers in the New York metro area has continued to decline during Q2 2010. The index has been significantly impacted by the announcement of more layoffs and the closing of St. Vincent’s Hospital in Manhattan, as well as 500 layoffs next year by the Health and Hospitals Corporation, with more layoffs to come over the next 5 years.

Orlando-Kissimmee, FL
The near-term demand for health care workers in the Orlando metropolitan area showed significant improvement during the second quarter of 2010. After a slight weakening during the first quarter, the index shows the Orlando area to be one of the strongest. Of note during the quarter, HCA is opening a 60-bed sister hospital to Osceola Regional Hospital by 2013. Orlando Health is expanding its pediatric clinic network to add a 4th site for rotating physician specialists. The Florida Hospital Cancer Institute is opening its 6th medical and radiation oncology services center in Kissimmee. Also, the Ohme Inpatient Rehabilitation Center is expanding by 7 beds, and the Florida Hospital for Children is adding neonatal ICU rooms. Most significantly, the Orlando VA Medical Center project is estimated to add 1000 new healthcare related jobs upon completion.

Philadelphia-Camden-Wilmington, PA, NJ, DE, MD
The near-term demand for health care workers in the Philadelphia metropolitan area declined during the 2nd quarter of 2010, but sill remained relatively strong. The number of workers required to meet announced expansion plans will likely exceed the number of announced positions eliminated or deferred. Of note, Albert Einstein Healthcare Network completed two rounds of layoffs this quarter, of 28 and 48. Also, Doylestown Hospital laid off 20 employees and Abington Hospital laid off 100, both due to declines in patient volumes. On a positive note, Wilmington Hospital is undergoing an expansion and renovation that will add 337,000 square feet to the hospital and add 600 more jobs. Holy Redeemer Hospital has completed its first phase of expansions with a new 15-bed neonatal intensive-care unit, seven more triage beds and six additional post-partum beds.

Phoenix-Mesa-Scottsdale, AZ
After several strong quarters and growth, the near term demand for health care workers in the Phoenix metropolitan area fell off during Q2 of 2010. Of note is the elimination of 145 positions by Maricopa Integrated Health in order to save more than $7 million. By contrast, Banner Good Samaritan began a surgical services expansion that will add 6 operating rooms and additional waiting space, and the Phoenix VA Hospital is making plans for a $200 million clinic with primary care, mental health care, audiology, dermatology, rheumatology, optical, radiology and laboratory services.

Pittsburgh, PA
The near term demand for health care workers in the Pittsburgh metropolitan area remained steady during the 2nd quarter of 2010. Of particular note during the quarter, West Penn Allegheny Health warned of up to 344 layoffs when its Suburban campus ends acute care, emergency, and surgical services. Forbes Regional Hospital and UPMC at Presbyterian and Mercy hospitals are all planning to add 9 or 10 ER beds. Also, Heritage Valley Beaver opened an inpatient rehab unit with 10 beds, as well as opening a Walmart convenient care clinic. Finally, Advanced Surgical Hospital of Washington County is opening with 14 beds as a doctor-owned, specialty hospital.

Portland-Vancouver-Beaverton, OR
The demand for health care workers in the Portland metropolitan area remained fairly steady, although up slightly for the 2nd quarter of 2010. Of particular note during the quarter, Multnomah County approved a 16-bed mental health outpatient center. Also, OHSU is now employing a record 13,000 people and is stabilizing its finances. Finally, Kaiser Permanente Hillsboro and Adventist Medical Center are finishing expansions, which are likely some of the last for the region for the moment.

Riverside-San Bernardino-Ontario, CA
The near-term demand for health care workers in the Riverside- San Bernadino metropolitan area showed quite significant improvement during the second quarter of 2010. After a weakening during the first quarter of 2010, the index shows the Riverside-SB area to be one of the strongest. Of note during the quarter, Loma Linda University announced its new 24-bed rehabilitation hospital for patients with amputations or serious brain and spinal cord injuries. Also, St. Bernardine Medical Center and Riverside Medical Clinic announced that they have partnered with March Healthcare Development to build a 150-bed hospital on former March Air Force Base property.

Sacramento-Arden-Arcade-Roseville, CA
The near-term demand for health care workers in the Sacramento metropolitan area rebounded during the second quarter of 2010, particularly compared to a weak first quarter of the year. Of note in the Sacramento metro area were the additional layoffs at the Fremont-Rideout Health Group. After 185 layoffs last quarter, the Health Group is laying off an additional 90 nurses. Also of note, Heritage Oaks Hospital opened a new wing at the psychiatric hospital, with an additional 49 beds.

San Diego-Carlsbad-San Marcos, CA
The near term demand for health care workers in the San Diego metropolitan area improved considerably during the second quarter of 2010 after a series of flat quarters. Of note, the University of California-San Diego Medical Center Campus in La Jolla released plans for a new 10-story medical tower. Also of note, Scripps Memorial Hospital Encinitas began its critical care facility expansion which will include a emergency department that is two times as large as the current ED.

San Francisco-Oakland-Fremont, CA
The near term demand for health care workers in the San Francisco Bay Area fell off slightly during Q2 after a banner first quarter. Of note this quarter was the announcement by Children’s Hospital Oakland that it would lay off 17 employees as part of its restructuring and cost saving plan. But that announcement was more than countered by an upward adjustment to the estimated number of jobs created by the new UCSF Mission Bay Hospital.

San Jose-Sunnyvale-Santa Clara, CA
The near-term demand for health care workers in the San Jose metropolitan area continued to remain steady during the second quarter of 2010. Of note during the quarter, Regional Medical Center of San Jose unveiled its new office building, operating room, and larger ICU. The expansion features centralized nurse stations for streamlining the delivery of care. Also, two Stanford hospital construction projects have been further delayed until at least 2017.

Seattle-Bellevue-Everett, WA
The near term demand for health care workers in the Seattle metropolitan area slowed notably during Q2 2010 after a spike in Q1. Expansions announced this quarter were considerably smaller compared to last quarter. It was announced that Swedish Hospital has started a 15-bed expansion on the neonatal intensive care unit, family lounge, and educational center. MultiCare in Pierce County also announced expansions in their Bonney Lake and Puyallup offices. Valley General Hospital also announced they will be cutting 12 jobs in order to cut costs.

St. Louis, MO-IL
The near-term demand for health care workers in the St. Louis metropolitan area improved during the second quarter of 2010. The St. Louis index returned to its steady rate after a downturn in the first quarter this year. Of note during this quarter, Metropolitan St. Louis Psychiatric Center is closing its short-term acute psychiatric unit and laying off 31 employees. Also, Select Medical is laying off 66 workers at its Manchester business office. However, it was also announced that several healthcare construction projects are resuming after previously being delayed because of the recession.

Tampa-St. Petersburg-Clearwater, FL
The near-term demand for health care workers in the Tampa metropolitan area weakened slightly during the second quarter of 2010 compared to the first quarter of 2010, but still remained strong overall. Of note this quarter, St. Joseph’s Women’s Hospital began a 5-story expansion, including a 64-bed neonatal intensive care unit, a breast care center, additional private suites and women’s care services. Also, Oak Hill Hospital announced an addition of 20 private cardiac rooms and an additional 41 jobs. Also of note, Ten Broeck Children’s Inc received approval for a psychiatric hospital facility able to treat 40 patients.

Washington-Arlington-Alexandria, DC-VA-MD-WV
The near-term demand for health care workers in the Washington DC metropolitan area improved notably during the second quarter of 2010. Of note, Inova Fairfax Hospital will begin building a new patient tower that will add 43 licensed obstetrics beds and Inova Mount Vernon Hospital announced that it is planning a new patient tower as part of a renovation and expansion of its campus. Shady Grove Adventist also announced plans to open a new radiation oncology facility in Germantown early next year and HCA’s Stonespring Medical Center received approval for its new 164-bed Loudoun County hospital.

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