The outlook for the healthcare staffing industry looks bright, though healthcare staffing executives should not expect growth to continue at the high levels seen over the last two years.

According to Staffing Industry Analysts’ most recent US Staffing Industry Forecast report, the healthcare segment of the US staffing industry is projected to grow by a robust 13% in 2016, decelerating to 8% in 2017. The industry has been buoyed in part by an increase in the number of newly insured US patients as a result of the Affordable Care Act (ACA), and has also benefitted from higher turnover among healthcare workers due to improving economic conditions.

Illustrative of these dynamics, below is data from the US Census Bureau showing the net number of non-elderly newly insured from 2009 to 2015.

As can be seen from the table, the number of newly insured skyrocketed in 2014, causing a spike in demand for healthcare workers. The Congressional Budget Office last year projected an additional 5 million non-elderly individuals would gain healthcare coverage in 2016 as a result of the ACA, and earlier this year projected an additional 2 million will gain coverage in 2017. While we don’t know exactly how precise the CBO’s projections will turn out to be, if even directionally correct the CBO’s projections underpin our rosy forecast for the industry, and suggest growth is likely to continue for healthcare staffing firms at least through 2017, though we expect growth to decelerate from the levels seen over the last two years.

The travel nurse subsegment of the healthcare staffing industry continued to be the star of the industry; after growing 40% in 2015, we project the segment will grow by a market leading 22% in 2016, slowing to a still strong 12% in 2017. Some of the growth in travel nursing came at the direct expense of the per diem nurse staffing model as firms and hospitals increasingly prefer to “lock in” a nurse for a 13-week assignment. The allied health and locum tenens subsegments are both projected to grow by double digits in 2016, decelerating to single digit growth in 2017.

Corporate members can access our full US Staffing Industry Forecast here.