FAULT LINES | HEALTHCARE, Part 2: Geopolitics
Introduction: Three major Fault Lines are rattling the global labor market: labor shortages, geopolitics, and artificial intelligence. Healthcare sits squarely within the fault zone of all three.
This second of our three-part series covers the intensifying geopolitical factors that are putting new pressures on Healthcare in the US.
A convergence of factors make Healthcare vulnerable to geopolitical disruptions:
1. Healthcare-related supply chains rest on shaky ground as billions of tons of pharmaceuticals and medical supplies come from outside the US, and American manufacturing is not yet poised to fill gaps caused by trade disruptions.
2. Policy changes in both the US and abroad are driving immigration rates down and disrupting the labor supply for both high-skill and low-skill health professions.
The industry’s workforce is heavily reliant on foreign-born workers, with more than 3 million immigrants employed in Healthcare roles.
On the flipside, the immigrant workforce is also heavily reliant on the Healthcare industry for jobs; roughly 1 in 5 foreign-born workers in the US is employed in Healthcare.
3. Globally, birth rates are in decline, and the world is aging, which means that origin countries also need more Healthcare workers. In response, some are enacting policies to retain their domestic workforce.
4. International enrollment at US institutions is an uncertain source of new Healthcare workers.
As addressed in part one of this series, Healthcare faces significant labor shortages as a result of demographic, educational, and retention challenges within the US. Now we’ll cover how Healthcare’s homegrown workforce challenges are further compounded by geopolitical factors: cracks in the Healthcare supply chain, shifts in international student enrollment, and major declines in the arrival of talent from outside the country. As geopolitical shifts rattle this critical sector of the economy, can the US continue to fill its pharmacy shelves and high-demand Healthcare roles from within its own borders?
Geopolitical Strain on the Supply Chain
To provide for our aging population, the supply of health-related goods will need to rise to meet demand. To address this concern, reshoring efforts have already become a strategic goal for some policymakers in trade-dependent countries. But rebuilding domestic manufacturing requires time, resources, and younger workers—who are also in shorter supply in the years ahead. Before the Healthcare economy can successfully adapt to possible restrictions on trade, the US would need to boost its lagging output of health-related products.
According to one estimate, 70-80% of generic drugs sold in the US are sourced from India and China, and the amount of pharmaceutical imports to the US has risen by 700% over the last 25 years. With tensions between the US and China making headlines, this global dependence reveals underlying vulnerabilities to the health of the US population.
Multiplying this concern is that the number of Americans aged 65 and older is expected to grow by nearly 12 million over the next ten years, creating soaring demand for medications and health products. Since a significant share of life-saving drugs and medical equipment are manufactured outside the US, geopolitical tensions would pose both an economic and a medical threat.
Immigrant Presence in the American Healthcare Workforce
Increasing the output of domestic medical and pharmaceutical manufacturing could help stabilize one geopolitical fault line where pressure is building for the Healthcare industry in the US. But as restrictions on immigration intensify, an even greater challenge will be how to build a domestic supply of talent, given Healthcare’s widespread dependence on foreign labor.
Nearly 1 in 5 Healthcare workers in the US is foreign-born, putting Healthcare at one of the major epicenters of the geopolitical workforce shakeup. For foreign-born labor already in the US, Healthcare has been a major source of employment. More than 3 million Healthcare workers in the US are immigrants, according to the 2024 Current Population Survey. (This count may be even higher than reported since respondents could choose not to disclose their immigration status.)
Foreign-born workers are unevenly distributed across Healthcare occupations—filling large shares of some of the most in-demand jobs. In the last installment on labor shortages, we highlighted two of the most-posted Healthcare jobs in the US: health aides and registered nurses. Postings for physicians and surgeons have also doubled in just the past 5 years. So let’s look at who works in those roles:
Since immigrant labor clearly plays a critical part in the US Healthcare workforce, stricter immigration laws could create bottlenecks in the future supply of Healthcare talent.
But even without tighter restrictions to immigration as a whole, tensions with any individual country that these workers come from could constrain future job growth as well. A short list of nations account for a majority of immigrant labor in Healthcare—with India, Mexico, and Philippines together accounting for nearly 30% of that total. Industry leaders should understand and prepare for how geopolitical relations with these regions may impact their future workforce.
Just as shifts in immigration from several specific countries can impact the Healthcare industry as a whole, it's also essential for leaders to understand which specific roles are filled by workers from these countries:
The state-level impact of tensions between the US and the origin countries of immigrant workers will also vary. States with the highest dependence on workers born outside the country include California and New York. These have the highest immigrant share of both their overall population (as shown in the map below) and of their Healthcare labor force—with more than a third of those workers originating from outside the US.
Slowing International Migration is More than a US Policy Issue
Both demographic and policy changes are slowing the movement of people across international boundaries. Here in the US, net migration has fallen almost 90% in just the past two years.
Much of this has been the result of stricter immigration enforcement on the US side, but global migration isn’t a single-factor issue. Europe, like the US, is aging and anticipating a shortage of nearly 1 million Healthcare workers in the next 5 years. But many of these countries have also made recent policy decisions aimed at lowering international migration.
Birth rates have also fallen in all global regions, squeezing labor supplies as more retirees exit the workforce and fewer young people replace them. These demographic shifts have combined with political pressures to create an international tug-o-war for new talent.
Many wealthy, developed countries have placed restrictions on new work visas in an effort to boost the domestic workforce and reduce foreign dependence. Others continue to draw more Healthcare workers from elsewhere. The free flow of foreign workers may not be as readily available in the future, however. A growing number of the poorer origin countries are fighting to keep these essential workers from moving abroad.
The Philippines has already placed caps on the number of nurses leaving the country for higher pay elsewhere. And parts of subsaharan Africa and southeast Asia are pushing to stave off “brain drain” by improving opportunities at home for their health professionals.
We've already seen in the last article that the US-born workforce is aging and poised to shrink. But we now know that relying heavily on international sources of Healthcare workers comes with its own risks. In today's unpredictable geopolitical climate, building a broader and more efficient system for developing Healthcare workers within the US will be essential—but far from easy.
More International Students Are Getting Healthcare Degrees, but Will They Join the US Workforce?
While many foreign-born Healthcare workers in the US arrived with work-ready skills and degrees, others first entered the country as students. But as the chart below shows, overall international enrollment has dropped in recent years and remains well below the 2017 peak.
This decline in international enrollments is concerning for higher education more broadly, but for Healthcare programs in the US, the numbers have been moving in a more positive direction:
New graduates from Healthcare programs at American institutions nearly doubled in the past decade. This represents a possible bright spot for the future of Healthcare talent growth. That said, the total number of these grads remains small compared to the soaring worker demand. And if some of these graduates intend to stay in the US for work, their student visas would need to become work visas. How likely an outcome that is remains to be seen as US immigration policies continue to shift and as worker demand rises in students’ countries of origin.
Conclusion
The complex geopolitical pressures on Healthcare are not easy to track or predict, but what’s clear is this: rising demand for medical goods and Healthcare workers spans the globe and is subject to multiple disruptions. International pressures are building as countries age and jockey for supply chain advantages and labor force dominance.
As Lightcast’s Fault Lines report demonstrates, labor shortages and geopolitics are two of the major forces rattling the global labor market. Artificial intelligence is the other force putting pressure on the Healthcare industry. We’ll cover that third and final fault line in the coming weeks.
To understand why the world of work seems to be shaking under our feet—and what strategies can help leaders prepare for the future—you can read the full Fault Lines report, listen to the audiobook, or explore the interactive experience on our website.
