Healthcare employs 15.5 million full time workers – more than 1 out of every 9 jobs. That’s more workers than the manufacturing industry. By 2019, healthcare employment will surpass retail.
Over the next decade, 9 of the 12 fastest-growing occupations will be in healthcare – fully a quarter of total job growth.
While that’s good news for folks working in the healthcare industry, those jobs are funded by employers and taxpayers – and those funds are not available to buy other goods or services. Some argue healthcare is “crowding out” economic expansion in other sectors thereby hurting overall economic growth. Moreover, much of healthcare is inherently inefficient; extra cost does NOT equal extra benefit. The US’ healthcare efficiency rating by the Commonwealth Fund was a miserable 11th out of 11 countries.
That isn’t exactly “exceptional”.
This from “The Health Care Jobs Fallacy” authors Katherine Baicker, Ph.D., and Amitabh Chandra, Ph.D.:
Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government with less money to perform all other governmental functions — including paying teachers, scientists, and social workers.
By the same token, “controlling” health care costs will cut employment, and pharma stock prices, and margins for medical device firms, and bonuses at healthplans.
This is where things get interesting.
If efforts to control healthcare costs and increase efficiency actually bear fruit, those lost jobs, reduced profits and lower margins will hurt the economy. At some point, the entities that pay those costs
are going to may put the dollars to work elsewhere, but that’s going to take some time. And, the money saved may just be parked in cash accounts where it won’t do anyone much good.
So, if the healthcare sector of our economy gets more efficient, the US economy will suffer.
What does this mean for you?
Healthcare is a huge employment generator, and a very inefficient industry. Fixing that inefficiency will reduce employment and economic growth.
One wonders how this will affect politics and politicians.