Is healthcare job growth good for everyone who isn't in the healthcare sector? That's a question I ask just about everyone who's willing to weigh in on the topic.
Anthony P. Carnevale, director of the Georgetown University Center on Education and the Workforce, said in June that healthcare sector cost and job growth are byproducts of an inefficient and fragmented healthcare system. He estimates that by 2020 one-in-five dollars spent in the overall economy will go to healthcare. That's money that will have to come from other areas of the economy.
In addition, he estimates that the healthcare sector will create 5.6 million new jobs, from drug reps to bedside nurses, by 2020.
"There is a dilemma here, and it gets at the root of the healthcare issue in general. We are paying twice what other advanced industrial nations pay for healthcare. They are at 9% of GDP and we are at 18% and headed for 20%," Carnevale said in June. "We've built a huge sector, but the productivity growth has been negative for a while. Our estimates on the productivity growth are basically -1%. In manufacturing productivity is +8%. We are supporting a huge apparatus in healthcare and no doubt there are huge inefficiencies."
Others argue that healthcare sector job growth is a natural evolution for a mature society and should not necessarily be met with wringing hands.
"There seem to be two economies—the healthcare economy and the non-healthcare economy. One of the problems in healthcare policy is the attempt to understand healthcare economics in the context of the rest of the economy," says Richard "Buz" Cooper, MD, Senior Fellow at the Leonard Davis Institute of Health Economics at the University of Pennsylvania and director of the Center for the Future of the Healthcare Workforce.
"What is driving the growth? It's the evolution of civilization and right now we are evolving from having better basic needs like clean water and sanitation to the desire that society as a whole improve the health and wellbeing of people."
Rather than wondering if the healthcare sector is creating too many jobs, Cooper says we should consider what the economy would look like without those jobs, particularly in Rust Belt cities such as Cleveland, Detroit, Pittsburgh, and Philadelphia.
"I just got back from Cleveland. Without the developments in healthcare in Cleveland you could wrap it up in a paper bag and blow it away. I spent most of my career in Philadelphia. What is the economy of Philadelphia? It's four medical schools and the university," Cooper says. "What are young people going to do? They aren't going to work in a brewery and an automobile plant is all robots. This is the way the economy is moving. It isn't Chicken Little the sky is falling in. You fight this and you are fighting the economy."
Carnevale says data shows that more people are hired at a faster rate in healthcare than output is increasing, which translates into negative productivity. Cooper doesn't disagree with the data, but he says the comparison is misleading and does not take into account the complexity of healthcare. Treating patients is not the same as the manufacturing process.
"If you buy more iPads you aren't creating more jobs here because they're made in China. Healthcare has a different product and it's hard to measure the productivity of the product," he says.
"So if the worker is putting in an artificial knee it takes so much time, or the healthcare worker is doing a throat swab to test for strep throat, how do you measure that productivity? You can't really increase the rate of throat swabs. So, worker productivity tends not to increase because they can't do it faster."
"The nature of healthcare has changed so much so that the worker is doing is so much more complicated and time-intensive work. Healthcare is different from other things because most of it can't be automated," he says. "What you are doing is hard to measure in comparative terms and secondly it's high touch and it can't be outsourced either, for the most part. So yes you are going to create a lot of jobs."
Speaking of new jobs, the Bureau of Labor Statistics reports that the healthcare industry created 12,000 jobs in July, marking the second straight month of slower job growth for the sector that reported 29,500 new jobs in May.
Healthcare created 11,300 jobs in June and 175,400 jobs in the first seven months of 2012 which represents about 16.5% of the 1.059 million jobs created in the larger economy. Healthcare created 173,500 jobs in the first seven months of 2011 and 269,000 jobs for the entire year.
In the larger economy, BLS reported that 163,000 new jobs were created in July, led by 49,000 new jobs in business and professional services and 25,000 new jobs in manufacturing. Despite the better-than-expected numbers, the nation's unemployment rate remained essentially unchanged at 8.3%.
BLS data shows ambulatory services, which include physicians' offices, led healthcare with 8,900 new jobs in July. Hospitals created 5,300 jobs, and nursing and residential homes dropped 2,200 jobs. BLS data from June and July are preliminary and may be revised considerably in the coming months.
More than 14.3 million people worked in the healthcare sector in July, with more than 4.8 million of those jobs at hospitals and more than 6.3 million jobs in ambulatory services, which includes more than 2.4 million jobs in physicians' offices.
In the larger economy, BLS said 12.8 million people were unemployed in July, which was essentially unchanged throughout 2012. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, remained at 5.2 million people in July, representing 40.7% of the unemployed.
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.