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Healthcare Continues Strong Job Growth

 |  By John Commins  
   February 06, 2012

Job growth in the healthcare sector for the first month of 2012 continued the robust pace that was set throughout 2011, new federal data shows.

The Bureau of Labor Statistics data reports that the healthcare sector created 30,900 jobs in January, including 12,900 jobs in ambulatory services, and 12,700 jobs in hospitals.

J.D. Kleinke, a fellow at the American Enterprise Institute, says healthcare job growth continues—in great part—because healthcare spending continues. He dismissed recent arguments suggesting that healthcare costs had declined. In fact, Kleinke says, the costs continue to grow but at a slower rate.

"I can tell you exactly what is going on. It's not that complicated. The healthcare economy is recession proof," Kleinke told HealthLeaders Media. "There is no reduction in healthcare costs. There is a reduction in the rate of growth. So, jobs are always going to get created in healthcare because healthcare costs are always going to go up."

"Increasing costs in healthcare is a sign of a society that is taking care of higher-order problems, like curing cancer, dealing with depression, or lifestyle—we want to look perfect and have perfect children," he says. "All of that stuff is inflationary. This country will never feel healthy enough. That's another reason why healthcare is recession proof."

Kleinke says healthcare inflation has slowed over the last decade in large part because healthcare consumers have gotten smarter as their premiums, co-pays, and deductibles have risen.

"Healthcare inflation used to be double-digit, 10%–12% while the rest of the economy grew at 3%–4%," he says. "We are seeing the 'Costcoing' of healthcare." Starting with 2001, people are not demanding less care, they're getting smarter about it. They're using generic drugs. They're going to nurse practitioners. They're going to urgent care instead of the emergency room. The nature of a lot of healthcare purchasing is changing because of high deductibles."  

Revised BLS figures show that healthcare created 17,600 jobs in December, finishing a strong year for job growth that saw 291,300 payroll additions in 2011. Healthcare accounted for nearly one in five new jobs in the overall economy last year, Bureau of Labor Statistics data shows.

In 2011, ambulatory services, which include physicians' offices, accounted for 59% of the job growth in healthcare. The subsector created 7,500 jobs in December and 184,700 jobs in 2011, after creating 166,100 jobs in 2010.

"Where the growth is coming from is information technology," Kleinke says. "There are grants for that and huge initiatives to train people to install computer systems. That's a good thing. Hallelujah!"

BLS data from December and January are preliminary and may be revised considerably in the coming months.

More than 14.2 million people worked in the healthcare sector in January, with nearly 4.8 million of those jobs at hospitals, and more than 6.2 million jobs in ambulatory services, which includes more than 2.3 million jobs in physicians' offices.

The 30,900 jobs created in healthcare in January represent 12.7% of the 243,000 jobs created in the overall economy for the month. In 2011, the 291,300 jobs created by healthcare represented more than 18% of the 1.6 million jobs created in the overall economy that year.

In the larger economy, the nation's unemployment rate dropped for the fifth straight month in January, falling from 8.5% to 8.3%—its lowest level since early 2009. BLS said the 243,000 new jobs created in January came from the healthcare, manufacturing, and leisure and hospitality industries.

Even with the modest gains, BLS said 12.8 million people were unemployed in January. The number of long-term unemployed, defined as those who have been jobless for 27 weeks or longer, was little changed at 5.5 million in January, and represented 42.9% of the unemployed.

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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