Healthcare's Next Trick: Economic Stabilizer
Since the 1990s, healthcare has been the economy's "stabilizer," he explains—rarely fluctuating even during the worse points of the recession. Economic swings will become less and less severe as healthcare takes up a larger and larger place in the economy, and ultimately the industry will help to stabilize the nation's economy with its continued growth, he says.
While national job growth has displayed a winter boom after a summer bust, healthcare's fluctuations haven't been as dramatic. A divergence from the fairly straight line of job growth that the healthcare sector has been experiencing for decades would require a shift in the way consumers think about healthcare in the United States, he says.
"At the end of the day, no one wants to see people sick, and as long as we're in the mindset that it doesn't matter the cost to cure someone, healthcare will continue to be consumed and experience revenue growth," says Smith. "If anything, we will be seeing more revenue, [and] more hiring with the growth of the insured populations."
Last month, I spoke with an economist at Dartmouth with a different view. Jonathan Skinner, PhD, economist and senior author at The Dartmouth Atlas Project, suggested that with the focus on cost reduction and improved efficiencies in healthcare reform, job creation should eventually slow down. If it doesn't, he said, healthcare is not truly cutting expenditures and the culture of the industry isn't really changing.
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