Supplement Reviews

Health Care’s Economic Footprint . . . It’s Complicated

It’s now more than obvious that the key U.S. issue for the immediate indefinite future is the economy, and it’s no surprise that an industry as sizable as health care would find itself in the thick of the debate on job creation. But as seems the case with all things health care . . . well, it’s complicated.

From one vantage point, the health care sector can be seen as that rare economic safe harbor that racks up jobs gains month after month. For example, BLS reported 44,000 new health care jobs for September, more than 40 percent of the month’s total employment gains and a continuing moderating force against unemployment’s upward tick, as shown in the chart below. But there are questions about the “quality” of at least some of these new health care jobs.

A recent study by the Federal Reserve Bank of Atlanta, while generally extolling health care’s employment track record in the southeastern U.S., also took note that the future may hold a strong dose of lower-wage positions requiring relatively modest levels of education. A key challenge, according to the report, is to train workers to take on the more sophisticated tasks required to bring to completion such key health care transitions as those to electronic health records and ICD-10 coding.

In this same vein, a proposal by the American Health Information Management Association urges policy incentives to help workers acquire “the core job skills demanded by an integrated electronic health information system” as a means for creating “sustainable, middle class jobs that pay well and offer employment security.”

Everything said thus far assumes the basic desirability of a growing, thriving health care industry. But health care is nothing if not a flashpoint for double-edged swords, and there’s at least one we find ourselves flirting with here: the view that at some level robustness in the health care sector becomes a net negative for the economy as a whole.

This view finds resonance in another Fed report, this one out of the St. Louis district and titled “Why Health Care Matters and the Current Debt Does Not.” Probing the notion that health care is a “superior” good, this analysis finds that the sector has an “unambiguously unsustainable” spending trajectory that is “the overwhelming obstacle” to the nation’s fiscal stability. (Other than that, no problem.)

Similarly, an Alliance for Healthcare Competitiveness proposal to export the U.S. medical “ecosystem” to other nations drew a rebuke from former U.S. Senator and MedPAC member David Durenberger, who, likening the effort to “a parasite eating its host,” sees the health industry’s enviable economic record as directly traceable to heavy government subsidies.

And so the beat goes on as the back-and-forth of competing worldviews long familiar inside health care finds new expression in the broader search for jobs and economic growth.

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