High health care spending yields large job growth
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The health care sector has added three times as many jobs as the rest of the economy over the past year, with growth outpacing all other economic sectors, according to a new KFF analysis.
Why it matters: The big question is whether policymakers' efforts to reduce costs could reduce demand for jobs in the sector propping up the rest of the economy.
What they found: Since September of last year, the health care sector has added 372,000 jobs — a 2% increase — while the rest of the economy added a net 124,000, a 0.1% increase.
- Factors driving health care labor growth include the aging population and more people with chronic conditions, "relatively high pay" for many jobs and the fact that many positions are hands-on and "less susceptible to outsourcing or automation," the authors write.
Between the lines: Health care also tends to be more insulated from broader economic swings, given that people still get sick or need care during a recession.
- Demographics over the next decade will likely create even more demand.
- The Bureau of Labor Statistics projects that health care and social assistance will add more jobs than any other sector between 2025 and 2035 — more than 2.2 million.
Yes, but: The impact of AI and major policy changes could change the trend line, KFF notes.
- A rise in the uninsured population from Medicaid and Affordable Care Act policy changes could reduce demand for some services and increase hospitals' rates of uncompensated care.
- That will likely affect hospital revenues, which could impact employment.
What we're watching: More major policy changes could be on the way if lawmakers translate rising patient angst over health care costs into measures that significantly slow projected spending growth.
- It's unclear what fewer dollars going into the system would mean for jobs, but there would likely be some change.
- "The short answer is yes, serious cost control would probably affect health care employment and/or compensation for at least some health sector employees," said KFF senior vice president Cynthia Cox, an author of the analysis.
- "One person's health care cost is another person's salary," she added.
By the numbers: The most growth over the past decade has been in outpatient care, home health services and physicians' offices, reflecting an ongoing shift in where patients receive care, according to a second KFF brief on health sector employment trends.
- Employment in outpatient settings alone has increased by 40% over the past decade.
- Health care employment outpacing the rest of the economy is nothing new — since 1990, it's grown over three times as much as all other non-health, nonfarm employment sectors.
The bottom line: The same health care spending that has become a top cost-of-living issue for voters is keeping millions of Americans employed, often at very comfortable salaries.
- The more realistic cost containment efforts become, the more we can all expect to hear about the jobs impact.
