Expanding Medicaid does not appear to have fueled healthcare employment in states that raised eligibility and accepted billions of dollars in additional federal matching funds for their programs under the healthcare reform law.
U.S. healthcare employment began to accelerate after the first three months of the year and the uptick caught the attention of economists with the Altarum Institute, who conducted the analysis to determine whether hiring grew faster in Medicaid expansion states. It did not, they found. In fact, growth was faster in states that did not expand Medicaid, said Ani Turner, deputy director of Altarum's Center for Sustainable Health Spending.
Proponents of expansion have touted the economic benefits of increased Medicaid enrollment, as they make their case to reluctant state governors and lawmakers. Indeed, hospitals in states that expanded eligibility are seeing less bad debt and fewer uninsured patients. But it might become harder to argue that Medicaid expansion is a jobs engine if the numbers don't bear it out.
Healthcare averaged 14,271 new jobs a month from April to October in states that did not expand Medicaid, up 117% from the preceding 12 months. The healthcare employment increase in Medicaid expansion states over 2013, meanwhile, was 92%.
Turner cautioned that the analysis included employment figures for social assistance jobs, in addition to healthcare jobs. Healthcare, though, accounts for about 80% of the hiring measured, she said.
The employment analysis adds to a puzzling picture of healthcare use and spending since millions of Americans gained insurance or Medicaid coverage under the Patient Protection and Affordable Care Act in January. Turner said health spending and job growth have accelerated somewhat this year. But, she added, “when you look under the surface, it's not clear that you can link that to expanded coverage.” Another contributor to job growth might be the overall improvement in the economy, she said.
States that did not expand Medicaid have seen more robust overall growth in employment, said Paul Hughes-Cromwick, a senior health economist with Altarum, which could be a confounding factor.
Estimates of healthcare spending growth so far this year remain modest, including a revised estimate of consumer spending for visits to hospitals and doctors released Tuesday, showing 3.5% growth during the third quarter compared with the same period a year ago.
Job growth has accelerated across all healthcare sectors, including hospitals, where hiring was largely flat in 2013. Hospital employment growth however, remained modest, with faster gains in ambulatory settings.
Hospitals are working to minimize hiring “pretty significantly” in their continued efforts to cut expenses, said Dan Steingart, vice president and senior analyst with Moody's Investors Service. Modest hospital hiring “doesn't really surprise me,” he said.
Aggressive attempts to slow expenses that began with the Great Recession have continued as hospitals scramble to protect their margins from weak revenue growth.
Follow Melanie Evans on Twitter: @MHmevans