More healthcare job gains in November, but is that a good thing?
The healthcare industry created 23,800 jobs in November, another month of solid job growth. But the sustained hiring blitz of 2015 raises questions about whether healthcare is doing enough to become more efficient and lower costs.
This week, government health actuaries said national health expenses rose 5.3% in 2014, the highest level since before President Barack Obama took office. But the higher growth rate was expected because more people obtained health insurance under the Affordable Care Act—through the exchanges or Medicaid expansion—and therefore used more healthcare services.
Consequently, hospitals, doctor offices, nursing homes and other healthcare providers are hiring more people to serve the growing insured population. In November, hospitals added 13,400 people to their payrolls, while ambulatory settings like doctor offices and outpatient clinics added 4,200, according to preliminary estimates from the Bureau of Labor Statistics.
Healthcare has created 432,700 jobs overall, so far, in 2015, far above the numbers from the past few years.
“Health employment has really rebounded strongly since last year, which portends continuing expenditure growth for 2015 and 2016 rather than any slowdown,” said Thomas Getzen, a health economist at Temple University. “Once you hire those nurses and technicians, you have to keep paying them.”
However, he added, “In the long run, we will not have this job growth in healthcare. We can't afford it.”
Indeed, many are torn over the high growth rate of healthcare employment. An increase in jobs bodes well for the broader economy, which was “in the tank” due to the recession that severely hurt the middle class, Getzen said. Healthcare professions also tend to have higher salaries than other sectors, which create economic security for individuals and families.
But that ultimately means the U.S. economy will continue to direct more money into the healthcare system even though the Obama administration has made it an explicit goal to lower costs.
“This is just another indication of the gobbling up of GDP by our inefficient healthcare industry,” Paul Leigh, a health and labor economist at the University of California at Davis, said in an e-mail. “The percent of our GDP devoted to healthcare is approaching 18%. We are in splendid isolation when compared to other rich countries that, on average, allocate 9% on their healthcare spending.”
“The only way to see these increasing job numbers is to see more spending in healthcare,” added Craig Garthwaite, a health economist at Northwestern University. “It does very much suggest we are not doing a good job of bending the cost curve.”
Adding doctors, nurses and other clinicians to the workforce immediately helps with care delivery, but some are concerned about the hiring of administrators and other operational positions at hospitals and health insurance companies, many of which are not tied to direct clinical care. The Bureau of Labor Statistics does not break down how many healthcare jobs are administrative.
“Are we hiring people who are actually creating benefit for the companies, or are we kind of throwing bodies at these complex systems that have been created over time?” asked Mike Simmons, CEO of CredSimple, a company that helps healthcare organizations credential doctors and facilities
Notably, the home healthcare sector slashed 1,600 jobs. It could be tied to the recent refusal of the Supreme Court to delay a new Labor Department rule that would raise the wages of many home healthcare workers.
The entire economy added 211,000 jobs in November, and the unemployment rate stayed steady at 5%.
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