Economic Recession Affecting Growth in Health Care Jobs
The pace of job growth in the health care industry has "slowed sharply" this year, as hospitals, pharmaceutical firms and health insurers experience trouble related to the continuing recession, the Wall Street Journal reports.
In each of the first three months of 2009, the health care sector added an average of 17,000 jobs, less than half the rate of increase for 2008.Â According to federal data, the number of mass hospital layoffs in February 2009 was twice what it was in February 2008.
Health care and the federal government are the only two major industries still adding jobs, according to the Journal. Since December 2007, when the recession began, the health care and social assistance sector added 500,000 jobs.
Health care is thought to be able to handle economic downturns better than other industries because consumers typically forgo other types of spending first, the Journal reports.
However, the scale of the current recession has had an effect on consumers' health care spending and purchasing behavior. Many hospitals have experienced losses in their investment portfolios, a rise in uninsured patients and a decline in elective surgeries.
Industry officials expect economic problems to continue as states introduce new budget cuts and federal lawmakers mull health care reform.
Beth Israel Deaconess Medical Center CEO Paul Levy said, "To the extent that health care might have been recession-proof, it is no longer."
Once the recession ends, health care is expected to grow, particularly with "enormous advances in medical technology, ... Americans' strong appetite for health care" and President Obama emphasizing health care reform, the Journal reports.
Health spending has more than tripled in the past 50 years to about 16% of the gross domestic product, and CMS predicts it will increase to 20% within 10 years. Â
Robert Fogel, a Nobel laureate and professor at the University of Chicago Booth School of Business, said, "It's a long-term shift reflecting changes in technology and what consumers want.Â Health care is the growth industry of the 21st century" (Johnson/Evans, Wall Street Journal, 4/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.