When Health Care Employment Rises, Health Care Costs Will Go Up

Today’s Managing Health Care Cost Indicator is 2.8 million
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Research from the Center for Health Workforce Studies (Albany)   shows that between 2000-2010 the health care workforce represented more than 100% of the increase in employment for the entire country.  Overall number of jobs decreased by 2%, while health care jobs increased by 25%.  The non-HC sector lost 6 million jobs from 2000-2010, while the health care sector gained 2.8 million jobs.  

Health care jobs are well-paying, good jobs. That’s why health care can represent 18% of the GDP but less than 10% of total employment.  Low skilled jobs (janitorial and food service) were the only place where there were fewer jobs in health care in 2010 compared to 2000.

The calculations, derived from Department of Labor/ Bureau of Labor Statistics, suggest that we will create net new jobs over this decade –but again health care will represent a disproportionate share of these jobs.   Health care represented 9.8% of jobs in 2010, and is projected to represent 11.2% of jobs in 2020.
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These are only projections, and there are some good reasons for increased employment in health care.  Our population is aging, which leads to higher health care costs.  Projections are also usually wrong;  few projected in 2002 that the last decade would have concluded with fewer jobs.    The Bureau of Labor clearly doesn’t see technology leading to displacement of labor in health care.    I’d guess that there will be more savings due to increased use of technology than these estimates suggest.

There is a straightforward relationship between health care job creation and health care inflation.  As long as we are predicting more jobs in health care, we have to conclude that health care costs will continue to rise.  

Previous posts on this subject here and here