Tuesday, July 2, 2013
two sides of heathcare
Two Sides of Healthcare: Increased Employment and Increased Costs
We might reasonably dispute whether it is the upper or the lower blade of a pair of scissors that cuts a piece of paper, or whether value is governed by utility or cost of production.
Alfred Marshall (1842 – 1924), Principle of Economics
Is the increased cost of healthcare a good thing or a bad thing? Is that cost sustainable for American society? Does the good offset the bad, or the bad overwhelm the good?
The prevailing, or perhaps, I should say, the overwhelming view is that rising health costs are unsustainable and therefore a bad thing.
Then along comes a study from the Brookings Institution. The study says healthcare now accounts for more jobs than before the recession in all 100 U.S. major metropolitan areas. The number of jobs jumped 23% to 14.5 million between the 1st quarter of 2003 to the 1st quarter of 2013 and now accounts for more than 1 of 10 American jobs.
The biggest job growth occurred in the industrial Midwest, the Northeast, and parts of Florida. These regions share a common denominator – aging populations requiring more health care.
In the last decade, the health care industry has enjoyed a 22.7% job growth compared to 2.1% for all other industries.
Again, are rising health costs a good thing, or a bad thing? It depends, of course, on whom you ask. Employed health workers may say it’s a good thing. Employers, ordinary citizens, and state and local governments may say it’s a bad thing, crowding out money that could be spent elsewhere. Physicians, hospitals, and other providers may say it’s a necessary thing, brought on by advances in technology, an aging population, costly bureaucratic regulations, and consumer preferences for more access to specialists and high-end breakthroughs.
It may be, of course, that the Affordable Care Act, will reduce expensive hospital stays and specialty care. But at the moment, that doesn’t seem to be happening.
Tweet: In the last decade, healthcare employment has gone up 22.7%, fueling the economic recovery but causing escalating costs.