We’re in a health jobs slump. And it might be good news!

August 2, 2013

Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.

The Advisory Board's Dan Diamond raised an important question in a column last month: How does the number of health care jobs keep growing when growth in health care costs keeps slowing?

Health care costs have grown especially slowly in recent years, rising at the same rate as the rest of the economy. This is after four decades of growing faster than the rest of the economy. 

At the same time, the number of health care jobs has risen at a steady clip. As Diamond writes, the sector has an "an unparalleled track record that spans two major health reforms and the Great Recession; since August 2003, health care has added 2.75 million jobs, nearly half of all new jobs created in the nation."

This has been true for the past decade, but perhaps not anymore.

The Bureau of Labor Statistics noted something unusual in the July unemployment report released Friday: "Employment in health care was essentially unchanged over the month." And this wasn't an isolated event; since 2013, the BLS has noticed a slowdown in health care hiring.

"Thus far in 2013, health care has added an average of 16,000 jobs per month, compared with an average monthly increase of 27,000 in 2012," their analysts write.

Here's what the health care sector looks like in chart form. This beautiful BLS chart shows the seasonally-adjusted, yearly net change in health care jobs from 2006 to present:

Since December 2012, the annual number of jobs added to the health care sector has been inching slowly downward. We've certainly hit a lower level before, although not since August of last year. So while this slowdown in health care hiring isn't unprecedented, it's a departure from relatively fast growth in 2012.

Another way to break this down is by sector. Much of the health care cost slowdown has been in hospital spending, reflecting lower demand for inpatient services. Overall, hospital spending increased 4.3 percent in 2011 compared with 4.9 percent growth in 2010. Some of this might be due to a slew of new programs in the health care law that focus on reducing hospital readmissions and paying hospitals by value rather than volume.

Hospital employment, meanwhile, has actually fallen by 4.4 percent over the past year. And, when you look at the net annual growth in jobs, we're at the lowest level this month since March 2011:

 

It's impossible to say at this point whether this is a permanent trend or a temporary blip. But, at least for now, we do have some evidence that, after health care cost growth has slowed, hiring appears to be pumping on the brakes, too.

As for whether that's good news, that's an open question. On the one hand, federal budget wonks would surely cheer a slowdown in rising health care costs. It has, after all, knocked hundreds of millions of dollars off the projected spending on Medicare and Medicaid. On the other, fewer health care jobs means fewer overall jobs.

KLIFF NOTES: Top health policy reads from around the Web.

WellPoint has inked an important deal with Univision. "WellPoint and other Blues insurers in six states including Florida have signed deals with Univision for undisclosed sums to be the exclusive health insurance sponsor of the network’s Peabody-award winning health initiative, 'Salud Es Vida,' which means Health Is Life. The deals include a special plan-sponsored Univision website that will be able to connect Latinos with coverage on the online markets, or exchanges, that will serve individuals beginning in October. But it's a path that could take a detour around some competitors who are offering plans." Jenny Gold in Kaiser Health News

Enroll America is hitting the ground, and expects lots of work ahead. "While advocates say that knocking on doors is one way to overcome these challenges, skeptics point out that such canvassing, which is modeled on successful political campaigns, is untested for a complex national program such as the Affordable Care Act. It’s also labor-intensive; Botero’s group, Enroll America, expects to talk to each person seven to eight times to encourage enrollment in a health plan." Sandhya Somashekhar in the Washington Post

Doctors are gearing up for Affordable Care Act outreach. "Doctors for America is training 500 physicians and medical students to assist people in their local areas, coordinating with education and outreach efforts by medical societies and coalitions like Enroll America and Get Covered America, and creating materials doctors and their staffs can give to patients inside their offices." Jeff Young in the Huffington Post

 

 

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