Healthcare Is Still Adding Jobs, Despite Recession

According to a recent survey by the Medical Group Management Association, the top three challenges of medical practice remain in the same in 2009 as they were in 2008: operating costs rising faster than revenues; maintaining physician compensation levels as reimbursement drops; and selecting and implementing an electronic health record. But this year, for the first time, the fourth biggest challenge was collecting from self-pay (read: uninsured) patients and those with high-deductible health plans.

MGMA’s 22,500 members, who lead 13,700 healthcare organizations, were also asked how the recession is affecting their practices. Among the effects they cited were an increase in uninsured patients, decreased revenues, postponed capital expenditures, and staff hiring freezes. Roughly a third (but not necessarily the same third) reported each of these outcomes. But despite the economic stress, 80 percent of respondents said there was no likelihood their practices would close. That stands in contrast to hospitals, many of which are said to be in dire financial straits.

Actually, compared to the rest of the economy, the health care industry appears to be in pretty good shape. Over the past year, nearly 6 million Americans lost their jobs, but health care added about 300,000 positions for a total of 13.6 million jobs, according to the Bureau of Labor Statistics. From June to July 2009, the number of healthcare workers rose by nearly 20,000. They broke down like this:
•    Ambulatory care services, 9,600
•    Physician offices, 6,200
•    Home health services, 3,600
•    Hospitals, 4,200
•    Nursing and residential care facilities, 5,800

The only two categories that saw a slight drop in employment were “outpatient care centers” and “nursing care facilities.”

However, this might well be the calm before the storm. If healthcare reform legislation strips hundreds of billions of dollars from Medicare and Medicaid over the next decade, the net increase in health care employment could turn into a net decline. On the other hand, if the legislation shifts money from government programs to subsidies for people to buy private insurance, the net effect might be neutral, at least in the short run.

At this point, the outcome of the reform debate in Washington is still unknown. Nearly anything can happen in the next several months. But as Gail Wilensky, a former CMS administrator, pointed out on the “Lehrer News Hour” on PBS the other night, legislators will need very rapid savings to pay for reform, unless they want to raise taxes more than they have proposed. Wilensky favors a more gradual approach in which Medicare is restructured over time to save money, rather than a sudden cutback in the rate of growth. But with Medicare expected to go broke within the next decade, and with more and more people losing private insurance, we don’t have much time left.