40 Million New Health Patients = How Many New Jobs?
I am by no means an expert when it comes to the creation of jobs but it just sounds logical if when you look at the potential of what any new health care/insurance reform could bring to America, how many jobs that reform could bring along with it.
When experts were explaining the reason why we had to save companies like General Motors (GM), Chrysler and others, they pointed out that the thousands of jobs lost if these companies were to go belly up didn't just include those in the headquarters and office areas; it included those that reached across the nation. The automobile parts industry, the fabric industry, the tire industry, factories that put the parts together, the paint industry, the window/glass industry and yes even the oil industry would all lose jobs because business would drop dramatically.
Wouldn't the reverse effect happen if over 40 million new patients were to suddenly have access to affordable, or in some cases free because of their income, health care? Those Americans that have been turned down for health insurance because of pre-existing health conditions would suddenly have access to the health care they need.
I'm guessing, but wouldn't millions of jobs be added to our economy if the health care reform were to be enacted?
Just imagine, 40 million additional Americans would suddenly need access to an insurance plan, a clinic and/or a hospital to get that preventive health care that would be required of Insurance companies to provide. A potential of 40 million people plus would now have access to medicines they couldn't afford before the reform took place.
Looking into the future, just as those experts did with companies like GM, I can see thousands of jobs created to build new clinics and new hospitals to handle the extra patients. That requires the construction, electrical and plumbing industry to kick in gear. It also means new jobs for clinic clerks, technicians, nursing and doctors across America. I can even see new custodial and sanitary crews being hired and new diet/food personnel being hired which would also end up helping our farmers. Not to mention the new insurance agents and offices for that industry to handle all their new customers.
I can also see the factory industry build up with the demand for new surgical equipment, new x-ray machines and new CAT scan and MRI machines. The fabric industry would even see an increased need for help to make those new gowns, bedding and surgical materials. The office industry, for those new clinics and hospitals would require office personnel to run the daily business of the health care record systems. That brings to mind those hired to run information technology service job demands.
Even the auto industry would be helped by such a plan in place. All of the above employees would require transportation to and from work and transportation to transport that new equipment, food, medicine and medical supplies.
It's been reported that any health care reform would be delayed by 3-4 years to put it all in place. Well folks, guess who has to get that ball on the road; all of the above.
I'm sure I've missed a few more industries and professions that would see an increase in their employment needs; but hopefully you get my drift. Health care reform along with the previously past Recovery and Reinvestment bill have the potential to be our and the next generation's "New Deal".
I sincerely hope that the Obama administration and Congress look into this side of the equation of any possible health care reform and provides the studies that are accumulated as to how many potential jobs this health care reform could bring to our nation.
Coonsey - I concur with your aspirations for job growth in the coming years, but healthcare is probably not the ideal place to look. The problem is that healthcare already consumes about 17 percent of GDP, approximately twice that of other industrialized democracies, and the main culprit is excess within healthcare itself, with the insurance industry contributing much less to the excess. American healthcare suffers from a huge surfeit - an enormous excess in terms of duplicate or unnecessary facilities, tests, procedure, and specialty referrals, driven by a fee for service paradigm that rewards excess. Other nations have achieved better health outcomes with far fewer facilities and far less expenditure - that means, essentially, fewer jobs rather than more.
The evidence from these other countries clearly shows that we can accomodate the increased patient load without a net increase in jobs, and in fact, we must strive to accomplish it with a net reduction over the long term. To avoid too much pain, attrition rather than worker firings will probably be the main tool to be used.
Although the net trend should be downward, there will be components of healthcare that deserve to grow. Most particularly, primary care and preventive medicine should be encouraged at the expense of specialty referrals. To some extent, walk-in clinics might substitute for hospital construction in some regions as well, and so limited opportunities for job growth will exist.
Most new jobs, however, would best come elsewhere in the economy. In my view, a transition from a fossil fuel economy to one based on renewable energy (wind, solar, geothermal, biofuel, tidal, etc.) can serve as an enormous job creation engine.
September 27, 2009 2:25 PM | Reply | Permalink
There should probably be a decrease in health services jobs overall, since this ia a consumption sector that is not affordable.
There should be a reduction in adminstrative paper-pusher jobs and jobs like drug company sales and advertising, and an increase in jobs for front-line care delivery like primary physicians and nursing.
There should also be a reduction in jobs associated with plastic surgery, chiropractic, and other non-essential or medically dubious procedures.
September 27, 2009 2:57 PM | Reply | Permalink
Coonsey's point is that if millions of new health-care consumers come into the system, it will require support staff to accommodate them. Why do you think that the numbers will go down. Not be able to afford health care? Look at all the jobs that came out of the Iraq war, which we obviously also could not afford.
Much plastic surgery is restorative, and is covered by insurance. Elective plastic surgery is still available to the uber-wealthy, which have not changed their habits from what I've seen. The upper-middle class is probably passing on face-lifts and liposuction.
My medical practice (infertility and IVF) went through a down-turn a couple of months ago, but it has picked right up again, including tubal reanastamoses, which are very expensive and almost never covered by insurance, and are usually wanted by people who already have at least one child.
Now, as to administrative, paper-pushing jobs: they would only be reduced if we got rid of our current system and replaced it with single-payer, or absent that, a Public Option.
We can always hope!
September 27, 2009 8:00 PM | Reply | Permalink
Since it is a service industry, most of the costs of medical care are personnel costs -- even when they show up as costs of items such as drugs and medical equipment.
If you reduce the health care system from 16% to some lower number like 14% of GDP, the only way you can do that is to reduce payroll. Since you will need more doctors and nurses to deliver care to the greater number of recipients, you will need to cut in other areas. The people working in other areas probably don't make more than doctors and nurses on average, and therefore, you will have to cut numbers.
It is top down budgeting.
Bottom up demand may be for more health care spending, but it is unaffordable to the economy.
September 27, 2009 9:17 PM | Reply | Permalink
Well, if we lose our hubris, and take a lesson from our international neighbors, we can do better than your predictions.
September 27, 2009 9:33 PM | Reply | Permalink
Well, we could train a lot more doctors than we do. This would reduce the pay scale and allow for the hiring of more of them, which would be a good thing.
Canadian general practice physicians make a little over $100,000 Canadian per year. The US equivalent is a little over $135,000.
September 27, 2009 9:45 PM | Reply | Permalink
Building new medical schools would also create jobs.
September 28, 2009 7:43 AM | Reply | Permalink
Most of the increase should be done by expanding the existing medical schools. They are not very large, with first year enrollment being in the vicinity of 25,000 in over 125 medical shools. The current projection is to increase first year enrollment figures by 30% by 2017 or 2018. See Medical School Enrollment Plans Through 2013
September 28, 2009 10:50 AM | Reply | Permalink
Creating a demand for new jobs won't necessarily create all those new jobs. You need people willing and able to become doctors - the fact that lots of people want doctors won't make more doctors magically appear, and increased demand would likely only stimulate an increase in the number of doctors by increasing what doctors are paid to even more than they are paid now.
Unless, of course, you are suggesitng that we should lower the standards for becoming a doctor so that more people can become doctors more easily.
The problem with a lot of Keynesian economics is that it is the equivalent of saying that the best way to increase our oil supply is to build more gas guzzlers.
September 27, 2009 5:28 PM | Reply | Permalink
I think there will be increases in jobs for nurses, lpn's and rn's as well as other medical positions that take as little as six months for proper training.
Yes, many, many positions will be available.
September 27, 2009 11:40 PM | Reply | Permalink
It's important to point out that we don't need more doctors or nurses, but rather more of the right kind of doctors and nurses - primary care physicians, clinic nurses, etc., rather than specialty doctors or nurses. Our ratio of doctors to population is as high as or higher than that in many other nations that manage to provide care for all their residents and with better outcomes.
Overall, it will be critical to bring about a net reduction in jobs in the healthcare industry if we are to control costs. Substituting lower salaries for higher ones in the case of the highest paid individuals (specialist physicians, hospital CEOs, etc.) would only alleviate the excess costs to a relatively small extent. The current healthcare reform proposals are making a tentative stab at the problem in terms of incentivizing primary care and rewarding efficient delivery mechanisms that eliminate unnecessary procedures, specialty referrals, tests, or other wasteful expenditures, but much more will be required to bring us in line with the other nations.
September 28, 2009 10:45 AM | Reply | Permalink
Fred, you are right, as you are many times. This is a difficult problem with hard choices ahead -- and you are correct that to reduce spending, it will result in fewer jobs. I worry that the politics will take over, and the hard decisions will be put off again and again and again...
September 28, 2009 11:32 PM | Reply | Permalink