Why 1.4 Million Health Jobs Have Been Lost During a Huge Health Crisis


Why 1.4 Million Health Jobs Have Been Lost During a Huge Health Crisis

For more than half a century, in good economic times and bad, health care jobs in the United States just kept increasing. Economists and health analysts thought of them as nearly recession-proof: a buffer against the business cycle.

But like so many other patterns, the coronavirus pandemic has broken this relationship. With the virus and its fallout deterring Americans from using the health system, job losses started in March and accelerated to 1.4 million last month.

“This is a disruption unlike any we’ve seen in decades,” said Ani Turner, the co-director of sustainable health spending strategies at the Altarum Institute, which tracks trends in health care spending and employment. Ms. Turner recently wrote an essay titled “Health Sector Won’t Be the Backstop in This Downturn.”

In previous recessions, the health industry has not taken such a hit. Because most Americans have health insurance, health services are more insulated from the business cycle than other kinds of spending. The biggest users of the system are older Americans. Besides being likelier to have health problems, they also tend to have comprehensive insurance coverage through Medicare and a stable source of income from Social Security. The Medicaid program, which is structured to allow people to enroll when their incomes fall, tends to offer access to health care for the poor, even if their jobs disappear.

And, of course, many of the problems that send people to the doctor — heart disease, appendicitis, cancer or the flu — do not go away during a struggling economy. As a result, the doctors and nurses and medical assistants and billing clerks who work in health care are usually protected from an economic downturn.

The industry still seems somewhat protected: Health care jobs have fallen by less than jobs in the rest of the economy. But in the Great Recession, as jobs of nearly every kind plummeted, health jobs kept growing at a good clip. In the eyes of many economists, it was health care that led the economic recovery, by providing a powerful and reliable jobs engine. All those new health workers helped strengthen their local economies.

This downturn is clearly different, and the enormous reductions in the health work force mean the recovery may be different, too. Some of the lost jobs in health care are likely to come back later. Cancer patients who postponed chemotherapy, or people who canceled their hip replacements, will eventually want that care. But other changes may be permanent.

Other changes are more invisible. Hospitals have been forced to find small ways to digitize processes and share records that used to involve labor and bureaucracy. Bob Kocher, a partner at the venture capital firm Venrock, has been acting as an adviser to Gov. Gavin Newsom of California through the crisis. He said he had seen hospitals adapt quickly to begin sharing their daily bed counts with one another and the state, for example, a task that used to involve hours of phone calls and faxes. Data about laboratory testing — how much is being done, how many patients have been found to have coronavirus — has been similarly digitized in real time.

Are those sorts of on-the-fly tweaks enough to have an appreciable effect on long-term health care employment? Mr. Kocher thinks so, describing the recent cuts in health care administration as a “silver lining” of the crisis, while acknowledging the short-term pain of the job losses.

“I will passionately say that’s a good thing, because health care costs in America are high, and most of the health care cost in America is labor,” he said.

Another possibility is that the financial shock hitting smaller and less capitalized hospitals and physician practices could lead to a wave of consolidation, as bigger competitors gobble them up for a discount. Those kinds of mergers have typically led to rising health costs, since bigger systems can demand higher prices from private health insurers. That could make the legacy of this shock a more expensive health system instead of a cheaper one.

Either way, health care is unlikely be the economic stabilizer it has been in the past. The loss of industry jobs on top of the major losses in other sectors are likely to make the recession deeper, and the recovery slower.




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