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Health-Care Jobs Are Getting Squeezed, Finally

Author: Peter R. Orszag
February 19, 2014


Evidence is spreading that health-care costs are growing much more slowly than before. Now, it's not just a flattening in Medicare spending; the deceleration has spread to employment, too.

Last fall, in a generally skeptical analysis of the apparent slowdown in health-care costs, Harvard University economist Amitabh Chandra and co-authors noted that, because 57 percent of overall health-care expenditures are labor costs, "it seems unlikely that we would expect to see a permanent bending of the cost curve without a commensurate shift in employment rates." And at that point, they didn't see any such shift.

Now, a few months later, the accumulating data show that we are indeed experiencing a noticeable decline in health-care employment growth. From 1990 to 2005, according to the Bureau of Labor Statistics, employment in health care grew by an average of 2.8 percent per year. But over the past year, it has grown by only 1.4 percent. And in the past two months, it has barely changed at all -- and that is something that hasn't happened since data collection began.

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