Slower Healthcare Employment Growth Is Necessary to Curb Costs, Researchers Say

An op-ed published in JAMA by economists Jonathan Skinner at the Dartmouth School of Medicine and Amitabh Chandra at Harvard University shows a strong correlation between employment and spending in the healthcare sector, and they warn job growth is due to suffer for the sake of cost control, reports FierceHealthCare . The authors note rising employment among healthcare organizations is closely linked to cost growth, and the nonprofit status of many systems frequently leaves fewer places to divert excess profits outside of service expansion. Moreover, technological innovations in medicine have raised demand for additional employees. The authors refer to an annual 2.1 percent boost in healthcare jobs in the United States between 2013 and 2017, when costs climbed to 18 percent of GDP. The concurrent rise in the cost of care has mitigated its positive effects of job growth overall. "The challenge of job gains in the healthcare sector is higher healthcare costs, job loss in other sectors ... and stagnant take-home pay for those who manage to keep their jobs," Skinner and Chandra say. On account of this, the U.S. push to control healthcare costs will eventually demand slower job growth industry-wide. Skinner and Chandra advise human resources department to start preparing by exercising restraint in their current hiring and seeking out better efficiency. "The urge to expand employment using unexpectedly healthy profit margins should be resisted because it is easier to create new positions than it is to lay off workers in a less sanguine future," they say.