Slow Growth, Downward Revisions in Health Jobs Continue

For the second month in a row, the Employment Situation Summary showed a slowing down in the growth of jobs in health services versus non-health jobs, relative to recent history. Further, revisions to data in this morning’s very strong jobs report indicate high job growth reported in health services for December and January were not correct.

Health jobs increased only 0.17 percent in this morning’s jobs report, versus 0.16 percent for non-health jobs. With 27,000 jobs added, health services accounted for 11 percent of new nonfarm civilian jobs.

This continues a welcome development. The previous disproportionately high share of job growth in health services was a deliberate outcome of Obamacare. If this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals (0.25 percent versus 0.12 percent). This was concentrated in physicians’ offices and home health. This is a good sign because these are low-cost locations of care.

See Table I below the fold:

Repealing Obamacare Will Create Jobs

(A version of this Health Alert was published by InsideSources.com and widely syndicated in local newspapers.)

Obamacare channeled billions of dollars out of the productive economy and diverted it towards a health-services sector that has become even more bloated than it was before 2010.

Last July, Dr. Bob Kocher, a venture capitalist who served as a special assistant to President Obama when the Affordable Care Act was created, noted that more than half of all health care workers today are administrators, up from just over a third before Obamacare became law.

These are paper pushers, not doctors and nurses—not the kind of jobs we should be bragging about.

Slow Growth, Downward Revision in Health Jobs

Last month’s job report showed an explosion in health jobs versus non-health jobs. Revisions to previous data in this morning’s very strong jobs report indicate those data were not correct.

Health jobs increased only 0.12 percent in this morning’s jobs report, versus 0.16 percent for non-health jobs. With 18,000 jobs added, health services accounted for only eight percent of new nonfarm civilian jobs.

This is a welcome development. The previous disproportionately high share of job growth in health services was a deliberate outcome of Obamacare. If this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals (0.41 percent versus 0.21 percent). This was concentrated in outpatient care centers and home health. This is a good sign because these are low-cost locations of care (Table I).

Private Sector Health Benefits Grew 17 Percent Faster Than Wages Last Year

Released yesterday, the Bureau of Labor Statistics quarterly Employment Cost Index showed private sector health benefits increased 2.7 percent in 2016, versus only 2.3 percent for wages.

Overall, private-sector benefits grew only 1.8 percent, indicating non-health benefits would have grown little if at all. State and local government workers’ benefits grew 3.1 percent, 72 percent faster than private-sector benefits!

Obamacare Is A Terrible Jobs Program

(A version of this column was published by American Thinker.)

As congressional Republicans embark on their promise to repeal and replace President Obama’s signature Affordable Care Act, they are being overwhelmed by claims that imply it’s a jobs program.  Scholars affiliated with the Milken Institute School of Public Health at George Washington University estimate Obamacare repeal would kill 2.6 million jobs by 2019.  Almost a million jobs would be lost from health services, while the balance would be lost in construction, real estate, retail, finance, and insurance.

Unfortunately, such research relies on the so-called “multiplier effect,” a politically seductive but misleading type of voodoo economics.  It goes like this: Obamacare throws money at hospitals, doctors’ offices, and other health services.  Those recipients build new facilities and hire more workers, who spend their paychecks in their communities.  It is the same kind of research that developers seeking taxpayer-subsidized stadiums commission – and it is meaningless.

Health Jobs Explode Versus Non-Health Jobs

Health jobs exploded in this morning’s jobs report, growing more than three times faster than non-health jobs (0.28 percent versus 0.09 percent). With 43,000 jobs added, health services accounted for over one quarter of 156,000 new nonfarm civilian jobs.

The disproportionately high share of job growth in health services is a deliberate outcome of Obamacare. While this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals (0.41 percent versus 0.21 percent). This was concentrated in offices of physicians, which alone added. Ambulatory sites added 30,000 jobs, versus 11,000 in hospitals. This is a good sign because hospitals are high-cost locations of care versus doctors’ offices and other ambulatory sites.

See Table I below the fold:

Health Jobs Grow 1.5 Times Faster Than Non-Health Jobs

This morning’s jobs report maintained the trend of high growth in health services, which grew 1.5 times faster than non-health jobs (0.18 percent versus 0.12 percent). With 28,000 jobs added, health services accounted for almost one in six of 178,000 new jobs.

The disproportionately high share of job growth in health services is a deliberate outcome of Obamacare. While this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Ambulatory sites added jobs at a much faster rate than hospitals. This was concentrated in offices of physicians and other practitioners, and outpatient care centers. Physicians' offices alone added seven thousand jobs, more than the six thousand added by hospitals. This is a good sign because hospitals are high-cost locations of care versus doctors’ offices and other ambulatory sites.

See Table I below the fold.

Health Jobs Grew Twice As Fast As Non-Health Jobs in October

This morning’s jobs report maintained the trend of high growth in health services, with those jobs growing twice as fast as non-health jobs (0.21 percent versus 0.10 percent). With 31,000 jobs added, health services accounted for almost one fifth of 161,000 new jobs.

The disproportionately high share of job growth in health services is a deliberate outcome of Obamacare. While this trend persists, it will become increasingly hard to carry out reforms that will improve productivity in the delivery of care.

Health Jobs Grew Twice As Fast As Non-Health Jobs In September

This morning’s jobs report was a return to normal, with jobs in health services growing twice as fast as non-health jobs (0.21 percent versus 0.10 percent). With 33,000 jobs added, health services accounted for one fifth 156,000 jobs added. Ambulatory sites (with the exception of labs) added jobs at more than double the rate of hospitals. Nursing and most other residential care facilities were flat (Table I).

Job Losses in Nursing Homes A Drag On Health Job Growth

This morning’s jobs report was somewhat weaker than expected, adding 151,000 jobs versus 180,000 expected. For the first time in many months, job growth in health services slightly lagged growth in non-health jobs (0.09 percent versus 0.11 percent).

However, there was a significant divergence within health services: Jobs in ambulatory care and hospitals jumped 0.16 percent and 0.21 percent, while nursing homes shed 7,000. That imposed a massive drag on health services overall, limiting growth to 14,000 jobs (Table I below the fold).

Health Services Jobs Grew 75 Percent Faster Than Non-Health Jobs

This morning’s jobs report was the second month in a row of good news on the employment front. However, like last month’s report, jobs in health services grew much faster than non-health jobs. Health services added just 43,000 jobs in July comprising 17 percent of the 255,000 civilian non-health, non-farm jobs added (Table I). The monthly rate of growth in health services jobs was 75 percent more than for other jobs. The shifting of jobs towards the government-controlled health sector continues.

Obamacare's Perverse Job Creation Program

The latest jobs report gave the stock market a boost and injected some optimism into public sentiment about our economic prospects. Unfortunately there’s a problem with the current employment situation that few understand: Obamacare has likely led to too many jobs in health care, drawing labor from more productive functions.

Dan Diamond of Politico reports jobs in health care have grown 23 percent since 2005, while jobs overall have grown only 6 percent. Much of this was driven by the collapse of non-health jobs in 2008-2010, while health jobs remained undisturbed. As the economy recovered, Obamacare kept layering jobs onto health care that did not actually improve health care:

“We knew our economy spends more than it should on health care," says Bob Kocher, a venture capitalist who served as a special assistant to the president in 2009 and 2010 and helped shape the Affordable Care Act. “And we had good battles inside the White House" over whether to preserve health jobs — which were one of the biggest drivers of those costs, but kept Americans employed at a bleak economic time.

The resulting law — born at the very moment the economy was bottoming out — ultimately came down on the side of saving jobs. Many of those jobs are effectively waste. "For every doctor, there are now 16 FTEs that are non-doctors," Kocher said. "Nine of them are administrators — and it's jumped from six" in the past few years. 

(Dan Diamond, “Obamacare, the secret jobs program,” Politico, July 13, 2016.)

Health Services Jobs Still Dominate Employment Growth

Last Friday’s thrilling jobs report, which drove the stock market to new highs, continued to be dominated by growth in health services jobs. Indeed, breathless media coverage disguised that monthly job growth followed a miserable May report (which was actually revised downward last Friday).

Health services added just 39,000 jobs in June, significantly fewer than July. Nevertheless, those comprised 13 percent of 287 thousand civilian non-health, non-farm jobs added (Table I). The warping of our economy towards the government-controlled health sector continues.

Eight Thousand Non-Health Jobs Lost in May

The true scope of this morning’s miserable jobs report is disguised by the headline figure of 38,000 jobs gained. In fact, health services added 46,000 jobs while civilian non-health, non-farm employment dropped eight thousand (Table I). The warping of our economy towards the government-controlled health sector has reached the tipping point I have suggested for months.

Workers Increasingly Prefer Pay to "Benefits"

The Employee Benefits Research Institute (EBRI), a research organization with a mission “to contribute to, to encourage, and to enhance the development of sound employee benefit programs and sound public policy through objective research and education” includes members as diverse as AARP, Aetna, Boeing, Charles Schwab, and Wal-Mart.

EBRI’s latest research on how employees view their benefits should give some encouragement to reformers who want to change the tax treatment of health insurance, and weaken the iron triangle of big business, big labor, and big government which enforces the discrimination against individually owned insurance. From EBRI’s latest Note: "There appears to be the start of a trend away from being satisfied with the current mix of benefits and wages, toward more preference for fewer health benefits and higher wages"

Read more at NCPA'ss Health Policy Blog.

Health Jobs Grow Three Times Faster Than Other Jobs

Health services jobs grew over three times faster than non-health, nonfarm civilian jobs in April. Health services jobs comprised 44,200 (28 percent) of 160,000 jobs added. The rate of growth from March was 0.29 percent for health services jobs versus only 0.09 percent for other jobs.

Also concerning is the revisions of the job figures from February and March (Table III). The estimates of overall employment growth in those months have been revised down significantly from the previous two reports. However, all the downward revision has been outside health services. Indeed, the originally reported health services job growth for February has been revised up, while the previously estimated growth in other jobs has been revised down by 22,000.

Read more at NCPA's Health Policy Blog.