Healthcare Is a Big Driver in U.S. Economy, Jobs
In this week’s cover story, BusinessWeek is attributing most of the job growth in the U.S. for the past five years to health care, while IT for instance employs less people now than in 1998. Since 2001, 1.7 million jobs have been added in the healthcare at large (including related industries such as pharmaceuticals and health insurance). Even booming real estate added only 900,000 jobs during the same period, and it is now cooling off in most places. Data from the Organization for Economic Cooperation & Development (OECD) shows that other western countries didn’t display similar health-related job growth during the last decade, though America started with lower ratios in terms of doctors, nurses or beds per capita (see highlights from the OECD Health Data 2006 report). At 16 percent of GNP, money spent on healthcare is way higher than everywhere else in both relative and absolute terms.
Healthcare is labor-intensive which proves both a blessing and a curse. It provides a substitute to retail and industry to let workers with low skills enter the workplace. However, half of the country’s healthcare spending is financed by the government which is running steep deficits. This brings the evergreen subject of potential productivity gains through increased use of information technology. But Richard Cooper, a professor at the University of Pennsylvania School of Medicine, was quoted as saying that increased spending was a natural result of higher real incomes: “[w]hen you get richer, you aren’t going to triple your food expenditures. But there’s much more that can be done to improve health.” (Cooper is co-chairing the recently formed Council on Physician and Nurse Supply.)