NCPA - National Center for Policy Analysis

Medical Industry Employment Plummets

October 22, 2013

Somebody somewhere has just entered a night school course to qualify for an X-ray technician's job that isn't going to be there, and somebody else is getting a pink slip rather than a bonus this Christmas, says Kevin Williamson, a correspondent for the National Review.

 Recently, hospitals, medical practices and related businesses are shedding jobs:

  • Since April, 8,000 medical jobs have been shed, more than in any other sector.
  • For the year, there have been more than 41,000 layoffs at health care firms.
  • USA Todayreports, those are mostly hospital staffing reductions in response to reduced reimbursement rates for Medicare patients under the sequester and cuts for some providers under the Affordable Care Act.
  • From 1990 to 2008, the number of jobs in health care grew 63 percent, providing one in four of the jobs created in those years, and, equally important, health care is one of the few sectors that have shown relatively strong growth in inflation-adjusted wages in recent decades.
  • Losing that means losing a big piece of the employment picture, not just in total jobs but in real income.

Which puts us in a difficult position: Cutting Medicare and Medicaid spending will have ill effects on the job market, but not cutting Medicare and Medicaid spending will bankrupt the country. This is a textbook case of why you do not want government trying to steer an industry or fixing prices.

Source: Kevin D. Williamson, "A Sick Job Market in Health Care," National Review, October 14, 2013.


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