Health Care Job Boom Could Soon Slow

This week, New York Times reporters Reed Abelson and Katie Thomas took on a sticky issue–as the federal and state governments cut into health care funding their budgets can’t support, can the health care industry continue to generate much-needed jobs? 

The answer, it seems, is no.

“The situation has led many in the health industry to caution that it cannot be relied upon to keep

Dartmouth-Hitchcock Medical Center

As health care funding faces more cuts, providers fear they'll no longer be able to support job growth.

 hiring workers. ‘It’s not realistic to believe that we’re going to continue to generate job growth when you’re speaking about Medicare and Medicaid reductions in the hundreds of billions of dollars over the next few years,’ said Daniel Sisto, president of the Healthcare Association of New York, which represents the state’s hospitals and health systems.

Companies that rely on government spending have been bracing for deeper reductions, and President Obama recently alluded to another round of belt-tightening from one of the industry’s bedrock payers — Medicare.”

The article notes health care fields added 31,000 jobs in July (out of 117,000 across all industries), which is actually up by a few thousand from average.  Apparently help wanted ads from providers are down, as is new facility construction.  An atmosphere of economic uncertainty, coupled with confusion over contradictions in lower-court rulings on the federal health care overhaul have many providers sitting tight.  Then, there are these numbers to consider:

“Hospitals experienced reductions in Medicaid reimbursement in 37 states for next year’s budgets, according to Lisa Goldstein, an analyst at Moody’s, who predicts further cuts.”

And the New Hampshire Medicaid kerfluffle also gets a mention,

“At the Elliot Health System in Manchester, N.H., the seemingly abrupt decision by state lawmakers to sharply reduce hospital reimbursements led the hospital to recently lay off 182 people.

“For the last 10 years, we’ve been pretty stable and we’ve been able to grow,” said Elliot’s chief executive, Doug Dean. But faced with the loss of millions of dollars in Medicaid revenue that would wreak havoc on the coming hospital budget, Mr. Dean said he had no choice but to cut jobs. “It was simply because of the economics of Medicaid,” he said. Elliot is among a group of hospitals filing a lawsuit to stop the cuts.”

According to numbers from the US Census, in 2009, 22.4 percent of New Hampshire residents were employed in the Educational Services, Health Care and Social Assistance arena.  You can read more about New Hampshire’s hospital controversy here, and here.