Archive for March, 2016

Health Care: Good Jobs at Good Wages

Sunday, March 20th, 2016

It’s that time again. We get to pick a new president. And what an array of choices: socialists, secretaries, surgeons and senators, as well as several governors, a Clinton, and of course Donald Trump, who has excited the electorate and insulted most of the world’s mainstream religions. Is this a great country or what?

From Single Payer to Repeal and Replace

The range of political options is staggering and extreme. Bernie Sanders has unapologetically advocated for a single payer system, which is energizing college students (but not so much members of the U.S. Congress).

At the other extreme, Ted Cruz has sworn to repeal and replace Obamacare and end employment-based health insurance. And Ben Carson would like everyone to have a lifetime health savings account.

With the exception of Hillary Clinton, who has vowed to build on Obamacare and expand coverage and affordability (which is code for more subsidies), all of the candidates’ positions would limit the growth in dollars flowing into health care. And less money in the future will mean fewer health care jobs created.

As the national domestic policy debate centers on profound policy disagreements over jobs, income inequality and health care policy, let us not lose sight of the fact that health care is a major jobs engine delivering good jobs at good wages.

 

A Resilient Jobs Creator

I was always taught that health care expenditures equal health care incomes. It is a perfect equation. Expenditures are a function of the number and type of services delivered multiplied by the price. And the total expended on health care exactly equals the number and type of people employed in the health care system multiplied by their income. (OK, there is a little leakage to insurance and profit, and to drugs and supplies and so forth. But insurers and pharmaceuticals hire people, too, to misquote Mitt Romney.)

Let’s be clear. Spending more on health care has an opportunity cost. We could spend it perhaps more productively (and in more health producing ways) on education, housing, transportation, infrastructure and so forth. But that is not likely. Instead, in a world where globalization and technology and the ravages of the financial crisis have gutted the finances of the middle class, health care remains a resilient middle class jobs creator. Health care really is the mother of all Keynesian industries, and more productive and humane than digging holes and filling them up again (which is what Keynes once advocated because of the effect on employment and income).

But what are the facts? How good a job creator is health care?

 

The Chart

 

The chart below was published in 2014 in a major review of health care and employment by the Bureau of Labor Statistics (BLS). It shows the

resilience of health care employment through the dramatic job losses of the Great Recession.

Healthcare: Millions of jobs now and in the future

From 2004 to 2014, health care added approximately 250,000 jobs per year. And since the report was published in 2014, we have seen the coverage expansion of Obamacare kick in. Jobs in health care have grown in parallel at an annualized rate of 400,000 to 500,000 per year over the last two years.

This is not new. A September 2007 BusinessWeek cover showed a Rosie the Riveter look-alike in nurse’s garb. The story detailed that basically all of net private sector job growth from 2000 to 2007 was found in the health care sector.

(Critics of the article at the time pointed out that other sectors of the economy, like retailing and food services, also added jobs on a net basis. But these sectors were swamped by manufacturing job losses, leaving health care as the industry accounting for all the overall net growth in jobs.)

Any way you cut it, health care is a major jobs creator and consistently has been for decades.

And for most geographic areas, from rural America to the largest cities, health care is a major if not the major employer. In a lot of America, health care is a key element of the economic base.

 

Growth in Good Jobs at Good Wages

The BLS report from 2014 not only looked back but ahead at the prospect for jobs growth in health care. The BLS forecast 26 percent growth in health care employment from 2012 to 2022, an increase of about 4.1 million jobs over the period. Growth in employment in offices of health practitioners accounted for 1.2 million of that overall growth, with hospitals accounting for approximately 800,000 of the increase — the balance (a 2.1 million increase) being in home care, long-term care and other ambulatory services. Indeed, home health care is forecast to experience the most growth in jobs of any sector by a full 60 percent from 2012 to 2022.

And these are good jobs. Most of the growth in hospital jobs is expected to occur in occupations such as nursing or hospital administration, with incomes in excess of $60,000. In the ambulatory environment and alternate site environment, more of the jobs are in occupations such as aides, assistants and personal care staff, although jobs for nurses are forecast to grow substantially in these sectors, too.

And many of these jobs are unionized, with resulting higher incomes. While unionization continues to decline across all industry sectors (with only 6 percent of the private sector labor force in unions), health care has a higher penetration of unionization (approximately 11 percent nationally), but not nearly as high as public sector employees (where over

a third of the workforce is unionized).

Why will health care jobs continue to grow? According to the BLS, the basic drivers are demographic: A growing, aging, more chronically ill population provides the fuel for health care demand. Add the technological advances that will create new procedures, tools and interventions along with the coverage expansion of recent years, and it seems hard to believe that growth will somehow stop.

The demographic factors are certainly important key driving forces for employment growth. And there is reason to suspect that employment growth will come from the stunning and increasing complexity of health care. Think: navigators, Medicaid eligibility workers, population health managers, care management professionals and social media specialists, to name a few.

 

Could the Jobs Engine Stall?

If Ted Cruz or Bernie Sanders were to prevail and have his ideas actually implemented, then we are probably looking at significant reductions in health care employment. Economists have reviewed Bernie Sanders’s plans and, at best, they estimate the Sanders plan would reduce health expenditures by a half trillion dollars or so (which, remember, equates approximately to a half trillion of jobs and incomes).

If more moderate regulatory schemes were implemented ­— for example, the proposals academic researchers

have made to limit all private insurance payment rates to no more than 125 percent of Medicare — such schemes would likely require a minimum of 20 percent layoffs in hospitals, given current care models.

Donald Trump will take care of everyone with health care and will bring so many jobs back that we will have plenty of good jobs in every industry … for the best people. So maybe we don’t have to worry about health care jobs in a Trump administration. I relish reviewing the specifics.

But the jobs engine could stall for reasons beyond political and policy malfeasance. Here are some trends to watch for:

Care redesign. If we seriously move from volume- to value-based payment and redesign care, we may change the locus of care even more dramatically than is already forecast by the BLS report. Creative use of scope of practice changes, new technology and innovative care pathways could transform the jobs outlook.

Uberization. Uber is a metaphor for disruptive innovation. Uber has killed taxis in many cities and now threatens to enslave debt-ridden Uber X drivers who have company car loans and need to keep driving to pay them off. Kinda like cab drivers, eh? We have yet to see a big disruptive player in health care. But if it comes, it could change the jobs outlook. I am not holding my breath. Software solutions don’t change diapers, or give bed baths.

Immune to foreign competition. One key advantage health care has over most industries is that it is harder (but not impossible) to outsource health care to other countries. While there is some medical tourism (of which the United States is still a net beneficiary), health care remains a local good delivered in person. There are obvious exceptions — from Australian-based radiology services to flying to Thailand for a hip replacement. But for most Americans, health care will be delivered and consumed locally, creating good jobs at good wages.

Ian Morrison, Ph.D., is an author, consultant and futurist based in Menlo Park, California. He is also a regular contributor to H&HN Daily and a member of Speakers Express.

 

 

 

 

The Trump Healthcare Interview: Part Two

Saturday, March 12th, 2016

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Donald Trump is leading in the polls and has the best chance of becoming the Republican nominee and maybe even President. In February, THCB asked Scottish-Canadian-Californian healthcare futurist Ian Morrison to conduct an interview with Trump, figuring that Morrison would have an in with Trump given Trump’s praise for Scottish and Canadian healthcare (SEE HERE).  Fittingly, that interview was published on THCB on President’s Day, February 16th.  Since then Donald Trump has racked up impressive victories and more importantly has released some specifics of his healthcare proposal.  THCB thought it was time for Morrison to reach out to Mr. Trump again.

MORRISON:  Thanks for making time Mr. Trump, it is a pleasure to have a chance to follow up with you.

TRUMP:  You were a little rough on me last time, but I enjoyed it, I thought I did very well in the interview.

MORRISON:  Indeed you did, it was incredible.  Mr. Trump before we get to your healthcare plan, let’s just catch up on the race.  Since we last talked you have had some impressive victories in a wide variety of states from Hawaii to Mississippi.  Why do you think you have done so well?

TRUMP.  I’m winning everywhere, everywhere, and with all the groups: vets, high income, low income (we love the low-income).   I won Hispanics in Nevada? Hispanics, Trump?  They like me because I am a winner, and I’m winning everywhere.  I am winning by a lot.

MORRISON:  You did particularly well in the South, the so called SEC primaries, where Ted Cruz was expected to do well, particularly with evangelicals.  You won by more than 20 points in Alabama for example.

TRUMP: Well they loved me in South Carolina, I won big there and then I did the dog whistle to the Klan and that probably helped, in the South.

MORRISON: You mean being slow to disavow David Duke and the Klan before those southern primaries?

TRUMP:  It worked well, we had hats ready: “Make America White Again” but Corey (Trump’s Campaign Manager) told me it probably wouldn’t work in the General, but we trademarked them anyway, I couldn’t believe it was available, so we may use the “Make America White Again” hats later, we’ll see.  But now I disavow, I disavow, how many times do I have to say it.

MORRISON:  Mr. Trump are you a racist?

TRUMP: Look I told the New York Times Editorial Board the whole story on deep background.  Republican primaries are about getting angry, white people to turn up.  Those people are tired and angry at the Mexicans, the Muslims, and Obama (we still don’t know if he was born in Kenya).   So when we win, we can be nicer in the general election, because I get along with everyone.

MORRISON:  But in the meantime Mr. Trump you have called Mexican immigrants rapists and murderers and only “some of them are nice people”.  A set of assertions that are factually incorrect.  You plan to deport 11 million undocumented immigrants, separating families, and build a wall to prevent anyone from returning.  You also called for a temporary ban on all Muslims coming to the US, regardless of their circumstances or legal immigration status.  You stereotyped Jewish people as being “good at making deals”.  You have young black demonstrators forcibly thrown out of your rallies, urging supporters to rough them up.  And you criticized the Pope for being too political.  All of this sounds like you are a xenophobic, racist, bigot with fascist tendencies.

TRUMP:  Maybe that’s why I am winning……. Look I love immigrants.  I married two of them.   But they came here ……legally.

MORRISON:  Did Melania come on an H1B Visa like the ones you are trying to eliminate?

TRUMP:  She’s a supermodel.  They have special visas for supermodels and world class golfers.  Look Adam Scott just won my tournament at Trump Doral, he’s Australian, he can come in.  Rory from Ireland, in, no problem.  Supermodels, in, no problem, but they have to be a 10.

MORRISON:  Mitt Romney criticized you in a remarkable speech in Utah two weeks ago, basically arguing that you were unfit to be president; you weren’t much of a businessman; and that the party should vote for Rubio in Florida, Kasich in Ohio, denying you the delegates and leading to a contested convention in which anyone, maybe even Romney, might win.  So far that strategy seemed to have backfired on the Republican establishment with your victories this week.  How do you see it?

TRUMP:  Romney choked.  He’s a stiff who should have beaten Obama.  He begged me for his endorsement in 2012:  he would have gone down on his knees to get it, and now he turns on me?  But we won easily this week in a lot of states, and we had a great event in Jupiter with the Trump steaks, and the Trump water, and the Trump wine, and the Trump winning. So Romney is a loser.  I have a store worth more than Romney.

MORRISON:  What about Rubio and Kasich.

TRUMP:  We will win Florida.  Bye-Bye Little Marco.

MORRISON:  Why so much animosity towards Senator Rubio?

TRUMP:  He hit me with the hands thing.  He said I had little hands…and you know, the implication.  But, I’m a counter puncher, so I had to come back with the schlong at the debate.  I guarantee you there is no problem.  That I can assure you.  I would have pulled it out at the debate, but Melania told me to be presidential.

MORRISON: And Kasich?

TRUMP:  We win Ohio and Kasich goes bye-bye.  Then it’s me and Lyin Ted I can’t wait.

MORRISON:  You match up well against Senator Cruz?

TRUMP:  Look Cruz is not likeable.  He has no friends.  And he has a problem with the Goldman Sachs and Citi loans, so we will beat Ted.  We will win all the big ones: New York, New Jersey, California and we will wrap it all up by the Convention and then we can go after Hillary or Bernie.  It might be Bernie, because Hillary may get indicted and Bernie is winning so we may end up against Bernie.  We’ll see. Either way we win easily.  Bernie is a socialist Jew from New York who has never had a real job.  I am a very successful businessman.  I have built a terrific business.  I employ tens of thousands of people.  I’m a very good Christian (remember 2 Corinthians and the crackers). And, you know, they’re chipping away at Christianity. We’re not going to let that happen anymore..So you put me, a Christian businessman up against a Jewish socialist who do you think will win?

MORRISON: Which brings me to healthcare.  You recently released some specifics about your health plan.  Let me quote a respected conservative health care commentator Avik Roy who wrote in Forbes magazine about your plan: “It has the look and feel of something that a 22-year-old congressional staffer would write for a backbencher based on a cursory review of Wikipedia.” Mr. Trump a lot of pundits from the right and left have criticized your 7 point plan as a hackneyed rehash of old Republican ideas, none of which would work.  I thought Trump healthcare was going to be amazing?

TRUMP:  I told you last time.  We will repeal and replace Obamacare and it will be amazing.

MORRISON: But the 7 point plan didn’t seem very amazing, or new, do you want to talk about it and explain how exactly it would be amazing.

TRUMP:  Look this is simply a place to start the negotiation.  I told you already, it will be different when I win and I am President.  I get along with people and I will make a great deal on healthcare.

MORRISON:  So you are not a real conservative?

TRUMP:  Look I am a conservative, I like to conserve, I just don’t believe in free trade, and I like Planned Parenthood.  But with the health plan we start with the conservative ideas and then we will negotiate.

MORRISON:  You want to keep guaranteed issuance and in earlier interviews supported the individual mandate.

TRUMP:  I disavow the mandate, I disavow. But I want to keep the pre-existing conditions.  I told you I don’t want people dying in the streets. And the Trump healthcare plan will do all that.

MORRISON:  So what are the specifics?

TRUMP:  First, we get rid of the lines around the states.  Once we get rid of the lines then there will be more competition and the prices will fall so fast.

MORRISON:  Most healthcare analysts agree that this is impractical to implement given that health insurance is regulated at the state level.

TRUMP:  Once the lines are down, the prices will drop I guarantee there isn’t a problem..

MORRISON:  Just like your….

TRUMP:  Exactly.

MORRISON:  The second point in your plan is making health insurance tax deductible for everyone.  But only half of people pay income tax, and anyone who is self-employed or has employment-based insurance already has the benefit of tax deductibility, so it is just a tiny sliver of the population who would benefit.

TRUMP:  But it sounds good, to say everyone gets a tax break.  That’s why we are winning because we say things that sound good to the Trump voter, even if they won’t make much difference.

MORRISON:  Your next point is Health Savings Accounts.

TRUMP: It was really Ben’s idea, but I liked but.  I like Ben.  He is a doctor, so you have to listen to him about this stuff so we will do the Health Savings Account thing.

MORRISON:  But Health Savings Accounts have been around as described in your plan since 2003.  Ben Carson didn’t invent them.  20 million Americans already have them, how is this a new idea?  How is this amazing?

TRUMP:  Trump Health Savings Accounts would be a much better brand.  People would sign up in droves.  We would have hats.

MORRISON: You want to have increased price transparency for doctors, hospitals, and drugs and many people support that.  But again it is not a new idea and many groups and organizations from the Obama administration to industry leaders are already promoting this so

how is this amazing?

TRUMP:  The difference is we will get it done.  We will get them all around the table and get it done.

MORRISON: You are in favor of block grants to the states for Medicaid, but you and many other conservatives want to eliminate the lines around the states for regulation of health insurance.  Which is it?   Should states have more authority or not?

TRUMP: States should have more authority apart from the lines …we need to get rid of the lines.

MORRISON:  You also plan on saving healthcare dollars currently spent on illegal immigrants some $11 billion you estimate.  Will that money be used to pay for the wall?

TRUMP:  No, the Mexican government will pay for the wall, I can assure you, because of the trade deficit.  We have so much leverage with them on trade, and the Mexicans are bringing drugs into the country especially to New Hampshire where it is the number one problem.  I couldn’t believe the beautiful hills, and roads and the little towns and the nice people and the number one problem is heroin from Mexico. So we will build a wall and stop it.

MORRISON: Which brings me to a final point of your plan which is to increase free trade on pharmaceuticals and allow importation from other countries where pharmaceutical prices are much lower, like Mexico. Don’t you think that is somewhat ironic, given what you just said?

TRUMP:  No, we would bring in the drugs legally.  Like oxy.  And the prices would come down for oxy so no one would have to buy heroin from the Mexicans.

MORRISON:  While we are on pharmaceuticals, earlier in the race you claimed you will save $300 billion on the drugs spend for Medicare recipients, which is remarkable given that the total spend by Medicare on drugs is about $75 billion.  How could that possibly work?

TRUMP:  Carl.

MORRISON:  Excuse me?

TRUMP:  Carl Icahn.  He is a good friend, a terrific businessman and a fantastic negotiator.  He is tough.  So I am going to get Carl to lead the negotiation with China on trade.  But I will also ask him to negotiate with the drug companies for the drugs for Medicare.

MORRISON:  But what if pharmaceutical companies don’t want to reduce prices given they have strong patent protection and monopoly pricing power.

TRUMP:  Maybe we will use eminent domain.  We’ll see.

MORRISON:  What if that is rejected by the courts, what could you do to get drug companies to comply?

TRUMP:  Waterboarding….and more.

MORRISON:  Mr. Trump that truly is amazing.  Thank you.