Health care is the nation's top employer!

The journalists Lydia DePillis and Christine Zhang wrote an article for The New York Times last month that I found very interesting ("How Health Care Remade the U.S. Economy").  I actually saw the article appear on my daily newsfeed when the article had first appeared and marked it to be read later, and I finally was able to read it.  The main theme of the article is that the health care industry has become America's top employer!

According to DePillis and Zhang, health care has been responsible for about one-third of the growth in employment in the past year and has more than replaced the loss of jobs in the manufacturing and retail sectors (see also the working paper by the health economists, Joshua Gottlieb, Neale Mahoney, Kevin Rinz, and Victoria Udalova "The Rise of Healthcare Jobs").  Today, health care workers account for approximately 13% of the total workforce in the United States, up from 9% in 2000.  Certainly the changing demographics in the U.S. have played a role here - as Americans age, they will require more care.  However, these trends could change in the next few years.  Given the recent cuts to Medicare and Medicaid, health care organizations are looking for ways to cut costs, and cutting labor costs could be one lever to pull.

DePillis and Zhang cite three factors at play here.  First, more Americans are getting access to care as the uninsured rate declined significantly following passage of the Affordable Care Act.  Second, as access to care has increased, people are using more of it.  Again, the aging U.S. population is a factor here, as chronic conditions (that require more care) increase with age.  Third, Americans are spending more on health care because they have more money to spend.  Americans now spend more on health care than either groceries or housing.

What I found most interesting about the article was the fact that the health care industry is the biggest employer in 38 out of 50 states!  Just look at the graphic below, again from data obtained by DePillis and Zhang and published in The New York Times:

The article also mentions the potential impact of artificial intelligence on the U.S. healthcare workforce (I've mentioned this a few times in recent posts, see "Will we get replaced by AI?").  What's also mentioned is the fact that health care is not efficient.  Many times, but not always, efficiency is equated, rightly or wrongly, with being smaller.  It will be interesting to monitor these health care workforce trends as artificial intelligence, the aging U.S. population, and the looming cuts to Medicare and Medicaid all converge at the same time.