Protecting health care jobs shouldn’t be part of cost-control debate, Harvard economists argue

Hospital officials frequently warn state and national lawmakers that aggressive cost controls will lead to health care job losses. But two Harvard economists argue in this week’s New England Journal of Medicine that health care jobs have no place in the policy debate.

There’s a bigger employment picture to consider, Harvard School of Public Health professors Katherine Baicker and Amitabh Chandra write.

“Salaries for health care jobs are not manufactured out of thin air—they are produced by someone paying higher taxes, a patient paying for more health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck,” they write.

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Policymakers should strive to make health care as efficient as possible, with the best care at the lowest cost. If jobs are lost as a result, money saved could be invested elsewhere, including in job creation programs.

Even as jobs in other sectors have fallen in recent years, the health care job market has continued to grow.

“There’s no recession in health care,” Chandra said in an interview Wednesday.

He and Baicker note that health care employees make up more than 10 percent of the US workforce, up from less than 4 percent in 1965. Certainly health care has improved since then. Diseases that were fatal four decades ago no longer are, and Americans live longer. But the authors say, the cost for each year added to the average life expectancy has risen precipitously.

Such growth is unsustainable, Chandra said.

“We can’t expect the health care industry to both deliver affordable health care and contribute to job growth,” he said. “That’s asking too much.”

The authors argue that jobs could be lost in health care, or shifted as the needs change. But money saved by trimming health jobs could mean higher wages for other workers or expanded job creation programs more likely to benefit the most vulnerable workers.

“Treating the health care system like a (wildly inefficient) jobs program conflicts directly with the goal of ensuring that all Americans have access to care at an affordable price,” they write.

The risk of health care job loss plays a more prominent role in the national debate of the Affordable Care Act, Chandra said. But Lynn Nicholas, president of the Massachusetts Hospital Association, said last month that a state House proposal requiring health care to grow more slowly than the overall economy would require her members to cut hours and services.

“That would have direct implications in terms of job loss,” she said then.

Nicholas said Wednesday that she realizes that some jobs will be lost as the health care system is overhauled and others will be shifted to new kinds of work. She does not want the Legislature to pass a plan so severe “that, in order to meet goals and targets, people just lay off and slash and burn without the ability to really redesign” what they do.

“It’s all a matter of pace and timing,” she said.

Not taking significant steps to control health spending could mean job losses for other workers, according to a report published in April by the Blue Cross Blue Shield of Massachusetts Foundation and written by MIT economist Jonathan Gruber and analyst Ian Perry.

They projected that Massachusetts employers would spend $33 billion on insurance for their workers in 2019, up from $18 billion in 2010, if current trends in the growth of health costs continue. The average worker in the state would lose about $17,000 in take-home pay, including lost wages and higher premium contributions.

The authors also project that increased employer costs will be too big to pass on to employees. As a result, they said, companies would have to reduce profits or lay off workers.

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