A brief comment on health care layoffs

Hospital systems in my area, like hospital systems all over the country, are laying off people. They are also often blaming this on “Obamacare”. This has led to many of my friends, especially those who lean to the right, to ask me (often sarcastically) if this is what people “wanted”.

The larger question is whether this is Obamacare’s “fault”. In a literal reading of the law, no, because there’s nothing in there that tells hospitals to fire people. But in a larger sense, yeah, there’s some blame to go around. But it’s important to understand why. It’s because Obamacare seems to be working to slow healthcare spending down.

And that’s good! It’s what everyone, from both sides of the aisle, says they want. Almost everyone agrees that we spend too much money on health care, and that we should spend less. And now we are! Did you think that would have no consequences?

We don’t take all of our health care spending and put it in a pile and burn it. All of that money goes into other people’s bank accounts. It’s wages, and profit, and benefits. It goes to doctors, and nurses, and janitors in hospitals, and execs, and pharma reps, and medical device designers, and on and on. One man’s “waste” is another man’s “salary”. If we spend less on health care, there’s less money to go to wages and profit. Period. You can try to operate leaner, but eventually, you’re still taking money out of someone else’s pocket.

So if we manage to spend less on health care, it doesn’t matter if we do it by the most free market method, or by the most price-setting regulated method. The result will pretty much be the same in the end. Someone is going to make less or be fired. You can’t manage the same workforce at the same salary on a significantly smaller amount of money.

So if you profess to like lower health care spending, then this is what happens. You can dislike Obamacare for any number of rational reasons. But if you are hating on it for this reason, and you also think we spend too much on health care, you’re being a bit irrational.

P.S. In the last few years, during the largest recession in known history, while pretty much every other sector was shedding jobs, health care was adding them like crazy. Did we not think this might come back to burn us a few years later?


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