• More jobs in health care is not unambiguously good

    A new, ungated NEJM paper by Kate Baicker and Amitabh Chandra has the correct interpretation of health care job growth.

    It is tempting to think that rising health care employment is a boon, but if the same outcomes can be achieved with lower employment and fewer resources, that leaves extra money to devote to other important public and private priorities such as education, infrastructure, food, shelter, and retirement savings. […]

    Employment in the health care sector should be neither a policy goal nor a metric of success. The key policy goals should be to achieve better health outcomes and increase overall economic productivity, so that we can all live healthier and wealthier lives. Our ability to ensure access to expensive but beneficial treatment is hampered whenever health care policy is evaluated on the basis of jobs. 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.

    Their chart (below) emphasizes that growth in health care employment has accompanied a decrease in the efficiency with which resources are converted into life expectancy. And, no, they are not assuming all of life expectancy gain is due to consumption of health care. Read the caption, which notes (with citation) an assumption that 50% of the gain is due to health care. Note that they do not presume it’s a mere 10%.

    @afrakt

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    • I’m not an Economist but when I do the bath we are better off with bloated HC Jobs then just about any other spending. If we base the assumptions on reality and not impossible outcomes. If this money was not being spent on healthcare where would it be going?

      Healthcare is consumed after we eat, pay for our largest houses in the world with the most TVs, AC, cars, bedrooms. From what I know excess healthcare spending is mainly people wastefully spending excess money. Either their own or in the case of public programs someone else’s foolish enough to give it to them.

      If we were to magically optimize healthcare tomorrow to the perfect efficiency where would the money be spent? Other unnecessary and consumable goods and services. If that is the case name others that keep as much money domestic as healthcare. If people buy a new or bigger TV the money is gone. Travel more, wasted on foreign oil. New Computer, gone. I believe the term is elasticity of money, by buying $1 of healthcare we actually goose GDP 7-20? times. Foreign oil, zero times.

      Unless we could replace wasteful healthcare spending with something else domestic instead of saving money we would actually be losing money, billions.

      I find the argument we should be more efficient in healthcare so we can spend more on education about ironic as you can get. Lets replace waste with more waste? We already spend more than everyone else in our worst schools and get far less. The LAST thing our education system needs is more money, it needs a substantial reduction and return to its core mission, education. Talk about social engineering creeping in, schools are far more inefficient than healthcare in that regards.

      I’m not in any way saying HC is not inefficient and we could easily get rid of 20% of the people, but doing so won’t save a penny. It’s the same problem economist and academics have with wellness, they don’t understand healthcare at all so they foolishly run around saying preventive care is going to “save” billions. We have 7+ years of real world experience showing it actually cost billions and doesn’t save anything, but that doesn’t stop the ivory tower proclamations.

      In regards to efficiency of converting spending into life expectancy. If you could live till 78.5 and die with $500,000 in the bank or live till 78.8 and be broke in the end, which would you choose? The assumption is based on having no bills, or family to take care of, it’s just extra money. If you have no other use for the money why not take the extra .3 years? Terribly inefficient and waste of money, almost as wasteful as dieing with it in the bank.

    • Why do they compare it to non-farming civilian workforce? How much of the increase is due to shrinking workforce versus increase in healthcare? Just because people retire or are out of work doesn’t mean they will stop consuming healthcare. As the babyboomers retire wouldn’t we expect to see a huge decrease in the workforce but a legit increase in demand for healthcare?

      The selected measures for comparison seem picked to guarantee the desired result.

    • I’ve been also coming across numerous articles and top 10s related to the ones with largest jobs growth and the ones, related to the health care has been topping all of them. But your points are really noteworthy and I wonder if these two concepts are really interrelated?! Also, i did not see no distinction to be made in terms of public health against private health (i.e. medicine)!

    • I wonder how much of this has to due with; 1) an aging population, 2) the specialization of medicine and nursing, 3) care ratios of physicians and nurses (per 1,000 people for example), and 4) redundancy of care (in the mid-sized city I live in we have two hear centers and three cancer centers all competing with on another)?

    • In these days of high unemployment I often find myself reminding people that jobs are a cost not a benefit. It is not good to use a method that requires more working hours to produce the same output. It often comes up in green power production so I have to also point out that it may still be worthwhile if the benefit is sufficient to justify the additional cost.

    • For what it is worth, an actual count of online and print ads in a recent month showed 200,000 advertised openings for full time, high wage health care jobs, I forgot where I saw this but it looked like a thorough study.

      If every job got filled every month, that would mean 2.4 Million new jobs a year.

      Good, yet, but not enough to create a boom by itself.

      That is just for generral info.
      What interests me is that health care so far is a non-tradable, non-offshorable job source. There are many cities where the largest employer used to be a factory and is now a hospital.

      Health care has bought us time vs the paradox of productivity, that no one to my knowledge has solved, An efficient world uses less labor, and so it leads to layoffs and poverty.

      We do survive this but the social costs are high. The mechanization of southern farms led to the black migration in the last century, and the costs in crime and family breakdown are still being calculated every minute in tragic detail.

      In other words, if we don’t want health care to be a jobs program, we had better have another jobs program to replace it Most people and especially most men need jobs to start families and lead decent lives.