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Health Workers May Experience Costly Dislocation As Health Spending Growth Slows

For decades, Americans have been worried about the impact of escalating health costs and working to keep expenses down. The proportion of our Gross Domestic Product (GDP) devoted to health services, once expected to soar to one-fifth or even higher by the end of this century, has now held steady at 13.6% for four years in a row. As recently as 1995, the Health Care Financing Administration predicted that health expenditures would reach 17.9% of GDP by the year 2005. In fact, the 1996 rate of growth was lower than the most optimistic "slow-growth" projections used by the Bureau of Labor Statistics and the Department of Commerce in their forecasting models.

An article appearing in the May/June 1998 issue of Public Health Reports analyses the effect this slowed rate of growth will have on health workers and local economies. "The mix and location of jobs must shift," says author Christine E. Bishop, PhD, of the Institute for Health Policy at Brandeis University, "with some workers and some regions bearing disproportionate transition costs."

The health services sector is a major employer. Excluding government employees, over 9.5 million workers--almost one in ten private sector employees in the United States--work to produce health services. Between 1988 and 1996, private health sector employment grew at a 3.7% average annual rate, substantially faster than the 1.6% annual growth in jobs in the private non-farm economy as a whole. But the latest available employment statistics show that total non-government health jobs grew only 2.2% between 1995 and 1996, slightly slower than total jobs for the private non-farm economy, which grew 2.6%.

The mix of jobs will need to change, consistent with shifts in spending within the health sector. Bishop finds that "there currently is decreased growth in hospital jobs--both government and non-government--and strong job growth in ambulatory and home health c
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Contact: Christine Bishop
bishop@binah.cc.brandeis.edu
781-736-3942
Public Health Reports
4-May-1998


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