Saturday, March 02, 2013

Healthcare Jobs Bubble

The healthcare industry and higher education are booming. Eds and meds are anchoring the regional economies for many Rust Belt cities. This has some analysts concerned about a bubble. From Modern Healthcare:

The trends suggest regions betting on rebuilding their economies on the backs of resurgent healthcare sectors may be betting on horses that have already run their races. “Even as people migrate away from these Rust Belt cities and the Northeast, and toward the Sun Belt, the healthcare jobs seem to be more sticky,” said Chapin White, a senior researcher with the Center for Studying Health System Change, a policy not-for-profit in Washington. The jobs “seem to be staying in these cities where people are moving away from.” ...

... But cities with fast-growing populations tend to be less reliant on healthcare jobs, Modern Healthcare's analysis found. “Cities that are growing quickly are most likely adding diversified industries,” said Dr. Sheldon Retchin, CEO of the Virginia Commonwealth University Health System in Richmond and vice chairman of the federal National Health Care Workforce Commission, created by the healthcare reform law but not yet funded by Congress. The growth requires services such as healthcare, he said.  ...

... Not every metro area with excessive job growth was in decline. Richmond, Va.—which has grown its population since 2003 when its healthcare jobs per capita ranked well below the national average—added healthcare jobs on a per capita basis faster than any other region in the country, according to the Modern Healthcare analysis.

The analysis of Labor Department and census data shows that before the recession, the Richmond metropolitan area—composed of 16 counties and four cities—had an average healthcare job concentration of 46 per 1,000 residents, nearly equal to the national figure. By 2011, the area's intensity of healthcare provider jobs relative to its population had spiked 26.2% to 58, growing faster than the area's above-average 10% population growth.

Emphasis added. This is a good example of how place-centric thinking handicaps our understanding of the economy. More fundamentally, the fixation with population growth makes for specious conclusions. On the ground in dying Pittsburgh:

Children’s Hospital of Pittsburgh has received a $1 million government grant to look at the usefulness of telemedicine in determining which patients need immediate emergency care at the Lawrenceville hospital.

The goal is to develop educational programs for doctors at rural hospitals to make the best use of telemedicine in deciding which patients should be transferred emergently to Children’s for care. The program gets underway March 4 the Health Resources and Services Administration provided the grant, which totaled nearly $1 million.

About a quarter of all pediatric emergency visits are to hospitals in rural areas, which rarely have the equipment and expertise necessary to handle complex emergencies, according to Dr. Jeremy Kahn, project leader. The program will enable doctors in outlying hospitals consult with UPMC doctors to determine the best treatment for the patients.

Pittsburgh has been faced with the shrinking market problem for about half of a century. Thus, eds and meds are export oriented. Telemedicine is a technology that can expand the reach of Pittsburgh-based healthcare, which is like attracting high school graduates from other states to attend regional institutions of higher education.

Pittsburgh is the face of this country's demographic future. The fast-growing metros tend to be drunk on inmigration, such as an over-reliance on construction jobs. What happens when the people spigot stops? Rust Belt cities are way ahead of the curve, not behind it.

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