Over the last couple years the health care industry has endured a deep economic recession that has included rising numbers of uninsured patients, a decline in doctors’ visits and an uncertain future partially obscured by the ongoing overhaul debate in Congress.
But, as today’s jobs report reminds us, resilient health businesses have added jobs throughout the recession even as virtually every other sector of the economy shed them by the thousands. In the past two years, even as the economy tanked, the health sector added 631,000 jobs, including 22,000 last month, according to the monthly report by the Bureau of Labor Statistics. Manufacturing companies, by contrast, dropped 2.1 million workers since the recession began.
There’s a simple explanation, economists say: When consumers have to choose between buying a new car and getting needed medical treatments, they go to the doctor’s office, not the Ford dealership.
“It’s the one area where people are not willing to make cuts,” said Harry Holzer, a former Labor Department economist and Georgetown professor. An aging population has helped fortify the sector against the effects of the recession by deepening the Medicare rolls as baby boomers retire, he said.
The federal government also picked up the tab for more patients to enroll in Medicaid and began to subsidize insurance for laid-off workers during the recession, by paying for 65 percent of their COBRA costs. A report last week from Medicare actuaries concluded that while overall health spending slowed in 2008, total federal spending grew by 10.4 percent that year, compared with only 6.6 percent in the year before the recession began.
One interesting thing to draw from the jobs report: While individual Americans are reluctant to make cuts in their health spending, no matter how rough a recession gets, health care is often the first place Congress looks for savings. For instance, 1997’s Balanced Budget Act sought to take a bite out of the federal deficit by setting targets for Medicare spending on doctors’ visits.
In the end, however, Congress overrode many of those budget cuts, which have been fiercely opposed both by the doctors’ lobby and AARP, an advocacy group that includes many Medicare beneficiaries.
“I think the reason that [health care cuts] are always on the table always is that it’s a huge trouble to get people to accept them,” said Heidi Shierholz, a labor economist at the Economic Policy Institute.