Jobs and Healthcare in the US

The United States is in the process of rolling out a new healthcare insurance system.  It's very controversial, and has lead to lots of debate.  The latest source of confusion is a report by a government agency that predicts the new healthcare plan should lead to “fewer people working.”  It was an ill considered claim, since it only focused on one possible impact of the new system — but its interesting, since this same kind of consideration goes into most of the business cases people build for business process change.

Let's consider this in a very abstract way.  The new US health insurance law requires that everyone has insurance, and pays poorer citizens to assure that everyone can afford a policy.  The policies are provided by private insurance companies, often in cooperation with doctors and hospitals, but the government now provides detailed guidelines to assure policies meet minimum requirements.   Some inefficient healthcare providers will be forced from the market.

Some 15-20% of US residents currently lack healthcare insurance.  Some are young and simply do without.  Most are poor, or had pre-existing conditions that meant that they could not afford insurance.  The new law will deal with that and, in effect, increase the demand for healthcare in the US by 15-20%.

The government agency estimated that some poor workers, relying on government supplements and obtaining health insurance for the first time, would opt to stop working.  Obviously people in this group would be people with low paying jobs who decide that, with health care provided, work is more of a hassle than its worth.

The report didn't consider that US employers currently pay quite a bit for healthcare, and that many companies will now cancel their paid health plans, forcing employees to use the new government plans, instead.  As that happens, and health care costs becomes a less significant part of an employer's labor costs, some companies will opt to hire more employees.  Indeed, some US companies currently do manufacturing in Canada because Canada provides state funded health insurance and thus its considerably cheaper to use Canadian workers.  Some of those jobs will return to the US, as US healthcare costs are reduced.

More important, however, is that providing healthcare for the 15-20 percent of US citizens who do not currently have healthcare will lead to major growth in hospital employment, and, a bit later, in the number of doctors and nurses.

There will also be some loss in healthcare employment as there will be consolidation, and less efficient insurance companies and healthcare providers drop out of the market.  But, at least in the foreseeable future, the healthcare industry should be a growth industry, as companies hire employees and expand to handle 15-20 percent more patients.

Changing processes always has an impact.  Some changes reduce jobs, while other changes increase jobs, either directly, or among suppliers or among competitors.  Sorting it all out is never easy.