Our recent report on tech employment, authored by myself and Diana Carew, calculated that women have been getting three times as many healthcare-related bachelors degrees as men. A NYT article from February 2015 lauded women for taking advantage of the stable, middle class jobs in healthcare, observing that
As the job market has shifted, women, in general, have more skillfully negotiated the twists and turns of the new economy, rushing to secure jobs in health care and other industries that demand more education and training. Men, by contrast, have been less successful at keeping up.
And indeed, the number of healthcare jobs have soared, even during the recession, propelled by government spending and the aging of the population. In fact, college administrators, students, and policymakers have encouraged young Americans and mid-career switchers to go into healthcare.
But the healthcare employment boom may actually represent a bubble. College students and administrators may be overestimating the safety and security of healthcare careers, especially in an era where the healthcare sector is under increasing pressure to control costs. And if the bubble bursts, women may bear the brunt. Consider the following chart.
The first bar of the chart shows that total population grew by 3.1% between 2010 and 2014. The second bar adjusts population to account for higher spending on the elderly, by effectively tripling the contribution of 65-and-over Americans. So demographics by itself would argue that healthcare spending and employment would rise by 5.4% between 2010 and 2014.
In fact, healthcare employment rose by 6.6% over the same stretch. The fact that healthcare employment is outpacing adjusted population is the most tangible manifestation of healthcare costs being out of control.
We calculated what we call “gross medical productivity”–adjusted population divided by the number of healthcare workers. We’d like to see gross medical productivity rise, which would mean that fewer healthcare workers are needed per potential patient, adjusted for demographics. In fact, the exact opposite is happening–even after we adjust for demographics, more healthcare workers are needed for each potential patient in the population.
So the healthcare employment boom is being fueled by falling gross medical productivity, or, conversely, rising costs. As we note in the tech employment paper:
Containing healthcare costs therefore means incorporating productivity enhancing—or cost- cutting—technology into the sector…That means that to increase productivity and reduce costs long-term, the rate of increase of healthcare employment needs to slow.
Note that we are not saying that healthcare employment will fall, as manufacturing employment did. Healthcare jobs are still relatively protected from foreign competition, and people value health as much as anything else. Yet given the number of young people and mid-career switchers going into healthcare, we could easily have a situation where the mere slowdown in healthcare employment growth by 1 percentage point could dramatically shift the balance of supply and demand in the field.
Given the strong possibility of such a change, we suggest that progressives should strongly support a diversification of college degrees out of healthcare and into other growing areas such as tech. This is especially important for women, who according to our calculations got more than 20 healthcare-related bachelors degrees for every tech-related degree in 2013.
