More Jobs in Health Care Is Not Unambiguously Good

A new, ungated New England Journal of Medicine paper by Kate Baicker and Amitabh Chandra has the correct interpretation of health care job growth.

It is tempting to think that rising health care employment is a boon, but if the same outcomes can be achieved with lower employment and fewer resources, that leaves extra money to devote to other important public and private priorities such as education, infrastructure, food, shelter, and retirement savings. […]

Employment in the health care sector should be neither a policy goal nor a metric of success. The key policy goals should be to achieve better health outcomes and increase overall economic productivity, so that we can all live healthier and wealthier lives. Our ability to ensure access to expensive but beneficial treatment is hampered whenever health care policy is evaluated on the basis of jobs. Treating the health care system like a (wildly inefficient) jobs program conflicts directly with the goal of ensuring that all Americans have access to care at an affordable price.

Their chart (below) emphasizes that growth in health care employment has accompanied a decrease in the efficiency with which resources are converted into life expectancy. And, no, they are not assuming all of life expectancy gain is due to consumption of health care. Read the caption, which notes (with citation) an assumption that 50% of the gain is due to health care. Note that they do not presume it’s a mere 10%.

[Cross-posted at The Incidental Economist]

Austin Frakt

Austin Frakt is a health economist and an assistant professor at Boston University's School of Medicine and School of Public Health. He blogs at The Incidental Economist.