Healthcare jobs are no way to improve the economy. Greg Gerritt 4/25/17
For many years I have been pointing out that growing the healthcare economy makes it impossible to keep health care affordable, and that this dilemma makes the RI economic development strategy unlikely to work, seeing as it seems to be based on building new buildings for healthcare businesses. I have copied one snippet of an essay from 2012 in which I make that point.
Many healthcare professionals have agreed with my analysis, though the economic development crew seems to be immune to my consultations. In the Sunday April 22 2017 New York Times there is an op-ed by Chad Terhune (link below) that makes exactly the same points. He quotes Katherine Baicker, a Harvard University Health Economist
“The goal of increasing jobs in health care is incompatible with the goal of keeping health care affordable:”
Terhune discusses this issue in the context of the efforts to replace Obamacare and how cutting money out of the system will lead to job losses in the industry, and the fact that many Rust Belt cities (like Providence) have used the growth of the medical industrial complex to replace the manufacturing jobs that slipped away.
Terhune sticks to his main points, while my analysis is much wider, but essentially Terhune concludes we have ourselves a wicked problem. We can not afford healthcare as currently configured and paid for in the USA, but if we cut the money out of the system (as President Toxic Dump is threatening to do) the economic dislocations will be massive. And the health of our nation will suffer, especially lower income people.
I always think that if you want to solve a problem, the first thing to do is stop digging the hole you find yourself in. This means that the first thing to do is stop trying to use the health care system to create more jobs. Stop offering cheap land and tax breaks to the medical industry. I offer the snippet below to point out how long I have been reminding Rhode Islanders of the stupidity of our economic devleopment scammers, and i want to0 say I am glad the mainstream is catching up, though I doubt the folks on Smith Hill will get a clue soon.
August 30 2012
The medical industrial complex
One of the industries Rhode Island is always encouraged to pursue is the medical industrial complex. This is one of the bulwarks of the knowledge economy, but a closer examination gives us many reasons to be cautious about using the medical industrial complex as the engine of economic growth. Over the last 50 years health care has become the largest component of our economy, now responsible for 18% of the total national income. Medical costs have now become the largest cause of bankruptcy other than the housing bubble. Thousands of Americans seek bankruptcy protection each year due to the burden of health care costs, with the number growing every year. This even effects people with insurance, as often their insurance is inadequate once they actually get sick, or by virtue of being unable to work they lose their health care coverage.
Part of how Rhode Island will eventually dig out from the burden of health care costs is with single payer health care. Many refer to this as medicare for all. While i support single payer, very strongly support single payer, that alone will not solve the health care cost crisis. If we continue on our current health care industry path, even with a single payer system, costs will continue to go up two to three times as fast as costs in the rest of the economy, funneling ever more money into the medical industrial complex and causing other sectors of the community to fail due to disinvestment. There are more than a few people who want to do business in RI or start new businesses who have been stymied because of the cost of medical care and insurance.
Beyond single payer and the removal of the insurance companies from the health care field we need to do several things to stop the outrageous run away costs. One aspect of this is prevention. As long as our lifestyles and environment continue to be more toxic, people will demand high tech quick fixes to the problems our industrial civilization causes like asthma, heart disease, and cancer. While magic bullets would be nice, the pursuit of magic bullets is a chimera. Magic bullets are very expensive, which makes them much less magical for the poor, and often just perpetuate the problems rather than addressing the root causes. While we do not directly pay for all of the research that creates drugs and procedures, ultimately every penny paying the high salaries (the reason the economic development community wants these jobs here) of the people doing health care research comes out of the pockets of the public, either through governmental support of basic research, or in the cost of the procedures and drugs we use. It is fabulous that we can cure people and save lives that a generation ago would have been lost, but because of the cost of this care a few get rich providing the research and the care, while more and more people enter debt and bankruptcy. It is more of a drain on our communities than a boon, a hallucination of prosperity.
The American public may or may not be willing to shoulder the cost of the modern medical miracle. We also know it is nearly impossible to deny folks treatments that can save lives no matter what the price. But ultimately a lower tech approach, based on prevention (clean environment, healthy food, less stress economy) will return the resources to the communities of Rhode Island, rather than siphoning into the hands of the 1% the way the current system does, and no longer deny folks timely health care.
An example of how far from prevention we have drifted can be found in this comparison. 60 years ago Americans spent 15% of their income on food and 5% on healthcare. Now we spend about 13% of our income on food (the 2nd lowest percentage in the world) and over 18% on health care (the highest percentage in the world). A good year is one in which health care costs do not rise 8%. The industrialization of our food supply means that we have more obesity, more heart disease, more diabetes,. The phony trade off is that we can cure more of the cancers that the industrialized food system creates, and we have elaborate procedures that can prolong the life of the very ill for a month or two. This trade off in the costs of health care and food has less of an effect on average life spans than basic public health expenditures like sewage treatment plants. It also leads to a bankruptcy and governmental budget crisis, blocks 50 million Americans from basic care, and gives us the industrial world’s worst health care delivery system. I am not sure an expansion of the medical industrial complex is going to help RI attain prosperity.