Magazine

The Health-Care Economy: Brickbats And Kudos


The reality of broad-based job growth in recent years is at odds with your Sept. 25 Cover Story, "What's really propping up the economy." The writers mistakenly concluded that the health-care industry is the only part of the private sector that has added jobs since 2001.

Health care is a vital, job-generating sector of our economy but is not, as the article asserted, the only one. Since January, 2001 (the article's baseline year), employment has grown across most major industries, including: financial activities (+578,000 jobs), professional and business services (+555,000), construction (+697,000), leisure and hospitality (+1.1 million), and public and private education (+1.2 million).

The Bureau of Labor Statistics projects that the health-care industry will account for about 20% of employment growth in 2004-14. That means 80% will be in other industries.

There are excellent career opportunities for American workers in a broad range of industries, including health care. For a full and accurate picture of job growth and the labor market, I urge readers to look at the Labor Dept.'s August, 2006, report, "America's Dynamic Workforce," which can be found at www.dol.gov.

Ronald Bird

Chief Economist

Labor Dept.

Washington

Editor's Note: Ronald Bird cites several areas where private jobs have grown since 2001. But most of those gains are the direct or indirect result of the health-care -- and housing -- booms. Within the financial sector, for example, health insurance, real estate, and mortgage-related jobs account for almost all the growth since 2001. By contrast, the securities industry and insurance (outside of health insurance) have lost jobs over the same stretch. Similarly, many of the job gains in professional and business services were in real estate-related industries, including architectural and engineering services and services to buildings and dwellings. Finally, roughly two-thirds of the added education jobs mentioned by Bird were in the public sector.

- Michael Mandel

Your article asserts that if there were no growth in health-care jobs, then there would have been no growth in jobs at all in the U.S. Any employer will tell you this assertion fundamentally confuses cause and effect: Increased health-care costs have curtailed hiring.

A more logical conclusion: If the U.S. had not spent so much more on health care in the past five years, then more jobs would have been created in other industries with the freed-up cash.

Steven Willson

Crystal Lake, Ill.

Thirty years ago, economists predicted an inexorable change to a service economy in the U.S. Is it not happening? Mandel contends the industry is too labor-intensive, with insufficient investment in technology. Perhaps so, but that may change. The U.S. economy is not static. There were people decrying the collapse of the buggy-whip industry years ago.

Thomas Brent

Foresthill, Calif.

The robust job growth in the health-care sector actually began 15 years ago with the demise of the Cold War. Thousands of engineers and workers retooled themselves from arms and armament manufacture to health-care insurance and technology.

Correcting the much-vaunted underinvestment in information services, however, will be unlikely to diminish the need for thousands of physicians, nurses, and technicians. We care for our patients with repeated encounters and exquisite attention to detail. Information technology may speed the flow of health-care data, but it is less likely to reduce the cost.

Frank Welsh, M.D.

Cincinnati

Nice art on the Sept. 25 cover. As a nurse practitioner, I can appreciate everything that makes Rosie the Riveter a perfect representative of not only the idea that the health-care professions are propping up the economy but also the "roll-up-your-sleeves" attitude of working until the job is done. Rosie "the nurse" is more than tough: She is resolute. Art like this can be one way of inspiring interest in a profession that is experiencing critical shortages at this time.

Janet M. Gourley

La Verne, Calif.

I appreciate and agree with much of the analysis in Mandel's article, but his statement that information technology employment has declined in the current expansion is misleading. While industry-based IT employment has declined as Mandel accurately notes, IT occupations (in both IT and non-IT industries) have in fact added more than 200,000 jobs since 2001, according to data from the Bureau of Labor Statistics. Far from being a "disappointment," information technology has created high-paying jobs throughout the economy and revolutionized the way America does business.

Jeremy Leonard

Chief Economist

American Sentinel University

Montreal

Your cover story on health-care jobs paints a bullish picture about the industry's growth. However, it ignores the flip side of the coin: How and where do we find people to fill the "30% to 40% of all new jobs created over the next 25 years"? It won't be easy, given the departure of baby boomers from the workforce and the growing need for personal care workers to assist the elderly and people with disabilities.

Currently, there is a bill in Congress that provides states an option to help increase the wages for direct-support professionals in the private sector through enhanced Medicaid funding for a five-year period. As the wages for these workers are almost exclusively funded through Medicaid, this is a reasonable compromise between limiting the expansion of Medicaid and helping ensure a stable, qualified workforce both now and for the future.

And here's another idea: Let's utilize the abilities of people with disabilities so that they, too, can meet a personnel need that will be challenging health care providers well into the future.

Thomas H. Fanning

President & CEO

Ability Beyond Disability

Bethel, Conn.

Kudos on your innovation supplement. In "The truth about brainstorming" (Inside Innovation, Sept. 25), two critical points were absent: Brainstorming is conducted in all stages of the creative process. You brainstorm about the goal you want to accomplish. You brainstorm about the facts associated with the situation you want to change and who is the decision-maker. You brainstorm to discover what the real problem is and why that is so. Next, you brainstorm for ideas and possible solutions; then how you might evaluate possible ideas/solutions; and finally, you brainstorm ways to gain acceptance and implementation of the best idea or combination of ideas. The last stage should take up 80% of your time and resources as compared with the previous brainstorming stages.

Frank L. Maraviglia

President, Creativity Unlimited

Syracuse, N.Y.

Robert Parker's "Jack of two grapes, master of both" (Executive Life, Sept. 4), described the flavors he found in the listed wines: flowers, raisins, plums, figs, incense, Asian spices, cedar, spice box, dried herbs, oak, cr?me de cassis, licorice, graphite, black olives, black carrots, blackberries, smoke barbecue spice, tapenade, acacia, roasted meat, pain grill?. Is he serious or joking?

Howard Purcell

Amagansett, N.Y.

"Everything old is new again" (The Corporation, Sept. 25) is a great example of how we can make our resources unlimited. These companies have found ways to reuse old resources rather than turning them into waste.

I like how Caterpillar Inc. (CAT) developed incentives for its customers by selling them cheaper replacement parts if they return their used ones. Our government is going to have to build incentives like this some day. Thank you for sharing this example. Hopefully, others can catch the "remanufacture" bug.

Sam Patton

Erie, Colo.

The client executive is responsible for identifying whether a consultant is needed, selecting the right one, and managing the scope of services ("A twisted chain of command," The Welch Way, Sept. 18). A consultant may play a part in these decisions, but this does not justify implying that all consultants are selfish and unprofessional. Furthermore, finding a qualified consultant does not have to be hard.

Because the management consulting profession is unlicensed, clients must have a reliable means to identify professional consultants who are committed to technical competence and high standards of ethical conduct. The Certified Management Consultant (CMC) designation represents the standard of competence and ethics that is accepted in 44 countries, including the U.S. The CMC designation is awarded to consultants who demonstrate client satisfaction and consulting competence, and who pass a rigorous peer review panel as well as both written and oral ethics examinations.

Mark R. Haas, CMC

National Board Chair

Institute of Management Consultants USA

Washington

The data detailing the U.S. trade gap with China -- specifically, the numbers related to all things electronic such as televisions, phones, audio equipment, and computers -- is less consumer-driven and more original-equipment manufacturer (OEM)-driven ("Why the gap won't stop growing," Global Business, Sept. 25). For most products of these types, we consumers have few choices but "Made in China" when making a purchasing decision. As a 20-plus-year veteran of the electronics industry, I see more manufacturing moving to China every year. While the benefits of lower prices benefit consumers at the cash register, there are many of us out here who would be willing to pay 10% to 15% more for an equivalent product made in the U.S. Sadly, we do not have a choice in our purchasing decisions.

Bret Daniels

Director of Sales

Fairchild Semiconductor

San Clemente, Calif.

In "The eyes of taxes are upon you"(Government, Sept. 25), the issue at hand is not whether the tax collection outsourcers are more expensive. It is whether they are more effective. As long as the tax collection outsourcers can generate more net federal revenue than the Internal Revenue Service's own workforce, then the IRS should continue to use third parties for collecting Americans' taxes.

Tim Bohdan

Katy, Tex.

"Why Peter Dolan got the boot" (Science & Technology, Sept. 25) on his ouster at Bristol-Myers Squibb (BMY) was unduly harsh on Dolan. As a patent lawyer practicing in the pharmaceutical field, I want to make readers aware that almost half of all patent trials are modified on appeal (i.e., either reversed outright or modified and returned to the trial court for further proceedings). Thus, the question still remains unanswered whether Dolan's misgivings regarding the strength of patents on Plavix were unwarranted. An appeal by the ultimately losing party is a virtual certainty.

In any event, the systemic problem remains: Patent cases are tried in courts of general jurisdiction having little scientific or patent law expertise (federal district courts), but are appealed to a court of highly specialized jurisdiction (the Court of Appeals for the Federal Circuit, which handles all patent appeals). Hence the uncertainty in the patent litigation game.

Joseph T. Leone

DeWitt Ross & Stevens

Madison, Wis.


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