According to the Bureau of Labor Statistics, between 2003 & 2011, the healthcare sector created 2.67 million jobs. In comparison, rest of the U.S. economy added 850,000 jobs.
This post discusses how the Affordable Care Act (ACA) is positively impacting the American economy, particularly in the healthcare sector, and why this trend will continue.
The Affordable Care Act seeks to make healthcare more affordable, streamlined and consumer-focused. However, the reforms have had another impact—job creation in the healthcare sector and related industries. As more people gain health insurance and patient care becomes more comprehensive, there will be a direct increase in demand, and jobs, across:
• Real Estate: Clinical facilities
• Manufacturing: Medical equipment, drugs
• Industry personnel: Healthcare IT professionals
This is explained via the following examples:
1. Small businesses will prosper—small business owners have often reacted negatively about the healthcare law, often pointing fingers at how the federal mandates will eat into their recruitment and retention capabilities. However, this isn’t applicable to all small businesses. For instance, the ACA lays significant emphasis on improving the overall quality of care, including post-operative/follow-up care. Thus, in-home service providers for the disabled and elderly can expect their business to grow substantially.
Under the ACA, clinical facilities can be penalized if patients are readmitted within 30 days. Traditionally, Medicare recipients have been often readmitted, costing the federal government nearly $17 billion in additional care. In-home care providers target patients with high readmission probability by providing follow-up care. This approach will create greater demand for ancillary healthcare services like at-home laboratory testing, ambulatory surgical set-ups, nutritional consultations, mobile treatment centers & dialysis units and nearby rehab centers.
2. A boon for real estate—ACA emphasizes the role of better preventive care, highlighting it as a major tool for pushing the cost curve downward, i.e. reducing healthcare costs in the long term. Thus, people with a personal or family history of illnesses or genetic disposition toward developing lifestyle diseases will be asked to undergo more tests, more regularly. The idea is to reduce ER visits that often lead to inflated hospital bills. This is particularly true for cases of high blood pressure, elevated cholesterol, heart diseases, diabetes and obesity care.
Healthcare facilities will need to ensure easy access to clinical facilities. This translates into collaborating with more testing centers or creating smaller, outpatient centers equipped with laboratories. This will directly boost the clinical real estate market. This is just one aspect of the sluggish real estate market being impacted by the healthcare market. To understand this topic more comprehensively.
3. Not enough doctors—An unprecedented surge in the recruitment of medical professionals has been routinely reported. This pattern will only increase as more people gain access to healthcare. With expanded coverage for high-risk individuals, people with preexisting conditions and the addition of traditionally uninsured populations, health insurance will become viable to millions of new consumers. This will create a direct strain on clinical facilities, as they will need to recruit more physicians, nurses and supporting staff. In addition, a greater demand for care coordinators, psychiatric professionals and dietary & lifestyle experts is likely to surface.
4. Exchanges could become recruitment zones—Kaiser Family Foundation published the results of an April 2013 poll that found nearly 49 percent of the public had little or no understanding of the new marketplaces and ACA. To educate the public, all state and federal health insurance marketplace will be hiring navigators and assisters to educate the market on the marketplaces, the available plans and “metals” and enrollment. The Health and Human Services has stated that consumer assistance for the exchanges should represent the demographic characteristics, including language and ethnicity, of the serviced community. Thus, navigators and assisters proficient in multiple languages will need to be hired.
The ACA’s ability to boost hiring also lies in core activities that will have to be performed by every marketplace. For instance, to answer consumer queries and provide phone-based assistance, marketplaces will need to set-up call centers or contract with a call center operation, which should dramatically increase the number of customer care representatives.
5. Healthcare technology professionals should be smiling—healthcare technology is witnessing a transformation, courtesy of ACA. In order to compete with the Federally Facilitated Marketplace and State-based marketplaces, large insurers are pumping millions into developing their own, private health insurance marketplaces. Across the U.S., there is increased demand for health insurance software solutions that ensure compliance with federal mandates.
Insurers are interested in hiring healthcare IT service providers that can help them integrate with the marketplaces, i.e. an exchange connectivity solution. These developments have proven to be boon for the healthcare IT sector as it continues to recruit more technology professionals. People with an understanding of their community’s healthcare requirements or those a background in finance and related matters can expect increased job options.
6. Number of entrepreneurs will be boosted—the Kauffman-RAND Institute for Entrepreneurship Public Policy reported that the Affordable Care Act could create 33 percent new small businesses in the next five years—this is in stark contrast to the general perception that the healthcare law will kill small business owners. Small businesses are expected to receive nearly $40 billion in the form of tax credits from the health insurance marketplaces. Some of these savings are likely to be directed toward expanding business activities and recruitment. In an Urban Institute report, it stated that approximately 1.5 million Americans are likely to be self-employed as a result of feeling assured about affordable health insurance. This is particularly true for Americans who face rising expenses due to chronic conditions, like diabetes.
Many Americans wanting to start their own business have been deterred by the selective nature of the individual, non-group health insurance market. Conventionally, individual health plan issuers have refused to sell coverage based on age, health status and pre-existing conditions. Furthermore, the individual market is burdened with higher cost-sharing administrative fees. People have been hesitant to become entrepreneurs since they seek the found in employer-sponsored coverage. With the reforms expanding Medicaid coverage and making it impossible to deny coverage due to preexisting conditions, this “entrepreneurship block” is likely to be removed. With overall reduction in premiums, people will have more money at their disposal to start a business.