The health care jobs fallacy.

10.1056/nejmp1204891 nejm.org 1 Amid this malaise, the health care sector is one of the few areas of steady growth.1 It may seem natural to think that if this sector is one of the bright spots in the economy, public policies should aim to foster continued growth in health care employment. Indeed, hospitals and other health care organizations point to the size of their payrolls as evidence that they play an important role in economic recovery, a role that must not be endangered by reforms that seek to reduce spending on health care. Politicians on both sides of the aisle are quick to emphasize the “job-creating” or “job-killing” aspects of reforms. But this focus on health care jobs is misguided. The goal of improving health and economic wellbeing does not go hand in hand with rising employment in health care. 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. Consider an example involving two hospitals that serve the same number of patients: one employs 100 physicians, and the other 120 physicians. The leadership of the second hospital might claim that the additional employment is benefiting the local economy. But unless the employment of 20 extra physicians in the second hospital generates additional health improvements that are commensurate with the additional spending on physicians’ salaries, the higher employment is not socially beneficial. Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government The Health Care Jobs Fallacy