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April 1994, Vol. 117, No. 4
Janet Pfleeger and Brenda Wallace
T he problems of climbing health care costs and a lack of health insurance for an estimated 37 million individuals in the United States have focused attention on health care issues. Health care expenditures have grown faster than the overall economy for the past three decades, rising from 7.4 percent of nominal gross domestic product (GDP) in 1970 to over 14 percent by 1992. If current trends prevail, health care expenditures could reach an unprecedented 19 percent of nominal GDP in the year 2000.1
In light of the uncertainty concerning the future of health care, BLS has conducted an analysis of two possible paths for the health care industry and for employment in the economy and in the health related industries and occupations. The health care alternatives presented in this article examine a high and a low range of health care spending built around the bureau's 1992-2005 moderate-growth projections described in November 1993 issue of the Monthly Labor Review.2 These alternatives do not attempt to quantify any specific proposals for health care reform. Rather, they present a range of employment impacts that might result should health care spending in 2005 fall between these two projected levels.3
Regardless of the actual health-related employment levels that are attained in 2005, the 10 health-related industries discussed here will likely provide a significant number of jobs in the economy. Direct employment in these industries accounted for 8.2 percent of total employment in 1990, and is projected to account for 10.1 percent of total employment in 2005 under the moderate-growth scenario. When direct and indirect employment is considered, health care spending accounted for 11.4 percent of total employment in 1990, and is projected to account for 14.5 percent in 2005 under the moderate-growth scenario. In short, health care is such a significant part of our economy that the impact of the 10 health care industries on overall employment will be substantial no matter how the health care system changes.4
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1 Verdon Stain, "Managed Competition and Its Potential to Reduce Health Spending" (U.S. Congressional Budget Office, May 1993).
2 For a fully detailed discussion of the Bureau's moderate-growth projections, see Norman C. Saunders, "The U.S. economy: framework for BLS projections," Monthly Labor Review, November 1993, pp. 11-30.
3 Sources that provided supporting research for this paper include: Jeffery Lemieux and Christopher Williams, "Projections of National Health Expenditure" (U.S. Congressional Budget Office, October 1992); Stain, "Managed Competition"; Dr. Anthony R. Kovner, Health Care Delivery in the United States (Springer Publishing Company, Inc., 1990); Pauly, Danzon, Feldstein, and Hoff, "A Plan For Responsible National Health Insurance," Health Affairs, Spring 1991; Zedlewski, Acs, and Winterbottom, "Play-or-Pay Employer Mandates: Potential Effects," Health Affairs, Spring 1992; Cassel, Rudberg, and Olshansky, "The Price of Success: Health Care in an Aging Society, Health Affairs, Summer 1992; Victor Cohn, "New Deal on Health Care," The Washington Post, Nov. 3, 1992; Dana Priest, "Mixed Signals on Health Care," The Washington Post, Nov. 23, 1992; Dana Priest, "Clinton's Health Care Options," The Washington Post, Dec. 16, 1992; Dana Priest, "The Road to Health Care Reform," The Washington Post, Jan. 26, 1993; Dana Priest, "Clinton Plan Envisions Health Security Card," The Washington Post, Apr. 10, 1993; Dana Priest, "Health Plan's Likely Features," The Washington Post, Apr. 16, 1993; Fortune Magazine, May 3 and 31, 1993; Business Week, April 26 and May 3, 1993; Melinda Beck, "The next Bite: Paying for Health Care," Newsweek, Mar. 1, 1993: Jolie Solomon, "Drugs: Is the Price Right?" Newsweek, Mar. 8, 1993; Eleanor Clift, "Health Care: Covert Operation," Newsweek, Mr. 15, 1993; Eleanor Clift, "Hillary's Hard Sell," Newsweek, Mar. 29, 1993; and Mike McNamee and Susan Garland, "From Brainstorms to Headaches," Business Week, May 3, 1993.
4 For more background information on health care, see David R. H. Hiles, "Health services: the real jobs machine," Monthly Labor Review, November 1992.
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