Doesn’t any talk about a “cheaper” future of healthcare mean a huge loss of jobs? A fair question, but the answer is not as simple as you might think.

In most communities, the hospital is one of the largest employers, if not the largest, and healthcare as a whole is the biggest piece of the local economy.  Nationwide, the healthcare sector, which will probably top out at something like $2.4 trillion in the U.S. this year, is one of the biggest sources of jobs in the whole economy.  And they are more highly prized jobs than most.  Though the job slots range from janitors and security guards to radiologists and economists, healthcare jobs skew more than those in most industries to the highly-trained and highly-specialized, such as phlebotomists, radiology techs, and physician assistants.  Even for the custodians and groundskeepers, healthcare jobs tend to pay better.  They are more likely to be union jobs.  They are less vulnerable to economic swings, with fewer cutbacks during recessions, and less likely to be outsourced to Kuala Lumpur or Bangalore.  You can’t do a blood draw, an X-ray, or a chemotherapy session over the Internet, or delivered by container ship from Shanghai.

At the same time, all this highly-trained and steady employment is one of the big reasons healthcare is so over-the-top expensive.  Labor is usually the single largest expense of any healthcare organization.
So when we try to imagine healthcare that costs significantly less than today’s, we must be talking about massive job loss, even a crippled economy, right?
Not quite. Sort of, kind of, not really.
Why not? Let’s take a look.

First of all, any such change will take place over years to decades.  If we imagine that tomorrow healthcare will cost half as much as it did today, we are imagining an economy plunging suddenly into recession, even depression, from massive job loss.  But if we imagine a transformation that takes 10 years, the downwinding of the healthcare labor market looks much slower, less chaotic, less wrenching – especially keeping in mind that it is common in healthcare institutions to experience a 10 to 20% turnover every year.

At the same time, spending that much less money on healthcare will mean that other parts of the economy will have that much more money to invest.  Over time, reducing healthcare spending could well lead to an economic boom by cutting what is, in effect, a massive tax on all other industries, and on all taxpayers.

Different types of jobs will be affected differently.  Those most subject to streamlining by healthcare information technology (such as some office support staff, transcriptionists, and order entry clerks), or to replacement by automation will be the most affected – and many of these are the least-specialized, least highly-trained jobs.  Messengers, for instance:  Buy a small fleet of robots, and hire a few techs to service them, and your messengers are gone.  But even more highly-trained jobs are subject to automation.  Automate your lab, and you may reduce the need for lab techs to a fraction.  Invest in digital image processing and storage, and the image processing tech jobs go way down.  This is true even at the very high end: robotic-assisted surgeries often call for one less assistant surgeon and one less surgical nurse in attendance. So some job sectors will be strongly affected, but slowly, in bits and pieces, as we invest in healthcare information technology, as we digitize, automate, and streamline.

In some areas, on the other hand, all this streamlining will only relieve the shortages in trained personnel looming as the baby boomers age.  By today’s standards, we have nowhere near enough nurses already, let alone for the time five to ten years from now when the halls of healthcare are glutted with me and my cohort.
Much of the outrageous cost of today’s healthcare comes from doing too many things that are unnecessary and unhelpful, even injurious – such as tens of thousands of unnecessary back surgeries, an estimated $100 million in unnecessary scans, and many heroic measures on frail elderly people in the last stages of dying, which they did not ask for, which do not benefit them, and can often hurt them – while at the same time not doing enough of the necessary things to curb chronic disease and detect disease in its early stages.

So in a “better faster cheaper” system (particularly one dealing with aging boomers) we can expect a great expansion of preventive and chronic-care jobs, such as diabetes educators and nutritionists, physical therapists, and home health nurses.  We can expect, as well, a great need to expand and strengthen primary care of all sorts.  And of course, we can expect a much higher component of data technologies tying it all together, which means an expanded need for tech geeks skilled in healthcare information technology.

At the same time, if we imagine a universal healthcare system that still includes private insurance, but a rationalized, digitized system operating under firmer insurance rules, we can imagine a far more automated payment system with far less human handling, and less need for the endless wrangling and appeals which consume a significant fraction of our health plan dollars today with no benefit to the consumer.  As health plan overhead needs approached those of the Center for Medicare and Medicaid Services, providers could also shrink their staffs – no need to hire people to fight with the insurance companies if the insurance companies are simply doing their jobs and honoring their contracts.

So yes, in the long run, a less expensive but higher quality healthcare system would mean many fewer jobs overall.  And if we conceive of healthcare only as a massive make-work program, with no concern for whether it is impoverishing us as a nation while failing to provide us with true health security, then maybe we should leave the system as it is – bloated, wasteful, and misguided.  But I believe few Americans would see it that way.  I believe most people would welcome – and even demand – changes that bring us bit by bit closer to a truly effective, efficient system that does what we need it to do and no more. Such a system, while offering fewer jobs than today’s would still be one of the largest sources of good, steady, well-trained, high-paying jobs in the entire U.S. economy.