This morning’s Employment Situation Summary, which showed slow job growth overall, contained a big jump for health services: 23 percent of last month’s jobs were in health services (see Table I).
Of the 41,000 health jobs, a little more than half were in ambulatory settings. Because of a long-term shift in the location of care, there are now almost seven million people working in ambulatory settings, versus just under five million working in hospitals. This is a positive development.
Hospitals are very expensive facilities and have very concentrated lobbying power that they bring to bear to keep their payments higher than they would otherwise be. One of their most successful talking points is that they are the largest employers in a community, which obviously attracts the support of politicians. As they health services workforce shifts to ambulatory settings, this talking point will lose its power.
Significant revisions to previous months’ reports are reflected in the longer term change (See Table II). Over the last twelve months, employment in ambulatory settings has grown much faster (4.15 percent) than hospital employment (2.81 percent). The health services workforce overall has grown faster (3.10 percent) than the non-health workforce (1.98 percent).
Labor costs comprise a large share of health spending, so we should interpret this another signal that the slowdown in growth of health spending that has been recently celebrated is fading into the rear-view mirror.