Impact of Health Reform on Healthcare Jobs BIANCA K. FROGNER, PHD - - PowerPoint PPT Presentation

Impact of Health Reform on Healthcare Jobs

BIANCA K. FROGNER, PHD ASSOCIATE PROFESSOR, DEPARTMENT OF FAMILY MEDICINE DIRECTOR, CENTER FOR HEALTH WORKFORCE STUDIES ( TWITTER: @UWCHWS) UNIVERSITY OF WASHINGTON

“PANEL ON CRITICAL AND EMERGING ISSUES IN HSR” ACADEMYHEALTH ANNUAL RESEARCH MEETING NEW ORLEANS, LA JUNE 26, 2017

Acknowledgements

Collaborators:

• Joanne Spetz, PhD, Professor, Associate Director of Research, Healthforce Center, University of

California, San Francisco

• Steve Parente, PhD, MPH, MS, Professor, University of Minnesota, Carlson School of Management
• Shelley Oberlin, MHA/MBA, Health Systems Innovation Network, LLC

Other Acknowledgements:

• Health Systems Innovation Network, LLC for adaptation of ARCOLA model
• Jonathan Keisling, American Action Forum

Background (1)

Healthcare industry has been “job engine” for US economy for last decade:

• Healthcare employment grew by 21.7% between 2003 and 2013 1
• Driven by growth in ambulatory care employment
• Over 15.7 million people working in healthcare as of May 2017 2
• One of largest employment sectors (10.7% as of May 2017)
• 1. Frogner, 2017, MCRR; 2. BLS: https://data.bls.gov/pdq/SurveyOutputServlet; 3. Frogner, Spetz, Parente, Oberlin, 2015, IJHEM; BLS:

https://www.bls.gov/emp/ep_table_103.htm

Number of Jobs by Sector, 2016

5,901,050 834,190 2,516,790 1,390,000 1,354,620 3,312,800

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 Hospitals Outpatient Care Centers Physician Offices Other Ambulatory Home Health Care Services Nursing/Residential Care Facilities

• 1. https://www.bls.gov/oes/

Healthcare Jobs by Sector and Type, 2016 1

55.1% 40.0% 42.9% 41.0% 24.2% 17.5% 12.5% 10.6% 17.3% 19.0% 37.1% 31.9% 32.4% 49.3% 39.8% 40.0% 38.8% 50.6% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hospitals (N=5,901,050) Outpatient Care Centers (N=834,190) Physician Offices (N=2,516,790) Other Ambulatory (N=1,390,000) Home Health Care Services (N=1,354,620) Nursing/Residential Care Facilities (N=3,312,800)

Healthcare Practitioners/Technical Jobs Healthcare Support Jobs All Other

• 1. https://www.bls.gov/oes/

Background (2)

Prior to new administration, healthcare jobs projected to grow into the next decade:

• Another 20 to 26% growth (3 to 4 million additional jobs) projected by 2022 3
• 40% (1.2 million) jobs driven by ACA expanding health insurance coverage leading to

greater healthcare access and demand

• 7 out of 10 fastest growing occupations projected by 2024 are healthcare jobs 4
• Jobs common in long-term care  demand from aging population with multiple chronic

diseases

• 1. Frogner, 2017, MCRR; 2. BLS: https://data.bls.gov/pdq/SurveyOutputServlet; 3. Frogner, Spetz, Parente, Oberlin, 2015, IJHEM; BLS:

https://www.bls.gov/emp/ep_table_103.htm

Projected Gain in Jobs by Sector, 2014-2024

368,400 348,100 522,700 622,500 760,400 735,700

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000 Hospitals Outpatient Care Centers Physician Offices Other Ambulatory Home Health Care Services Nursing/Residential Care Facilities

Healthcare Job Gains by Sector and Type: BLS NEM 2014 to 2024

63.1% 43.0% 44.8% 39.9% 24.6% 13.2% 12.2% 11.7% 17.2% 25.0% 35.1% 31.8% 24.7% 45.3% 38.1% 35.1% 40.3% 55.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Hospitals (N=368,400) Outpatient Care Centers (N=348,100) Physician Offices (N=522,700) Other Ambulatory (N=622,500) Home Health Care Services (N=760,400) Nursing/Residential Care Facilities (N=735,700)

Healthcare Practitioners/Technical Jobs Healthcare Support Jobs Other

• 1. https://www.bls.gov/emp/ep_table_109.htm

Study Motivation and Question

With debates about ACA repeal and replace, several reports project job loss with reduction in government spending/subsidies and repeal of mandate:

• Ku et al. 2017 newly released report projects 924,000 job loss across economy by 2026 1
• 78% (725,000 jobs) lost in healthcare alone
• Bivens 2017 report projects 1.2 million job loss across economy by 2019 2
• Frogner & Spetz 2017 blog post suggests our projection of 1.2 million healthcare jobs driven by

ACA will not be realized 3 Study Question: How will health reform impact jobs within healthcare industry? 1.

Update Frogner et al. 2015 IJHEM paper to look at impact of AHCA proposal 2. Compare results using different projection models for insurance coverage loss/uptake 3. Examine change in jobs within healthcare sector and by job type

• 1. www.cmwf.org; 2. http://www.epi.org/publication/repealing-the-affordable-care-act-would-cost-jobs-in-every-state/; 3. UCSF blog post:

https://healthforce.ucsf.edu/blog-article/healthcare-policy/aca-repeal-pull-job-opportunities

Methodology and Data

Insurance Status (#)

• Uninsured
• Employer sponsored

insurance (ESI)

• Individual Market
• Medicaid

Data Source:

• ARCOLA 1
• CBO 2
• OACT/CMS 3

Utilization Rates by Insurance Status (#)

• Hospitals
• Outpatient
• Physician offices
• Other ambulatory
• Long-term care
• Home health
• Skilled nursing
• Residential

Data Source:

• Health Exchanges
• Claims data

Healthcare Jobs (#)

• Hospitals
• Outpatient
• Physician offices
• Long-term care
• Home health
• Skilled nursing
• Residential

Data Source:

• 2016 Occupation

Employment Statistics 4

2016 Actual % Δ Utilization by Setting 2016 to 2025 2025 Projected

Δ Healthcare Jobs by Setting 2016 to 2025

• 1. ARCOLA: Parente et al, 2017; 2. CBO: https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/americanhealthcareact.pdf; 3.

OACT/CMS:https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/americanhealthcareact.pdf; 4. https://www.bls.gov/oes/

Note: Only modeling changes related to <65 population

Insurance Coverage Projections under Current Law v. AHCA: Percent Change from 2016 to 2025

Insurance Type Current Law American Health Care Act ARCOLA 1 OACT/CMS 2 CBO 3 ARCOLA OACT/CMS CBO Uninsured

+59% +10% +4% +50% +51% +89%

Employer Sponsored Health Insurance

No change +4%

• 2%
• 1%

+2%

• 3%

Individual Market

• 43%
• 2%

+14% +23%

• 9%
• 18%

Medicaid

+8% +10% +4%

• 16%
• 1%
• 21%
• 1. ARCOLA: Parente et al, 2017; 2. OACT/CMS:https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/americanhealthcareact.pdf; 3.

https://www.cbo.gov/system/files/115th-congress-2017-2018/costestimate/americanhealthcareact.pdf

Number of Healthcare Jobs Lost/Gained under Current Law v. AHCA

64,535 627,522 (174,929) (171,250) 274,655 (1,627,311)

(2,000,000) (1,500,000) (1,000,000) (500,000)

• 500,000

1,000,000

ARCOLA OACT/CMS CBO

Current Law AHCA

Difference in Job Loss/Gain between Current Law v. AHCA, by Sector

(49,454) (15,387) (108,566) 3,435 (9,967) (55,846) (118,136) (22,812) (66,809) (40,860) (24,486) (79,762) (229,961) (100,890) (521,161) (260,334) (24,966) (315,071)

(600,000) (500,000) (400,000) (300,000) (200,000) (100,000)

• 100,000

Hospitals Outpatient Physician Offices Other Ambulatory Home Health Care Services Nursing/Residential Care Facilities

ARCOLA OACT/CMS CBO

Difference in Job Loss/Gain between Current Law v. AHCA, by Job Type

• 90,732
• 47,461
• 97,592
• 139,517
• 70,982
• 142,368
• 558,506
• 288,790
• 605,087

(700,000.00) (600,000.00) (500,000.00) (400,000.00) (300,000.00) (200,000.00) (100,000.00)

• Healthcare Practitioners/Technical

Jobs Healthcare Support Jobs All Other

ARCOLA OACT/CMS CBO

Summary of Findings

• Job gains expected under Current Law under ARCOLA and OACT/CMS assumptions
• CBO assumptions suggest slight job loss
• CBO assumptions paint worst job scenario under AHCA with over 1.5 million healthcare jobs lost
• OACT/CMS best picture with job gains under AHCA, but not as large gains as under Current Law
• AHCA has negative impact on healthcare jobs across all models, sectors, and job type
• Ranging from 235,785 to 1.5 million fewer jobs under AHCA v. Current Law
• Physician offices may experience largest loss in jobs under ARCOLA and CBO assumptions
• OACT/CMS assumptions suggest largest loss in hospitals
• All job types expected to fare worse under AHCA
• Other non-healthcare jobs expected to experience largest loss across models

Limitations

• Did not include any changes related to Medicare
• May be important for long-term care
• Assumptions vary across models
• Different baseline insurance coverage estimates
• Hard to predict response by states, employers and individuals
• Utilization rates based on 2011 data
• Did not model how utilization changes over time
• Did not account for changes in health workforce or healthcare employer response to change in

demand

Conclusions and Policy Implications

• Ambulatory care, particularly physician offices, are at most risk at losing jobs
• Shifting workers back to inpatient care and emergency services?
• Existing issues in supply of workers for long-term care, which health reform does not address
• All models suggest healthcare job growth may slow under AHCA
• However, overall healthcare job growth may continue, most likely driven by demand from

aging population.

• Need to still think about how novel and flexible ways of using workers (e.g., team based care,

emerging roles, telemedicine, mHealth) are changing demand for healthcare jobs

• Projections may mask shifts across states
• State level monitoring needed to better understand how shifts in care utilization and employer

use of healthcare workers is changing demand for healthcare workers.

Questions? Contact:

BIANCA K. FROGNER, PHD ASSOCIATE PROFESSOR, DEPARTMENT OF FAMILY MEDICINE DIRECTOR, CENTER FOR HEALTH WORKFORCE STUDIES BFROGNER@UW.EDU UW CENTER FOR HEALTH WORKFORCE STUDIES WEBSITE: HTTPS://DEPTS.WASHINGTON.EDU/FAMMED/CHWS/ FACEBOOK: WWW.FACEBOOK.COM/UWCHWS TWITTER: @UWCHWS

CBO Model Assumptions

MODEL KEY ASSUMPTIONS ABOUT ACHA: CBO Removal of individual mandate Reduce federal matching rate for adults Capping growth of per-enrollee payments Repeal current-law subsidies obtained in nongroup market New refundable tax credit to purchase health insurance Funds thru PSSF Relax requirement to prevent charging more than 3 times more for older persons Remove requirement that plans must cover at least 60% of costs of covered benefits Requiring 30% surcharge on premiums if they have bene uninsured more than 63 days Medicaid-specific Assumptions No additional states will enroll in Medicaid expansion

OACT/CMS Model Assumptions

MODEL KEY ASSUMPTIONS ABOUT ACHA: OACT/CMS Overall

• Removal of individual mandate
• Change in age rating
• 25% of states apply for waivers for community rating/EHBs, and portion of PSSF funding used to lower premium for

high risk individuals.

• Half of remaining PSSF funding used to reduce premiums for lower income, older, and higher risk, and other half

used to reduce premiums for all enrollees Medicaid-specific Assumptions

• No additional states will enroll in Medicaid expansion
• Starting in 2020, 25% enrollees would disenroll every 6 months tapering down to 5% every 6 months by 2025
• For 55% of persons assumed currently in expansion states, 10% would ultimately reside in states that maintain

eligibility based on 138% of FPL; 30% in states with eligibility at 100% FPL; 60% in states with eligibility at 50% FPL.

• Newly eligible adult group will face 75% higher costs compared to current law

Per Enrollee Cap Assumptions

• Caps have no impact on enrollment or eligibility, and States would operate under caps thru 2026 via 1) lower

reimbursement rates, 2) manage utilization/program efficiency, 3) reduce optional services.

• No states will elect block grant option.