Is Sequestration to Blame for Slowdown in Healthcare Jobs Growth?

The Bureau of Labor Statistics jobs report released June 7 contains some interesting news about the nation’s job growth. First, the number of jobs increased by 175,000 in May, which leaves the unemployment rate at 7.6 percent, basically unchanged. However, only 11,000 new jobs were created in the healthcare sector, which is a very low figure. Over the past year, job growth in healthcare averaged 24,000 per month. Throughout our nation’s economic downturn, healthcare has been one of the few consistent bright spots of growth and new jobs. But then comes May, with its sudden slowdown in healthcare jobs. Why?

While I’m not a health economist, I would bet that the slowdown is due to the impact of sequestration – the broad spending cuts enacted this spring to help rein in the federal deficit. All healthcare providers across the nation that serve the Medicare population are shouldering a 2 percent cut in what they are paid for taking care of Medicare patients. For New Jersey hospitals, the impact is $70 million in cuts in 2013. Add in nursing homes, rehabilitation facilities and other healthcare providers, and the impact to New Jersey reaches $100 million. This figure will only grow in 2014. Congress doesn’t seem poised to act on sequestration anytime soon, but one would hope that our leaders act before this becomes a further drag on our nation’s healthcare system and the jobs and services they deliver.

Written by Betsy Ryan at 00:00


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