Health cost containment: what it will mean for workers and local economies

Abstract

After decades of rapid growth, the rate of increase in health services spending appears to be moderating. Although a slowdown in health expenditure growth would release resources for other uses in the economy, concerns have been raised about the effects of a spending slowdown on health workers and regional economies. Based on projections carried out by the Bureau of Labor Statistics during the health reform debate and on state health sector employment data, the author concludes that health workers may experience costly dislocation as health spending growth slows, and some regions may be more affected than others. However, the appropriate response is a general economic policy supporting economic growth and full employment policy with regard to health expenditure growth cannot be held hostage to concerns about employment effects.