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Pulling It Together: Jobs, A Reason to Fast Track Coverage

The two big topics in Washington right now are the economy and health care.  I’ve written before about how the two are linked, and in particular about how among the everyday economic problems people are having, paying for health care is a big one.

But the latest numbers out from the Bureau of Labor Statistics show there is another link: Health care is one of the few relatively healthy parts of our unhealthy economy right now. Since January 2008, the economy has lost 4.3 million non-farm jobs. Virtually all major industries have shed jobs. What went up? Well, mining and logging companies added modestly to their payrolls. Government and education employment is up somewhat, along with social assistance (not too surprising given our economic circumstances). But where did employment go up the most since January of last year? You guessed it: Health care, which added 383,200 jobs.

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These numbers underscore a similar point made recently by my friend Uwe Reinhardt. Cutting back on health care spending is tricky right now because health care is one of the few things fueling our economy, which desperately needs a boost.

At the same time, we can’t forget that more health care jobs generally mean higher health care costs. In fact, the actuaries at Centers for Medicare and Medicaid Services just released projections showing that in 2009 health care as a share of the economy will grow faster than it ever has, with health spending growing by 5.5% as GDP shrinks. Over the next decade, they forecast that annual increases in health care spending will eclipse GDP by 2.1 percentage points.

This presents a bit of a conundrum. As our surveys continue to document, people are struggling with health care bills.  And, as the Obama Administration has emphasized recently, a primary aim of health care reform is to slow the growth in health costs in the future. Virtually everyone agrees health care costs pose a serious problem we need to confront, but for the next year or two, the country needs those health sector jobs even more than it needs to control health care costs.

A way out may be to think differently about the long run and the short run. Over the long term, it is certainly the case that we need to weed out unnecessary care, get the best value we can for our health care dollar, and rein in the rate of increase in health spending. In the short term, if policymakers can act quickly to expand coverage and assist families with their health care expenses, they can both provide immediate help to people and stimulate the economy with added jobs.

We need to do both coverage and cost containment in health reform, but what the job numbers suggest is that the coverage elements in health reform should kick in as rapidly as possible — to create more jobs, free up other money in family budgets people can put back into the economy, and help fuel the recovery.