New Report Finds that Potential Medicare Cuts Could Lead to Nearly 37,400 Jobs Lost in Pennsylvania
Harrisburg, Pennsylvania - Wednesday, September 12, 2012
A new report has found that nearly 37,400 health care and related jobs could be lost in Pennsylvania by 2021 as a result of the 2 percent reduction (sequester) of Medicare spending mandated by the Budget Control Act of 2011. Nationally, more than 766,000 jobs and 144,000 hospital jobs would be lost, according to the report released today by the American Hospital Association (AHA), the American Medical Association (AMA), and the American Nurses Association (ANA) at a press conference in Washington, DC.
The report, produced by Tripp Umbach, a firm specializing in economic impact studies, measures the anticipated effect of these cuts in Medicare payments on health care providers and other industries. The cuts are scheduled to begin in 2013 and continue until 2021. The Tripp Umbach model reflects how reductions in Medicare payment for health care services will lead to direct job losses in the health care sector, reduced purchases by health care entities of goods and services from other businesses which in turn will lay off workers, and reduced household purchases by workers who lose their jobs. As the impact of these cuts ripples through the economy, jobs will be lost across many sectors beyond health care.
This model estimates that 24,000 Pennsylvania jobs and more than 496,000 jobs nationally—92,980 hospital jobs—will be lost in 2013. The report ranks Pennsylvania fifth in the nation for greatest job losses as a result of the Medicare reduction. The report found that the job losses will affect many economic sectors beyond health care.
Pennsylvania hospitals are expected to lose $149 million as a result of the first year of sequestration cuts, and over $1.4 billion through 2021.
The health care sector has long been an economic mainstay, providing stability and growth even during times of recession. In Pennsylvania, hospitals provide nearly 600,000 hospital and hospital service-related jobs to the commonwealth’s workforce and almost $100 billion to the state’s economy. In 55 of Pennsylvania’s 67 counties, hospitals are among the top five employers.
Bureau of Labor Statistics data shows that nationally, health care created 169,800 jobs in the first half of 2012 and accounted for one out of every 5 new jobs created this year.
“Hospitals provide essential health care services for millions of patients each year and stable employment for hundreds of thousands of Pennsylvanians,” said Carolyn F. Scanlan, president and CEO of The Hospital & Healthsystem Association of Pennsylvania.
“These jobs in our hospitals and other health care facilities translate in to hands-on care to patients. Job losses of this magnitude mean that access to health care will be seriously jeopardized at a time when we are striving to increase access to care and assure better-coordinated patient services across the entire health care continuum.”
Tripp Umbach designed a customized model based on the national economic impact models developed by MIG IMPLAN, as well as previous impact studies.