Health Care Reform and the Health Care Workforce — The Massachusetts Experience

By Douglas O. Staiger, Ph.D., David I. Auerbach, Ph.D., and Peter I. Buerhaus, Ph.D., R.N.
The New England Journal of Medicine, September 7, 2011

In 2006, Massachusetts enacted legislation to provide universal health insurance coverage that later served as a model for the national health care reform legislation passed in 2010.

Since implementing these provisions, Massachusetts has achieved near-universal insurance coverage but has also seen continuing growth in health insurance premiums, a net increase in state spending on health care, and growing political pressures to control cost growth. Polls of the public and of physicians indicate that the state’s health care reforms are generally viewed favorably, though physicians are concerned about access to primary care and administrative burdens.

The Massachusetts reform experience has been watched closely for indications of what might occur throughout the country as national health care reform is implemented under the Accountable Care Act (ACA). One aspect of the Massachusetts experience that has remained unexplored is the impact on the health care workforce, particularly the question of whether greater numbers of health care professionals or support personnel were needed to ensure the success of the reform in increasing access to care.

Since Massachusetts enacted the Health Care Reform Plan in early 2006, total health care employment per capita in the state has grown more rapidly than that in the rest of the country.

Most of the divergence in employment growth between Massachusetts and the rest of the country occurred in 2006 and 2007, when the Massachusetts reforms were being phased in. Had health care employment in Massachusetts grown at the same rate as in the rest of the country, approximately 18,000 fewer people would have been employed in health care by 2010.

Most of the difference in health care employment growth occurred in administrative occupations. From 2005–2006 to 2008–2009, employment per capita in administrative occupations grew by 18.4% in Massachusetts, as compared with 8.0% in the rest of the country. These administrative occupations include management, business and financial operations, and office and administrative support (including medical records and health information technicians). In contrast, employment levels in nonadministrative positions in Massachusetts increased by 9.3% after health care reform, an increase similar to that of 8.6% in the rest of the United States.

The Massachusetts experience provides lessons for national health care reform. First, reform may accelerate the trend toward health care’s being the dominant employment sector in the economy. More important, our analysis supports physicians’ concerns about the administrative burden of health care reforms, an issue that will have to be addressed as the ACA is implemented. Finally, rather than requiring greater numbers of physicians and nurses, reform may require larger numbers of people supporting the work of such health care professionals.

With today’s high unemployment rates, some have celebrated the fact that employment in the health care sector has continued to grow. This study confirms that health care employment in fact has grown within the state of Massachusetts, which has served as a model for our national reform through the Affordable Care Act. Should we be celebrating these newly generated jobs?

When the Massachusetts plan was proposed the policy experts at Physicians for a National Program warned that the additional administrative excesses would add to the already very heavy administrative burden that uniquely characterizes the U.S. health care system. PNHP issued the same warning when the Affordable Care Act was under development.

And what are these new jobs in Massachusetts? According to this report, “Most of the difference in health care employment growth occurred in administrative occupations.” More administration!

Although there is much interest in finding new employment opportunities for residents of the United States, there is also a compelling interest in controlling runaway health care costs. With a single payer system, one of the most important efficiency targets is to reduce this profound administrative waste. Instead, our legislators brought us changes that dramatically increase this waste!

We do need more jobs, but not more administrative jobs in a profoundly expensive health care system that is now almost sinking under the costly added burden of administrative excesses. There are far more important potential employment opportunities throughout society that would benefit all of us if Congress were to enact the type of jobs program that we need.

Instead of adding to our profound administrative waste, let’s use our health care dollars for, of all things, health care!