Hospital jobs keep growing in recession

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Even in a recession year, hospitals continued to be a stable and slightly growing source of jobs and wages in Indiana—for better and for worse. The sector paid $7.3 billion to 127,000 Hoosiers in 2008, according to the latest data from the American Hospital Association.

The data is the most recent analyzed by the AHA. In spite of the recession that began in December 2007, Indiana hospitals added 5,000 jobs in 2008 and increased their payrolls by $700 million.

Hospitals continue to be one of the surest ways for local communities to bring in outside dollars, since upwards of 50 percent of a hospital’s revenue can come from the federal Medicare program and the federal-state Medicaid programs.

Wages aren’t their only contribution, either. Indiana hospitals had total expenditures nearing $15 billion in 2008, or about 6 percent of the state’s entire economy.

Statewide, unemployment has been stuck near 10 percent for nearly a year, although the state recently has begun adding jobs.

“This study reaffirms the importance of hospitals as an integral part of the state’s economic engine,” said Douglas J. Leonard, president of the Indiana Hospital Association. “Hospitals have remained stable employers even in bad economic times.”

And yet there’s a double edge to hospital employment. The other half of hospital revenue comes from employers and private citizens, who have been increasingly squeezed by rising health care costs.

Indianapolis-based health insurer WellPoint Inc. said health care providers nationally raised prices about 8 percent in 2008, and another 8.5 percent last year. Locally, the Clarian Health hospital system pushed through rate increases of 9.75 percent in 2008 and another 9 percent last year.

That kind of spending does help create jobs in the health care sector, but tends to force non-health-care employers to reduce their payrolls to absorb the higher health care costs.

A 2004 study commissioned by the state of Indiana found that, if Hoosiers could slow the growth of health care spending by 25 percent over 10 years, the state would lose 16,000 health care jobs but gain more than four times that amount, or 68,000 non-health-care jobs.

Hospital CEOs acknowledge this, but say the way Medicare and private insurers pay them gives them incentives to do more and more procedures, not to find ways to make people healthy for less money. Some pilot programs in the new health reform law, passed in March, are designed to experiment with new payment models that reward high-quality, low-cost care rather than high volumes.


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  1. I could be wrong, but I don't think Butler views the new dorm as mere replacements for Schwitzer and or Ross.

  2. An increase of only 5% is awesome compared to what most consumers face or used to face before passage of the ACA. Imagine if the Medicaid program had been expanded to the 400k Hoosiers that would be eligible, the savings would have been substantial to the state and other policy holders. The GOP predictions of plan death spirals, astronomical premium hikes and shortages of care are all bunk. Hopefully voters are paying attention. The Affordable Care Act (a.k.a Obamacare), where fully implemented, has dramatically reduced the number of uninsured and helped contained the growth in healthcare costs.

  3. So much for competition lowering costs.

  4. As I understand the proposal, Keystone would take on the debt, not the city/CRC. So the $104K would not be used to service the $3.8M bond. Keystone would do that with its share.

  5. Adam C, if anything in Carmel is "packed in like sardines", you'll have to show me where you shop for groceries. Based on 2014 population estimates, Carmel has around 85,000 people spread across about 48 square miles, which puts its density at well below 1800 persons/sq mi, which is well below Indianapolis (already a very low-density city). Noblesville is minimally less dense than Carmel as well. The initiatives over the last few years have taken what was previously a provincial crossroads with no real identity beyond lack of poverty (and the predictably above-average school system) and turned it into a place with a discernible look, feel, and a center. Seriously, if you think Carmel is crowded, couldn't you opt to live in the remaining 95% of Indiana that still has an ultra-low density development pattern? Moreover, if you see Carmel as "over-saturated" have you ever been to Chicago--or just about any city outside of Indiana?