The US healthcare workforce and the labor market effect on healthcare spending and health outcomes

Author

Listed:
• Lawrence Pellegrini

()

• Rosa Rodriguez-Monguio

()

• Jing Qian

()

Abstract

The healthcare sector was one of the few sectors of the US economy that created new positions in spite of the recent economic downturn. Economic contractions are associated with worsening morbidity and mortality, declining private health insurance coverage, and budgetary pressure on public health programs. This study examines the causes of healthcare employment growth and workforce composition in the US and evaluates the labor market’s impact on healthcare spending and health outcomes. Data are collected for 50 states and the District of Columbia from 1999–2009. Labor market and healthcare workforce data are obtained from the Bureau of Labor Statistics. Mortality and health status data are collected from the Centers for Disease Control and Prevention’s Vital Statistics program and Behavioral Risk Factor Surveillance System. Healthcare spending data are derived from the Centers for Medicare and Medicaid Services. Dynamic panel data regression models, with instrumental variables, are used to examine the effect of the labor market on healthcare spending, morbidity, and mortality. Regression analysis is also performed to model the effects of healthcare spending on the healthcare workforce composition. All statistical tests are based on a two-sided $$\alpha$$ α significance of $$p\,>$$ p > .05. Analyses are performed with STATA and SAS. The labor force participation rate shows a more robust effect on healthcare spending, morbidity, and mortality than the unemployment rate. Study results also show that declining labor force participation negatively impacts overall health status ( $$p\,>$$ p > .01), and mortality for males ( $$p\,>$$ p > .05) and females ( $$p\,>$$ p > .001), aged 16–64. Further, the Medicaid and Medicare spending share increases as labor force participation declines ( $$p\,>$$ p > .001); whereas, the private healthcare spending share decreases ( $$p\,>$$ p > .001). Public and private healthcare spending also has a differing effect on healthcare occupational employment per 100,000 people. Private healthcare spending positively impacts primary care physician employment ( $$p\,>$$ p > .001); whereas, Medicare spending drives up employment of physician assistants, registered nurses, and personal care attendants ( $$p\,>$$ p > .001). Medicaid and Medicare spending has a negative effect on surgeon employment ( $$p\,>$$ p > .05); the effect of private healthcare spending is positive but not statistically significant. Labor force participation, as opposed to unemployment, is a better proxy for measuring the effect of the economic environment on healthcare spending and health outcomes. Further, during economic contractions, Medicaid and Medicare’s share of overall healthcare spending increases with meaningful effects on the configuration of state healthcare workforces and subsequently, provision of care for populations at-risk for worsening morbidity and mortality. Copyright Springer Science+Business Media New York 2014

Suggested Citation

• Lawrence Pellegrini & Rosa Rodriguez-Monguio & Jing Qian, 2014. "The US healthcare workforce and the labor market effect on healthcare spending and health outcomes," International Journal of Health Economics and Management, Springer, vol. 14(2), pages 127-141, June.
• Handle: RePEc:kap:ijhcfe:v:14:y:2014:i:2:p:127-141
DOI: 10.1007/s10754-014-9142-0
as

File URL: http://hdl.handle.net/10.1007/s10754-014-9142-0

As the access to this document is restricted, you may want to search for a different version of it.

References listed on IDEAS

as
1. Cawley, John & Simon, Kosali I., 2005. "Health insurance coverage and the macroeconomy," Journal of Health Economics, Elsevier, vol. 24(2), pages 299-315, March.
2. Ruhm, Christopher J., 2005. "Healthy living in hard times," Journal of Health Economics, Elsevier, vol. 24(2), pages 341-363, March.
3. Cai, Lixin, 2010. "The relationship between health and labour force participation: Evidence from a panel data simultaneous equation model," Labour Economics, Elsevier, vol. 17(1), pages 77-90, January.
4. Roelfs, David J. & Shor, Eran & Davidson, Karina W. & Schwartz, Joseph E., 2011. "Losing life and livelihood: A systematic review and meta-analysis of unemployment and all-cause mortality," Social Science & Medicine, Elsevier, vol. 72(6), pages 840-854, March.
5. Garcy, Anthony M. & Vågerö, Denny, 2012. "The length of unemployment predicts mortality, differently in men and women, and by cause of death: A six year mortality follow-up of the Swedish 1992–1996 recession," Social Science & Medicine, Elsevier, vol. 74(12), pages 1911-1920.
6. Martin Browning & Anne Moller Dano & Eskil Heinesen, 2006. "Job displacement and stress-related health outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1061-1075.
7. Amy Finkelstein & Sarah Taubman & Bill Wright & Mira Bernstein & Jonathan Gruber & Joseph P. Newhouse & Heidi Allen & Katherine Baicker, 2012. "The Oregon Health Insurance Experiment: Evidence from the First Year," The Quarterly Journal of Economics, Oxford University Press, vol. 127(3), pages 1057-1106.
8. Gerdtham, Ulf-G. & Ruhm, Christopher J., 2006. "Deaths rise in good economic times: Evidence from the OECD," Economics & Human Biology, Elsevier, vol. 4(3), pages 298-316, December.
9. Gerdtham, Ulf-G. & Johannesson, Magnus, 2003. "A note on the effect of unemployment on mortality," Journal of Health Economics, Elsevier, vol. 22(3), pages 505-518, May.
10. Christopher J. Ruhm, 2000. "Are Recessions Good for Your Health?," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 617-650.
11. repec:aph:ajpbhl:1991:81:9:1148-1152_7 is not listed on IDEAS
12. Franks, Peter & Gold, Marthe R. & Fiscella, Kevin, 2003. "Sociodemographics, self-rated health, and mortality in the US," Social Science & Medicine, Elsevier, vol. 56(12), pages 2505-2514, June.
13. Lixin Cai & Guyonne Kalb, 2006. "Health status and labour force participation: evidence from Australia," Health Economics, John Wiley & Sons, Ltd., vol. 15(3), pages 241-261.
14. Ruhm, Christopher J., 2003. "Good times make you sick," Journal of Health Economics, Elsevier, vol. 22(4), pages 637-658, July.
15. Amy Finkelstein, 2007. "The Aggregate Effects of Health Insurance: Evidence from the Introduction of Medicare," The Quarterly Journal of Economics, Oxford University Press, vol. 122(1), pages 1-37.
16. Brenner, M. Harvey & Mooney, Anne, 1983. "Unemployment and health in the context of economic change," Social Science & Medicine, Elsevier, vol. 17(16), pages 1125-1138, January.
17. Crossley, Thomas F. & Kennedy, Steven, 2002. "The reliability of self-assessed health status," Journal of Health Economics, Elsevier, vol. 21(4), pages 643-658, July.
18. Petri Böckerman & Pekka Ilmakunnas, 2009. "Unemployment and self-assessed health: evidence from panel data," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 161-179.
19. Neumayer, Eric, 2004. "Recessions lower (some) mortality rates:: evidence from Germany," Social Science & Medicine, Elsevier, vol. 58(6), pages 1037-1047, March.
20. Joseph P. Newhouse, 1996. "Reimbursing Health Plans and Health Providers: Efficiency in Production versus Selection," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1236-1263, September.
21. Edwards, Ryan, 2008. "Who is hurt by procyclical mortality?," Social Science & Medicine, Elsevier, vol. 67(12), pages 2051-2058, December.
Full references (including those not matched with items on IDEAS)

Keywords

Labor market; Unemployment; Labor force participation; Medicaid; Medicare; Health outcomes; Healthcare spending; H5; I1; J2;

JEL classification:

• H5 - Public Economics - - National Government Expenditures and Related Policies
• I1 - Health, Education, and Welfare - - Health
• J2 - Labor and Demographic Economics - - Demand and Supply of Labor

Corrections

All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ijhcfe:v:14:y:2014:i:2:p:127-141. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Rebekah McClure). General contact details of provider: http://www.springer.com .

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.