Health care industry on the riseby Mark Steil, Minnesota Public Radio,
Annie Baxter, Minnesota Public Radio
Mankato, Minn. — Health care is generally less affected by the turmoil of a recession than other parts of the economy. That's because when someone needs care, they typically don't wait, no matter what the Dow Jones is doing.
Dick Thomas is proving that point at Immanuel St. Joseph's hospital in Mankato, part of the Mayo Health System. On a recent day, the stock market fell again after a gut-wrenching 1000-point roller-coaster ride the day before. But that didn't stop Thomas, a one-time blood donor, from getting the blood transfusion he needs.
"You give it away and then you buy it back I think," Thomas said. "Isn't that the way it goes? I kind of think it's like that."
The wise-cracking 85-year-old from Lake Crystal is a prime reason medical jobs continue to increase.
The elderly population is growing and that means more doctors, nurses and support staff are needed for everything from open heart surgery to a simple blood transfusion.
As the baby boom generation crosses the threshold into senior citizen status that need will only increase. According to the state demographic center, South Central Minnesota has about a five-year lead over the state as a whole in the growth of residents age 50 and older.
Greg Kutcher, president and CEO of Immanuel St. Joseph's Mayo Health System, expects steady growth. Kutcher said the hospital and related operations have nearly tripled their employment over the last 15 years. There have been only a few disruptions to the steady increase. The most notable came last year when the recession temporarily cut into revenue. The hospital laid off about 140 people but nearly all of those positions have since been restored.
County-wide, employment in the health care sector fared much better than all other industries combined. Kutcher said he expects his system will continue to add jobs.
An example of the facility's growth is its new heart center, which gives Mankato and South Central Minnesota residents an important option for cardiac emergencies, when time can be critical. Before the center was built, the nearest option was in the Twin Cities or Rochester -- an hour or more away. Kutcher said that in 10 years the center has done about 2,000 often life-saving cardiac procedures.
"That's been good for the Mankato region, in terms of keeping that business here," he said. "But it's been really good for patients, because they get it done quicker."
Immanuel St. Joseph's also has built centers for cancer treatment and orthopedic care, a radiology center for women, even a sleep disorder clinic. They're a big reason the number of health jobs is growing so rapidly in the area.
Blue Earth County, which includes Mankato, has seen a 70-percent increase over the past decade in health related employment. That far outpaces the statewide average, where medical jobs grew by about one third. The U.S. Labor Department predicts the health care and social assistance industry will add four million jobs nationwide by 2018, more than any other industry.
However, the mix of jobs will change along with the industry itself, health economist Mark Pauly said.
"There's to be a shift away from aggressive care, where people put tubes in orifices and do procedures toward diagnosing problems and trying to head them off before they occur," he said.
That kind of preventive care is a big priority in the health industry today, said Pauly, a professor of health care management at the University of Pennsylvania's Wharton School. It aims to reduce the growth in health costs. Health Care is likely to add Internet technology jobs as the industry moves to more efficient electronic record keeping. And the growing number of elderly will increasingly try to stay home to avoid the cost of nursing homes and hospitals.
"There will be some people who will be able to come there and help them with activities of daily living and other needs that they have," Pauly said.
Personal care aides are projected to be among the top five occupations with both the fastest -- and largest -- growth of all occupations over the next 10 years, jumping around 50 percent.
But there's a downside to that growth.
"Traditionally it's been low-skill, low-wage job, almost an embarrassment," Pauly said.
The growth in such lower paid jobs has fueled a distinct two-tiered pay scale in the health industry. The skilled positions -- doctors, nurses, anesthesiologists and others -- average about $70,000 a year. The personal care aides earn under $30,000, less than the national median. But despite the low pay, the personal interaction with clients can make the jobs as gratifying as any in the health business.
"I love my job and I love what I do," said Katina Hopkins.
Hopkins, of St. Paul, has done personal care work for over 10 years. Her work for the Metropolitan Center for Independent Living in St. Paul includes helping a client with a form of muscular dystrophy get ready for the day. The care involves helping people brush their teeth, fix hair and dress.
Hopkins said she knows aides like herself are pretty much at the bottom of the pay scale in the medical industry. The average wage in Minnesota is about $11 an hour. Hopkins makes $12.75 an hour, near the upper end of the scale. Still, with four children, it's difficult to make ends meet without a second personal care job. To top it off, not only is the pay low, but government regulations limit how many hours a month she can work. And the state has been reducing those hours as part of budget-balancing funding cuts.
"I have to work a job and a job and a half; I'm a single parent you know," said Hopkins, 36. "I'm not complaining about that. But I'm complaining about when somebody else tells me I can't work extra. Or, I can't work a double shift."
David Hancox, executive director of the Metropolitan Center for Independent Living, would like to pay her more, but can't. State and federal agencies pay pre-determined reimbursement rates for personal care jobs. In Minnesota, it's just under $16 an hour. That money must cover her employers' administrative costs and other overhead, leaving just under $13 for Hopkins.
Health economist Mark Pauly said that with the economic downturn limiting tax revenue, there's not much hope for raising those reimbursement rates. Any increase in health care spending, no matter how justified, would likely enflame public resistance to health spending, he said.
"The public is outraged by the high cost of health care," Pauly said.
That pressure is playing out in the Twin Cities as nurses threaten to strike hospitals over staffing levels, which nurses say are too low. Hospitals say the nurses' demands are expensive and unnecessary.
At Immanuel St. Joseph's hospital in Mankato, CEO Greg Kutcher is acutely aware of the backlash against health costs. He said the reaction makes health care job growth a two-edged sword. It's good for the local economy, but too much growth could increase health costs and dampen job growth at businesses already struggling with high medical bills, he said.
"If health care sucks up more and more resources there's less for other parts of the economy," Kutcher said.
Health care keeps consuming more resources. The nation's health care bill has tripled in the last 50 years, to 17 percent of the U.S. economy. The extra costs mean consumers have less money to spend in the nation's shopping malls, car lots, and appliance centers. If health care costs strangle consumer spending, in the end that could threaten job creation everywhere, including the health industry.