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Is America’s Booming Health Care Sector Actually a Bubble?

Over the last two decades, the health care sector has been a remarkable engine of job growth in the United States. Even as the economy plods along, health care has been responsible for adding an average of 22,500 jobs per month in 2011 through July. Health care jobs now represent about 11 percent of American employment, as compared to 8 percent in 2001. But rather than cheer this development, a number of health care experts are increasingly worried.

The reasoning behind wonks’ fears is that even as the health care sector has added jobs, the productivity of the average worker may have declined, indicating a labor force that is growing bloated and inefficient. As a recent paper in the New England Journal of Medicine by Bob Kocher and Nikhil Sahni showed, labor productivity growth in the health care sector actually fell by .6 percent between 1990 and 2010, a result which corroborates the findings of a 2010 paper by heath economist David Cutler. This conundrum raises an urgent question: How can we rethink health care labor to foster a more innovative, productive system? While a number of legal, cultural, and logistical hurdles remain, the most promising answer seems to lie in allowing basic medicine to be practiced in more places and by an increasingly diverse set of practitioners.

ACROSS THE FIELD, health care experts speak in unison about the need for health workers with varying credentials to take on a number of responsibilities that are currently the sole purview of doctors. In the same NEJM paper, Kocher and Sahni write that a “different quantity and mix of workers engaging in a higher value set of activities” is necessary to increase productivity, with one of their suggestions being to relax licensure and scope of practice requirements for nurse practitioners and other non-doctor health care workers. That’s a suggestion with which Joe Antos, a scholar at the American Enterprise Institute, agrees, saying “We need to make it possible for people without MD after their name to handle a richer set of tasks.” The theory behind this argument is that as technology becomes more advanced, so too should the nature of tasks that low- to medium-skilled workers are able to perform. As Ashish Jha, an associate professor at Harvard Public School of Medicine and a practicing physician, told me, “What you see in other industries is when there’s been an uptick of technology, it has allowed everybody to move up in terms of the kinds of work they do. [In health care] it [should] allow nurses do stuff only doctors could do before.”

Several obstacles stand in the way of this vision becoming a reality, however. To begin, a morass of state laws blocks nurses and other non-MDs from performing many tasks. According to a report from Kaiser Health News, Colorado recently became the 16th state to allow nurse anesthetists to work without a doctor’s oversight. The specificity of the change suggests the scope of the challenge: Each change is approved piecemeal, often over the objections of physicians’ groups. “The standard pushback [against allowing nurses to take a higher burden in health care] is it’s going to affect the quality of care,” says Jha. “My argument is it might! I don’t know that it won’t … but we can actually study that and monitor it closely. And if it starts affecting quality [negatively], we can back off. … [But] we can’t be so afraid to innovate that we’re locked into a completely unsustainable way of doing things.”

In addition, there’s another, cultural obstacle standing in the way of non-MDs taking on greater responsibilities. Kaiser Health News quotes another doctor saying that allowing nurses to take up a greater role is “exactly what people worry about” when they worry about health care reform—that is, their doctors will be taken away from them. Patients are biased in favor of physicians. As Antos asks rhetorically, “Nurses could do a lot of the work … but you look at my mother: Who does she listen to—the doctor or the nurse?”

Another popular suggestion for increasing productivity in the health care workforce is to change where health care is practiced. Recently there’s been an uptick in what’s known as “retail clinics”—that is, small health clinics being located in retail stores, often in strip malls. CVS is one big brand that’s made an investment, and it has been rumored that Wal-Mart is interested in entering the market as well. For Americans, retail clinics are a quick and convenient way to deal with urgent but not catastrophic care. In a piece titled, “And now I’m forced to like retail clinics a little,” blogger, physician, and professor Aaron Carroll waxed rhapsodic about the convenience of taking his kids into a such a clinic to see if an ordinary sore throat was strep throat: “[It] opens at 8 AM. No appointments. It would take a few minutes and everyone would be on their way. Problem solved.” And, Carroll adds, since a doctor’s clinical diagnostic skills are no better than 50 percent for determining whether a given sore throat is bacterial or viral, you need a test, for which a “mid-level practitioner is more than enough.”

Retail clinics are not without some drawbacks, however. Austin Frakt, a health economist and one of Carroll’s co-bloggers, notes that such clinics tend to poach younger and more affluent patients—meaning that measurements of their quality might be skewed by a better patient population. In addition, standalone retail clinics might well contribute to the fragmentation of care problem in the health system by creating another place generating records and care and prescriptions that’s unconnected to everything else. And yet, despite these potential pitfalls, the value proposition offered by such clinics led the majority of experts with whom I spoke to consider them a trend worth monitoring.

Of course, there is one last issue to consider before attempting to ramp up the productivity of today’s health care workforce. When academic papers attempt to gauge productivity, the measure is derived from things it can count: visits to the doctor, number of scans, etc. But it’s possible, Frakt says, “to imagine a situation where greater quality means fewer visits to the doctor.” For example, a well-done surgery might reduce readmission to the hospital; or, a timely, state-of-the-art drug intervention might head off a problem before it ever develops.

If there’s unanimity on one point, however, it’s that the health care system is stuck and needs reinventing, especially in the way it pays for health care. “The big reasons,” Jha told me, “we haven’t seen big gains in productivity and efficiency is the business model. We have new technology, people with bright ideas … but the dominant players in the market have a very specific idea of how they’re being paid.” But in the meantime, expanding the range of qualified people who can practice medicine and places where care can be accessed seems like an important first step.

Darius Tahir is an intern at The New Republic.