[M II A II R II K]

Healthcare jobs fuel revival in Pittsburgh


May 13, 2012

By Don Lee

Read More: http://www.latimes.com/business/la-f...010,full.story

While most of the nation is still trying to claw its way out of the deep economic crater left by the recession, this onetime steel capital is already out — thanks largely to the relentless growth in healthcare jobs. Partly because of the outsized ambitions of the University of Pittsburgh Medical Center, the healthcare industry has replaced manufacturing as the region's powerhouse. About 1 in 5 private-sector employees in the Pittsburgh area today works at a hospital, a doctor's office or in some other health services business.

- But even as the healthcare boom has sped up Pittsburgh's recovery, the economic transformation has left many people worried about the side effects. Among the concerns: overdependence on a rapidly shifting industry, huge nonprofits that don't generate much in tax revenue, and a business model that exacerbates the disparity in income among workers in different but similar jobs. And that's not just in Pittsburgh. "This is the U.S. in a microcosm," Eileen Appelbaum, a senior economist at the Center for Economic and Policy Research, said about the rise of healthcare and the issues that has wrought.

- Healthcare firms now dominate the rankings of major employers in large cities as well as rural communities such as Klamath Falls, Ore., where a growing medical center has brought more diversity to the historically white logging town. In affluent Oakland County, Mich., part of the tri-county Detroit area,General Motors Co.had for decades been the top employer. But since 2008, that title has been claimed by Beaumont Health System. And two other hospital employers are right behind GM. Nationwide, healthcare services have added some 770,000 to their payrolls since the start of the economic recovery in June 2009 — about a third of all new jobs, according to the U.S. Labor Department.

- Absent the hiring related to healthcare, the country's unemployment rate would be 9.8% today instead of 8.1%, said economist Charles Roehrig of the Altarum Institute, a healthcare policy group in Ann Arbor, Mich. Pittsburgh's latest jobless figure is 7.1%. Even though healthcare's growth remains solid — the industry added 19,000 jobs nationwide in April — Roehrig and other experts see an inevitable retrenchment. Spending for medical care is nearing one-fifth of the American economy, much more than in other developed nations and beyond what governments, businesses and consumers can afford.

- Healthcare has fueled job growth for a generation. When Pittsburgh's steel industry began its collapse in the early 1980s, healthcare employment was a third of manufacturing's and the University of Pittsburgh Medical Center was little more than an operator of a single psychiatric hospital. Today, from his suite on the 62nd floor of downtown's tallest building, once owned by U.S. Steel Corp., UPMC Chief Executive Jeffrey A. Romoff has a wide view of the city's cleaner skies and rivers — and of much of his $10-billion empire. The company has about 20 hospitals, 3,300 doctors and 1.8 million health plan enrollees. It employs about 55,000 people, more than any private employer in Pennsylvania, including No. 2 Wal-Mart Stores Inc. Over the last 15 years, UPMC's annual revenue has grown 13% on average, and its employment has increased 17% a year. But Romoff, 66, readily acknowledged that was not a sustainable pace.

- Few people would say that the healthcare boom has been bad for local economies. In Pittsburgh, it's helped revive neighborhoods, open up more opportunities for women and staunch the region's long population decline. Pittsburgh's number of people from India, for example, nearly doubled between 2000 and 2010 — a trend that has had an "unmistakable impact" in the area, said Michael Madison, a University of Pittsburgh School of Law professor. "This is a community that is generally well-educated and entrepreneurial," he said. Yet healthcare's rise hasn't been a cure for some of the nation's biggest economic ills: stagnating wages and widening income disparities. Although healthcare creates a broad spectrum of jobs, including many well-paying ones in nursing, the industry's fastest-growing occupations are home health aides and personal-care assistants — jobs that are expected to jump about 70% nationwide, to 3.2 million by the end of the decade from 1.9 million in 2010, the Labor Department said. The average pay: about $10 an hour.

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