Healthcare jobs fuel revival in Pittsburgh

[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.

.....

[mhays]

I wonder how much of that employment is actual caring for people / innovating / etc., vs. paper shuffling due to the US' absurd payment, liability, etc., situation.

[Austinlee]

Originally Posted by mhays

I wonder how much of that employment is actual caring for people / innovating / etc., vs. paper shuffling due to the US' absurd payment, liability, etc., situation.

Well it's true that Pittsburgh has a massive hospital sector and UPMC has been a giant in making money and paying virtually little taxes. They get special treatment though because of how important they are to Pittsburgh. You have to wonder though like the article states how long the gold rush can last.

@mhays: Not sure about the whole country but in Pittsburgh where we have major research universities and many medical tech companies springing up, innovation is very high. Everything from streamlining clerical work to digital records to robotics and of course medical instruments.

The recently finished $600+ million Children's Hospital of Pittsburgh.


http://old.post-gazette.com/pg/09095...lthscience.xml


http://en.wikipedia.org/wiki/File:Ch...Pittsburgh.jpg

Research tower on left.

[mhays]

Yes, research is a big driver in several cities and it's good that Pittsburgh is one of them. But the healthcare industry (providers, insurers, etc.) still has a massive amount of dead weight that's everywhere from the extra admin staff every provider needs to the insurance industry to law firms....I wish 50% of that would go away.

(Some idiot will say "what about their jobs", but obviously money that doesn't go to healthcare will go somewhere else instead.)

[Jonboy1983]

Not to mention, in a few years (God willing) we're going to see a major polyethylene plant go up. Other such plants as well as other such companies may follow suit.

I do see how that article states some concern for Pittsburgh with that particular industry, but that's not the only big thing going for Pittsburgh. It's more diverse and is becomming more diverse than most people realize...

[mhays]

If you can have a strong research sector plus a strong production sector, more power to you. The first tends to go to the brain centers (labs, pilot plants, maybe scale-up plants). The second tends to go to the places where production can be both high-quality and cheap. My city gets the first but less of the second.

[glowrock]

Damn, from those angles it's amazing (and a bit awkward) how enormous and immense Childrens is when compared with the rest of the neighborhoods surrounding it! I guess I never really realized just how huge the facility was when I drive past it on Butler!

Aaron (Glowrock)

Originally Posted by Austinlee

Well it's true that Pittsburgh has a massive hospital sector and UPMC has been a giant in making money and paying virtually little taxes. They get special treatment though because of how important they are to Pittsburgh. You have to wonder though like the article states how long the gold rush can last.

@mhays: Not sure about the whole country but in Pittsburgh where we have major research universities and many medical tech companies springing up, innovation is very high. Everything from streamlining clerical work to digital records to robotics and of course medical instruments.

The recently finished $600+ million Children's Hospital of Pittsburgh.


http://old.post-gazette.com/pg/09095...lthscience.xml


http://en.wikipedia.org/wiki/File:Ch...Pittsburgh.jpg

Research tower on left.

[bunt_q]

Originally Posted by mhays

Yes, research is a big driver in several cities and it's good that Pittsburgh is one of them. But the healthcare industry (providers, insurers, etc.) still has a massive amount of dead weight that's everywhere from the extra admin staff every provider needs to the insurance industry to law firms....I wish 50% of that would go away.

(Some idiot will say "what about their jobs", but obviously money that doesn't go to healthcare will go somewhere else instead.)

I swear a lawyer must have stolen your Halloween candy when you were a kid, mhays. Everything comes back to liability for you.

But believe me, you won't be so opposed to the whole system the first time some doctor closes you up and forgets to pull out the scissors first.

Besides... the costs of medical malpractice insurance, tort judgments, etc. is massively overblown by the media. The best study I've seen came out of the University of Maryland - you can probably find it googling - showed that the whole issue is basically baloney. And it was an older study, before tort reform took root in most states. I know we've had a firm (and low) judgment cap for ages now in Colorado. And not surprisingly, neither health care costs nor malpractice premiums have gone down in the slightest (but plenty of legitimately harmed plaintiffs have been limited to a nice low recovery, destining them to a life of uncompensated misery).

[mhays]

I don't buy that at all. It's at every level -- additional procedures, additional equipment (good for their general contractors like my firm!), additional process, and so on, way before the premiums and payouts themselves.

Here's an example. I got a mole cut off last year. The procedure was $200 or whatever. But cancer testing was also required by this clinic despite acknowlegement that it wasn't cancer. That was an extra $300. They were very upfront that it was entirely due to liability.

[Larry King]

the thought that eds and meds are a bubble of sorts gives me alot of anxiety

if these industries ever collapse, PA is in for a free fall

[Private Dick]

Originally Posted by Jonboy1983

Not to mention, in a few years (God willing) we're going to see a major polyethylene plant go up. Other such plants as well as other such companies may follow suit.

Yay!... Can't wait for a brand-spankin' new polyethylene plant Because that's what we really need -- more plastic bags for everyone and more pollutants in the region's already woeful air quality.

It goes right in line with Pittsburgh's claims of how "green" it now is.

Originally Posted by bunt_q

... the costs of medical malpractice insurance, tort judgments, etc. is massively overblown by the media.

Absolutely

Medical malpractice as a whole accounts for only about 2% of all healthcare costs. Torts are at only 1%.

It's an issue that the insurance companies, and thus the Republicans, latched onto and made a much bigger issue out of to distract from the actual crippling costs of our unfathomably wasteful healthcare system.

[DBR96A]

Originally Posted by Larry King

the thought that eds and meds are a bubble of sorts gives me alot of anxiety

if these industries ever collapse, PA is in for a free fall

Not necessarily. The bubble will slowly deflate in Pennsylvania as it inflates in other states with rapidly-aging populations. Pennsylvania's elderly population is expected to grow the slowest of all states over the next 20 years, and its ranking among the oldest states is expected to drop precipitously as well. Furthermore, Pennsylvania is one of the leading states in medical research and development, which is essential, so those jobs are more likely to stick around because the state has established itself in that field. If there are mass layoffs, it'll mostly affect medical paper-pushers, which every state has.

[mhays]

Federal reseach dollars can rise and fall dramatically year-to-year. I wouldn't bet my life on it being stable. Same with donations from individuals, which rely heavily on stock values etc.

If Pittsburgh has headquarters, those can grow, shrink, disappear, etc., with little notice.

Regarding actual care, trends in types/extent of care might have more influence than demographics. A bubble is partially about changes in that, as well as related facilities etc. All of that can change dramatically, particularly given the huge percentage of GDP healthcare has been seeing in the US.

Regarding demographics, babies are another high-demand group.

All of that notwithstanding, it should be as stable a sector as any.

[glowrock]

Originally Posted by Private Dick

Yay!... Can't wait for a brand-spankin' new polyethylene plant Because that's what we really need -- more plastic bags for everyone and more pollutants in the region's already woeful air quality.

It goes right in line with Pittsburgh's claims of how "green" it now is.

You do realize that the proposed Shell ethylene cracker would make the raw materials for a hell of a lot more than plastic bags, right? Honestly, while I'm not the world's biggest fan of huge petrochemical plants, this thing is going to be an enormous economic boost to the entire region, especially because it's going to draw so many related companies here as well. Some will be chemical plants in their own right, likely many others will be manufacturing. And most of the jobs will be the kind that have a very reasonable living wage, we're not talking fast-food wages here!

As for pollution, you do realize that EPA regulations put upon any sort of new industrial facility are extremely strict, right? We're not talking about smoke-belching, fume-inducing hellholes like those plants built 30-50 years ago. And this isn't an oil refinery where odors by their nature are produced. "Cracking" natural gas and its associated heavier liquids is nowhere near as inherently dirty as refining heavy oil.

I have no problem with the Pittsburgh area developing a chemicals-based manufacturing presence. Metro areas need diverse economies, and we're going to need a hell of a lot more than eds and meds to keep the economy going into the future. Manufacturing will need to continue to rebound, and increasing our energy presence will also continue to move the economy forward.

Besides, I'd much rather see natural gas-derived products than those derived from coal, which is inherently a MUCH dirtier process.

Face it, not everything's going to be solar, wind, geothermal, tidal or nuclear. Energy and other products derived from natural gas is an excellent intermediate step between dirtier energy production from coal and heavy oil (ie: tar sands) to cleaner and more renewable energy sources.


Aaron (Glowrock)

[urbanactivist]

The healthcare sector is exploding, and will continue to do so as the Baby Boomers as and need services. Glad to see that cities like Pittsburgh are on the leading edge.

[Private Dick]

Originally Posted by glowrock

You do realize that the proposed Shell ethylene cracker would make the raw materials for a hell of a lot more than plastic bags, right? Honestly, while I'm not the world's biggest fan of huge petrochemical plants, this thing is going to be an enormous economic boost to the entire region, especially because it's going to draw so many related companies here as well. Some will be chemical plants in their own right, likely many others will be manufacturing. And most of the jobs will be the kind that have a very reasonable living wage, we're not talking fast-food wages here!

As for pollution, you do realize that EPA regulations put upon any sort of new industrial facility are extremely strict, right? We're not talking about smoke-belching, fume-inducing hellholes like those plants built 30-50 years ago. And this isn't an oil refinery where odors by their nature are produced. "Cracking" natural gas and its associated heavier liquids is nowhere near as inherently dirty as refining heavy oil.

I have no problem with the Pittsburgh area developing a chemicals-based manufacturing presence. Metro areas need diverse economies, and we're going to need a hell of a lot more than eds and meds to keep the economy going into the future. Manufacturing will need to continue to rebound, and increasing our energy presence will also continue to move the economy forward.

Besides, I'd much rather see natural gas-derived products than those derived from coal, which is inherently a MUCH dirtier process.

Face it, not everything's going to be solar, wind, geothermal, tidal or nuclear. Energy and other products derived from natural gas is an excellent intermediate step between dirtier energy production from coal and heavy oil (ie: tar sands) to cleaner and more renewable energy sources.


Aaron (Glowrock)

Yeah, I totally realize what you are saying. I was just being sarcastic in my enthusiasm and with the for effect. I used to work for the EPA, so I have a pretty good idea about the regs and requirements for plants like these. The Ohio and Beaver river valleys have long had chemical facilities located there, so this really is nothing new. Though this new one will have to be much cleaner. Still, I can't get too excited for a polyethylene plant, though I do realize the potential it holds for jobs in the region -- not everyone can work in healthcare, software development, or as a glorified bank teller.

[glowrock]

Originally Posted by Private Dick

Yeah, I totally realize what you are saying. I was just being sarcastic in my enthusiasm and with the for effect. I used to work for the EPA, so I have a pretty good idea about the regs and requirements for plants like these. The Ohio and Beaver river valleys have long had chemical facilities located there, so this really is nothing new. Though this new one will have to be much cleaner. Still, I can't get too excited for a polyethylene plant, though I do realize the potential it holds for jobs in the region -- not everyone can work in healthcare, software development, or as a glorified bank teller.

Fair enough, Private Dick. Guess I got a little carried away with my response to your sarcasm! Haha

What division of the EPA did you work in, BTW?

Aaron (Glowrock)