WASHINGTON — Health care has become the beating heart of America’s economy.
In the past 15 years, the health- care economy has pumped out 4.5 million new jobs, including many in related fields such as drug development and health insurance. A dozen of the 30 fastest-growing occupations are related to health care. Even last month — as the unemployment rate took its biggest jump in 22 years — health care continued to add thousands of jobs.
No other industry matches this rapid growth spurt. Globalization has closed factories. New technologies have shrunk retailers and agriculture operations. Few jobs have been created in the finance and insurance industry recently, with the exception of health and real estate. Then the housing bubble burst.
The health-care economy is only bound to grow larger. The aging baby-boomer population is about to spur a wave of health-care needs. Advances in technology are improving the survival rate of terminally ill and injured patients, who need extended therapy and care.
The health-care economy employs about 16.5 million Americans.
In the past three decades, the total national spending on health care has more than doubled to 16 percent of the gross domestic product. The Congressional Budget Office forecasts that by 2082, rising health- care costs will push that spending to nearly 50 percent.
Clearly, health care comes at a steep cost to the public and individuals. It also has brought about economic benefits, such as creating a second life for older manufacturing cities.
The auto industry has been steadily shrinking in greater Detroit, for example, shedding tens of thousands of car-manufacturing jobs in the past decade. Ford plans to cut white- collar salary costs 15 percent by August, laying off an unspecified number of workers.
Next year, the Henry Ford Health System plans to open a $350 million community hospital employing 1,600 new hires.
Cleveland has emerged as a prime location for medical care and research. Longtime manufacturers, such as machine-tool behemoth Warner & Swasey, that once dominated the region’s economy have been replaced by the Cleveland Clinic and University Hospitals and more than 500 companies providing medical goods and services.
“In this global economy, we knew we needed to stimulate a new economy in what we have skills in,” said Baiju Shah, president and chief executive of BioEnterprise, which has helped develop the region’s health-care industry. “Health care is one of those shining spots for Cleveland.”
Health care dominates in cities such as Pittsburgh and Memphis, Tenn., said Gerard Anderson, a Johns Hopkins University professor specializing in health-care economics.
“Health care is either the largest or second-largest producer of jobs and good works for that community,” he said. “Often, the nicest building in the city is the hospital.”
By 2016, the Bureau of Labor Statistics predicts health-care employment to double the projected growth of all other industries combined.
“It’s one of those industries that doesn’t seem to be affected by economic downturn,” said Terry Schau, an economist at the bureau. “People get sick, and they’re going to need health care. The state of the economy may affect their ability to pay but not the demand.”
