Wanna See a Bigger Crisis – Solve the Healthcare One

Why are we complaining that healthcare prices keep going up? Didn’t we just see what happened when housing prices came down? It seems the bottom fell out of our economy. I say, to keep America’s economy going strong (or at least, to keep it from completely collapsing), don’t let healthcare costs come down! Learn from the housing crisis: be proactive and keep healthcare prices up!

I looked at the US Bureau of Labor Statistics (BLS) data for the healthcare and construction industries and found some insightful information. With the collapse of the housing segment of the economy the home construction industry is taking a serious hit. Many construction workers, naturally, are losing their jobs. Consequently, these formerly employed workers lose their income (which, according to the BLS, was higher than the national average income in all private industries) and the butcher and baker, etc. who used to sell to these workers and their families lose customers and revenue, and in turn their suppliers lose revenue, etc, etc, along the chain. Clearly, the negative effect ripples (or rips?) throughout our feeble economy.

The construction industry employed (yes, past tense, since all data are for 2006, the latest available) 7.7 million workers, 2 million of them in no way associated with residential construction, which leaves 5.7 million affected by the housing crisis. These are a lot of workers in an industry that is collapsing. We are witnessing the consequences and feeling the pinch as unemployment increases and incomes slide.

Now let’s look at the healthcare industry. Like construction, it also paid above the national average. Unlike construction, it employed nearly two-and-a-half times as many workers—a whopping 13.6 million! It is the single largest industry in these United States. Imagine what would happen if healthcare prices collapsed—hospitals and doctors’ offices across the country, unable to generate the cash flow to pay their employees, would have no choice and be forced to lay off many of these workers. A lot more butchers and bakers, etc. etc. would be hurt by the ripple (or is it now tsunami?) effect of such layoffs.

Well, one might say, tough luck for those Porsche-driving, trophy-wife sporting doctors who ignored us and overcharged us on our last office visit! Alas… Of the 13.6 million workers in healthcare only 3.4% (less than half a million) are physicians and surgeons. They number fewer than even the top management and business types employed by the industry (4.2%). So if docs and execs account for less than 8% of healthcare workers… who are the 92%? According to the BLS, they are middle-class Americans whose jobs require [certain skills and training but] less than 4 years of college education. Are these the good American jobs we want to sacrifice on the altar of low healthcare costs? Haven’t we seen and suffered enough from the consequences of low housing prices and growing unemployment in the much smaller construction industry? Why do we never learn from history?

So why are we complaining that we have a healthcare crisis? Solving it would cause a much bigger one, you see.