Wednesday, May 21, 2014

Oregon's Changing Health Care Industry

Employment in most industries follows a general business cycle. The health care industry, on the other hand, is driven more by population change than recession and expansion. The health care industry is more insulated from this business cycle as many health services are mandatory, rather than discretionary, expenses. During tough times, a consumer might not buy a new pair of skis, but if he breaks his leg skiing, he still needs to see a doctor.

This explains why there were no significant employment declines during the Great Recession, but fails to answer: Why is the industry growing? The answer is threefold: Oregon's growing population, Oregon's aging population, and increased access to health services. 

Most of the growth in the health care industry during the past several years is due to an expansion in ambulatory health care services. Much of this growth in ambulatory health services is due to an emphasis on preventative health care management. 

Perhaps most surprising is the stagnation seen in the state's hospital employment, with no substantive gains since 2007. The CEO of Salem Health Hospital notes that people are not using hospitals as much due to a variety of factors, including high-deductible plans and the cost of services to patients. 

Another sector of the health care industry expected to see rapid growth during the next decade is nursing and residential care facilities. The projected growth of 11,800 new jobs (+27%) in these facilities is closely tied to the aging population in Oregon.

You can find more information about Oregon's health care industry, see the full article written by Regional Economist Damon Runberg. 

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