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In Health Care, Good News/Bad News
Region tops in concentration of health-care employment but last in employment growth
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Business New Haven
3/3/2003
By: BNH
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CAMBRIDGE, Mass. - New England leads the nation in percentage of people directly employed in the health-care industry, but is last in the U.S. in health-care employment growth. So says a new study released last month by the New England Healthcare Institute (NEHI).
According to the survey, five of the six New England states (excepting New Hampshire) rank among the top ten states in the U.S. in percentage of workers employed in health-care fields. Approximately 11.4 percent of the region's workforce is directly employed in health-care professions, accounting for more than 800,000 jobs.
Connecticut ranks fifth among all states in health-care employment concentration with a high concentration in medical devices (No. 3 in the nation), pharmaceuticals (No. 4) and medical service and health insurance (fifth in the nation).
The study, conducted for NEHI by the Milken Institute, also examined the indirect impact on the regional economy. It discovered that 25 percent of New England's workforce is employed today as a result of the health-care industry, which translates into approximately 1.7 million jobs. In addition, as much as $53 billion in annual revenues is directly generated by health care-related businesses in the six-state region.
"The health care industry is the backbone of the region's economy," said Wendy Everett, president of NEHI. "That said, our research shows that this industry is stagnating when compared to the rest of the country and if the public and private sectors in every New England state don't work together to foster growth, the industry and local economies could find themselves in critical condition."
The study found that New England is losing ground when it comes to health-care job growth and retaining related manufacturing operations. Health-care employment in the region from 1996 to 2001 grew six percent. Meanwhile, the fastest-growing region - the Rocky Mountain states - grew by 16 percent. Over that period Connecticut ranked 45th in the nation in health care job growth.
While the Nutmeg State recorded high job growth in the pharmaceuticals sector in the 1980s, that growth has slowed significantly in the past five years. In the 1980s Connecticut's job growth in pharmaceuticals was approximately 40
Percent for the decade From 1996-2001 that growth rate fell to about 20 percent, and by 2000-01 had slowed to a negligible 0.2 percent.
Jobs in the health-care sector are important to the state's economy, as each job in the pharmaceuticals sector creates an additional 3.5 jobs in other sectors, according to the report's authors.
New England continues to play a prominent role in health-care research and innovation based on levels of NIH funding, industrial R&D data and venture capital funding of biotechnology and medical-devices companies.
Among other notable findings:
- Health care stimulates significant job creation for the region; for every job in the New England health care industry, an additional 1.15 jobs are created through indirect and induced impact;
- The past 15 years have seen a steady decline in New England's share of total U.S. health-care employment The study, entitled, "The Economic Contributions of the Health-Care Industry to the New England Region," is the first of four research projects NEHI will undertake in 2003.
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