How Health Care Reform Can Create Jobs — and Cut Costs

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Nobody would be surprised to hear that spending more on healthcare will result in new jobs. But a new program announced by the Obama administration last week seeks to create new healthcare jobs and at the same time reduce healthcare costs. Is such a trick possible?

The so-called Health Care Innovation Challenge will invest up to $1 billion in the project proposals that can deliver high-quality medical care and save money. Is there reason to believe such projects exist?

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Well, it’s reasonable to doubt that more can be done with less, especially when it comes to our health. But the initiative appears to be aimed at increasing the number of less expensive but well-trained healthcare workers who can help doctors see more patients — and spend more time with serious cases — at about half the cost. And the data on these “mid-level” healthcare workers is very encouraging. Here are a few examples:

  • Nurse Practitioners. Today’s nurses receive far more education than in the past. In addition to a four-year bachelor’s degree in nursing, a growing number hold a graduate degree that requires two years of course work and at least 700 hours of clinical training. Others earn PhDs and specialize in areas such as geriatrics. NPs can prescribe medications in every state, and in some, provide primary care without a doctor’s supervision. When baffled, they simply refer patients to a physician, just as primary care doctors refer patients to specialists. Acceptance even among M.D.s is growing. As Roland Goertz, president of the American Academy of Family Physicians, recently told Money magazine: “NPs are often better trained and more experienced than docs in teaching patients how to manage chronic conditions.” The cost benefit? Nurse-practitioners average $89,450 in base salary, while median income for primary care physicians is $186,500.
  • Community Healthcare Workers. Healthcare workers who know the culture and language of their communities can dramatically increase preventive care in those communities — which keeps people healthier and saves big money. Here, too, the data is pretty powerful. For instance, Chinese American women have higher rates of invasive cervical cancer and lower Pap smear screening rates than the general population. Research has shown shown than when they receive home visits from CHWs, they go for testing. In another study, when African-American CHWs reached out to African-American diabetics, ER visits fell by 38%, hospitalizations dropped by 30%, and Medicaid expenditures were sliced by 27%. That’s serious money, especially considering that CHWs earn just $30,000 to $55,000.
  • Nurse Midwives. According to a recent study published in Obstetrics & Gynecology, the use of nurse midwives during natural births results in a significantly lower risk of neonatal deaths and fewer low birthweight babies. And because there are fewer C-sections and complications, costs are lower. Nurse-midwives earn an average of $91,500, while Ob-gyns (who of course would continue to handle risky cases) average $261,000.

Today many of these workers staff Community Health Centers (CHCs), where some 20 million Americans find care. Without a CHC, a majority of these patients would receive their care in the most expensive setting possible — an emergency room. Like an ER, many CHCs are open “after hours.” Unlike an ER, Community Centers can provide a “medical home” where a team of physicians, nurse-practitioners, physicians’ assistants, nurses, dentists, and case managers see many of the same patients on a regular basis.

Happily, Republicans and Democrats tend to agree on the value of CHCs, and reform legislation passed in 2010 set aside $11 billion to expand CHCs over 5 years, doubling their capacity. The Center for American Progress estimates that this investment could generate some 300,000 additional jobs, both inside clinics walls and in surrounding neighborhoods “where local businesses sell products and provide services to the health centers.”

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Recently, however, CHCs have had reason to worry that their funding is in jeopardy. In March, when politicians negotiated a federal budget compromise, the money supporting operations at existing centers was trimmed by $600 million. As a result, this year, rather than handing out $250 million to establish new patient-care sites to serve more than 2 million additional people, as originally expected, the administration gave $29 million to 67 organizations that will serve 286,000 patients.

Since then, rumors have spread that the congressional Super Committee charged with slicing the federal budget by $1.2 trillion would be taking a second bite out of Center funding. If, as it now appears, the Super Committee remains deadlocked, continued funding of CHCs will be a consolation.