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Archives - November 2009
Wednesday, October 21, 2009

If 3,600 jobs in Oregon just disappeared, you can bet someone would notice.

But an estimated 3,600 jobs that are likely to spring up in the wake of the Legislature’s recent health care reform legislation have gone all but unnoticed.

“There’s actually been very little talk about all the health care jobs — permanent, good, family-wage jobs that are going to be here in Oregon and are very difficult to export — that are going to be created as a result of this legislation,” Rep. Dave Hunt (D-Clackamas County) said at an August meeting of the Medical Society of Metropolitan Portland.

The legislation, HB 2116, expanded health care coverage to 80,000 Oregon kids and 35,000 low-income adults with a 1% tax on health insurers and a floating assessment on hospitals. It also lassoed $1 billion in federal matching health care funds.

The resulting 3,600 jobs — a prediction based on the standard software IMPLAN — will mostly be health care positions to tend to these new patients.

“The increased number of insured people will mean more people going to health care providers, which will require staff, supplies and services in every region of Oregon,” says Justin Dickerson, a regional economist with the state’s office of forecasting.

The provider tax also funded an additional 175 state jobs to help manage outreach and administrative services related to the expanded coverage.

Jo Isgrigg, executive director of the Oregon Healthcare Workforce Institute, said her organization has been watching other states, particularly Massachusetts, to see what effects expanded coverage has on the workforce.

“There’s huge demand for primary care practitioners,” she says, noting also that need goes up for nurses, physical and occupational therapists, and pharmacists, as well.

But because there’s already a health care worker shortage in Oregon, meeting any new demand won’t be easy.

It’s not clear yet, either, where these new health care jobs will materialize, though some could be at federally certified managed care organizations. Expected demand also gives a good hint: State data show that 45,000 of Oregon’s 104,000 uninsured kids live in four counties around Portland; another 32,000 live in Marion, Polk, Lincoln and Tillamook counties.

Priscilla Andres, human resources director for OHSU Healthcare, says that OHSU may hire additional staff as a result of HB 2116, but it’s too early to tell. But Marvin Hass, chief administrative and finance officer at Asante Health System, says that no new hiring is planned because many of the people who will be covered under HB 2116 have already been receiving care at Asante.

Another area not likely to be hiring anew: private sector pediatricians in Portland.

“Medicare and Medicaid reimburse at 55% of commercial insurance rates,” says Sharon Fox, executive director of the Children’s Health Alliance, a nonprofit association of 110 pediatricians in Portland. “Private practices want these kids, but being small businesses, they can’t take on more than what they do now.” 



Bo Shindler
0 #1 longer linesBo Shindler 2009-11-03 12:43:51
It's misleading to imply that health insurers and hospitals are paying the 1% assessment. Insurance companies and hospitals will assess their clients who will in turn pay the 1%, nothing is being absorbed i.e. this is not found money. The real story here is that people who are struggling to pay their health insurance premiums and hospital bills just took another hit. And the likelihood of 3600 jobs being created is unsubstantiated , unrealistic, and would be difficult to prove out at best - what this really means is longer lines.
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Kelsey Wood
0 #2 Insurance to Oregon Health Plan eligibleKelsey Wood 2009-11-03 13:00:27
On the surface, this well-intentione d health care tax to add people to the Oregon Health Plan coverage seems like maybe a great idea. Ever since Senator Dr Alan Bates proposed health care reform, the basic idea has been to cover those without insurance providing for lower-cost health care and reduce more expensive care for lack of primary care, but to "throw" insurance coverage at a segment of people who have difficulty managing even just the household, let a lone difficulty managing a job, the responsiblilite s of car ownership, car insurance, maintanance, a budget for gas and repairs, much of his insurance will go to waste. Why no fund clinics within our school system and deliver real primay care? Now there's a chance to make a difference in our communities.

The current powers to be, Speaker Hunt included are not interested in solutions outside what Representative Greenlick pushed through this last legislative season. That's too bad. There are a lot of good ideas left on the table needing attention.
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0 #3 JB 2009-11-03 14:29:58
There's no denying that the 1% assessment went directly past the insurance companies and on to their customers. But even worse is that premiums for individuals and small businesses have gone up or will go up over the next year anywhere from 10% to 23% — even without the provider tax. On the bright side, at least the assessments have helped steer some new federal dollars toward Oregon's health care system. Without that there'd be no talk whatsoever of expanded coverage or projected job creation. Or maybe there would be talk, but that's all it would be . . .
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Eric Fruits
0 #4 $1.2 billion in new taxes and DHS fudges the economic impactsEric Fruits 2009-11-11 07:52:10
I did a public records request on the study cited in this article. The state agency committed some serious fouls to make the employment numbers look good. For more detail, see my blog post: http://bit.ly/b2qFw
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Oregon Business
0 #5 Response to Eric FruitsOregon Business 2009-11-11 15:21:28
In looking at Mr. Fruit's documents and claims, they do not seem to disprove the prediction that "an estimated 3,600 jobs are likely to spring up" or that the DHS method to come up with that estimate (IMPLAN) was faulty. (In fact, we're not sure he's even disputing that prediction.)

Certainly people can find bones to pick with how the state is raising this money (the provider tax and insurer tax) and how it is figuring in the matching federal dollars. But the premise of our story was that the state estimates 3,600 new jobs as a result of this legislation, and that is still true. The fact that the state has levied a tax on hospitals and health insurance companies — the latter of which was passed directly onto consumers — to expand medical insurance to 115,000 people does not negate or make faulty the prediction for job creation.

A few points:
1. There seem to be some discrepancies in the information Mr. Fruits cites: On his post, he says that in 2011-2013, the health insurer tax will raise $550 million. If you look at the DHS document he links to, however, you'll see it's actually $450 million. Similarly, his post reports that the insurance tax will amount to $345 million in 2011-2013; according to the DHS document, it's $145 million. He also says it's $1.2 billion in total taxes on insurers and hospitals over the four-year life of the tax; the DHS doc says $1.02 billion. (A $200 million difference). His post also omits the fact that matching federal dollars will top $1.7 billion.

2. The hospital tax is actually not a "massive tax increase"; it is a four-year extension and renegotiation of a prior assessment that was enacted first in 2003 and then extended again in 2007.

3. The one thing we see on the DHS document that does bother us is that in one part they say 3,600 jobs "created"; in another spot they say "retained or created." In our research and interviews, no one ever suggested to us that it was anything but brand new jobs.

We appreciate the information added to this discussion, but there's nothing wrong or inaccurate with the story. The facts are that the state is taxing hospitals and health insurance companies as a way to leverage new federal dollars and expand health care coverage in Oregon. As a result of that expanded coverage, the state, using a standard and accepted methodology, has predicted that an estimated 3,600 health care jobs may be created.

If citizens have a problem with the state's method of taxation or just how it is funding this new coverage, that's a different story altogether.
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Eric Fruits
0 #6 Response to Oregon BusinessEric Fruits 2009-11-17 15:47:54
Thank you for pointing out where revisions were called for. The blog post has been updated and corrected.

The main point of the blog post was to question the large number of jobs that DHS claims would/might be created or "retained or created."

While DHS may have used IMPLAN, a widely used economic impact program, that does not mean they used the program correctly.

An accurate analysis would have noted that dollars would be removed from households and businesses, pass through a bureaucracy, and then be redistributed to other households and businesses. It is well known in the economics literature that such transfers slow economic growth.

To be fair, the Legislative Fiscal Office reports that DHS expects hire 230 FTEs. Even so, the most generous employment multipliers would not produce another 3,300 to 3,400 jobs throughout Oregon.

I never indicated that there was anything inaccurate in the Oregon Business story. However, the story gave the impression that the author repeated the state's talking points without doing a "smell test" first.
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