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NM could gain from national health sector growth

ALBUQUERQUE, N.M. — It is tempting to call a rapid increase in hiring by the state’s health care sector a lone bright spot in the generally bleak Department of Workforce Solutions employment report released Tuesday.

After all, the state lost 1,800 jobs in the 12 months that ended in January. New Mexico’s manufacturing employment fell by 1,200 jobs. Mining and logging, which consists mostly of oil and natural gas extraction, lost 7,700 jobs, thanks to depressed oil prices. Government employment was down 1,200 jobs.

In the same period, education and health services employment rose by 7,300 jobs, or 5.6 percent. Workforce Solutions says it doesn’t know how many of those jobs are health and how many are education services, but because public education hiring is reported as government employment, it’s safe to assume the bulk of that job growth was in health care. The department says the past 12 months had the sector’s fastest annual growth rate since July 2003.

That is good news, certainly, but employment in the health sector signals both the strengths and the weaknesses of New Mexico’s economy.

To begin with the weaknesses, there has been no significant increase in the number of providers of health care being hired, according to Richard Larson, a physician and executive vice chancellor of the University of New Mexico Health Sciences Center. (Providers are doctors, nurses, therapists and the like.) That’s partly because the pipeline of newly trained providers is narrow and partly because New Mexico competes nationally for a limited supply of labor.

Larson, who serves on a number of national and local committees concerned with health industry workforce development, says the real growth is in all the other jobs required to operate health systems. That includes well-paid executives and information technologists, certainly, but it also includes many not-so-well-paid janitors, security guards, kitchen staffers and clerks. Obviously, it is better that people be employed than not employed, but the state needs both more jobs and better-paying jobs if we are to climb out of the economic chasm in which we find ourselves.

The growth in hiring is a function of growth in demand for health care. That growth in demand is being funded in large measure by tax-based programs like Medicaid and subsidies provided by the Affordable Care Act. On the positive side of the ledger, the federal government is injecting many millions of dollars into our state, spurring spending not only by health care institutions but by the people they hire. On the negative side of the ledger, the federal government is injecting many millions of dollars into our economy, continuing our reliance on federal spending, but in the health care field instead of the nuclear arms field. That close to half of our population has to get taxpayer help to afford health care means we have a poverty problem that gets much worse the day the government decides it doesn’t want to foot the bill any longer.

As to the strengths, local businesses have an opportunity to sell goods and services to a growing industry, provided they have the right stuff and access to the market. UNM is trying to help locals by working with the Washington, D.C.-area Democracy Collaborative to give New Mexico vendors a better shot at the Health Sciences Center’s $1.5 billion business. The Mayor’s Office, Central New Mexico Community College, the Community Foundation and other groups are partners in the effort.

“The reason academic health centers got involved in it was because a lot of what determines health status of communities is not always about health care but things surrounding health care,” Larson said. “It’s a concept that wealth means health.”

Larson said the project is patterned after work the collaborative did with University Hospitals of Cleveland.

University Hospitals generated about 16 tons of laundry a year. Cleaning hospital laundry is a specialty, and UH had to send it to a firm in Chicago. UH and the collaborative helped a small laundry business in Cleveland take on the job. Today, small businesses in Cleveland handle 4 million tons of laundry.

UH required a Richmond, Va., medical supplier to establish a distribution center in Cleveland, staffed by locals, as a condition for renewing its contract.

The hospitals established basic job skill training programs to get 100 or so local entry-level job seekers ready for UH employment. The program has worked so well the system now expects to hire a few thousand graduates.

Larson said UNM and its partners are in the planning stages, but he expects to find several business opportunities to offer small firms. If the project works, over time, New Mexico businesses that get a leg up from UNM can become regional players by selling to health systems in other states. We could literally start taking in other people’s laundry.

UpFront is a daily front-page news and opinion column. Comment directly to Winthrop Quigley at 823-3896 or wquigley@abqjournal.com. Go to www.abqjournal.com/letters/new to submit a letter to the editor.

 

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