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From the Editor
Al Krulick
Editor-in-Chief
R
Editor-in-Chief
Al Krulick
Associate Editor
Lorie Steiner
Vice President of
Business Development
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Lauren Blackwell
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Brendan McElroy
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Regular readers of Business ViewMagazine
have no doubt noticed that in almost every issue,
we highlight cities and towns across the U.S.
and Canada.One of the standard questions we
pose to representatives of the municipalities we
profile concerns the main economic drivers of
their communities: “What industries or compa-
nies employ a good share of your population or
contribute a significant amount of taxes to your
government coffers?”
Lately,more and more American cities are
telling us that their economies are being under-
written not bymanufacturing,agriculture,retail,
finance,transportation or any number of other
traditional sectors,but rather by the healthcare
industry.And as surprising as this seemed to us,at
first,the numbers bear out the assertions.
Since the Great Recession hit America in late
2007,a whopping 35 percent of the nation’s
job growth has come in healthcare.Today the
industry employs one in nine U.S.workers–up
from one in twelve in 2000.In cities such as Pitts-
burgh,Cleveland,and St.Louis,as well as many
other smaller municipalities across the county,
healthcare has replaced dying industries like coal
and heavymanufacturing as a primary source of
new jobs.
Mike O’Dell,the Assistant Planning,Zoning,and
Building Director of Wellington,Florida,which
is profiled in this issue,said the following,when
asked about the Village’s major employers: “We
have three hospitals within our region.One is
the Wellington Regional Medical Center,which is
within our boundaries.The Bethesda Hospital is
the latest addition to our south,and Palms West
Hospital is just to our north.What we’re seeing
with those three hospitals within our region is
a bit of a medical hub developing around us.
Wellington has office space and we’re seeing it
converted to medical space and we’re seeing
specialists and other medical related practices
moving into this area,filling that gap between
the three hospitals.So,although we lack a major
employer in our area,the medical industry is one
of those areas that is growing in the Village.”
And while cities are wont to welcome the jobs
and the income,the phenomenal growth of the
sector is a double-edged sword,because all of
these newworkers need to be remunerated–a
major reason why healthcare costs in America
continue to skyrocket.
Today,labor accounts for more than half of
the $3.4 trillion spent onU.S.healthcare,and not
all of those dollars go into the pockets of doctors
and nurses.In fact,for everypracticing physician in
America,there are 16 other workers,half of whom
are in administrative and other nonclinical roles–
data entryclerks,revenue cycle analysts,medical
billing coders,and other back-office laborers.
It’s no wonder,then,that administrative costs
in the U.S.healthcare industry are the highest in
the developed world.More than eight percent of
U.S.health spending is tied up in administration
while the global average is three percent.Amer-
ica spends approximately $630 for everyman,
woman,and child on health insurance adminis-
tration compared to just over $50 in Japan.
And because so manymore Americans are now
being employed by healthcare entities–mem-
bership in the American Academy of Professional
Coders,alone,has increased by 10,000 this past
year–hospitals keep raising their rates to pay for
all of their labor costs-which,of course,concomi-
tantly pushes up insurance premiums.
The huge growth of the sector is presenting some
interesting political conundrums for theTrump
WhiteHouseandthosemembersofCongresswho
havevowedtorepealObamacare,which,since2014,
hashelpedpropelhealthcarehiringevenmore,when
newfederaldollarsflowedintothesystem,givinghos-
pitals,universities,andcompaniesevenmorereasonto
investinnewfacilitiesandstaff.
Because as more and more municipalities grow
increasingly dependent on the health care sector
to power their economies,there will be more and
more countervailing pressure against reining in
the very healthcare costs that are breathing new
life into their communities,even while they are
simultaneously saddling their citizens with bloat-
ed hospital bills and higher insurance premiums.
As President Trump recently opined,“Who knew
that healthcare was so complicated?”