As health industry thrives, so does city

October 04, 2006|By JAY HANCOCK

Union Memorial Hospital is consolidating and expanding its Weinberg Heart Institute. That means hiring.

Doctors expect to perform 1,050 open-heart surgeries this fiscal year, up 30 percent. Artery-clearing angioplasties are forecast to increase by even more, so the institute needs 37 new nurses, lab technicians and other pros on the payroll when the facility opens next month, says spokeswoman Debra Schindler.

So goes the Baltimore economy.

Medical and social welfare organizations, which account for less than a seventh of the employment in Baltimore and its surrounding counties, have driven a stunning 64 percent of the region's job growth the past five years. Metro Baltimore has always been a preferred health care vendor, but its role as doctor to Maryland and the world has gotten even bigger.

That's a blessing and a risk.

It's a blessing because, without growth in the medical industry and its relatively high-paying jobs, metro Baltimore's economy would feel more like Detroit's these days.

It's a risk because Baltimore is more dependent on medical employment than ever. Along with government and higher education (two other Baltimore specialties), health care is one of the few sectors yet to be hit hard by restructuring, downsizing and offshore outsourcing.

There is no sign that an upheaval will happen soon. But this town, while continuing to build its admirable medical economy, might remember the cliche about eggs and baskets.

Of the 33,000 jobs added in metro Baltimore during the past five years, 21,000 were in health care and social assistance, according to the Labor Department. (The government lumps social assistance and medicine together, but health jobs predominate by far.)

Such positions, which include doctors and medical-research scientists, nurses' aides and drug sales persons, make up 13 percent of the region's employment. That's up from less than 10 percent in 1990.

Johns Hopkins Hospital has added 420 jobs in numerous departments during the last year and now employs close to 11,000, says Bonnie Windsor, senior director for human resources. Baltimore's University of Maryland Medical Center has added more than 500 positions in two years and employs the equivalent of 5,150 full-time workers, says spokeswoman Joan Shnipper.

Like groceries and toiletries, health care tends to be recession-resistant. Everybody gets sick. The aging population is getting sicker. Partly as a result, the country is sinking unprecedented resources into medicine, and health care employment is growing almost everywhere.

In an important article in a recent Business Week, Michael Mandel, the magazine's chief economist, writes: "If you really want to understand what makes the U.S. economy tick these days ... take a short trip to your local hospital." The health care business, he says, accounted for all the net growth in U.S. private-sector employment since 2001.

Metro Baltimore benefits disproportionately from the medical boom because, in addition to caring for residents, it "exports" enormous amounts of care and research. Nearly a third of admissions to Johns Hopkins Hospital in its most recent fiscal year came from outside Central Maryland, according to a spreadsheet the hospital sent me. Organizations in Baltimore City alone got $100 million in cancer-research grants in fiscal 2004, the most recent data available from the Census Bureau.

Whether or not soaring health care employment is a wholly good thing, of course, is debatable.

Economists disagree whether medical spending should be booked as a maintenance cost on the human financial statement, in which case it would be an economic negative, or as a positive capital investment in human potential and longevity.

In any event, there are big reasons to doubt that the country is getting its money's worth. The United States spends far more on medicine than other developed nations, as a portion of its economy, with poorer results.

And whether or not the money is well spent, it cannot keep increasing. Expansion of the Medicare program for retirees is unsustainable. Employers are cutting back on health care coverage. Not every hospital can add a new wing or open a new "institute" every few years. Someday, maybe within a decade, medicine will cease to be a growth industry.

But until then, Baltimore is in the sweet spot.

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