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Copyright 1998 by the Wyoming Department of Employment, Research & Planning


Health and Social Services Industries: An Exploration of Two Dynamic Industries

by: Fay Walther and Nancy Brennan


The Health and Social Services industries are dynamic, growing and changing. This article explores employment growth, wages and some of the problems and changes occurring on statewide and national levels in these industries(1). In Wyoming, employment in Health Services is projected to grow by 13 percent from 16,055 in 1996 to 18,112 in 2000, and projected employment in Social Services will grow by 18 percent from 5,250 to 6,169 during this period(2). Several occupations in these industries are among the top 50 projected growth occupations in Wyoming including nursing aides, home health aides, registered nurses and human services workers (3). Some of the factors which generally influence employment growth are the increasing life expectancy of Americans and the increase in chronic diseases related to longevity. There are two problems which are catalysts for change in these industries: poverty, which restricts the availability of health insurance, and the need to contain costs while preserving the quality of Health and Social Services care.

Nationally, projected employment in the Health Services will grow from 9 million in 1994 to a conservative projection of 12 million in 2005, and the Social Services will grow from 2.2 million in 1994 to a conservative projection of 3.6 million in 2005 (4). Employment in the health-care field from 1990 to 1995 had an average annual increase of 3.8 percent, in comparison to the economy as a whole which increased only 1.4 percent(5).

The Health Services industry includes establishments primarily engaged in furnishing medical, surgical and other health services to people (such as hospitals, nursing homes and home health care services). Table 1 shows a complete listing of industries. Examples of occupations in these industries include doctors, registered nurses, nursing aides and home health aides.

The Social Services industry includes establishments providing social and rehabilitation services to people with personal or social problems which require special services, and to the handicapped and disadvantaged (such as offender rehabilitation agencies, child care centers, counseling centers and residential care homes). Please refer to Table 1 for a complete listing. Some examples of occupations in these industries include family counselors, psychologists and social workers.

Statistics from the National Center for Health Statistics (NCHS) of the Center for Disease Control (CDC) help to explain some of the growth in these industries. Table 2 illustrates the increasing life expectancy of Americans.

This increase in life expectancy from 62.9 years in 1940 for both genders to 75.7 years in 1994 represents an increase of 12.8 years (20%). NCHS statistics on nursing home care indicate that the number of elderly persons residing in nursing homes was 1.4 million in 1995. Additionally, the percent of home health care patients aged 65 and over was 73 percent in 1994. The increasing life expectancy of our population influences the need for segments of the Health and Social Services industries devoted to caring for the elderly.

The increase in longevity is related to the treatment of chronic diseases in doctors' offices and clinics (SIC 801), home health care (SIC 808), and hospitals (SIC 806). Specifically, arthritis-related problems result in 35 million physician visits per year(6). Table 3 illustrates in more detail the incidence of chronic diseases by age and gender.

Employment Growth

The percentage of males under 45 years old who have a chronic condition of arthritis is 2.7 percent while the percentage of males over 75 years old with chronic arthritis is 42.4 percent. The percentage of females under 45 years old who have a chronic condition of arthritis is 3.8 percent while the percentage of females over 75 years old is 60.4 percent. More doctors and nurses who treat chronic diseases will be needed as the population ages. Chronic conditions such as arthritis, diabetes and heart disease are treated in doctors' offices and clinics and if they become progressively worse result in home health care or hospitalization. As life expectancy increases, the percentage of chronic diseases associated with the elderly also increases and there are likely to be more employment opportunities for health care providers in geriatric medicine.

Employment in both Health and Social Services is related to the health care of the elderly for long-term physical and mental illnesses. For example, an illustration of the need for individual and family services (SIC 832), doctors’ offices and clinics (SIC 801), nursing and personal care facilities (SIC 805) and residential treatment centers (SIC 836) is reflected by the statistics on Alzheimer’s disease. This disease is ranked ninth in the cause of death among Americans aged 65 and over (7). In some cases, death is preceded by a long-term illness in which the patient is unable to care for himself/herself and in which there may be a need for family counseling to cope with the stresses of the illness. As the population of "baby boomers" continues to age, there is likely to be an increase in the demand for Health and Social Services for a mental and physical disease such as Alzheimer’s.

Expenditures and Wages

Turning from the previous discussion of the employment growth in the Health and Social Services industries to the economic issues of expenditures and wages, there are some important changes which influence the future of these industries. In 1995, national health expenditures as a percent of the gross domestic product was 13.6 percent (8).

If you translate this percentage into dollars, the expenditure was $988.5 billion. Of that amount, public funds constituted $532.1 billion and private funds constituted $456.4 billion. In an article entitled "In Search of an Elusive Truth--How Much do Americans Spend on Health Care?" by David Betson, Notre Dame University (1996), the author states: "Clearly the single most important variable that determines the level of out-of-pocket expenses is age: the older one is, the more one spends." As the American population ages, the Health Services industry is experiencing some major changes to contain costs such as increased utilization of managed care plans and greater emphasis on preventive medicine. Health Services providers seek to maintain the quality of health care while pursuing cost effectiveness.

What are the wages for some occupations in these industries and how do they influence attracting employees into these fields? For Health Services, the Wyoming statewide hourly mean (average) wage is $12.60 per hour. The source for the data on wages is the 1996 Wyoming Wage Survey(9). For Social Services, the Wyoming statewide hourly mean wage is $8.00 per hour. Based on these averages, the wages for Social Services is only 63 percent of the wages for Health Services. Also, there is a considerable range of wages within each industry. The highest average wage for Health Services is $20.30 per hour for professional/para-professional/technical; the lowest average wage is $5.80 per hour for services. In Social Services, the highest average wage is $14.30 per hour for professional/para-professional/technical, and the lowest average wage is $5.90 per hour for services. Since both of these industries are projected to grow, what kind of employees can they attract for Health and Social Services occupations at the lower ranges of pay? If these wages represent entry-level wages with an opportunity for career advancement, some future employees with interests in the medical/social services may be attracted to work in these occupations. However, since the occupations such as nursing aide and registered nurse require different levels of training and licensing, the lower wages may reflect the long term job prospects of some employees.

Another challenge which affects the future of these industries is: how do you include people in basic Health and Social Services who do not have insurance? In Wyoming, about 15 percent of the people did not have health insurance from 1994 to 1996, which is the highest percentage in the region (see Table 4).

In an article on health insurance coverage in 1996, Robert Bennefield states: "An estimated 41.7 million people in the United States or 15.6 percent were without health insurance coverage during the entire 1996 calendar year (10)." He draws a connection between poverty and lack of health insurance: "The poor are more likely not to have coverage. Despite the existence of programs such as medicaid and medicare, 30.8 percent of the poor or 11.3 million had no health insurance of any kind during 1996." He further states that "employment is the leading source of health insurance coverage." The lack of health insurance directly affects the costs of providing Health and Social Services to people in poverty.

Conclusion

In conclusion, the Health and Social Services industries are experiencing some important changes such as increased employment growth, a wide range of wages within each industry and large expenditures of private and public money. In Wyoming, the projected growth of 13 percent in Health Services and 18 percent in Social Services offers employment opportunities for workers in the state. Some of these jobs will be in geriatric medicine as the population ages and the percentage of chronic diseases increases. Some occupations such as nursing aides, who provide direct patient care of the elderly and sick, have lower average wages of $7.29 per hour in Wyoming (see Table, for more wage information).

There is a connection between poverty and the lack of health insurance: "the poor are more likely not to have coverage." There is another connection between age and expenditures: "the older you are, the more you spend." It will be interesting to follow the shifts toward managing costs and maintaining quality in the years ahead. As more Americans live longer, the Health and Social Services industries will be challenged to treat the physical and mental diseases associated with longevity. The dynamic changes in these industries offer exciting possibilities for applications of research to reduce costs and maintain the quality of Health and Social Services care for all Wyoming residents.


1 The Health Services industry is Standard Industrial Code (SIC) 80 and the Social Services industry is SIC 83.

2 Research & Planning, Department of Employment, Industry & Occupational Projections.

3 Research & Planning, Department of Employment, Wyoming 1994: What does the Future have in store for Wyoming’s Labor Market?.

4 U.S. Department of Labor, Bureau of Labor Statistics, Monthly Labor Review, November 1995.

5 U.S. Industry & Trade Outlook ‘98.

6 Arthritis and Rheumatism, May 1998.

7 Monthly Vital Statistics Report, Vol. 46, No.1, Supplement 2.

8 United States, Health , 1996.

9 Research & Planning, Department of Employment, Wyoming Wage Survey, 1996.

10 Economics and Statistics Administration, U.S. Department of Commerce, Current Population Reports.

Fay Walther is an Economist, specializing in Labor Market Information (LMI) projects with Research & Planning; Nancy Brennan is an Economist, specializing in the Employment Statistics (ES-202) program with Research & Planning.


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