THE CLINTON HEALTH PLAN : Weak Prognosis for Jobs : Reforms Could Put Big Dent in Industry’s Hiring Growth

For many job hunters in the health care field, the Clinton Administration’s reform proposals could be a bitter pill.

Experts say the current tumult in the industry and the recent slowdown in its employment growth--following more than a decade of booming expansion--will worsen if the President’s plans are adopted.

“If people are saying, ‘We want cost containment,’ you can translate that into slower job growth. You don’t get one without the other,” said Harold S. Luft, a professor of health economics at UC San Francisco.

Signs of a slowdown are already evident. Last week, a fourth Orange County hospital announced that it would cut the pay of the majority of its nursing staff. Hospitals in San Diego and Los Angeles have laid off scores of nurses, a profession that witnessed a shortage for more than a decade in Southern California.

Amid the massive shifts expected within the health care industry, some areas are expected to thrive. In particular, opportunities should expand for people who provide primary care--including family doctors and other generalist physicians, nurse practitioners and physician assistants.

Also, new regulatory and quality-control jobs should emerge in government and the private sector.

Still, the overall employment picture for health care is a big comedown from the recent past. Since 1980, private-sector health care services have led the way in U.S. employment growth, producing 3 million new jobs, or one in every six new positions in the economy.

Conflicting forces are driving the trends. On one hand, the Clinton program would provide health coverage for 37 million Americans who are now uninsured.

Even though many of those people already receive some medical care--often emergency treatment at hospitals--they probably would visit doctors and other health care providers more often after becoming insured.

At the same time, economists say, the cost controls envisioned in the Clinton proposals would accelerate the current shakeouts in the insurance, hospital and drug industries.

Here is a rundown on job prospects in some of the industry’s major sectors.

Doctors and Other Health Care Practitioners:

Specialists are out. Generalists are in.

That is one of the main pushes in the Clinton reform package. The proposals intend to reverse the heavy emphasis the current system places on high-priced specialists such as cardiologists and urologists.

Instead, the proposals would place family doctors, nurses and other primary care providers into the role of “gatekeepers.” Patients would normally go to their primary care provider and would see specialists only if they were referred there by the gatekeeper.

In addition, health care reforms would probably put more responsibility in the hands of professionals such as pharmacists, physician assistants, nurse practitioners and other non-doctors, creating more job opportunities in those fields. “We may see a return to the old-fashioned school nurse who gave you shots,” said labor economist Audrey Freedman.

If restrictions are placed on seeing specialists, how will they hang on to business? Demographic trends, including the aging of the population, would help.

And some specialists would encourage patients to bypass their gatekeepers and come directly to them, even if that meant consumers would pay for the service out of their own pockets.

Nagi K. Saied, a dermatologist in Mission Viejo, said he already advertises his services as a hair replacement expert to gain “direct access” to patients. “I’m not at all concerned” about losing patients, he said.

Health Insurance

Insurance giant Cigna Corp. surprised analysts last week by announcing layoffs of 1,000 people in its health insurance operations--about 4% of that division.

It was an unexpected move because Cigna’s business has been strong and the Philadelphia-based company is regarded as a sure survivor under federal health reform. But Cigna said it must become leaner still to prepare for the changes Clinton has in store.

Many analysts believe that Cigna’s layoffs mark only the beginning of a painful contraction that the reforms would make necessary in health insurance--an industry that directly employs more than 1 million Americans. That number doesn’t count the 500,000 or more independent health insurance agents, who expect to be among those hit hardest by the changes.

Under Clinton’s proposed system of regional health alliances, consumers would have one-stop shopping for a uniform package of benefits, so there would be no need for a large infrastructure of agents to explain and market the plans.

At the insurance companies themselves, medical underwriters and actuaries--well-paid professionals who weigh the relative riskiness of individuals or groups--could become nearly obsolete because the reforms anticipate a “community rating” system where everyone would be covered and all would pay the same premium.

With simplified forms and standardized benefits, administrative costs--and personnel--would be sharply pared back.

That’s good news for the overall efficiency of the system, say the economists, but bad news for the individuals who hold those jobs.

Some of the cutbacks would be offset by the need for more managed care professionals, who oversee the performance of doctors, hospitals and other care providers, with an eye toward keeping costs low and quality high, said Lawrence Mayewski, senior vice president at A.M. Best & Co. But overall, he added, there would be a loss of jobs.

Pharmaceuticals/Biotechnology

The Clinton plan does not offer relief for the U.S. pharmaceutical industry, already in the midst of a massive restructuring. The industry could lose 15% to 20% of its more than 300,000 jobs during the next several years as major drug makers cut costs, industry analysts say.

But even though the Clinton plan doesn’t figure to help, it doesn’t deserve most of the blame. The main reason for the industry’s woes is the growth of managed care insurance programs, which have forced drug makers to become more competitive and sharply discount their products.

The outlook is brighter for the biotechnology industry, which employs about 40,000 people in California and nearly 100,000 nationwide. Analysts say the industry should continue to add jobs--but not nearly enough to offset the losses at the drug companies.

Hospitals

The biggest plus for hospitals is that insurance would be extended to the estimated 37 million uninsured Americans. That would help hospitals fill empty beds--a big problem in California and nationwide. It would also mean hospitals wouldn’t have to eat the costs of providing medical care for the uninsured, as they do now.

However, the continued emphasis on controlling costs would probably accelerate the current trend of hospital closings. Even the survivors would need to cut jobs in areas such as accounting, marketing and data processing.

Times staff writers David R. Olmos and Anne Michaud contributed to this report.

Health Services Employment

Health care industry employment is one of the fastest-growing job categories in the country. Annual average national employment figures, except latest, in millions of employees:

1958: 1.37 million

August, 1993: 8.92 million

Source: Labor Department

California Health Care Employment

Total health care employment in the state has been rising.

Average number of people employed in California’s health service industry, in thousands:

1992: 821,700