Alaska's health care industry: one private economic sector reporting growth.

• Author: Bohi, Heidi
• Position: HEALTH & MEDICINE

Health care and the economy, the top two concerns of Alaskans and the rest of the country, are issues that pivot around each other. It is impossible to talk of fixing the economy without fixing health care. At the same time, health care reform cannot happen without health care workforce reform because adequate access to these primary care services is the backbone of any solution--and that takes manpower.

Besides providing critical medical services, health care fuels an increasingly large segment of the U.S. and statewide economy. It represents 15 percent of the nation's gross national product and is the single largest sector for job growth. In Alaska, it is also one of the largest and fastest growing industries. Health care topped $5 billion in 2005, which was one-third the total value of North Slope oil exports that year.

EMPLOYMENT CLIMBS

Between 2000 and 2007 alone, employment in the health care industry increased 40 percent, and from 2008-2009 there were 1,000 new jobs filled--a number that labor economists expect to see year after year. It also accounts for 8 percent of the state's workforce, employing 29,000 people statewide, according to the Alaska Department of Labor and Workforce Development.

As the only private sector industry that is reporting growth, economists say the gaining numbers are especially remarkable as the rest of the state starts to feel the pinch of the economic crisis and other industries are either reducing their workforce, or at the very best, remaining flat, Dan Robinson, an economist for the state says.

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This accelerated growth is not news. For more than 30 years, policy makers have watched in amazement as the numbers continued to climb measurably and consistently. Although there were two years between 2006 and 2008 where it seemed like the growth might slow down, Robinson says, by 2008 the trend was again toward acceleration and there are no signs of that changing.

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Why is it continuing to increase, despite troubling and uncertain economic times? "These are the fun questions," Robinson says, adding that he has tracked the industry for the past eight years and continues to be amazed at how it supports such sustainable growth year after year. "I keep expecting it to exhaust itself, but the longer something does one thing, the harder it is to imagine it doing something else."

NOT DISCRETIONARY

Because health care is not a discretionary expense, when Alaskans cut back on their household budgets, it does not typically affect this expenditure, which is one reason that it is not surprising that it remains strong, Robinson says. Supply and demand is also part of the equation for explaining employment increases, and demographics continue to be a major contributor to the growth, especially as the state's population continues to age, a significant factor impacting demand. Although 6.8 percent of Alaskans are older than 65--compared to 12.4 percent nationwide--the 65-plus population grew by 50 percent between 1996 and 2006, bumping it from 30,440 to 45,489, and this trend will only accelerate into the future. This number is expected to double by 2020, before nearly tripling in 2030. At the same time, Robinson says, technological advances continue to boost the demand for services and the number of medical procedures grows as more remedies are found for health...