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April 21, 2015

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If an industry is immune to recession, it’s health care

Baby Boom ensures need for more workers

If Nevada is a boom-or-bust state, the economic meter is clearly pointing at bust.

But despite cuts in Nevada’s leading industries, health care continues to create jobs, fueled by another boom: The aging of Baby Boomers.

In Nevada the health care industry is expected to gain 11,700 jobs from 2007 to 2011, while the retail and hospitality sectors are each expected to lose more than 12,000 jobs over the five-year span, according to a recent forecast by the state’s Employment, Training and Rehabilitation Department.

The construction industry is predicted to be the hardest hit in the state economists’ forecast, shedding 38,800 jobs.

The forecast was based on demographics and the assumption of population growth, said Jered McDonald, a state economist. By 2011 the population age 65 and above is expected to grow 20 percent, to 371,000. The older population will require more health care services.

UNLV economist Keith Schwer said the aging of Baby Boomers would affect the entire health care industry, not just particular sectors. However, despite health care’s expected growth, don’t expect it to offset other industries’ job losses, he said.

Overall, state economists expect roughly 89,000 jobs will be lost from 2008 to 2010. In 2011 the state expects almost 13,000 jobs to be created across the state, except in real estate and construction, which are both expected to continue losing jobs.

Nevada’s unemployment rate in December hit 9.1 percent, a 25-year high for the state.

On the national level, health care gained 19,000 jobs in January, continuing its upward trend, the Labor Statistics Bureau reported. In 2008 the industry gained 30,000 jobs a month, according to the bureau.

Families with young children and pregnant women are also placing demand on the health care industry, Southern Hills Hospital Chief Executive Mike Johnson said. Women’s services — such as obstetrics — and pediatrics are highly used at the hospital, he said.

But even so, economists’ forecasts can be a bit misleading, he said.

“When you say health care jobs, you have to be thinking about pharmacies, nursing homes, home health and rehabilitation, and hospitals and physician offices — see what I’m saying?” Johnson said. “So it encompasses a lot of different things. Those numbers are also predicated on some growth assumptions of population that may or may not come to fruition as a result of the economy.”

Those assumptions, he said, are based on an aging population.

“Over the next 10 to 15 years, you’re going to have more and more Baby Boomers who are hitting 65 and they require more health services,” he said. “So, yeah, there will be a growth of jobs, but the distribution of jobs, which will be interesting to watch, a lot of it is really driven by population and age. That’s an issue our whole country will be facing,” said Johnson, who is also a registered nurse and specializes in geriatrics.

In 2008 health care spending nationwide reached $2.4 trillion, and is projected to reach $3.1 trillion in 2012, according to a report by the National Coalition on Health Care. By 2016 spending on health care is expected to reach $4.3 trillion.

A version of this story appeared in this week’s In Business Las Vegas, a sister publication of the Sun.

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