The Healthcare Bubble and How to Survive It
Why can't new nurses get jobs? Why are my insurance premiums rocketing up? Why is U.S. healthcare so much more expensive than healthcare anywhere else? Why is my hospital adding two new wings during a recession? The answer: the healthcare bubble. What it is and how to survive the "pop."Is there a healthcare bubble? The experts waffle, but facts are facts; between 1999 and 2011, government spending on healthcare increased 240 percent while GDP increased 62 percent. Health insurance premiums, according to the Kaiser Family Foundation, have increased 168 percent between 1999 and 2011 while earnings increased only 50 percent (Foy, 2012). Such vast and rapid increases are not sustainable. “The unfortunate fact is that Americans spend twice as much on healthcare as people in other developed countries, but receive lower quality care and less efficiency” (Colombo, 2012). When value becomes detached from valuation, bubble problems start. Why we have a bubble is the subject of another article but we can see the effects in the proliferation of MRI machines, hospital wings, and new nurses (like myself). The indisputable truth is that all bubbles must pop.
Don’t panic yet, however. Bubbles are part of the modern economic cycle – observe the dot com bubble, the housing bubble, Japan’s economic bubble. As this blog by Stan clearly articulates, bubbles have some benefits – increasing incomes and standard of living and improving access to certain technologies. Yes, they are painful when they pop – ask anyone who has sold a house in the last five years. But, big picture, there’s not a lot we can do to stop them. As Stan says, “Unfortunately, however, bubbles are difficult to detect as they occur because they typically begin with modest and innocent optimism. That makes bubbles inherently difficult to stop a bubble from forming. Besides, who wants to be the guy taking away the punch bowl as the party just gets started?”
I don’t know when, how, or even if the healthcare bubble will pop. Perhaps America will grow into its ballooning healthcare. I have a feeling that sequestration will have something to do with it - the abrupt reduction in Medicare and Medicaid payments that will be happening in January (Anderson, 2012). There will always be a need for healthcare but perhaps not in its current bloated state. Looking ahead, here are 6 tips to surviving…
- Enjoy the bubble while you can and be prepared for the pop. Enjoy the good times now and save what you can for a rainy day.
- Make yourself indispensable. If your company had lay-offs, how high on the totem pole would you be? I would like to think they will always need floor nurses but I’m not sure how cuts will happen.
- Have a Plan B. Do you have another talent you’ve been dying to try? Another iron in the fire?
- Don’t get caught up in other bubbles. There is also an education bubble going on right now (Colombo, 2012). Oh, go ahead, get educated… but be conservative and do what you love. Don’t max out your loans on a degree that may leave you high and dry.
- Don’t panic and don’t blame. We will all be going through this together – doctors, nurses, hospitals, MAs, CNAs, CNSs, NPs, PAs, and all the rest of our wonderful alphabet soup.
- Get informed and involved! Be a change agent and find ways to help reduce wasteful expenditures in your healthcare organizations.
Last edit by Joe V on Oct 21, '12
siRNita is a recently graduated floor nurse who survived the education bubble.
From 'Rochester, MN, US'; Joined Feb '12; Posts: 26; Likes: 47.1Oct 21, '12 by zacariasThis article is not encouraging for me. I am not enjoying the "bubble." Do to depression and anxiety, I have been floundering in nursing for the last few years and am currently unemployed hoping beyond hope that I will work as an RN in a hospital again. I am an intelligent, competent RN with excellent assessment skills not being used now.
This article makes me even more scared that if I don't hurry and get my "stable" job, I may be still unemployed when the healthcare bubble "pops"....and I'll be even worse off than ever.9Oct 21, '12 by TheCommuter, ASN, RN Senior ModeratorThank you for writing out your insights.
Bubbles come and go; they form before bursting with catastrophic aftermaths. Let's see...we've had real estate bubbles, stock market bubbles, dot com bubbles, and college/student loan bubbles. I am convinced that a healthcare bubble has been forming over the past few years, and its eventual burst is going to be ugly.9Oct 21, '12 by RNGriffinWhat you call a bubble is in fact simple inflation. People have begin to categorize every industry with high revenue and sustainable expense a bubble. Unlike the housing bubble, healthcare is not one that will simply diminish without consumer spending. The housing bubble was developed as a result of individuals being over optimistic on their future earning potentials. Healthcare organizations are cautious to over higher or spend, which you will see in our staffing and utilization reviews. People will always need healthcare. A technical bubble without the revenue nor population may be the insurance and pharmaceutical bubble. As consumers become more savvy with sites such as mayclinic alternative medicines may become more popular. But, to foresee a economic downturn with healthcare in general, no. Hospitals will come and go, as they always have but they will just make it easier for organizations to monopolize the market...8Oct 21, '12 by BrandonLPNI would guess any nurse currently licensed and working will survive a near future "bubble burst". Currently unemployed new nurses might be another story....
And I would add that new nurses should choose wisely when considering long term prospects. Acute care hospital nursing is an
area that *everybody* wants and won't see much growth. LTC and rehab is an area *few* want but will see massive growth. Weigh your choices accordingly.12Oct 21, '12 by SummitRNSorry OP, but you are trying to predict a future that already happened.
Plenty of hospitals closed down wings and laid off workers during the recession, so the article premise that everyone was expanding is bunk.
The patients aren't going away. There are going to be MORE patients shortly as access improves. Spending might not continue to climb, but it probably won't drop drastically. But that doesn't mean a rosy outlook for medical professionals. The bubble wasn't healthcare as an industry; it was the perception of the healthcare job market.
The bubble was ALWAYS on the labor education and credentialing side. Media hype repeated fanciful predictions for the medical job market as predicted by hack-analysts. This created perception that the medical industry could absorb new labor infinitely and was recession proof. With so many people out of good jobs (or any job) from the dot-com bust and again in the 2008 collapse, this big-lie was fed upon by the desperate and repeated by the marketing departments of many education institutions (particularly for-profits) who expanded to take the loan money of these the under/unemployed seeking a better life.
Nobody stopped to ask the industry if they could hire forever. They couldn't. We saw the results. The bubble already burst years ago. The situation is starting to become common knowledge.Last edit by SummitRN on Oct 21, '123Oct 21, '12 by brandy1017The only people who can afford healthcare these days are the ones who have govt coverage, the rest of us can't afford the thousands of dollars in out of pocket costs. People only get healthcare when they're at death's door and then if they live after will have to declare bankruptcy because they won't be able to pay the debt!2Oct 21, '12 by RNGriffinQuote from brandy1017This is not true for the majority. I don't know where you are gathering your statistical data from, possibly some biased news channel. But, most individuals strive to remain debt free and out of bankruptcy. Not to mention, most individuals seeks health insurance to maintain health rather than attempting to combat insurance companies for healthcare when there is a terminal illness. Critically thinking, how do you think it's possible for those w/o health insurance to know when they are "knocking on deaths door"? Do you really think EMTALA is covering the various lab exams you expect? Your idealistic thinking that most are Govt insured shows me you're commenting on biased political basis not evidential facts!The only people who can afford healthcare these days are the ones who have govt coverage, the rest of us can't afford the thousands of dollars in out of pocket costs. People only get healthcare when they're at death's door and then if they live after will have to declare bankruptcy because they won't be able to pay the debt!