High Health Care Costs May Impede Employment, Says RAND Economist

The rising costs of health care may be significantly impeding the growth of several industries’ workforces, according to Dr. Neeraj Sood, the Senior Economist for the RAND Corporation.

“Industries with a higher percentage of workers with employer sponsored insurance are hardest hit by rising health care costs,” Sood said during a briefing Monday, citing a report recently compiled through RAND Health.

The report states that during 1987 and 2005, when health care costs spiked, industries that typically provide insurance for their employees, such as construction and hotels, saw their workforces grow slowly or in some cases contract. In contrast, workforces for industries that do not provide health insurance, such as retail and theme parks, have risen at a much faster rate.

Sood noted that this pattern did not exist in Canada, where insurance is provided by the government.

“I think what this establishes is that there is a need for health care reform…the status quo is hurting the economic performance of U.S. industries,” Sood said.