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Health system jobs dominate

Five of the state’s  12 largest employers are health care systems.

The number of people employed at Atrium Medical Center in Middletown is one of the reasons health care is one of the largest industries in Ohio.

file photo The number of people employed at Atrium Medical Center in Middletown is one of the reasons health care is one of the largest industries in Ohio.

ENLARGE PHOTO

file photo The number of people employed at Mercy Hospital in Fairfield is one of the reasons health care is one of the largest industries in Ohio.

ENLARGE PHOTO

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By Ben Sutherly, Staff Writer 9:37 PM Monday, December 19, 2011

Health care not only has surpassed manufacturing as a job provider but it also is changing the makeup of the state’s most dominant companies.

Five of the 12 largest employers in Ohio are now health care systems, including Cincinnati-based Catholic Health Partners, which ranked 3rd with an estimated 30,300 workers.

And it is six of 12 if you count Ohio State University, which is a source of more health care jobs than higher education jobs. Of the university’s 28,241 nonstudent jobs, more than 18,000 are at the OSU Medical Center.

Health care’s dominance is reflected in manufacturing’s decline. A decade ago, only three health care systems ranked in the top 12, while big manufacturers such as General Motors Co. and Delphi Automotive ranked first and third respectively. Today, those former industrial giants are off the list.

The good news for Ohioans is that health care can’t be outsourced as easily as manufacturing.

It could, however, leave the state vulnerable in other ways, some observers say.

“It is a very dangerous phenomenon that demonstrates the need for a broader economic base that can help us pay for health care costs,” said Ned Hill, a Cleveland State University development economist who describes himself as one of the state’s “leading health care grumps.”

“At the end of the day, (health care) reshuffles dollars in the local economic base; it doesn’t necessarily add to them,” Hill said.

Part of health care’s dominance of the top tier of Ohio’s employers can be attributed to industry consolidation, including hospital mergers and affiliations that have created ever-growing health systems. But the sector also has shown remarkable resilience during the economic downturn. Ohio saw overall employment growth of more than 4 percent between late 2007, when the recession began, and the first quarter of 2011.

“Health care is local,” explained Mary Yost, spokeswoman for the Ohio Hospital Association. “Our services aren’t going to be outsourced and moved overseas. We are going to have people who are at the bedside, in the clinics providing care. ... Those people working in Ohio are paying income taxes, they’re buying goods and services in their communities, and the hospitals are as well.”

Rob Nichols, spokesman for Gov. John Kasich, said the state hasn’t “properly leveraged” health care to the extent it can. The administration for the past six months has been pursuing a “medical corridor” along Interstate 71 to do just that, he said.

“How do they (hospitals and health systems) work collaboratively in the name of job creation?” Nichols said. “Heretofore, that hasn’t been part of their mission. (Health care) is a huge part of Ohio’s economy. By working together, we’re going to be able to create a lot of jobs out of it.”

Nichols provided no specific goals or benchmarks for the medical corridor project, either in terms of job creation or the additional value of economic activity. He said the project is still in its early phases but will focus largely on sales, products, research and development.

Ohio still a manufacturing state

Health care surpassed manufacturing as the industrial sector that employs the most people in 2009, and no manufacturers ranked among the state’s 12 largest employers this year. That is in stark contrast to a decade ago, when not only were GM and Delphi on the list, but also General Electric Co. and Ford.

There are even more workers in state and local government in Ohio than in manufacturing, a recent phenomenon that reflects the long, steady downturn.

The manufacturing sector has shrunk from 760,800 jobs in the fourth quarter of 2007 to 634,800 this year, according to an analysis of Ohio labor statistics by Alan Tonelson, an economic policy analyst with the U.S. Business and Industry Council, a business group that has been critical of U.S. trade policy.

Employment, of course, is not the only measure of an employer’s contribution to the economy.

Andrew Doehrel, president and CEO of the Ohio Chamber of Commerce, said the absence of manufacturers from the state’s top tier of employers doesn’t threaten Ohio’s identity. Fewer workers are responsible for greater manufacturing output, Doehrel said, adding that health care hasn’t undergone such automation.

“We are still a manufacturing state,” Doehrel said. And, in fact, manufacturing in 2010 still accounted for 16.2 percent of the state’s gross product, compared with 9 percent for health care. I don’t think we’re so top-heavy in one area that we’re going to fall off a cliff.”

Concerns about health care

Ohio’s health care sector has many factors working in its favor. Ohio’s population is aging — nearly 140,000 baby boomers in the state now turn 65 every year — creating additional demand for health care services. And medical advances have in many cases helped to lengthen life, and improve quality of life.

“We have cancer survivors now that we didn’t have 20 years ago,” said Yost of the hospital association, whose data show the state’s number of hospital employees grew 15 percent in the past five years, reaching 274,840 in 2011.

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