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Long-term care industry an ‘economic driver’

Researchers at the AHCA used Impact Analysis for Planning (IMPLAN) data software to process economic data from the Bureau of Economic Analysis and 2009 employment data from nursing facilities provided by the Bureau of Labor Statistics.

The IMPLAN software allowed the AHCA researchers to closely examine the reach the long-term care industry has in a variety of regions – from state level to national level and from metropolitan areas to counties.

“This modeling allows you to estimate impact on other industries as well as the impact on your industry,” said Bill Hartung, vice president of research at the AHCA. “It really showed the economic power of the healthcare industry. We are really an economic driver.”

The long-term care industry’s reach extends into other industries such as transportation, food service and real estate.

The AHCA’s report estimates that long-term care facilities, such as nursing homes, assisted living and other residential care facilities, produce $529 billion in total economic activity, create more than 5.4 million jobs and generate more than $60 billion in taxes for state and federal governments.

“There’s no doubt that the long-term care industry is a major source of employment,” said Joshua Wiener, a distinguished fellow at RTI, a nonprofit research agency, and director of the agency’s Aging, Disability and Long-Term Care Program. “Clearly, with the aging of the population, especially with the increase in people 85 and older, the demand for long-term care increases substantially over time. Along with that is a demand for more workers.”

The challenge in the future, say industry observers, will be getting and retaining workers, especially in light of probable state and federal budget cuts. The long-term care industry is heavily dependent on public sector funding, like Medicaid and Medicare.

“In nursing homes in particular,” said Wiener, “72 (percent) to 75 percent of residents have their care paid for by either Medicaid or Medicare.”

“As you begin to make cuts, nursing homes will have a diminished ability to staff,” said David Grabowski, an associate professor of healthcare policy at Harvard Medical School’s Department of Health Care Policy. “They’re going to have to make adjustments, decrease the quantity of workers or decrease the quality of workers. … I don’t think either margin is very appealing from a policy perspective.”


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