New Report Finds That Potential Medicare Cuts Could Lead to Nearly 22,000 Jobs Lost in New Jersey

WASHINGTON, Sept. 12, 2012 /PRNewswire-USNewswire/ -- A new report found that more than 21,820 healthcare and related jobs could be lost in New Jersey by 2021 as a result of a 2 percent cut in Medicare spending mandated by the Budget Control Act of 2011. Nationally, more than 766,000 jobs would be lost, according to the report released today by the American Hospital Association, the American Medical Association and the American Nurses Association at a press conference in Washington, D.C.

The report, produced by Tripp Umbach, a firm specializing in conducting economic impact studies, measures the anticipated effect of these cuts in Medicare payments on healthcare providers and other industries. The Tripp Umbach model reflects how reductions in Medicare payment for healthcare services will lead to direct job losses in the healthcare sector, reduced purchases by healthcare entities of goods and services from other businesses and reduced household purchases by workers who lose their jobs. As the impact of these cuts ripples through the economy, jobs will be lost across many sectors beyond healthcare.

"These cuts would have a significant impact on the well-being of our hospitals, their patients, their communities and the entire Garden State economy," said NJHA President and CEO Betsy Ryan. "The healthcare community recognizes the importance of reducing the nation's deficit, but hospitals have already been forced to absorb billions in Medicare cuts under the Affordable Care Act. These additional cuts would go far too deep into a critical component of our safety net and our economy."

Under the Affordable Care Act, New Jersey hospitals have seen their Medicare payments cut $4.5 billion over 10 years, with nationwide cuts totaling $155 billion.

The Tripp Umbach model estimates that in 2013 – the first year of the so-called "sequestration" cuts – about 14,126 jobs will be lost in New Jersey and 496,000 nationwide. The report found that the job losses will affect many economic sectors beyond healthcare.

The healthcare sector has long been an economic mainstay providing stability and growth even during times of recession. Data from the U.S. Bureau of Labor Statistics shows that healthcare created 169,800 jobs in the first half of 2012 and accounted for one out of every five new jobs created this year. In New Jersey, hospitals employ about 140,000 individuals, and the healthcare sector is the second-largest employer in the state. Only government – at the combined federal, state, county and municipal level – provides more jobs in New Jersey than healthcare. 

Tripp Umbach designed a customized model based on the national economic impact models developed by MIG IMPLAN, as well as previous impact studies.

The Tripp Umbach report and other resources are available at NJHA's annual economic impact report, detailing hospital jobs and other economic benefits by county and for individual hospitals, can be found at

SOURCE New Jersey Hospital Association