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Economists say rising healthcare costs could lead to you losing your job According to collaborative research from Yale, the University of Chicago, and the IRS, among others, expensive medical care doesn’t just impact patients. It could result in layoffs for workers who never even went to the hospital.



 Rising healthcare prices have a hidden cost: job losses. A new working paper, titled “Who Pays for Rising Health Care Prices? Evidence from Hospital Mergers” and published by the National Bureau of Economic Research, examines the connection between increasing healthcare costs and job cuts. Authored by economists from Yale, the University of Chicago, the University of Wisconsin-Madison, Harvard University, the U.S. Internal Revenue Service (IRS), and the U.S. Department of the Treasury, the research reveals that a 5% increase in healthcare costs is linked to the elimination of 203 jobs and a loss of $32 million in wages. Tragically, 1 in 140 workers laid off in the wake of a healthcare cost increase ends up dying by suicide or drug overdose.


The researchers analyzed data on hospital mergers and discovered that healthcare prices rise by 1.2% two years after a merger. They combined this data with information from the Department of Labor on employer healthcare premiums and IRS data on income taxes from 2008 to 2017, assessing how increased healthcare costs ripple through the economy. They found that rising healthcare costs lead to higher health insurance premiums, and since employers are unable to reduce wages, they are forced to cut jobs.


“Many think that it’s insurers or employers who bear the burden of rising healthcare prices. We show that it’s really the workers themselves who are impacted,” said Zarek Brot-Goldberg, an assistant professor at the Harris School of Public Policy at the University of Chicago, in a statement. “It’s vital to understand that rising healthcare prices aren’t just impacting patients. Rising prices are hurting the employment outcomes for workers who never went to the hospital.”  

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