Obama to spend $1 billion to bolster an already-expanding part of US economy

The Obama administration has announced its next effort in the “We Can’t Wait” strategy of using executive authority to conduct end-runs around Congress.  The White House, through Health and Human Services, will spend $1 billion to bolster hiring in the health sector.  But does that sector need the help — and will it actually go toward new jobs?

The Obama administration will announce Monday as much as $1 billion in funding to hire, train and deploy health-care workers, part of the White House’s broader “We Can’t Wait” agenda to bolster the economy after President Obama’s jobs bill stalled in Congress. …

Health-care employment is growing steadily, with more than 300,000 jobs added in the past year, according to theBureau of Labor Statistics. It has been one bright spot in the economy as unemployment has hovered around 9 percent. The bureau projects total employment in health care to grow by 3.2 million jobs by 2018, more than in any other sector.

Even if one accepts the notion that government can create private-sector jobs through subsidies, is this the best use of such funds?  The health-care sector is about the healthiest in the nation at the moment.  We have an oncoming crunch in primary-care physicians, thanks to an absurdly distorted third-party-payer compensation system that makes general medicine a poor choice for those in medical school, but general hiring in this sector hardly needs boosting.

However, as described by the Washington Post, the new funding seems unlikely to produce many new jobs anyway.  Instead, it looks like a way for the Obama administration to bail out local governments … again:

Grants can go to doctors, community groups, local government and other organizations that work with patients in federal health-care programs such as Medicare and Medicaid. The funds are for experimenting with different ways to expand the health-care workforce while reducing the cost of delivering care. There will be an emphasis on speed, with new programs expected to be running within six months of funding.

So they’re shovel-ready, are they?  We have heard that claim from this administration more than once in the past.  How much of the money will go to “local government,” and under what conditions?  That sounds suspiciously like the state block grants that amounted to bailouts in 2009 and 2010 in an effort to artificially restrain local governments from cutting staff across the board.  For that matter, what kind of “community groups” will get this funding?  Are these non-profit health providers, or community organizing groups that play in politics more than they do in healthcare delivery?

The one data point missing from the Post’s report: how many new jobs this billion-dollar boondoggle will deliver.  The Obama administration apparently has no idea.  Instead, recess-appointed CMS chief Donald Berwick and his team promise that they will direct innovation with the funding to transform the health-care sector:

“We have a wealth of good ideas in health care, but the big challenge is spread,” Berwick said. “This will be seed money to get innovation to go further. This is venture capital to grow good ideas to scale.”

The Center for Medicare and Medicaid Innovation, created as part of the Affordable Care Act, will administer and oversee the program, called the Health Care Innovation Challenge.

Maybe the people who have run Medicare and Medicaid into a massive entitlement disaster aren’t the people who should be directing innovation.  Perhaps the government should get out of the way of real innovators and let the market determine how best to deliver health care — because when the third-party payers get out of the way, the market seems to find its way to efficiency and innovation.  In fact, based on this report, it looks as though the Obama administration will spend $1 billion just to reinvent the retail clinic wheel.

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