A new report out from the left-leaning Commonwealth Fund finds more than 32,000 jobs could be lost in Kentucky by 2026 if the U.S. Senate passes its proposal to repeal and replace the Affordable Care Act. Most of those jobs would be in healthcare, but the report found other fields, like real estate, could also be hit.
The Congressional Budget Office estimates nationwide, 22 million fewer people would have insurance under the Senate’s Better Care Reconciliation Act. Insurance costs for some people–like older people and those living in rural areas–would increase.
And these factors combined–fewer people insured and higher medical costs–could result in fewer people seeking care.
Economic Trickle Down
The report found the brunt of the about 32,100 job losses would affect doctor’s offices and hospitals, which would likely cut back staffing because of decreased demand.
“The health insurance money goes toward to help hospitals, doctor’s offices,” said report author and George Washington University public health professor Leighton Ku. “But in addition, it’s used to employ staff and purchase things like medical equipment, pay for the space the doctor’s office is in.”
And that means jobs in fields like construction and real estate could also take a hit.
Louisville real estate broker Seth Edens said he can see how there might be less work in real estate, if the medical industry begins shrinking. He works primarily with physician practices looking for medical office space.
“[Medical providers] might start to draw back and dig down their heels and stay in one spot. We saw that back in 2008, when the market took a tank,” Edens said.
Louisville’s Medical Real Estate
Getting an office in Louisville’s medical corridors like Dupont Circle in St. Matthews is expensive, Edens said. Even so, many medical practices he works with want satellite offices located there.
But if there are big cut backs on Medicaid and doctors see less private insurance money coming in, that might change. And then there’s the potential doctors might be giving away more free care. A separate report from the Commonwealth Fund found the amount of uncompensated care from health care providers would more than double if the House health care bill–which is similar in many ways to the Senate version–becomes law.
Edens said it’s common for the cost of renting a space to a health care practice to be much more than office space–the suites are often outfitted specially for medical uses. But if a tenant moves out and the market isn’t doing well, the landlord won’t be able to charge as much in rent.
“You get these buildings that are 5,000 square feet and it’s $36 a square foot in rent,” Edens said. That price, he said, is because of the upfront costs landlords pay to have office space fitted for a medical practice. “At that end of the 10 year [lease] term you have to look at the market, and maybe you’ll never be able to get $36, and maybe it’ll back down to $21 [a square foot].”
But Edens doesn’t think his job will be one of the 32,100 lost if the report’s predictions come true.
“You can always go back into helping [doctors] tighten up their leases, maybe consolidating two locations into one, so I feel like there will always be an opportunity for what I do,” he said.