Arizona’s health care sector growing at rapid pace with demographics playing a role

Aug 8, 2023, 4:35 AM | Updated: 8:20 am

Medical professional taking blood pressure (Pexels)...

Medical professional checking blood pressure (Pexels)


PHOENIX — Arizona’s health care sector is incredibly important to the state’s economy, and a new report finds it’s expected to keep growing.

That report was done by the Common Sense Institute, which measured the industry’s impact.

“The health care sector is the largest single sector in the state,” CSI Research Director Glenn Farley said in an interview with KTAR News 92.3 FM. “It’s between 10-20% of the state’s total economy.”

CSI also projected the ways the sector will continue to develop in the coming years.

“Based on the data we’ve seen and the modeling we’ve done, the sector is poised to grow significantly faster – about 50% faster – than the state’s overall economy over the next decade or so,”Farley explained.

“We’re forecasting it’s going to grow at about a 3% [per year] rate… the Arizona economy’s growth rate is about 2-2.5% per year, and we expect that to continue as well.”

He added while that rate could slow slightly, health care is expected to continue its fast upward trend.

Demographics influencing Arizona’s health care sector

What’s behind that expected growth? Farley said they found demographics are a big factor.

Older people require more health care, and Arizona’s pre-existing reputation as a destination for retirees is just the start.

“Arizona has a large population that’s 65 and older,” Farley said, “and that population group is poised to grow faster than any other population group due to the ongoing demographic transition that the United States is currently embarking on.”

This growth could present some challenges for Arizona, however.

“Growth can slow, even as demand takes off,” Farley explained, “or the health care sector can find a way to grow consistent with the demand, in order to keep costs manageable while providing the goods and services people demand.”

To keep the health care sector growing along with rising demand, Farley said he believes shoring up the workforce is essential – and doing it early.

“If you’ve got a rapid increase in demand, you can’t rapidly scale up the workforce,” he said. “You can’t just put out ‘help wanted’ ads… [health care workers] need significant background training and licensing. That restricts the pipeline for adding new workers.”

Farley also added that tackling rising administration expenses will also be important to sustainable growth.

With the health care industry poised to keep expanding, Farley stressed its influence in Arizona will keep growing too.

“About 20% of the state’s economy is either directly or indirectly dependent by the state’s health care sector,” he recalled. “It’s really remarkably large.”

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Arizona’s health care sector growing at rapid pace with demographics playing a role