Is Health Care Reform Worth $1.6 Trillion?
| By Mike Collins - Jun 26th, 2009 at 4:22 pm EDT |
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Categories: Economic Fairness & Security, Effective & Ethical Government, Affordable Healthcare
Categories: Economic Fairness & Security, Effective & Ethical Government, Affordable Healthcare
NY Times
June 26, 2009, 6:00 am
Is Health Care Reform Worth $1.6 Trillion?
By Uwe E. Reinhardt
Uwe E. Reinhardt is an economics professor at Princeton.
Like Captain Renault in “Casablanca,” who found himself “shocked, shocked” to discover that there was gambling going on at Rick’s Café, moments before pocketing his cut of the evening’s gambling profits, Congress last week expressed “shock, shock” at what was already well-known in policy wonkdom — namely, that a move to genuine universal health insurance coverage might easily entail federal budget costs of $1.6 trillion over the next decade.
There followed a scramble on the Hill to trim the proposed reform package, to keep its price tag below $1 trillion or so for the decade.
A price tag of $1.6 trillion seems immense if one contemplates the figure in the abstract. It is, however, only about 4 percent of the total cumulative health spending of $40 trillion, the amount government actuaries now project for the decade from 2010 to 2020. That is also less than the 6 to 7 percent that total national health spending has increased each year in the past decade.
And $1.6 trillion is only about 1 percent of the amount of G.D.P. that America can reasonably be expected to produce in the next decade (about $150 trillion to $170 trillion).
That 1 percent would not be lost to G.D.P., of course, because health spending is part of G.D.P. Rather, it would be a diversion of G.D.P. — away from other uses, and toward providing the otherwise uninsured with the peace of mind that comes with health insurance and access to timely health care. It would represent merely a change in the composition of G.D.P.
A change in the composition of G.D.P. should be distinguished from an actual loss of G.D.P.
More Here:
http://economix.blogs.nytimes.com/2009/06/26/is-health-care-reform-worth-16-trillion
June 26, 2009, 6:00 am
Is Health Care Reform Worth $1.6 Trillion?
By Uwe E. Reinhardt
Uwe E. Reinhardt is an economics professor at Princeton.
Like Captain Renault in “Casablanca,” who found himself “shocked, shocked” to discover that there was gambling going on at Rick’s Café, moments before pocketing his cut of the evening’s gambling profits, Congress last week expressed “shock, shock” at what was already well-known in policy wonkdom — namely, that a move to genuine universal health insurance coverage might easily entail federal budget costs of $1.6 trillion over the next decade.
There followed a scramble on the Hill to trim the proposed reform package, to keep its price tag below $1 trillion or so for the decade.
A price tag of $1.6 trillion seems immense if one contemplates the figure in the abstract. It is, however, only about 4 percent of the total cumulative health spending of $40 trillion, the amount government actuaries now project for the decade from 2010 to 2020. That is also less than the 6 to 7 percent that total national health spending has increased each year in the past decade.
And $1.6 trillion is only about 1 percent of the amount of G.D.P. that America can reasonably be expected to produce in the next decade (about $150 trillion to $170 trillion).
That 1 percent would not be lost to G.D.P., of course, because health spending is part of G.D.P. Rather, it would be a diversion of G.D.P. — away from other uses, and toward providing the otherwise uninsured with the peace of mind that comes with health insurance and access to timely health care. It would represent merely a change in the composition of G.D.P.
A change in the composition of G.D.P. should be distinguished from an actual loss of G.D.P.
More Here:
http://economix.blogs.nytimes.com/2009/06/26/is-health-care-reform-worth-16-trillion
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