Much has been written about the need for a large government stimulus to boost spending (and make up for reduced spending by businesses and individuals) and raise employment. The focus has been on infrastructure and construction, and on "shovel ready" projects. While many regions of the U.S. certainly do need improved roads and bridges, I would argue that focusing a stimulus primarily on infrastructure ignores the shift in our economy over the last half century from a manufacturing-based to a service-based one. More specifically, health care is a huge source of employment in the U.S., and a driver of well-paid, highly-trained employment. According to the 2002 U.S. economic census (the last economic census published), "health care and social services" was the largest employer of any segment in the economy. A quick survey of major cities shows that in many cases, a health system is the largest private employer: NY-Presbyterian in NYC (Crain's), Kaiser Permanente in LA (LA Almanac), Partners in Boston (Dept. Labor and Workforce Dev.). I would bet the data is similar in most MSAs.
Why not focus the stimulus on health care? Instead of shelving his health care reform efforts because of the recession, shouldn't Obama make it even more of a priority? Improving health coverage boosts demand for care (this has clearly been the case in MA), which helps some of the largest regional employers across the country. It will boost demand for good jobs (RNs, PAs, medical assistants, medical technologists, among many others) which should stimulate more people to train in these fields (come to think of it, a good stimulus program should probably pay for these training programs). Of course, hospitals and clinics still need secretaries, coffee shops, and janitors. And, lest we forget, better health care is an inherently good thing (unlike more pick-up trucks).
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There was a good perspective in the NEJM on this. http://content.nejm.org/cgi/content/full/360/5/437.
ReplyDeleteGruber builds on my point (not sure he sees it this way) and suggests several ways that health care reform can stimulate the economy:
1. By funding insurance for lower income people who currently lack it, it frees up money for them to spend on other things. He has documented as much as $800/year in increased spending through gaining health coverage.
2. Government sponsored health insurance allows people to move jobs more readily. According to Gruber, his studies show that fear of losing insurance reduces job mobility as much as 25%. This decreases labor productivity, which is the lynch pin of GDP growth.
3. Health care reform will promote job growth, both through the new IT infrastructure, and through higher demand for health care services. More attention paid to preventive care will further encourage growth in non-MD providers.
4. Most interesting, to me: Once coverage is universal, attention can shift to cost containment. "The health policy community has long been fighting a two-front war, and the goals of universal coverage and cost control can sometimes conflict. Having everyone pulling in the same direction - with the recognition that certain financial limits will be required to ensure ongoing health care for all - is key to developing the consensus necessary for cost control." He sites MA as an example, as many advocacy groups that formerly pushed for universal coverage now (after the passage of the reform act) push for cost containment in order to preserve universal coverage.
I just hope Obama can make some of these arguments, soon, to push for passage of his reform plans.