A central feature of Barack Obama’s presidential campaign was an aggressive plan to expand health insurance coverage by subsidizing low-income Americans and preventing discrimination against the ill. In recent weeks, Senators Max Baucus and Ted Kennedy have been working on a similar plan that might also require people to purchase insurance. Senators Ron Wyden and Bob Bennett are promoting a different approach that would largely replace our employer-sponsored health insurance system with new insurance-purchasing pools.
What all of these plans have in common is the goal of covering every American. And all would require major new spending in the near term — perhaps $100 billion a year or more.
Given the present need to address the economic crisis, many people say the government cannot afford a big investment in health care, that these plans are going nowhere fast. But this represents a false choice, because health care reform is good for our economy.
As the country slips into what is possibly the worst downturn since the Depression, nearly all experts agree that Washington should stimulate demand with new spending. And one of the most effective ways to spend would be to give states money to enroll more people in Medicaid and the State Children’s Health Insurance Plan. This would free up state money for rebuilding roads and bridges and other public works projects — spending that could create jobs.
Health care reform can be an engine of job growth in other ways, too. Most proposals call for investments in health information technology, including the computerization of patient medical records. During the campaign, for example, Mr. Obama proposed spending $50 billion on such technology. The hope is that computerized recordkeeping, and the improved sharing of information among doctors that it would enable, would improve the quality of patient care and perhaps also lower medical costs. More immediately, it would create jobs in the technology sector. After all, somebody would need to develop the computer systems and operate them for thousands of American health care providers.
Expanded insurance coverage would also drive demand for high-paying, rewarding jobs in health services. Most reform proposals emphasize primary care, much of which can be provided by nurse practitioners, registered nurses and physician’s assistants. These jobs could provide a landing spot for workers who have lost jobs in other sectors of the economy.
Fundamental health care reform would also stimulate more consumer spending, as previously uninsured families would no longer need to save every extra penny to cover a medical emergency. When the federal government expanded Medicaid in the 1990s, my own research has shown, the newly insured significantly increased their spending on consumer goods.
Universal health insurance coverage would also address economic problems that existed before this downturn began — and that are likely to linger after growth resumes. In our current system, people who leave or lose their jobs often must go without insurance for months or years, and this discourages people from moving to positions where they could be more productive. Most reform proposals call for the creation of pools of insurance coverage that would guarantee access to high-quality, affordable care for people who are self-employed or out of work, increasing their mobility.
If this coverage focuses on disease prevention and wellness, it could also improve the health, and thereby the productivity, of the workforce.
In the long term, the greatest fiscal threat facing this nation is the growth in the costs of health care. These costs have more than tripled as a share of our economy since 1950, and show no signs of abating. The Congressional Budget Office recently projected that the share of the economy devoted to health care will double by 2050.
Experts have yet to figure out how to restrain cost increases without sacrificing the quality of care that Americans demand. Yet cost control would be easier in an environment of universal coverage. Nations like the Netherlands and Switzerland, which have achieved universal coverage within a private insurance structure, control costs better than we do. And in my home state, Massachusetts, an ambitious plan to cover all residents has focused the attention of all stakeholders on the importance of controlling costs as a means of ensuring the plan’s success in the long run.
These are challenging times. The economic crisis of 2008 has left politicians of all stripes in shock and unsure where to move next. But rather than sit back and lick our wounds, we must move toward healing them. Fundamental health care reform that features universal insurance coverage is an important place to start.