Wednesday, February 12, 2014

An Economic Conundrum

Is our outsized health care system an economic plus or minus?

The conventional wisdom, which I have tended to accept, is that our unusually costly system places an undue financial burden on government, makes our industry less competitive internationally and unnecessarily consumes resources that would otherwise be devoted to something else.  Thus, the economy would benefit if we spent less on health care.

In contrast to that, columnist Benjamin Applebaum argues in the February 9 Sunday New York Times that during the last two years the health care system has been a drag on the economy because it has grown more slowly than the economy as a whole (Will Saving on Health Care Hurt the Economy?).

He also points out that “The health care sector has repeatedly helped to pull the economy from recession in recent decades….”   Certainly, it seems likely that unemployment during the recent recession would have been higher if it were not for the large number of people employed in health care, which is largely recession-proof. 

The stubbornness of unemployment, attributed in large part to globalization of the labor market and information technology, poses the question of whether in the foreseeable future there will be enough jobs to employ all our unskilled and semi-skilled people.  Health care employs a lot of them.  Maybe that is a good thing.

Applebaum’s column ends by quoting Harvard School of Public Health Economist Katherine Baiker who favors a more efficient health care system.  She said “….for a given outcome, if you could get it with fewer resources, that would be better for everyone.  You could get more health.  You could get more stuff.”

Well, maybe.  But then again, maybe not.

This page is powered by Blogger. Isn't yours?

FREE counter and Web statistics from sitetracker.com