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.
