|Paradigm Shift: Healthcare Spending Grows Economy, Saves Money, Study Reports
Americans may be looking at healthcare costs the wrong way.
That’s the conclusion of a North Carolina (NC)
State University study that shows not only will healthcare spending be
a catalyst for economic growth but government projections of healthcare
costs and financing may be unduly pessimistic.
"Healthcare spending should be viewed as an investment
in future capital, contributing to a productive workforce, rather than
merely as expenditure," said Dr. Al Headen, associate professor of
economics at NC State and a co-author of a paper that appeared in the
Dec. 15, 2009 issue of Proceedings of the National Academy of Sciences.
The researchers may have history on their side. The
Congressional Budget Office substantially overestimated the costs for
Medicare and Medicaid from 1994-2004. Their $361 billion estimate
turned out to be a $268 billion reality – a 35 percent error.
People are living longer, Headen said, and are retaining
their ability to be productive members of society – they are able
to work, pay taxes, consume goods, go on vacation and not draw on
Medicare. Government projections are not accounting for this trend.
"Our research suggests that if the government’s
projections had accounted for this improved productivity, those
projections would have been less pessimistic," he added.
One implication of the study’s findings, Headen
said, is that "some programs that the government has said will be in
deficit in the near future may actually have a surplus, once you
account for improved health and productivity. For example, we project a
$242 billion surplus for Medicare by 2020, not a deficit."
For more information on North Carolina State University, visit www.ncsu.edu.