| 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 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.
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