A Failure To Explain Financial Benefits Of Health Care Reform

November 24, 2009|By Thomas F. Schaller

Let's say you are in the market for a new car, and the salesman you meet on the dealership lot is Barack Obama. You want what every big-ticket consumer wants: something that will perform well over a long time and thus be worth your sizable investment. You're worried about sticker price, but only a myopic buyer focuses solely on that because there are many ancillary costs.

What can I get for my trade-in? What are the new car's regular maintenance costs? How likely is it to break down? Which repairs will my warranty cover and which will I have to swallow? What kind of gas mileage does it get? And, presuming you can't pay in cash, how much interest will it cost to finance it over five years?

With health care reform, President Obama is trying to make a much tougher sell. His problem is that too many voters are focusing only on the price tag. He is failing to persuade Americans - including the millions happy with their current coverage - that reform is about more than the literal health of Americans, that it's also about the economic health of the nation.

In October 2007, the Milken Institute published "An Unhealthy America: The Economic Burden of Chronic Disease," a report analyzing the long-term economic costs of leaving unchecked just seven maladies: cancer, heart disease, hypertension, mental disorders, diabetes, pulmonary conditions and stroke. Comparing a scenario of "reasonable improvements in treatment and behavior" with a "business as usual" baseline, the report estimated that cumulative savings in health care expenditures over two decades, from 2003 to 2023, could total $1.6 trillion. That's $80 billion saved per year - no small sum.

But those savings are dwarfed by the costs to the American economy caused by an unhealthy work force. "Chronically ill workers take sick days, reducing the supply of labor - and, in the process, the GDP," the report's executive summary explains. "When they do show up to avoid losing wages, they perform far below par - a circumstance known as 'presenteeism,' in contrast to absenteeism."

Milken's estimated cumulative loss to America's GDP of doing nothing during the same period? Almost $7 trillion. (For Maryland, which the Milken Institute ranked in the middle of the pack - 27th best state in terms of chronic disease rates - the projected loss to the state economy through 2023 would be about $22 billion.)

Just imagine if a proposed tax increase or business regulation were projected to do $7 trillion in economic damage. You wouldn't be able to watch Fox News or tune in Rush Limbaugh for five minutes without hearing about it. But when doing something about chronic illness could increase America's economic output and productivity, the silence is deafening.

The blame for not connecting our physical health to our economic health falls on Mr. Obama. It's his job to make sure the national debate doesn't get sidetracked with important but ultimately diversionary arguments about mammogram coverage or abortion funding.

The world's great capitalist beacon tolerates huge and unnecessary inefficiencies caused by an unhealthy populace and unhealthier insurance system. We spend twice per capita for health care what other industrialized countries do, yet we have way too many sick people racking up not merely treatment costs but workplace losses and productivity inefficiencies on a massive scale. Like car shoppers distracted by the nifty cup holders and heated seats, too many of us fail to notice that the invoice for the car is twice what it is for an identical car selling at a neighboring dealership, it guzzles gas, and Consumer Reports says it is prone to costly breakdowns.

The president's rhetorical task is to help us make the most informed choice. To do so he ought to appeal to our collective as well as our individual interests because what's good for America's health also happens to be vital to the American economy. Smart car buyers, after all, take into consideration all costs, not just the monthly payment.

That American workers would feel a whole lot better along the way is just a bonus - you know, like free floor mats.

Thomas F. Schaller teaches political science at UMBC. His column appears regularly in The Baltimore Sun. His e-mail is schaller67@gmail.com.

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