Editore"s Note
Tilting at Windmills

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December 4, 2008

JUST WHAT THE DOCTOR ORDERED.... Barack Obama unveiled a fairly ambitious healthcare plan during the presidential campaign, and during the transition, he and his team have reiterated their interest in pursuing a national policy during the first term. Pushing back against this, of course, are those who insist that the financial crisis, and the scarcity of funding, necessarily means healthcare will have to wait. It's more important, the argument goes, to stimulate growth than it is to expand access and coverage to healthcare.

This approach is not only wrong, it's backwards. Jonathan Gruber, an economics professor at MIT, explains in the New York Times today, "[H]ealth care reform is good for our economy."

As the country slips into what is possibly the worst downturn since the Depression, nearly all experts agree that Washington should stimulate demand with new spending. And one of the most effective ways to spend would be to give states money to enroll more people in Medicaid and the State Children's Health Insurance Plan. This would free up state money for rebuilding roads and bridges and other public works projects -- spending that could create jobs.

Health care reform can be an engine of job growth in other ways, too. Most proposals call for investments in health information technology, including the computerization of patient medical records. During the campaign, for example, Mr. Obama proposed spending $50 billion on such technology. The hope is that computerized recordkeeping, and the improved sharing of information among doctors that it would enable, would improve the quality of patient care and perhaps also lower medical costs. More immediately, it would create jobs in the technology sector. After all, somebody would need to develop the computer systems and operate them for thousands of American health care providers.

Expanded insurance coverage would also drive demand for high-paying, rewarding jobs in health services. Most reform proposals emphasize primary care, much of which can be provided by nurse practitioners, registered nurses and physician's assistants. These jobs could provide a landing spot for workers who have lost jobs in other sectors of the economy.

Fundamental health care reform would also stimulate more consumer spending, as previously uninsured families would no longer need to save every extra penny to cover a medical emergency. When the federal government expanded Medicaid in the 1990s, my own research has shown, the newly insured significantly increased their spending on consumer goods.

Universal health insurance coverage would also address economic problems that existed before this downturn began -- and that are likely to linger after growth resumes. In our current system, people who leave or lose their jobs often must go without insurance for months or years, and this discourages people from moving to positions where they could be more productive. Most reform proposals call for the creation of pools of insurance coverage that would guarantee access to high-quality, affordable care for people who are self-employed or out of work, increasing their mobility.

The financial crisis isn't an excuse to push off healthcare reform until the economy grows; the financial crisis is an excuse to pursue reform even more aggressively to produce economic growth.

Steve Benen 8:35 AM Permalink | Trackbacks | Comments (16)
 
Comments

Taking employee health care off the hands of US automakers would go a damn sight farther toward helping the industry than will the expensive Band-aids they're pleading for this week.

Posted by: dr. bloor on December 4, 2008 at 8:51 AM | PERMALINK

The GOP will try to stuff any health care initiative because they know a successful plan would seal their fate to the trash-bin of history. Their white-tight base would never recover from a successful way to manage healthcare. The electorate would become indebted to the Dems and they know it. So, don't hold out too much hope for bipartisan support for something this necessary for the good of our Republic.

Posted by: Stevio on December 4, 2008 at 8:59 AM | PERMALINK

The kind of people who argue against health care reform aren't currently watching their husband, a beautiful, talented man, succumb to MS that went undiagnosed for far too long, because nobody gives out MRIs and LPs for free.

It's easy to count the cost when that's all it is to you- money. I can only see the people, and their suffering.

Posted by: Personal Failure on December 4, 2008 at 9:07 AM | PERMALINK

I have to say I find the macroeconomics of this column bizarre. What the gov spends on most anything creates jobs, if it is deficit financed. Second, insurance coverage and health care spending are two different things. Those who lack coverage get care (not as good, admittedly) and somebody pays for it. If they spend money on health or something else matters not for job creation in general. Third, at the end he notes (correctly) that costs are growing rapidly. So does this mean there is too much spending and job creation?

That said, of course we need universal coverage and a deficit-financed down payment on a new system would be o.k. for economic stimulus. But Gruber's arguments are a hash.

Posted by: Miracle Max on December 4, 2008 at 9:16 AM | PERMALINK

Sleeve sleazy Joe Scarbough is on MSNBC today talking about the Pardon of that guy Mark Rich thinks he has something. Joe sound like he is taking a flying carpet ride, I will explain that later right now we need a discussion of cotton. Swing low sweet Chariot coming for to carry me home, those cotton fields by “Lead Belly” maybe something. Here, Holder and the African American people will finally realize reparations are deals to be made with the Wahabbi.

This one, the spot market, is great to analyze because of the woven connections of the Republican’s during the Nixon shock theater profiteering scenario. Here America has this guy Mark Rich who by wicked-pedia is described as the creator of the “Oil Spot Market” during the Arab oil embargo, as the demon and villain of America? From the way I read it Mark rich was able to make tons of profit helping the American economy during the Arab oil embargo. Remember these Arabs are our friends, not, these Wahabbi that think Americas are infidels, yes. This is thirty ago years folks.

But are not those quotes on the stock market called Spot Market type? Is there confusion here? I am? Perhaps the world needs to rethink Einstein because he thought of the basics of the atom bomb. Einstein should be jailed for tax evasion making everything his bomb touches radio active and not usable for a long time. That is disrespect for personal property isn’t it and screws up the tax base. I am sure the Arabs would agree at it that way. Because Einstein is Jew, get my point.

Scarbough is Jew baiting, and begging the question especially why Nixon In 1971 did unilaterally canceled the Bretton Woods system and stopped the direct convertibility of the United States dollar to gold. The second shock was the 1972 Nixon visit to China that brought a surprising new twist to Cold War diplomacy. And likely introduced the barrow and spend Republican rhetoric that got America into an economic hell hole. Scarbough and the spot market?

Bail or bale, sure we get good over sight, not…
Take a bail of spot market cotton, kooka – KARACHI type, ha ha (October 15 2008): Punjab prices 0.78 cent to settle at 50.22 cents per lb the latest from Pakastani.com Yuk, Yuk. On sale at Wall Mart. Comfy shirts for a good Christmas sale, not …if you don’t get what I am driving at hit the delete button now. Other wise continue…Surprise a whole lot shaken goin on great balls of fire where is Chris…

http://www.pakissan.com/english/news/newsDetail.php?newsid=18701

And Bin Laden is buried somewhere in Pakistan? Perhaps he runs the spot market? What’s the price of camel toe???

It’s all buckaroo’s folks and the fur is flying. Cut and Run Republican might have National security secret accounts. Hey at will economics. Government needs to be small and create big paying jobs; duh what hell does that mean?

On a massive scale of car stuff and banking stuff you name it stuff before the Jekyll island group is turning blue and if America runs out of cotton what do we print money with? This is cotton picking crazy.


Posted by: Megalomania on December 4, 2008 at 9:19 AM | PERMALINK

If 40 million or so people get affordable access to health care, we'll need a lot more doctors. That would certainly stimulate the economy in the long run.

Posted by: palinoscopy on December 4, 2008 at 9:37 AM | PERMALINK

One of the hazy concepts that is still left in my brain a quarter of a century or so after college economics is that money spent on labor intensive stimulus (like health care) instead of capital intensive stimulus (building bridges or aircraft carriers) produces more economic stimulation per dollar. Of course, in the intervening decades economic theory may have changed and YMMV.

Posted by: J Bean on December 4, 2008 at 10:18 AM | PERMALINK

I think we're missing the big "shadow benefit" of universal care. If we envision the creation of a thing that provides for those in need by "bulk-buying," then it would stand to reason that the same concept would result in a reduced premium-cost for those who currently have coverage---whether self-purchased, or provided as an employee benefit.

That amount alone could shift additional billions of dollars into consumer wallets, and further jump-start the stalled economy.

In the end, everyone becomes healthier because of universal care---not just the poor and currently-uninsured. Everyone "healthier" equates to everyone needing to spend less on health-related coats, thus making everyone "wealthier." Increased wealth allows for healthier choices in eating and living, which in turn brings the costs of "being healthy" down even more---and so the cycle continues until it reaches an optimum balance.

The only losers? The profiteers, who need us to be sick, in order to fatten their wallets by emptying everyone else's. Those profiteers---the insurance industries, the corporate barons, and their lobbyists---are like the legions of Napoleon at the gates of Moscow. It's time to leave them starving in the snow, retreating toward their Waterloo....

Posted by: Steve W. on December 4, 2008 at 10:31 AM | PERMALINK

This provides an opportunity to put forward an idea to improve the economy immediately without a big, cumbersome program. Obama should issue 100,000 green cards to Physicians to move to the US under the conditions that they: speak English, live and work in under served areas, and pay their own expenses to move here. This adds more health care capacity, 100,000 empty houses are bought/rented, and the local economies are boosted in a small way, all without the taxpayer paying a dime. Obama can cram reciprocal licensing down the licensing boards' throats if they don't want to cooperate.

Posted by: Th on December 4, 2008 at 10:45 AM | PERMALINK
The financial crisis isn't an excuse to push off healthcare reform until the economy grows; the financial crisis is an excuse to pursue reform even more aggressively to produce economic growth

That is exactly how the Democrats need to learn from the Republicans to frame issues.

Remember in the 'old' days how the Bush administration would respond to increased violence in Iraq: We need to send more troops and keep them there longer to address the problems. When the violence is down: We need to keep the troops there to keep the violence down.

That technique can be applied to pretty much any liberal / progressive issue. Let the Republicans figure out a way to counter it. That way it's not the usual liberals on the defense.

Posted by: bruno on December 4, 2008 at 11:01 AM | PERMALINK

As the country slips into what is possibly the worst downturn since the Depression, nearly all experts agree that Washington should stimulate demand with new spending.

I know that's what the experts believe, but has it ever worked? It hasn't worked for Bush and the Democratic Congress in 2008. There is some debate about whether it worked for Bush and the Republican Congress in 2001. It didn't work for Japan in the last long Japanese recession of the '90s. There is debate about whether it worked for Reagan and the Democratic Congress in the 80s. It didn't work for Nixon-Ford and the Democratic Congress in the 70s. It didn't work for Hoover-FDR and the Republican-Democratic Congresses of the 30s.

Posted by: marketeer on December 4, 2008 at 11:41 AM | PERMALINK

It's not so much that government spending, per se, can help the economy recover; it's *how* the government spends its money. Big difference.

Jonathan Gruber's point- well, one of them- is that were the government to spend money to establish a true national health insurance system, it would benefit the economy in many ways, both directly and indirectly. He makes some excellent points, as well. If you haven't read the original article, it behooves you to do so.

-Z

Posted by: Zorro on December 4, 2008 at 11:47 AM | PERMALINK

The journalist class seemed to take delight during the final stretch of the campaign in asking over and over again what Obama or McCain would change due to the financial collapse. It seemed like they were asking someone who just lost their job if they might consider selling their car or their work tools to make up for the shortfall.

To their credit, neither Obama nor McCain could envision any changes, yet reporters kept asking the same question.

This reminds me of the fact that we shamed the CEOs responsible for 3 million jobs into driving across the US, wasting valuable time, when they should be tending to their business.

Someone at ABC blogged about this yesterday and noted that it doesn't even make sense for them to fly first class, if they get delayed at all, their savings is shot. Plus you can't really do business in first class. Most reporters seemed to think private jets waste shareholder money. Big salaries do, as do retirement packages, not private jets.

Posted by: tomj on December 4, 2008 at 12:00 PM | PERMALINK

I was thrilled and shocked - SHOCKED I tell you - that Gruber actually mentioned nurses as a key stakeholder and a primary resource to reform healthcare.

But he didn't speak to transforming and shuttering obsolete and parasitic industries (BigPharma, commercial healthcare insurance, commercial healthcare marketing, etc.) and these are major healthcare cost loss leaders.

But at least professional nursing was put into play. That's a good start.

Posted by: Annie on December 4, 2008 at 12:35 PM | PERMALINK
It didn't work for Hoover-FDR and the Republican-Democratic Congresses of the 30s.

Actually, it worked pretty quickly for FDR, which is why the recession that started in 1929 ended in early 1933, and the GDP decline that started in 1929 ended in later 1933, with a strong recovery until the shorter and shallower 1937-1938 recession.

The reason that period of expansion is counted as part of the "Great Depression" is because production had fallen so far during the 1929-33 recession that it wasn't until almost the 1937 peak that it had reached back to what it had been prior to 1929, and, more importantly, that unemployment, while it was cut significantly in the 1933-1937 recovery, was still at high levels throughout that recovery (IIRC, it dropped to around 15% during the 1933-1937 recovery from about 25% at the bottom of the 1929-1933 recession.)

It didn't work for Hoover, that's true. It might be noted that Hoover's and Roosevelt's efforts differed both in the scale of the public works components, and the fact that along with institutional aid (to specific kinds of businesses and to states) and public works, Roosevelt's included expanding the labor protections, the social safety net, etc. IOW, it included efforts aimed directly at increasing the economic security of workers, not just big capital concerns that were given aid with the idea some benefit should trickle down to the public.

It might also be noted that most subsequent efforts have followed the Hoover model.

Posted by: cmdicely on December 4, 2008 at 1:06 PM | PERMALINK

Is anyone working on a "medical markup language"? It's not just getting files on the computer, it's also about being able to share them as needed.

Correct me if I'm wrong, but isn't it cheaper to have people in insurance programs and getting regular medical care than it is to have them show up at the emergency room?

Getting files online to start with and setting up a viable and secure data exchange network is labor intensive and expensive part--and shouldn't last forever. The costs of maintaining the set up, probably in a public-private partnership, will be offset, one hopes, by improved efficiency. That should also lead to better care, more coverage, and lower overall cost per person. No, I've not seen any numbers crunched on this--and poorly set up databases can easily add much more work without any real benefit--but at least they are trying to do something. And if they start at the nursing station and work their way up, it may work out really well.

Posted by: golack on December 4, 2008 at 8:21 PM | PERMALINK




 

 
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