Health Care and the Economy

Did you happen to hear the report on NPR tonight about health care as a key player in the stimulus to the economy? Uwe Reinhardt, Professor of Economics at Princeton, spoke about his perspectives about health care and economics. Currently, health care represents 16% of the gross domestic product, making it the largest sector of the economy. Because our economy is not growing right now, the professor speculates that within the next year or two, health care will grow to 18% of the GDP. By 2015, he assures us, it will represent 1/5th or 20% of the economy. He suggested thinking about the number $2.5 trillion within 4 or 5 years. He said,"Defense does not even come close to that number."

His perspective is that we should not try to "close down" or dramatically change health care right now, especially when our economy is so weak. What? The interviewer nearly gasped. Professor Reinhardt admits there is waste and plenty to "fix" in the health care system as it currently exists. He also testified before Congress recently to suggest that if we muck with it too much we may cause more economic disaster.

This interview was one of those that causes you to pause and rethink all your previous positions, even if only for a moment. As someone deeply "inside" health care as owner of Capabilities, I often think about reform. I have written many times in this blog about how the current system provides no glue; the fragmentation leaves individuals lost, like "deer in headlights," struggling to figure out the whole themselves. Having a bigger picture is what most people need when suddenly life changes because one's health changes. Yet, this professor of economics challenges the "culture of health care as burden," as he puts it. He sites news reports that unabashedly characterize the "good news" as the growth of businesses such as McDonald's, and "bad news" as the increasing costs of health care.

Professor Reinhardt wonders why we don't make more of the fact that fast food potentially damages health while "spiraling health care costs" might actually mean more hip replacements, effective drug treatments, and options for certain diseases that enhance the lives and productivity of Americans.

So, I have been pondering this report for a few days. I read all the immediate commentary from folks who replied on the NPR website, most of whom called the guy crazy. "Leave it to an economist," one wrote, "to come up with a depressing solution to one of the most devastating economy disasters of our time - health care." And yet, I find myself still intrigued that as the largest sector of our economy, health care is one of main economic engines we currently have. Surely, we are smart enough to figure this out, right?

What do you think? Give us your two cents.