The Economic Cost of Disease
It has been argued that a long term challenge to sustained economic development in the US is the ability to continually supply skilled workers to meet the expected demands. This is one reason why jobs are leaving US shores. The companies can find plenty of skilled labor in other countries, who can provide more productive labor, productivity being defined as output per worker at a given cost.
The US is Capital rich, meaning that we have a lot of it, but Labor poor, meaning that we lack sufficient skilled labor to compete in the global economy. Long term threats to our competitiveness include inadequate investment in economic infrastructure, rapidly rising medical and pension costs associated with an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. However, there is at least one opportunity to help us compete in the increasingly globalized economy.
An area where we can gain ground, in the short term, given this challenge is health care. Focusing on this issue will help to retain key labor inputs as productive members of our labor force. There are costs associated with disease other than just the nominal cost of medical treatment. The total cost of a disease includes the loss of productivity, loss of purchasing power, and a loss of tax revenues. In other words, when one worker is sick, the entire economy suffers.
As health care costs continue to rise, many younger people cannot afford to buy health insurance and thus opt out of doing so. As these economically productive workers begin to become sick due to lack of affordable health insurance, all of society will feel the economic pressure from the dramatic loss of these people, which is substantial. Simply stated, when you are ill, you are directing your economic resources to medical care—not for non-essential goods or services.
From research that has been done, according to the Financial Times, for every dollar that is spent in medical cost - there is a loss of 7.50 dollars to the economy. If we nationalized healthcare, though I don’t see this happening in the foreseeable future, we would become more competitive, as it would force us to take a more preventative approach to healthcare, which would yield a more productive workforce. It would also relieve US corporations from the burden of rising health care costs, thus reducing their costs and raising worker productivity, allowing us to compete more effectively with the rest of the world
The US is Capital rich, meaning that we have a lot of it, but Labor poor, meaning that we lack sufficient skilled labor to compete in the global economy. Long term threats to our competitiveness include inadequate investment in economic infrastructure, rapidly rising medical and pension costs associated with an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups. However, there is at least one opportunity to help us compete in the increasingly globalized economy.
An area where we can gain ground, in the short term, given this challenge is health care. Focusing on this issue will help to retain key labor inputs as productive members of our labor force. There are costs associated with disease other than just the nominal cost of medical treatment. The total cost of a disease includes the loss of productivity, loss of purchasing power, and a loss of tax revenues. In other words, when one worker is sick, the entire economy suffers.
As health care costs continue to rise, many younger people cannot afford to buy health insurance and thus opt out of doing so. As these economically productive workers begin to become sick due to lack of affordable health insurance, all of society will feel the economic pressure from the dramatic loss of these people, which is substantial. Simply stated, when you are ill, you are directing your economic resources to medical care—not for non-essential goods or services.
From research that has been done, according to the Financial Times, for every dollar that is spent in medical cost - there is a loss of 7.50 dollars to the economy. If we nationalized healthcare, though I don’t see this happening in the foreseeable future, we would become more competitive, as it would force us to take a more preventative approach to healthcare, which would yield a more productive workforce. It would also relieve US corporations from the burden of rising health care costs, thus reducing their costs and raising worker productivity, allowing us to compete more effectively with the rest of the world
posted by Sean | 1:02 AM
1 Comments:
It is amazing how economy is all rounded in one Circle, where everything effects the other.. Can you Ecnomists stay away from atleast one thing, i do not think so ...!! Politicians and Ecnomists shape the world we live in today :) So we are depending on their intellegince.
I talked to a women from GErmany and she said the reason Health Care is so expensive is becasue it started cheap so people would go to see a doctor for any stupid thing, just to check up since it was so cheap.
So insurance companies suffered from that , therfore had to increase the healthcare costs...
One would think since people are paying alot, they would expect good healthcare, as matter of fact, that is not nesserly True.. Public Sector still lacks behind...
So i see your pointe that good health care would increase the people's producitvity , therfore the overall economy.
I did not know that the US lacks lot s of skilled workers , i know at times, they needed lots of programmers and that's where they trurned to india.
but it actually makes sense, the US economy and labor market is growing far more than it can support so they have to turn to foriegn labor.
Nice Article by the way ,
Keep the knoweldge in the Air .. so we all can benefit,,
Peace
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