Obama Must Use Health Care to Fix the Economy ... Here's How

Posted by Steve Benen, Washington Monthly at 5:40 AM on December 4, 2008.

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.

Tagged as: economy, obama, new york times, new york times, health care, mit, jonathan gruber