Navigation Links
Study shows health care spending spurs economic growth

As the national discussion of health care focuses on costs, a new study from North Carolina State University shows that it might be more accurate to think of health care spending as an investment that can spur economic growth. The study also shows that government projections of health care costs and financing may be unduly pessimistic.

"Health care spending should be viewed as an investment in future capital, contributing to a productive workforce, rather than merely as an expenditure," says Dr. Al Headen, associate professor of economics at NC State and a co-author of a paper appearing in the Dec. 15 issue of Proceedings of the National Academy of Sciences. The paper was co-authored by researchers from Duke University, Brigham Young University and the National Council of Spinal Cord Injury Association.

People are living longer, Headen says, and are retaining their ability to be productive members of society they are able to work, pay taxes, consume goods and go on vacation. "But a lot of projections by the government of the future work force are not accounting for improved health and productivity of older Americans. People will be paying into government programs, such as Medicare, for a longer time while simultaneously delaying the point where they need to draw on those programs. Our research suggests that if the government's projections had accounted for this improved productivity, those projections would have been less pessimistic."

For example, the researchers found the Congressional Budget Office's (CBO) projected costs for Medicare and Medicaid from 1994-2004 to be substantially overestimated. In 1994, CBO projections of Medicare expenditures for 2004 for persons 65 and older were $361 billion, but the actual 2004 expenditure was only $268 billion an error of 35 percent.

"Our projections adjust for improved quality of health and functioning, indicated by declines in disability among the 65 and older age group from 1994 to 2004 in data from the National Long Term Care Surveys linked to Medicare files," Headen says. "Our health quality adjusted Medicare expenditures projection over the same decade covered by the CBO projections is $253 billion, an error of 5.6 percent. Thus, the projection error rate for the CBO, which did not adjust for improvement in the quality of health and functioning among elders, was over six times larger than the projection error rate that explicitly adjusted for improvement in the quality of health and functioning among elders."

One implication of the study's findings, Headen says, is that "some programs that the government has said will be in deficit in the near future may actually have a surplus, once you account for improved health and productivity. For example, we project a $242 billion surplus for Medicare by 2020, not a deficit.

"Spending on health care productivity, biomedical research and universal health care should be considered an investment that will eventually lead to increased economic growth," Headen says. "Improvements in human capital related to health are important, and need to be accounted for when doing projections of costs and benefits related to health care."


Contact: Matt Shipman
North Carolina State University

Related medicine news :

1. Penn study finds pro-death proteins required to regulate healthy immune function
2. New study shows promise in reducing surgical risks associated with surgical bleeding
3. Study, meta-analysis examine factors associated with death from heatstroke
4. Study suggests loss of 2 types of neurons -- not just 1 -- triggers Parkinsons symptoms
5. Study says COPD testing is not measuring up
6. Preclinical study suggests organ-transplant drug may aid in lupus fight
7. Ability to cope with stress can increase good cholesterol in older white men, study finds
8. High alcohol consumption increases stroke risk, Tulane study says
9. Mailman School of Public Health study examines link between racial discrimination and substance use
10. Pitt study finds inequality in tobacco advertising
11. Stanford study highlights cost-effective method of lowering heart disease risks
Post Your Comments:
(Date:11/28/2015)... ... 2015 , ... Pixel Film Studios is back again with ProPanel: Pulse ... are endless. Users have full control over angle of view, speed method, start point, ... sure to get heads to turn. , ProPanel: Pulse offers fully customizable pulsating shape ...
(Date:11/27/2015)... ... November 27, 2015 , ... According to an article ... University of Toronto and the University of British Columbia suggested that laws requiring bicyclists ... The article explains that part of the reason for the controversial conclusion is that, ...
(Date:11/27/2015)... ... November 27, 2015 , ... A team of Swiss doctors ... treat it. Surviving Mesothelioma has just posted the findings on the website. Click ... analyzed the cases of 136 mesothelioma patients who were treated with chemotherapy followed by ...
(Date:11/27/2015)... ... ... Lizzie’s Lice Pickers just announced a special promotion that will run throughout ... of lice treatment product. In addition, customers will receive a complimentary head Check when ... is a sure way to ruin the holidays, so we encourage all of our ...
(Date:11/27/2015)... CA (PRWEB) , ... November 27, 2015 , ... MPWH, the No.1 Herpes-only dating community ... 30 (see Table 1-1 ). More than 3.7 billion people under the age ... type 1 (HSV-1), according to WHO's first global estimates of HSV-1 infection . , ...
Breaking Medicine News(10 mins):
(Date:11/26/2015)... 26, 2015 Research and Markets ( ) ... Pacemaker Market Outlook to 2019 - Rise in Cardiac Disorders ... report to their offering. Boston ... Boston scientific and others. --> ... Biotronik, Boston scientific and others. ...
(Date:11/26/2015)... DUBLIN , November 26, 2015 /PRNewswire/ ... the addition of the "2016 Future ... Drugs of Abuse Testing Market: Supplier Shares, ... report to their offering. --> ... of the "2016 Future Horizons and ...
(Date:11/26/2015)... --> ... att använda SyMRI för att hitta optimal ... med multipel skleros (MS) eller hjärntumörmetastaser och ... för att kunna använda SyMRI Research Edition ... kan man generera flera konstrastbilder från en ...
Breaking Medicine Technology: