Stimulus Watch: More Federal Spending On Health Care Will Create Jobs
Stimulus Watch: More Federal Spending On Health Care Will Create Jobs
Just as the New York Times reported that “Medicaid rolls are surging, by unprecedented rates in some states,” Republican strategist Jennifer Millerwise Dyck appeared on MSNBC this afternoon to argue that extra federal funding for health care initiatives (expanding Medicaid, subsidizing COBRA) would not create jobs and should not be part of the Democrats’ economic stimulus package:
There is money in there getting us prepared for universal health care. I mean, this is supposed to be a stimulus package that gets people into jobs, that gets the economy moving, gets money back into the pockets of the people and I think this is ideologically where you see a real difference between Republicans.
Watch it:
In fact, investing federal dollars in Medicaid, as House Democrats have proposed, is far from an “ideological divide”; it actually generates business and “gets people into jobs.”
A recent report by Families USA, for instance, found that “every dollar a state spends on Medicaid pulls new federal dollars into the state—dollars that would not otherwise flow into the state. These new dollars pass from one person to another in successive rounds of spending”:
For example, health care employees spend part of their salaries on groceries, which adds to the income of grocery store employees, enabling them to spend part of their salaries on new shoes, which enables shoe store employees to spend additional money on home improvements, and so on. The new dollars pass from one person to another in successive rounds of spending, generating additional business activity, jobs, and wages that would not otherwise be produced. Economists call this the “multiplier effect.” The magnitude of the multiplier effect varies from state to state, depending on how the dollars are spent and on the economic structure of, and conditions in, the state.
Moreover, health insurance protects families from medical bankruptcy and allows healthy individuals to keep looking for employment.
2 Responses to “Stimulus Watch: More Federal Spending On Health Care Will Create Jobs”
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Historically, Medicaid does not pay doctors or hospitals as well as private insurance.
Most doctors in my community do not accept new Medicaid patients, i.e. the way to get care is via an ER, the most expensive source for care.
If the patient went from private insurance to Medicaid, that’s better than being uninsured, but it doesn’t mean more money for a hospital. The payor mix and volumes determine whether more staff are hired and those funds wash through the community.
I find it funny the Chamber of Commerce job mulitiplier is back. They exported it to China in favor of the dollar extender, which enabled a dollar to stretch further from buying cheap goods.
Health care was next on the exporting list. Get your procedure in Indonesia or India.
Also funny, I hear health care cost control from Emanuel and company. I don’t hear cover everyone.
January 23rd, 2009 at 9:00 amThough we usually focus on the essential services they provide, physicians and their practices are indeed a viable source of economic impact on their communities.
For example, using economic data from the IMPLAN database, the Robert Graham Center (www.graham-center.org) evaluated the annual economic impact of family physicians. Using MGMA data, we estimated that one fulltime family physician creates an average of five full time supporting staff positions, and created a linear input-output social accounting matrix to estimate direct, indirect, induced, and total economic impacts on their communities. The economic impact of one family physician was $904,696 on average, with sizable state to state variation.
Multiplied by their total number nationally(according to the AMA Masterfile), family physicians would generate a nationwide impact of $46,183,968,060 per year in economic impact. This is a conservative estimate, and doesn’t include a number of intangible and tangible economic benefits of FPs such as their contribution to the generation of income for other local healthcare organizations such as hospitals and nursing homes.
That remarkable figure reflects the impact of a single specialty, but one of particular importance as we debate the most effective ways to stimulate the economies of our nations poorest rural and urban communities. These underdeveloped geographies are also the ones most likely to be medically underserved – e.g. rural and urban Health Professional Shortage Areas. While most medical specialties tend to cluster in urban areas and near academic health centers, family physicians are the specialists that are most likely to work in such areas.
Physicians contribute to the economic viability of the communities they serve, as highly educated consumers, employers, and purchasers. A stimulus package that helped to attract or retain primary care physicians in areas of economic deprivation (e.g through investment in loan repayment, primary care residency training or tax incentives for practice in underserved areas) might expect to see not only additional health benefits for local citizens, but also a further return on investment for some of the most economically deprived areas of the country.
The Commonwealth Fund’s recent “Commission on High Performance Health” seeks to move the U.S. toward a health care system that achieves better access, improved quality, and greater efficiency, particularly for those who are most vulnerable. The Commonwealth Fund states that the U.S. cannot achieve a high performing healthcare system without primary care [www.cmwf.org] and family physicians are the most versatile providers of primary care.
Family physicians are trained to provide that medical home, improving access to health care for communities in greatest need. In addition to this critical service, as Table 1 illustrates, family physicians can serve as economic engines for their communities. Family physicians contribute to the economic viability of the communities they serve, as highly educated consumers, employers, and purchasers. States choosing to invest in loan repayment, primary care residency training or tax incentives for practice in underserved areas can expect not only the health benefits for their citizens, but also a further return on investment for some of the most economically deprived areas of the state.
January 25th, 2009 at 11:48 pm