There were two very interesting articles out on health care this weekend. One of very high quality that everyone interested in reform should know about. The other has some flaws but brings up interesting thoughts.
First, Wilper, et. al. have published in the American Journal of Public Health the best, recent study looking at the association between mortality and the lack of health insurance. The methodology in this study looks very sound in my judgment. While not perfect, for a study of this size, it is surprisingly thorough. (Tell me what you think Janice) The bottom line is that about 45,000 people now die per year as a result of not having adequate insurance so that they can pay for their health care.
The second article, from Bilmes and Day, is based upon the Wilper study. This article attempts to calculate the cost to the economy of lives lost during the working years due to lack of health care. Key quotes…..
The premature death of thousands of Americans can be translated into monetary terms using the economic “value of a statistical life.’’ Government economists use this methodology to help determine whether the cost of new government regulation (stricter pollution controls, for example, or food safety rules) is worth the value of lives saved. Insurance companies also use this approach to help estimate compensation levels for wrongful death. These estimates vary widely, from around $3 million to $12 million.
US government agencies typically use a figure around $7 million to represent the lost economic output from each death. If we conservatively use only half of the government figure, or $3.5 million, it suggests that the annual cost to the US economy of 40,000 deaths is about $140 billion. That adds up to a cost of more than a trillion dollars over a 10-year period – even taking future inflation into account – well above the cost of enacting a health care package.
A second way to estimate the cost of not enacting health care legislation is in terms of life expectancy. US life expectancy – at 78.11 years, ranks around 40th in the world and well below countries with universal health care. If we were to match Canadian life expectancy, for example, that would translate into an extra two years and 1 month of life expectancy for every American.
Putting a value on a life is not easy. Cowen has cited studies showing that people value an extra year of life at about $50,000 to $100,000. How does that translate into an extra 30 or 40 years? Determining what the contribution to the economy might have been is also difficult. How many of those people would have lived with health care, but not been able to work because of their illness?
Then there is the issue of productivity and health, i.e., what happens if health care makes you more functional, lets you work more or better? Key quote….
Less health insurance equates to more premature deaths, and shorter life expectancy. It also impairs the quality of life – and hence the productivity – of those who are living. This is evident in comparing the health of Americans who live in states with high levels of insurance with those who do not. We compared the five US states with the highest levels of health insurance among adults age 18 to 64 (Massachusetts, Hawaii, Minnesota, Wisconsin, and the District of Columbia) with the five states with the lowest levels (Texas, New Mexico, Louisiana, Florida, and California).
In the first group, 90 percent of those 18 to 64 are insured. In the second group the figure is just 73 percent. People living in states with the highest insurance levels have better health indicators, including fewer low birth weight babies, lower infant mortality, and lower death rates from diabetes, heart disease, strokes, Alzheimer’s, and some types of cancer (cervical, colorectal). While expanding health insurance is just one component of a state’s approach to improving health, the data are striking. Moreover, the annual death rate for residents of the states with higher insured populations was lower than for those living in the lowest insurance states. It is tricky to put a precise number on the economic loss from poorer life quality, but we can be sure the economic loss is substant
While I find Bilmes’ and Day’s calculations too crude to be taken at face value, there is enough truth in it to understand that there are real costs to the country incurred by not having health care available. When competing against other countries which do have health care for all, we may be at a disadvantage. So, bookmark the first study, and just think about the second.
Well, yeah…apparently the opponents of health care reform (i.e. those who don’t want something close to universal health care, even tho’ it might cost them a little more money) want us to infer that they don’t really care about the deaths of tens of thousands of people because it will a) cost them (tho’ mostly not them, in fact) and b) it will destroy the Republic as we know it.
I yield to no one in my support for universal health care, but, Steve, I think you have a cart-and-horse problem in your analysis. Are Massachusetts, Hawaii, Minnesota, Wisconsin, and the District of Columbia more productive (ie richer) than
Texas, New Mexico, Louisiana, Florida, and California because more of their people have health insurance, or do more of their people have health insurance because they are richer? Or, most likely of all, both?
Wired- Kind of the point in some ways. It actually speaks to a broader question. Do the richer states have better schools, more social services and health care because they are rich or are they rich because of the things I have listed?
Steve
I’m with you on most points. But to call DC productive is a bit of a stretch.
Yes. I am also absolutely sure that universal health insurance is needed, and this article and the following analysis should be yet more ammunition. I still am frustrated by the lack of any reasonable provisions for saving money that are in the present bill. Couldn’t we have even a stab at cost transparency or tort reform? I am particularly frustrated with physicians organizations that don’t have any united stand on reducing costs. This is such a key to getting bipartisan support.