ACALAHA BLOG

Here’s an excellent analysis of how much it would actually cost to provide comprehensive health care for ALL Americans — yes, I realize there’s a redundancy … just making a point … …

It’s done by Uwe Reinhardt, probably the leading academic economic analyst of health care, who teaches at Princeton’s Woodrow Wilson School …

He focuses on the ridiculous scare campaign about how much MORE it would cost to have health care for all, at least formally,

and points out how the supposedly huge — and “politically unpalatable” — figure of 1.6 trillion over the next decade is, in fact, LESS than the ANNUAL increase in health care costs that has ALREADY taken place …

A price tag of $1.6 trillion seems immense if one contemplates the figure in the abstract.

It is, however, only about 4 percent of the total cumulative health spending of $40 trillion, the amount government actuaries now project for the decade from 2010 to 2020. That is also less than the 6 to 7 percent that total national health spending has increased each year in the past decade.

And $1.6 trillion is only about 1 percent of the amount of G.D.P. that America can reasonably be expected to produce in the next decade (about $150 trillion to $170 trillion).

That 1 percent would not be lost to G.D.P., of course, because health spending is part of G.D.P. Rather, it would be a diversion of G.D.P. — away from other uses, and toward providing the otherwise uninsured with the peace of mind that comes with health insurance and access to timely health care. It would represent merely a change in the composition of G.D.P.

A change in the composition of G.D.P. should be distinguished from an actual loss of G.D.P.

Indeed, to give a sense of perspective: Whatever waste there might be in any new spending on health care, the loss of welfare it implies is dwarfed many times over by the actual loss of G.D.P. and human welfare over the coming decade caused by the reckless mismanagement of our financial sector. Not to mention the diversion of additional G.D.P. to Wall Street bailouts and away from uses that taxpayers probably would have preferred.