Because of our belief that health reform can bring significant general economic benefits, University of California professor of economics Laura Tyson and I (in our personal capacities) circulated a letter among health economists to see if those views were widely held. As it happens, they are. Twenty-five other economists joined in pointing to potential benefits. This letter was then sent to the president and all members of Congress and released on November 24. It has been reported on numerous Internet sites.
Some of the economic benefits listed in the letter include:
• Improving the efficiency with which health care is provided, thereby freeing resources for other consumption or investment, thereby promoting growth and employment
• Improving health and productivity of the work force by covering people who are now uninsured
• Reducing the disruption and personal tragedies associated with personal bankruptcy triggered by large health care costs.
The letter was motivated by the belief that extending health insurance coverage is not only the right thing to do but also an economically highly beneficial thing to do. The bad health and financial disruption that arises from insufficient access to care generates costs that go well beyond the people directly affected. The whole society ends up paying for the limited and often needlessly-costly care used by the uninsured because hospitals and physicians recover the costs of uncompensated care from the rest of the population through higher charges. In summary, we wrote:
The ethical case for reforming our health care system is compelling. So is the economic case. Enacting responsible health care reform now is essential to putting the economy on a sustainable path to a more prosperous future.
Among the signers were three Nobel laureates: George Akerlof, Kenneth Arrow, and Eric Maskin.