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November 23, 2004

Return on Investment

Looks like Mitt tried to get out in front of the health care issue, with the support of some small business groups. I haven't yet seen his plan, but I'll be looking at it in the context of the report by the Urban Institute for the Blue Cross Blue Shield Foundation. The BCBSF report has a manageable executive summary, with these critical paragraphs:

Expanding coverage to the uninsured in Massachusetts would result in economic
and social benefits due to improved health of $1.2 billion to $1.7 billion. These benefits are based on estimates of the effect of the lack of health insurance on health, including lower mortality and morbidity and lower wages and productivity. We relied on work conducted by the Institute of Medicine (IOM) that estimated the value of a year of healthy life as well as the number of years the uninsured would lack coverage. The IOM estimated the annual discounted present value of lost health up to age 65 due to lack of insurance ranged from $1,645 to $3,280 per uninsured person. Applying the midpoint of this range to the two estimates of the number of uninsured in Massachusetts results in an estimate of the total value in improved health from covering the uninsured in the range of $1.2 billion to $1.7 billion.

These estimates of economic and social benefits, i.e., the value of better health, including the higher wages and productivity that the newly insured would experience
if fully insured, exceed the incremental cost of expanding coverage by a ratio of about 3:1. The many other benefits that would come from universal coverage are difficult to quantify. They include reduced financial uncertainty and depletion of assets such as bankruptcy; improved workplace productivity and higher tax payments; improvement in the quality and availability of personal health services, particularly emergency room care; reduced pressure on the public health system; and lower costs of other public programs such as Medicare and state and federal disability programs.

So there's a significant upfront investment, with a big monetary and moral payoff in the future -- i.e. healthier people create more economic value, and it's just the right thing to do.

Is the Governor willing to make this big step, or is he too timid? I know how I'm betting... More on this later.

Posted by Charley on the MTA at 09:44 AM in Massachusetts | Permalink


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