Monday, June 8, 2009

Christina Romer: Health Care Reform Is "Good Economic Policy"


Citing a series of benefits to the nation's businesses, public coffers and individual citizens, Christina Romer -- chair of President Obama's Council of Economic Advisors -- made the case for tackling health-care reform.

Romer, speaking Monday, June 8, 2009, at The Commonwealth Club of California in San Francisco, gave some backing to people who've been seeing some recovery from the nation's economic crisis, at least if one measures that by her workload. She said that in the first few months of her tenure in the Obama administration, she dealt with a number of crisis-related topics that were all in her professional comfort zone: banking, fiscal stimulus, recession. But after his first 100 days in office, Obama announced his intention to tackle health-care reform, which led Romer to come up to speed on health-care economics.

"I've gone from being a positive but somewhat passive advocate of health-care reform, to being a passionate advocate," she said of the experience.

She worked on a report that looked at the benefits and costs to the country of reforming -- or not reforming -- its health-care system. She said that by the year 2040, health-care expenditures could be as high as one-third of the nation's economy if the system isn't reformed. A failure to reform, she said, could result in stagnating take-home pay (as insurance premiums eat up an ever-larger share of income) and the number of uninsured could rise from an already-alarming 46 million to 72 million people.

But if the country can meet the president's goals of slowing the growth of health-care costs and expanding coverage to the uninsured, Romer said that significant amounts of money could be freed up for investment in other things, savings will increase (which could also result in lower interest rates), unemployment will drop, and and the inflation rate would be lower.

"Good health-care reform is good economic policy," she summarized.

You can read a copy of the report via a link on this post on the White House blog (yes, they have one, too). A critique of the report's approach from libertarian Michael Tanner of CATO Institute is here. Politico.com reports on the political give-and-take over the report.

What do you think? Leave a comment below and join the conversation!

4 comments:

Igor said...

Old Russian saying...You can tell same lie 1000 time but not change truth!

Difference between USSR Communist media and USA "mainstream media"

In Russia government make media say what they want - even if lie.
In USA "mainstream media" try make government what they want - even if lie..
.....eventually they become same thing?!

Do we really want someone who can not even show his own birth certificate try "reform" healthcare

I Igor produce Obama Birth Certificate at www.igormaro.org

Compare Obama Care vs Igor Care at Obama vs Igor Care

The Mad Hedge Fund Trader said...

I saw Dr. Christina Romer, chairman of the Council of Economic Advisors, who practically tore my ear off proselytizing her new found religion, health care reform. Appointed by Obama to advise him on all things economic, Dr. Romer had this hot potato dropped in her lap six weeks ago in one of her daily briefings to the President. With the enthusiasm and ebullience of a new found convert, Dr. Romer laid out goals that were nothing less than revolutionary. She plans not to just “socialize” medicine, but to fundamentally rebuild the entire health care infrastructure of the US. Tax incentives will be created to encourage value over volume. People can keep existing plans they like. Technology will be applied to cut costs, not only to come up with more complicated and expensive cures. Existing subsidy programs for the poor will be folded into the new plan, offering coverage to 46 million uninsured. Providers will get cash incentives for prevention. Individuals will gain the advantages of risk pooling. Pre-existing conditions will be covered. All of this will be made revenue neutral through the taxation of employer paid insurance and savings through new efficiencies. If the administration can pull all of this off, the benefits will be huge. An annual 1.5% reduction in health care costs will add 8% to GPD and increase family incomes by $10,000/year by 2040. This will boost corporate profitability and competitiveness, labor mobility, the quality of life, and reduce the budget deficit and unemployment. Failure will see health care spending rocket from the current 18% to 33% of GDP in 30 years, and the number of uninsured explode to 76 million. Romer spewed out statistics as only an economics PhD from MIT can. Oh, and now or the stuff you care about. The economy will shrink in Q2, see no growth in Q3, and turn positive by Q4. The issue doesn’t affect me, as I have always avoided health care, insurance, pharmaceutical, and biotech stocks like the plague; they being subject to capricious government approvals, and therefore inherently unpredictable. These are the opening shots of a political dogfight that will ensue over the next three months and dominate the media. www.madhedgefundtrader.com

Nancy Harris said...

With various health care reform bills floating around both the House and the Senate, President Barack Obama is pulling out all the stops to get the votes that the bill needs, which is good news for the public option. President Obama continues to rally behind health care reform. I am really concerned that the fiasco of this reform may make Obama a one-term president.

Warren D. Griffin said...

Health is always a great wealth for all. Why we will not achieve this? In this consideration everyone wants to have good health. Let us build our healthier life with controlled food habit, discipline,keep pace with work, rest and or exercise. While Health is the root of happiness let us build a happier life.
Healthier Living

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