http://www.businessweek.com/blogs/money_politics/archives/2009/07/study_links_ris.htmlStudy Links Rise in Health Care Costs to Job Losses
Posted by: Cathy Arnst on July 23
In a first-of-its-kind study, the non-profit Rand Corp linked the rapid growth in U.S. health care costs to job losses and lower output. The study, published online by the journal Health Services Research, gives weight to President Barack Obama’s dire warnings about the impact of rising costs if Congress does not enact health care reform.snip//
This study provides some of the first evidence that the rapid rise in health care costs has negative consequences for several U.S. industries,” said Neeraj Sood, the study’s lead author and a senior economist at RAND. “Industries where more workers receive employer-sponsored health insurance are hit the hardest by rising health care costs.
To rule out the possibility that the economic effects were caused by some other industry-wide factor, the researchers compared U.S. industries with their counterparts in Canada, which has publicly financed universal health care. They found no similar percent change in employment in the corresponding Canadian industries over the 19-year study period.
The rate of growth in U.S. health care costs has outpaced the growth rate in the gross domestic product (GDP) for many years. In 1940, the share of GDP accounted for by health care spending was just 4.5%. By 1990, it had reached 12.2%, and 16% in 2005, when health care spending totaled nearly $2 trillion, or $6,697 per person, far more than any other nation. This year health care spending is on track to equal 18% of GDP.
RAND researchers underscore that their findings do not necessarily mean that rapid growth in health care costs results in large job losses in the overall economy, since losses in industries that cover most of their workers are at least partially offset by gains in those industries that don’t insure. Of course, the workers themselves may not find those jobs equivalent.
The study was partially funded by Bing Center for Health Economics at RAND and the U.S. Department of Health and Human Services.