The Medicare Office of the Actuary released its annual estimate of projected regional health spending for the upcoming generation in the middle of June. As usual, the , document , concluded that health spending would rise ever higher, from nearly$ 4.5 trillion in 2022, or 17.3 percent of the entire economy, to more than$ 7.7 trillion, and just under 20 percent of GDP, in 2032.
These lofty forecasts of ever-growing health spending, or the long-term, fiscal position it causes, have a tendency to make most Americans ‘ minds glaze over. However, a brand-new study provides many more substantial proof of the real effects of rising healthcare costs. In some cases, it costs persons their work.
Results of Hospital Merger
The , research, released by the National Bureau of Economic Research, attempts to get behind the grounds health costs increase. Rising healthcare costs may be caused by residents of a region becoming wealthier and thus spending more money on maintenance in some cases. The researchers examined the places where institutions merged and looked for this factor because these mergers are linked to higher costs but no comparable increase in the quality of the patient care.
The researchers came to the conclusion that a 1 % increase in health care prices caused employers outside the health care sector to reduce payroll by 0.37 percent after looking at hospital mergers, of which there have been many in recent years. Economists had generally agree with this assumption, due to the belief that the “employer’s” share of health plan premiums finally comes out of people ‘ hands. More money spent on insurance premiums means less money to spend on wages for employees because total compensation ( wages and benefits ) are being kept constant.
Middle-class work loss
According to the study, these payroll reductions are caused by businesses that work fewer hours and maintain fewer employees overall, which is eventually reflected in job losses. Lower income tax revenues and higher spending on unemployment benefits were the result of those job loss ‘ continued negative consequences. The researchers even came to the conclusion that because of the phenomenon known as “deaths of despair” from people who leave the workforce,” we observe that a 1 % increase in county-level health prices caused an additional county-level death from suicides and overdoses per 100, 000 people.”
However, the research also came to the conclusion that middle-class workers are most affected by the job losses brought on by higher health costs, for logical reasons. If health costs for every worker total$ 10, 000, paying health benefits for a worker making$ 200, 000 per year would raise that employee’s total compensation by 5 percent ( i. e.,$ 10, 000/$ 200, 000 ), but would raise the total compensation for a worker making only$ 50, 000 by 20 percent ($ 10, 000/$ 50, 000 ), giving the employer a greater incentive to lay off the latter.  ,
This pattern is not true for people with very low incomes, especially those earning less than$ 20,000, where they frequently rely on government programs like Medicaid to pay for their health care rather than employer coverage. An , article , in The , Wall Street Journal , highlighting the writer’s conclusions included a graph demonstrating how the work effects entirely hit center- income workers:
Obamacare Killing Patients?
The study looked at the years leading up to Obamacare’s passage, when clinics began , goingbble up their rivals and physician practices to get more leverage in the brave new health care world. That fact makes the scientists ‘ opinions all the more important:
Our estimations suggest that the price increase between 2007 and 2014 reduced workers ‘ income by 2.7 %, increased unemployment by 0.86 percentage points ( a 10 % increase or 1.44 million jobs lost ), decreased federal income tax revenues by 3.4 %, and increased suicides and overdoses of 6.2 % per 100, 000 population ( approximately 10, 000 additional deaths across working-age adults ). Based on the]Department of Transportation’s ] 2015 value of a statistical life ($ 9.6 million ), the economic value of this loss of life would be approximately$ 96 billion.
Barack Obama and Joe Biden somehow forgot to mention all of these negative effects when attempting to sell Obamacare to the American government.
The research provides additional proof that the combination that afflicts American health care needs to be stopped and, in the best case, reversed. The middle class deserves better than a program that overcharges them, lowers their pay, and occasionally removes their work.
