The New America Foundation (NAF) and the University of Denver’s Center for Colorado’s Economic Future recently published a new study in conjunction with The Colorado Trust and The Colorado Health Foundation. The study was designed to look at the projected economic outcomes for the state of Colorado with and without health care reform. For the reform scenario, the researchers concentrated on the recommendations created by the Colorado Blue Ribbon Commission (208 Commission) a few years ago. They compared that data with the projected outcomes if we do nothing and simply maintain the current system with regards to health care.
The NAF study notes that the recommendations of the 208 Commission in Colorado are quite similar to the rules enacted by the PPACA. In addition, the passage of the PPACA removes some of the funding hurdles that presented an obstacle to the implementation of some of the 208 Commission recommendations, as the PPACA includes federal dollars for Medicaid expansion and subsidies to help families pay for private health insurance (in the 208 Commission recommendations, the state would have borne the responsibility for funding these initiatives).
The research in this study focused on economic data rather than moral or social reasons for implementing reform. While the report states that “there are many reasons for health reform, including a strong moral obligation to care for all our citizens and the pressing need to improve the uneven quality of the health care delivered in our nation“, their conclusion – that reform will benefit Colorado’s economy – is based on numbers.
First, the study looked at the cost of doing nothing – of letting the current health care delivery and funding model continue unchanged. Their conclusion was that the economic impact of this would be unsustainable by a decade from now, as healthcare would continue to consumer an ever-increasing chunk of household, employer, and government resources.
The researchers concluded that reform would be better for Colorado’s economy for a number of reasons:
- Subsidies for families to offset the cost of health insurance would free up household income that could then be spent in other areas, stimulating the economy.
- Increased demand for healthcare (which is expected to go along with an increasing number of insured residents) would increase the number of healthcare-related jobs available, helping to reduce the unemployment numbers.
- An increase in the number of insured residents should also decrease the amount of uncompensated care provided by Colorado hospitals and clinics. The cost of uncompensated care is typically shifted to those who have health insurance, in the form of higher premiums. Reducing the number of uninsured residents should therefore result in health insurance premiums that are lower than they would otherwise have been.
- More efficient healthcare delivery systems will cut down on the cost of care for everyone.
- Improved health should result in improved productivity for Colorado workers. The study notes that it’s difficult to put an economic tag on some of the aspects that go along with improved health, but increased productivity would translate to higher income and thus an increased tax revenue for the state.
- The study also included family, community, and interpersonal benefits in their findings.
Colorado has been quite proactive over the last few years in terms of healthcare initiatives. In addition to the daunting task that the Blue Ribbon Commission undertook between 2006 and 2008, the state has also looked at numerous legislative issues having to do with healthcare. Bills addressing gender equality in health insurance premiums and maternity coverage both took effect at the beginning of 2011, and the state is continuing to consider new ways to make health insurance available and affordable for everyone in the state. The NAF study underscores the importance of Colorado’s reform efforts, from an economic perspective.