Blogging the CEA Health Care Report: Executive Summary
The Council of Economic Advisers is not assuming anything radical. Health care reform will not chop, slice, and juice. It will not yoke the growth in health care spending to the rise in GDP or the swell of inflation. It will be modest. It will cut the growth of health care by 1.5 percentage points a years. If health spending were to grow at 6 percent, now it will grow at 4.5 percent.
But when it comes to health care spending, modest restraint can prove hugely important. Here's the key takeaway from the report:
[P]roperly measured GDP could be more than 2 percent higher in 2020 than it would have been without reform and almost 8 percent higher in 2030. The real income of the typical family of four could be $2,600 higher in 2020 than it otherwise would have been and $10,000 higher in 2030. And, the government budget deficit could be reduced by 3 percent of GDP relative to the no-reform baseline in 2030.
Those are big numbers. Bigger than it feels they should be. But this isn't a delicate projection based on strange assumptions. It's pretty standard arithmetic projecting what will happen in the aftermath of a modestly successful health reform. So I'm going to end this post here and let those sums sink in. But I'll have a couple more posts on the CEA report as the day wears on: It's an important document on the economics of health reform, and a number of its arguments -- and, excitingly, its graphs -- deserve to be considered in full.
(Graph Credit: Council of Economic Advisers.)
Posted by: lensch | June 2, 2009 1:35 PM | Report abuse
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