The Fiscal Effect of National Healthcare for the Uninsured in the US

From Health Affairs. The gist of the article goes like this:

• 47 million americans were uninsured for some part of the year in 2007
• They spend $86 billion last year on healthcare
• The government paid $56 billion of that $86 billion through various programs
• Providing full coverage for the uninsured will increase overall spending by an additional $122 billion
• While there is a short term increase spending, there will be savings efficiencyin the long run: "Numerous studies have shown that the uninsured delay seeking care for treatable conditions that ofetn require more costly care when they progress to an advance state"

The papers references an interesting conjecture about the the effects of uninsured on the insured: that hospitals "overcharge" people with insurance in order to pay for emergency cares that the uninsured will receive. The implication here of course is that a national heathcare would mitigate this "shadow cost" and render the entire system more efficient as a result. The paper does not find this to be a significant factor, although they do not reject its occurance at a local level.

Jack Hadley, the author of the paper, makes the case that these increased spending will likely pay for themselves in the long run:

Hadley said that the benefits of expanded health coverage could include greater productivity and greater tax revenues for the government, in addition to the intrinsic value of good health.

"Spending on health care is not like spending on going to the movies," Hadley said. "There's an intrinsic value to good health, in addition to the ability to work effectively."

One other note of interest is that the principal investigator is affiliated with George Mason University, who, like University of Chicago, is sometimes viewed as official think tanks of conservative orthodoxy.

They're not. Advocating for universal healthcare on the ground that it will increase overall efficiency will not please the Grover Norquist wing of the Republican Party. And while Milton Friedman is fond of privatizing many thing, including national parks, he also favored "extremely tight regulation of any financial institution whose liabilities served as part of the economy's stock of liquid assets".

This is not to say that economists and academics don't have ideological underpinnings, but there is a difference between ideological and doctrinal, and for most [cough]Ben Stein[/cough] economists, their commitment to basic intellectual honesty provides a check against becoming hopeless doctrinal.