Does Doing Nothing Cost Nothing?

Failure to enact health care reform will be costly:

The cost of not enacting health care reform, by Linda J. Bilmes and Rosemarie Day, Commentary, Boston Globe: Much of the health care debate is focused on whether the country can afford the $850 billion the Congressional Budget Office estimates it will cost. ... This debate ... assumes that doing nothing will cost nothing. It turns out that not expanding health insurance is a pretty costly option...

Several major medical studies have determined that people with health insurance have lower death rates compared to the uninsured, fewer medical ailments, and better all-around health. This means more individuals contribute to the economy for longer. Not having health insurance means these economic benefits are lost.

For example,... Americans ... die each year because of a lack of health insurance. These deaths are largely because of failures to diagnose illness and to limited access to good quality care. ... A new study ... puts the number of deaths among Americans between the ages of 18 and 64 associated with lack of health insurance at 44,789 a year.

The premature death of thousands of Americans can be translated into monetary terms using the economic “value of a statistical life." ... US government agencies typically use a figure around $7 million to represent the lost economic output from each death. If we conservatively use only half of the government figure, or $3.5 million, it suggests that the ... cost to the US economy of 40,000 deaths is ... more than a trillion dollars over a 10-year period - even taking future inflation into account - well above the cost of enacting a health care package.

A second way to estimate the cost of not enacting health care legislation is in terms of life expectancy. US life expectancy - at 78.11 years, ranks around 40th in the world and well below countries with universal health care. If we were to match Canadian life expectancy, for example, that would translate into an extra two years and 1 month of life expectancy for every American.

Economists use another measure for the value of an additional year of life, adjusted for the quality of life. ... Most insurance companies, and many countries around the world, ... implicitly ascribe the value of an additional year of human life at $50,000... If the United States ... were able to ... insure at least 15 million more Americans, ...[r]aising the US life expectancy to match Canada ... would translate into $150 billion in economic value over three years.

Less health insurance ... also impairs the quality of life - and hence the productivity - of those who are living. This is evident in comparing the health of Americans who live in states with high levels of insurance with those who do not. ... People living in states with the highest insurance levels have better health indicators, including fewer low birth weight babies, lower infant mortality, and lower death rates from diabetes, heart disease, strokes, Alzheimer’s, and some types of cancer (cervical, colorectal). ... Moreover, the annual death rate ... was lower... It is tricky to put a precise number on the economic loss from poorer life quality, but we can be sure the economic loss is substantial. ...

Without health care reform, the economic cost imposed by premature deaths and avoidable illnesses will continue to grow... Congress needs to weigh carefully the substantial cost of doing nothing.