MEMO: The Cost of Doing Nothing on Health Care

Lost Productivity Costs States $124 billion to $248 billion

May 29, 2009

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Contact: Madeline Meth
Phone: 202.741.6277
Email: mmeth@americanprogress.org

By Peter Harbage, Ben Furnas|  May 29, 200

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WASHINGTON, DC-It may seem like now is the wrong time for the United States to fix our broken health system. It’s true that we are still dealing with the recent financial crisis and the continuing economic downturn. But health reform is actually exactly what we need to help get the American economy back on its feet.

Our analysis shows that the broken health care system will cost us between $124 billion and $248 billion in lost productivity this year alone due to the almost 52 million uninsured Americans who live shorter lives and have poorer health. In fact an analysis by the Institute of Medicine found that, “the estimated benefits across society in healthy years of life gained by providing health insurance coverage are likely greater than the additional social costs of providing coverage to those who now lack it.”

These findings are based on a 2008 analysis by the New America Foundation, which found that the national economic cost from lost productivity in 2007 was between $104 billion and $207 billion. Economic costs from lost productivity have increased by about 20 percent during the two years since the New America Foundation conducted its analysis. The low bound of this estimate represents just the cost from uninsured Americans’ shorter lifespan. The high bound represents both the cost of shortened lifespan and the loss of productivity due to the reduced health of the uninsured.

The cost of doing nothing in our current system is clearly too high. We must reform the health care system to build a stronger economy moving forward.

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