Friday, July 10, 2009

One person's overspending is someone else's income...

Earlier this week, the Baltimore Sun featured a column entitled "Look out, Baltimore, health care reform is on the way". This article demonstrates one of the many reasons that the discussion regarding health care reform is likely to get more complicated as more details about reform plans become available and people truly appreciate what the impact will be.

A lot of jobs depend on health care in Baltimore (and in many ways throughout all of Maryland). Physicians. Nurses. Even construction workers who have built the many buildings that are affiliated with medical centers all over the city. The Baltimore Sun columnist, Jay Hancock, noted that Baltimore has some similarity (and only some) with New York during the housing/finance boom. New York has had difficulty since the housing/finance collapse. The housing/finance collapse was at least somewhat unexpected. In contrast, we hear all the time about the desire to control health care costs. So, we should anticipate that there will be less money to go around for jobs in Baltimore. Notably, Mr. Hancock suggests that Baltimore (despite a port and a great number of educational institutions) will have no obvious engine of economic growth if the spending increases slow down. What does that create? An incentive for many in Baltimore to oppose any spending controls that threaten their livelihood.

A final interesting point regarding Mr. Hancock's column--despite the degree to which the Baltimore economy is based on health care, that does not lead to the people of Baltimore being particularly healthier, Baltimore was rated 83rd among US metropolitan areas based on 2007 data. The key is that we must consider the things on which we are spending all the money that has gone to training physicians, building incredible cancer centers, and attracting people from around the country and around the world. Then we must figure out how to use those resources to make the local population healthier or how to use the money that might be saved under reform to bring about economic growth in alternative industries.

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