ERIC WOLFERT, ENERGY AND ENVIRONMENT DIRECTOR
The debate over health care policy has been omnipresent in recent years, particularly since the rollout of the healthcare.gov online marketplace in October 2013 (CBS’ Evening News covered the issue 50 times in two months). However, such coverage, and in turn an overwhelming majority of the healthcare policy debate, is often missing one crucial factor: the role that American energy policy, particularly the country’s overreliance on fossil fuels, plays in giving the United States the most expensive and inefficient health care system among OECD nations. Without properly accounting and correcting for the many health care issues that carbon-intensive energy brings, our health care problems will persist.
The numbers are sobering. According to a peer-reviewed study published in Environment International in February 2013, total health care costs in the United States from fossil fuel usage annually total $886.5 billion dollars. If that number sounds astronomical, that’s because it is--it’s equivalent to a full 6% of the United States’ GDP. This is startling in the context of American healthcare spending, which in 2012 totaled 17.9% of US GDP. The fiscal effects, of course, only tell one side of the story. More important and tragic are the lives lost from such pollution, which by one estimate total 130,000 annually. Much has been written about how the United States, which relies significantly more on private as opposed to government health insurance than do peer nations, spends an enormous percentage of its GDP on health care compared to those nations. While the lack of a single-payer system in America certainly contributes to that fact significantly, the numbers foretell a clear need to transition away from fossil fuels if the United States is to significantly improve health care outcomes.
The most common ailment from air pollution, asthma, now affects nearly 1 in 10 children in the United States, according to Physicians for Social Responsibility. According to the organization:
“This [the fact that children are particularly susceptible to asthma] may be due to their distinct breathing patterns, as well as how much time they spend outside. It may also be due to the immaturity of their enzyme and immune systems, which assist in detoxifying pollutants, combined with incomplete pulmonary development. These factors appear to act in concert to make children highly susceptible to airborne pollutants such as those emitted by coal-fired power plants.”
Asthma’s ubiquity often overshadows how truly dangerous it is. According to a 2004 study of childhood asthma published in the journal Preventing Chronic Disease, the year 1996 saw 211 children die from asthma, and their medical bills total over $2 billion. Even though most children managed to escape asthma’s fatal effects, the disease still accounted for 6.3 million missed school days. One does not need to be an education expert to know that each day missed hurts a child’s life chances.
Fortunately, however, a solution already exists in renewable energy, particularly solar power. Pollution-free source of energy such as solar have often been discussed through the lens or preventing climate change, and given the urgency of the issue that is certainly warranted. However, solar energy has public health implications that go beyond climate change. As mentioned above, it lacks harmful emissions of carbon dioxide and other chemicals that have proven severely detrimental to human health. Unlike oil, coal, and gas, it requires almost no water to operate, virtually eliminating the threat of drinking water pollution posed so frequently by more traditional forms of energy. With solar costs consistently dropping even before the severe health care costs that arise from fossil fuels are factored in, switching to solar energy makes more sense by the day.
The deleterious health effects that arise from an energy system dependent upon fossil fuels are well documented and sobering. It is long past time for public policy and funding to favor energy sources that do not cause such harmful effects more fully and consistently.
FRANK FRITZ, HEALTHCARE DIRECTOR
If you are interested in hearing more from Frank and discussing your own opinions on healthcare policy, come to GW Roosevelt Institute’s Fireside Chat on the Affordable Care Act this Thursday, February 27th.
When discussing health care policy, a sometimes tempting line of thought emerges; instead of the government expanding its role in health care, it would be more efficient to allow the open market of consumers, providers and insurers find the best prices through competition. This is an appeal to empirical economics, as opposed to a more vague argument about freedom, basic rights, or national interests. So if it is an economic argument, what do economists think? Polarizing liberal economists such as Paul Krugman would reject it arguing instead for a British or Canadian-style government single payer system. Steven Brill, in a front page investigative article in Time Magazine, examined the American health care system—he found that while it is the most unregulated in the world, it is also the most expensive.
Why has the open market failed to provide the lower prices for health care? Is the solution to double down on our market based system? The field of healthcare economics simply does not support this approach. Over 50 years ago, economist and Nobel laureate Kenneth Arrow published “Uncertainty and the the Welfare Economics of Medical Care” in The American Economic Review. The crux of the paper is that health care is not a typical good; the market will not succeed because of numerous factors which when taken together lead to insurmountable market failure. Arrow notes “virtually all of the special features of this industry, in fact, stem from the prevalence of uncertainty.” The two essential points that complicate healthcare economics are as follows:
The Irregular Demand for Care
Excluding preventative care, health care is not a normal good, such as an automobile. The demand for medical services is irregular, because illnesses arise at unexpected times. It is difficult to compare prices between providers, because unlike shopping for a car, illness is almost always an unexpected expense that must be treated, lest the patient face a future loss of income.
Second, doctors are unique when it comes to purchasing a service. By their very nature, a doctor is expected to be more knowledgeable than a patient about health care. A great level of trust must exist between a doctor and their patient; healthcare professionals by their very nature are also much more invested in a patient’s welfare than typical service positions like a waiter or barber.
Third, when receiving care, a patient must deal with extraordinary uncertainty. It is impossible to “test-drive” a medical treatment, especially in cases such as a surgery. There is no guarantee that an expensive procedure will work, and even if it does, recovery times can differ greatly from patient to patient.
The Limits of Supply in the Healthcare market
Doctors, by their trade, are skilled individuals with a high barrier to entry. The licensing and education process to become a practitioner is long, difficult, and expensive. Because of this fact, the supply of doctors will always be limited due to difficulties in gaining certification, prices of medicine are always going to be difficult to control from a market perspective.
Arrow notes that when markets fail, “society...will recognize the gap, and nonmarket social institutions will arise attempting to bridge it”. This means the burden of funding health care must fall upon groups within a society, not just individuals. It is our role as members of a democratic society to formulate economically-sound public policy to improve the provision of health care.
Our members watched the State of the Union last night together. Here are some of their thoughts:
"While I was pleased to hear the announcement of an increase in minimum wage for federally contracted workers through an executive order, President Obama must also put in place limitations on the payrolls of corporate executives, which will hold them accountable for funneling taxpayer money into their own pockets. That sort of change will not come from the corporate-controlled White House, so progressives must shift their focus to the grassroots, bottom-up approach."
--Yasemin Ayarci, Chapter President (@DCyasemin)
"Watching the webcast with the corresponding graphs and diagrams, I was glad to see more substantive policy and slightly less rhetoric than past addresses, but some statements on progressive causes still felt shallow. On education, I was very happy to see the backing of a pre-K expansion, but dismayed at the few new ideas presented on improving college affordability."
--David Meni, Vice President (@TheDavidMeni)
"Any congressional action this year on issues progressives care about will depend on passage in the Republican-controlled House. Last night’s speech sought important solutions to our upward mobility crisis once popular with conservatives: education reform, job training, infrastructure, and a tax overhaul. Despite many important issues left unmentioned, the solutions proposed to reduce inequality may have the support necessary get through the lower chamber--and a chance at helping alleviate the many structural economic challenges too many Americans face."
--Zach Komes, Policy Director (@ZachKomes)
"Another beautifully crafted address by President Obama but as a Progressive, I found alarming the lack of any mention about unchallenged rape endemic in the military & his comments on foreign policy were largely anodyne. In fact, the 'Pivot to Asia' was notably absent, unless this is effectively his apparent support for the Trans-Pacific Partnership. On that note, I wonder when Obama will elucidate the opaque contents of the TPP treaty."
--Francisco Alvarez, Energy and Environment Policy Center Member (@F_J_Alvarez)
"I felt that the President's agenda was too broad and scattered to achieve all, or even most, of the goals that he put forth. If he devoted more effort to a single issue and made that the single crusade of the year, it would have a better chance of actually leading to real, measurable good."
--Matthew Kasturas, Freshman Representative
"While I enjoyed President Obama’s encouraging overall tone about the importance of increasing opportunities for all Americans, I found some of his policy suggestions to be a little vague. For example, although the broad idea of gun control was mentioned, specifics about his gun control platform weren't present, which is disappointing considering the amount of school shootings that have taken place in the last month alone."
--Kinjo Kiema, Freshman Representative (@Captain_Kinj)
"I thought President Obama’s speech had several strong, substantive policy proposals. However, I sincerely hope that his 'All of the Above' energy policy prioritizes renewable sources such as solar and wind, and does not include the Keystone XL Pipeline."
--Eric Wolfert, Outreach Director (@EricWolfert93)
What did you think of the #SOTU? Comment below and let us know your perspective!
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