Fix the Healthcare System (and Fight the Recession, Too)



by Dana P. Goldman and Neeraj Sood

August 21, 2009

A little-known proposition amid the highly charged health care debate is that properly controlling health care spending could generate economic growth equal to 1 percent of gross domestic product.

It may not be obvious that cutting healthcare spending would stimulate the economy. After all, delivering health care also means jobs. If we spend less on health care, doesn't that mean fewer jobs for health workers? And if cutting healthcare spending leads to worse health, wouldn't more people take more sick days or leave the work force entirely? One might believe that any attempt to trim spending on health care would trigger more unemployment and lower productivity.

The fact, however, is that much of our healthcare spending is wasteful. The U.S. spends more on health care than any other industrialized nation, yet our population fares worse than many others. Unnecessary surgical procedures are a good example of how the U.S. overinvests in often-ineffective treatment at the expense of prevention. This spending adds nothing to our economic output – let alone the damage it does to our health....

Dana Goldman is director of health economics and Neeraj Sood is a senior health economist at the RAND Corporation, a nonprofit, nonpartisan research institution. Both are also on the faculty at the University of Southern California.

The remainder of this op-ed can be found at

This commentary originally appeared on on August 21, 2009. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.