Economic Benefits of Health Care for Children

We just got this press release about a study showing the economic benefits of providing universal health coverage for children. It is a little off-putting that part of the argument is that good health in children “improv[es] their productivity as adults.” The authors of the study are clearly economists! But it looks like a worthwhile study nevertheless.

Providing health insurance for US children would be cheaper than expected, study says

Research from Rice University’s Baker Institute finds that economic benefits would outweigh costs

HOUSTON — (June 16, 2009) — Extending health insurance coverage to all children in the U.S. would be relatively inexpensive and would yield economic benefits that are greater than the costs, according to new research conducted at Rice University’s Baker Institute for Public Policy.

“Providing health insurance to all children in America will yield substantial economic benefits,” wrote Vivian Ho, chair in health economics at the Baker Institute and associate professor of medicine at Baylor College of Medicine. She co-authored the report with Marah Short, senior staff researcher in health economics at the Baker Institute. They based their research on recent studies published in peer-reviewed journals to examine the evidence regarding the economic impact of failing to insure all children in the United States.

The children will receive better health care and enjoy better health, thereby improving their productivity as adults, the researchers said. The cost incurred by providing universal coverage to children “will be offset by the increased value of additional life years and improved health-related quality of life gained from improved health care. From a societal perspective, universal coverage for children appears to be cost-saving.”

Ho and Short compared the children’s health care in the United States to the care provided in other industrialized countries and found that despite higher per capita spending, “the United States ranks third-highest among 30 Organisation for Economic Co-operation and Development countries in the percentage of the population lacking health insurance, with one in seven people uninsured.” They estimate the number of uninsured children in the U.S. to be more than 8 million.

The literature clearly indicates this lack of coverage leads to “lower access to medical care and lower use of health care services,” the authors wrote. It may even be reflected in relatively high child morbidity rates in the United States, they argued. Moreover, lack of health care for children has long-term effects as those children become adults.

“The collective body of research that we have reviewed,” Ho and Short said, “provides compelling evidence that covering all children in the United States with health insurance will yield immediate improvements in the health of children, as well as long-term returns of greater health and productivity in adulthood. The upfront incremental costs of universal health insurance coverage for children are relatively modest, and they will be offset by the value of increased health capital gained in the long term.”

Get a pdf of the report.

2 thoughts on “Economic Benefits of Health Care for Children”

  1. We need to begin looking at the long term impacts of universal health care, in this case for children. Yes it’s going to cost some money now, but as this study indicates, over the LONG RUN it will pay off. This is even more dire given the current rate of child obesity.

  2. “Research from Rice University’s Baker Institute finds that economic benefits would outweigh costs”. I think i read this somewhere but i am glad that everything is going right about health care now.

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