This past week held the first presidential debate between President Obama and hopeful Mitt Romney. While the debate centered on domestic policy, each candidate at points spoke of the role that domestic issues have on U.S. global competitiveness, citing the US economy and unemployment as examples. I believe that healthcare has an equal standing in this regards; a clear case can be made that our healthcare problems have a direct impact on US foreign policy. This might be one of the few areas in the healthcare debate that both Mitt Romney and Barack Obama can agree.
Few disagree that certain domestic challenges have a direct and significant impact on US foreign policy. Correspondingly, these domestic challenges limit what we can do outside of our borders. Many people may cite issues like trade, education, and energy. Healthcare should not be exempt from this conversation. The current problems we are experiencing in healthcare (lack of access, poor quality, spiraling costs, etc.) have a direct correlation to how other countries view the US and the ability to our leaders have to influence international affairs.
Our healthcare system is in dire need of reform, even if we only talk about it from a foreign policy perspective. Some discerning statistics on spending and debt: The US spends $2 trillion annually on healthcare expense, about two-and-a-half times more than the average OECD (Organization for Economic Cooperation and Development) country. It is estimated by the Congressional Budget Office (2008) that US healthcare spending will rise from 17% today to 25% of the GDP by 2025, without changes to the federal law. Our current spending on healthcare guarantees us a lasting weakened global position.
Businesses are severely hurt by high healthcare costs and, hence, our competitiveness in international markets. According to the US Chamber of Commerce, healthcare is the most expensive benefit paid by businesses at 12%. Experts and economists readily agree that a heavy burden is placed on companies doing business in the US due to healthcare costs and puts them at a competitive disadvantage in foreign markets. In particular, startup business may be most hurt by healthcare’s spiraling expenses, as their ability to offer healthcare coverage is more limited and thus attract the best and brightest to grow their businesses.
Medical inflation routinely outpaces economic growth. This results in our country having lower wage growth, increased unemployment (notably for low-income workers), and greater inequality among classes. Employers are shifting compensation from salary to health care premiums. They are hiring less and more likely to lay off employees due to cost cutting measures. Collectively, as unemployment rises and small business struggle, health care costs contribute to a weakening economic position in the global economy.
It is not all bad news when we talk about healthcare and foreign policy, however. Whether you support it or not, the Affordable Care Act signed into law by President Obama in 2010 can be viewed as a foreign policy win. The law is meant to increase access to medical services for the poor, cut costs for government-run Medicare and Medicaid, and improve care coordination across the care continuum. If it in fact does this (I recognize this is a large presumption for some), many of the problems above won’t be as bad. Looking in more concrete terms, President Obama scored a big win with the law from a policy perspective. Not only could the President turn his energies to more pressing international priorities after the passage of the law but he also likely gained credibility among international leaders to push forward a complicated global agenda.
There is a wide disparity on how the two presidential candidates will fix the problems that plague our healthcare system. Yet, some comfort can be gained by Americans from a few statements made by both men. Each understands that our healthcare problems play a substantial role in international affairs and that the next four years requires real progress to be made for us to remain competitive among leading nations.