The Effects of the Healthcare Industry on the Economy

An efficient health care industry is essential in modern societies to prevent diseases and ensure the general health of the public. Economists go much deeper, however, examining the impact of the health care industry not only on the population's health, but also on the nation's economy. The effects are diverse due to the industry's high costs, as well as its direct connection with the workforce's productivity.

Cost of Health Care

• The health care industry is a sector that relies on state-of-the-art equipment and a highly skilled workforce, both of which raise the costs of operating a health care facility. Especially when the state is solely responsible for the citizen's medical treatment, or when health care insurance is provided, a considerable portion of the public funds are allocated to this industry. For example, the cost of the 2010 Patient Protection and Affordable Care Act is estimated at $940 billion over ten years, according to the Congressional Budget Office, as the Huffington Post reported in March 2010.

Burden for Taxpayers

• Everyone needs medical attention in case of injury or other illnesses and no matter whether the health care system is state-funded or private, it's ordinary patients that pay the costs. Public health care systems rely on revenue from taxes (a rise in which was a major concern before the signing of the Patient Protection and Affordable Care Act), while private institutes ask for a direct payment from their patients; both deprive patients of money which could be used for other economic activities.

Employment in the Health Care Industry

• According to facts published by Bloomberg Business week, up until the mid 1990s, the health care industry created nearly 1.7 million new jobs, including the related industries of pharmaceuticals and health insurance. However, between 2001 and 2006, the number of private sector jobs, excluding private health care, had remained stable. Health care provides not only high salaries to skilled professionals, but also permanent jobs, factors that encourage investments by individuals, such as getting a mortgage.

Healthy Workforce Equals Higher Productivity

• According to the American College of Occupational and Environmental Medicine's study, "Healthy Workforce/Healthy Economy," a healthy work environment, as well as the ability of workers to receive medical treatment for serious injuries and illnesses are essential factors for a rise in productivity. Healthy employees can bring more intensity to their work than weaker colleagues, while fast and effective treatment by the health care industry means sick workers can return to their post instantly.